Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | ||||
(Address of principal executive office) | (Zip code) |
Title of each class | Trading Symbols | Name of exchange on which registered |
☒ | Accelerated filer | ☐ | Smaller reporting company | ||
Non-accelerated filer | ☐ | Emerging growth company |
Page Number | ||
PART I | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
June 30, 2020 | December 31, 2019 | ||||||
Assets | (Unaudited) | ||||||
Cash and due from banks | $ | $ | |||||
Interest bearing deposits with banks | |||||||
Investment securities: | |||||||
Equity securities | |||||||
Available for sale debt securities | |||||||
Held to maturity debt securities (net of allowance for credit losses of $1,593 at June 30, 2020) | |||||||
Total investment securities | |||||||
Loans held for sale, at fair value | |||||||
Loans | |||||||
Less: Allowance for loan losses | ( | ) | ( | ) | |||
Net loans | |||||||
Premises and equipment, net | |||||||
Lease right of use assets | |||||||
Bank owned life insurance | |||||||
Accrued interest receivable | |||||||
Goodwill | |||||||
Other intangible assets, net | |||||||
Other assets | |||||||
Total Assets | $ | $ | |||||
Liabilities | |||||||
Deposits: | |||||||
Non-interest bearing | $ | $ | |||||
Interest bearing: | |||||||
Savings, NOW and money market | |||||||
Time | |||||||
Total deposits | |||||||
Short-term borrowings | |||||||
Long-term borrowings | |||||||
Junior subordinated debentures issued to capital trusts | |||||||
Lease liabilities | |||||||
Accrued expenses and other liabilities | |||||||
Total Liabilities | |||||||
Shareholders’ Equity | |||||||
Preferred stock, no par value; 50,000,000 authorized shares: | |||||||
Series A (4,600,000 shares issued at June 30, 2020 and December 31, 2019) | |||||||
Series B (4,000,000 shares issued at June 30, 2020 and December 31, 2019) | |||||||
Common stock (no par value, authorized 650,000,000 shares; issued 403,823,728 shares at June 30, 2020 and 403,322,773 shares at December 31, 2019) | |||||||
Surplus | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Treasury stock, at cost (28,029 common shares at June 30, 2020 and 44,383 common shares at December 31, 2019) | ( | ) | ( | ) | |||
Total Shareholders’ Equity | |||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Interest Income | |||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | |||||||||||
Interest and dividends on investment securities: | |||||||||||||||
Taxable | |||||||||||||||
Tax-exempt | |||||||||||||||
Dividends | |||||||||||||||
Interest on federal funds sold and other short-term investments | |||||||||||||||
Total interest income | |||||||||||||||
Interest Expense | |||||||||||||||
Interest on deposits: | |||||||||||||||
Savings, NOW and money market | |||||||||||||||
Time | |||||||||||||||
Interest on short-term borrowings | |||||||||||||||
Interest on long-term borrowings and junior subordinated debentures | |||||||||||||||
Total interest expense | |||||||||||||||
Net Interest Income | |||||||||||||||
Provision for credit losses for held to maturity securities | |||||||||||||||
Provision for credit losses for loans | |||||||||||||||
Net Interest Income After Provision for Credit Losses | |||||||||||||||
Non-Interest Income | |||||||||||||||
Trust and investment services | |||||||||||||||
Insurance commissions | |||||||||||||||
Service charges on deposit accounts | |||||||||||||||
(Losses) gains on securities transactions, net | ( | ) | ( | ) | ( | ) | |||||||||
Other-than-temporary impairment losses on securities | ( | ) | ( | ) | |||||||||||
Portion recognized in other comprehensive income (before taxes) | |||||||||||||||
Net impairment losses on securities recognized in earnings | ( | ) | ( | ) | |||||||||||
Fees from loan servicing | |||||||||||||||
Gains on sales of loans, net | |||||||||||||||
(Losses) gains on sales of assets, net | ( | ) | ( | ) | ( | ) | |||||||||
Bank owned life insurance | |||||||||||||||
Other | |||||||||||||||
Total non-interest income | |||||||||||||||
Non-Interest Expense | |||||||||||||||
Salary and employee benefits expense | |||||||||||||||
Net occupancy and equipment expense | |||||||||||||||
FDIC insurance assessment | |||||||||||||||
Amortization of other intangible assets | |||||||||||||||
Professional and legal fees | |||||||||||||||
Amortization of tax credit investments | |||||||||||||||
Telecommunication expense | |||||||||||||||
Other | |||||||||||||||
Total non-interest expense | |||||||||||||||
Income Before Income Taxes | |||||||||||||||
Income tax expense | |||||||||||||||
Net Income | |||||||||||||||
Dividends on preferred stock | |||||||||||||||
Net Income Available to Common Shareholders | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Earnings Per Common Share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | |||||||||||||||
Cash Dividends Declared per Common Share | |||||||||||||||
Weighted Average Number of Common Shares Outstanding: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income, net of tax: | |||||||||||||||
Unrealized gains and losses on available for sale securities | |||||||||||||||
Net gains arising during the period | |||||||||||||||
Less reclassification adjustment for net losses (gains) included in net income | ( | ) | |||||||||||||
Total | |||||||||||||||
Unrealized gains and losses on derivatives (cash flow hedges) | |||||||||||||||
Net losses on derivatives arising during the period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Less reclassification adjustment for net (gains) losses included in net income | ( | ) | |||||||||||||
Total | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Defined benefit pension plan | |||||||||||||||
Amortization of actuarial net loss | |||||||||||||||
Total other comprehensive income | |||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
Common Stock | Accumulated | |||||||||||||||||||||||||||||
Preferred Stock | Shares | Amount | Surplus | Retained Earnings | Other Comprehensive Loss | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Balance - December 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
Adjustment due to the adoption of ASU No. 2016-13 | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Balance - January 1, 2020 | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||
Preferred stock, Series A, $0.39 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Preferred stock, Series B, $0.34 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Common stock, $0.11 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Effect of stock incentive plan, net | — | ( | ) | — | ||||||||||||||||||||||||||
Balance - March 31, 2020 | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||
Preferred stock, Series A, $0.39 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Preferred stock, Series B, $0.34 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Common stock, $0.11 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Effect of stock incentive plan, net | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||
Balance - June 30, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Common Stock | Accumulated | |||||||||||||||||||||||||||||
Preferred Stock | Shares | Amount | Surplus | Retained Earnings | Other Comprehensive Loss | Treasury Stock | Total Shareholders’ Equity | |||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||
Balance - December 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
Adjustment due to the adoption of ASU No. 2016-02 | — | — | — | — | — | — | ||||||||||||||||||||||||
Adjustment due to the adoption of ASU No. 2017-08 | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Balance - January 1, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||
Preferred stock, Series A, $0.39 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Preferred stock, Series B, $0.34 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Common stock, $0.11 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Effect of stock incentive plan, net | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||
Balance - March 31, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||
Preferred stock, Series A, $0.39 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Preferred stock, Series B, $0.34 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Common stock, $0.11 per share | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Effect of stock incentive plan, net | — | ( | ) | — | ||||||||||||||||||||||||||
Balance - June 30, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Stock-based compensation | |||||||
Provision for credit losses | |||||||
Net amortization of premiums and accretion of discounts on securities and borrowings | |||||||
Amortization of other intangible assets | |||||||
Losses on securities transactions, net | |||||||
Proceeds from sales of loans held for sale | |||||||
Gains on sales of loans, net | ( | ) | ( | ) | |||
Net impairment losses on securities, recognized in earnings | |||||||
Originations of loans held for sale | ( | ) | ( | ) | |||
Losses (gains) on sales of assets, net | ( | ) | |||||
Net change in: | |||||||
Cash surrender value of bank owned life insurance | ( | ) | ( | ) | |||
Accrued interest receivable | ( | ) | ( | ) | |||
Other assets | ( | ) | ( | ) | |||
Accrued expenses and other liabilities | |||||||
Net cash (used in) provided by operating activities | ( | ) | |||||
Cash flows from investing activities: | |||||||
Net loan originations and purchases | ( | ) | ( | ) | |||
Equity securities: | |||||||
Purchases | ( | ) | |||||
Held to maturity debt securities: | |||||||
Purchases | ( | ) | ( | ) | |||
Maturities, calls and principal repayments | |||||||
Available for sale debt securities: | |||||||
Purchases | ( | ) | |||||
Maturities, calls and principal repayments | |||||||
Death benefit proceeds from bank owned life insurance | |||||||
Proceeds from sales of real estate property and equipment | |||||||
Proceeds from sales of loans held for investment | |||||||
Purchases of real estate property and equipment | ( | ) | ( | ) | |||
Net cash used in investing activities | ( | ) | ( | ) | |||
VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) | ||||||||
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Cash flows from financing activities: | ||||||||
Net change in deposits | ||||||||
Net change in short-term borrowings | ||||||||
Proceeds from issuance of long-term borrowings, net | ||||||||
Repayments of long-term borrowings | ( | ) | ( | ) | ||||
Cash dividends paid to preferred shareholders | ( | ) | ( | ) | ||||
Cash dividends paid to common shareholders | ( | ) | ( | ) | ||||
Purchase of common shares to treasury | ( | ) | ( | ) | ||||
Common stock issued, net | ( | ) | ||||||
Other, net | ( | ) | ( | ) | ||||
Net cash provided by financing activities | ||||||||
Net change in cash and cash equivalents | ||||||||
Cash and cash equivalents at beginning of year | ||||||||
Cash and cash equivalents at end of period | $ | $ | ||||||
Supplemental disclosures of cash flow information: | ||||||||
Cash payments for: | ||||||||
Interest on deposits and borrowings | $ | $ | ||||||
Federal and state income taxes | ||||||||
Supplemental schedule of non-cash investing activities: | ||||||||
Transfer of loans to other real estate owned | $ | $ | ||||||
Transfer of loans to loans held for sale | ||||||||
Lease right of use assets obtained in exchange for operating lease liabilities |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands, except for share data) | |||||||||||||||
Net income available to common shareholders | $ | $ | $ | $ | |||||||||||
Basic weighted average number of common shares outstanding | |||||||||||||||
Plus: Common stock equivalents | |||||||||||||||
Diluted weighted average number of common shares outstanding | |||||||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted |
Components of Accumulated Other Comprehensive Loss | Total Accumulated Other Comprehensive Loss | ||||||||||||||
Unrealized Gains and Losses on Available for Sale (AFS) Securities | Unrealized Gains and Losses on Derivatives | Defined Benefit Pension Plan | |||||||||||||
(in thousands) | |||||||||||||||
Balance at March 31, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Other comprehensive income (loss) before reclassification | ( | ) | |||||||||||||
Amounts reclassified from other comprehensive income | ( | ) | ( | ) | |||||||||||
Other comprehensive income (loss), net | ( | ) | |||||||||||||
Balance at June 30, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Components of Accumulated Other Comprehensive Loss | Total Accumulated Other Comprehensive Loss | ||||||||||||||
Unrealized Gains and Losses on Available for Sale (AFS) Securities | Unrealized Gains and Losses on Derivatives | Defined Benefit Pension Plan | |||||||||||||
(in thousands) | |||||||||||||||
Balance at December 31, 2019 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Other comprehensive income (loss) before reclassification | ( | ) | |||||||||||||
Amounts reclassified from other comprehensive income | |||||||||||||||
Other comprehensive income (loss), net | ( | ) | |||||||||||||
Balance at June 30, 2020 | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Amounts Reclassified from Accumulated Other Comprehensive Loss | ||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
Components of Accumulated Other Comprehensive Loss | 2020 | 2019 | 2020 | 2019 | Income Statement Line Item | |||||||||||||
(in thousands) | ||||||||||||||||||
Unrealized (losses) gains on AFS securities before tax | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | (Losses) gains on securities transactions, net | |||||||
Tax effect | ( | ) | ||||||||||||||||
Total net of tax | ( | ) | ( | ) | ( | ) | ||||||||||||
Unrealized gains (losses) on derivatives (cash flow hedges) before tax | ( | ) | ( | ) | ( | ) | Interest expense | |||||||||||
Tax effect | ( | ) | ||||||||||||||||
Total net of tax | ( | ) | ( | ) | ( | ) | ||||||||||||
Defined benefit pension plan: | ||||||||||||||||||
Amortization of actuarial net loss | ( | ) | ( | ) | ( | ) | ( | ) | * | |||||||||
Tax effect | ||||||||||||||||||
Total net of tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Total reclassifications, net of tax | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) |
* | Amortization of net loss is included in the computation of net periodic pension cost recognized within other non-interest expense. |
• | 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). |
June 30, 2020 | 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: | |||||||||||||||
Equity securities (1) | $ | $ | $ | $ | |||||||||||
Available for sale: | |||||||||||||||
U.S. Treasury securities | |||||||||||||||
U.S. government agency securities | |||||||||||||||
Obligations of states and political subdivisions | |||||||||||||||
Residential mortgage-backed securities | |||||||||||||||
Corporate and other debt securities | |||||||||||||||
Total available for sale debt securities | |||||||||||||||
Loans held for sale (2) | |||||||||||||||
Other assets (3) | |||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||
Liabilities | |||||||||||||||
Other liabilities (3) | $ | $ | $ | $ | |||||||||||
Total liabilities | $ | $ | $ | $ | |||||||||||
Non-recurring fair value measurements: | |||||||||||||||
Collateral dependent loans | $ | $ | $ | $ | |||||||||||
Loan servicing rights | |||||||||||||||
Foreclosed assets | |||||||||||||||
Total | $ | $ | $ | $ |
Fair Value Measurements at Reporting Date Using: | |||||||||||||||
December 31, 2019 | 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: | |||||||||||||||
Equity securities at fair value | $ | $ | $ | $ | |||||||||||
Available for sale: | |||||||||||||||
U.S. Treasury securities | |||||||||||||||
U.S. government agency securities | |||||||||||||||
Obligations of states and political subdivisions | |||||||||||||||
Residential mortgage-backed securities | |||||||||||||||
Corporate and other debt securities | |||||||||||||||
Total available for sale | |||||||||||||||
Loans held for sale (2) | |||||||||||||||
Other assets (3) | |||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||
Liabilities | |||||||||||||||
Other liabilities (3) | $ | $ | $ | $ | |||||||||||
Total liabilities | $ | $ | $ | $ | |||||||||||
Non-recurring fair value measurements: | |||||||||||||||
Collateral dependent impaired loans | $ | $ | $ | $ | |||||||||||
Loan servicing rights | |||||||||||||||
Foreclosed assets | |||||||||||||||
Total | $ | $ | $ | $ |
(1) | Includes equity securities measured at net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy totaling $ |
(2) | Represents residential mortgage loans originated for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $ |
(3) | Derivative financial instruments are included in this category. |
Fair Value Hierarchy | June 30, 2020 | December 31, 2019 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||
(in thousands) | |||||||||||||||||
Financial assets | |||||||||||||||||
Cash and due from banks | Level 1 | $ | $ | $ | $ | ||||||||||||
Interest bearing deposits with banks | Level 1 | ||||||||||||||||
Investment securities held to maturity: | |||||||||||||||||
U.S. Treasury securities | Level 1 | ||||||||||||||||
U.S. government agency securities | Level 2 | ||||||||||||||||
Obligations of states and political subdivisions | Level 2 | ||||||||||||||||
Residential mortgage-backed securities | Level 2 | ||||||||||||||||
Trust preferred securities | Level 2 | ||||||||||||||||
Corporate and other debt securities | Level 2 | ||||||||||||||||
Total investment securities held to maturity (1) | |||||||||||||||||
Net loans | Level 3 | ||||||||||||||||
Accrued interest receivable | Level 1 | ||||||||||||||||
Federal Reserve Bank and Federal Home Loan Bank stock (2) | Level 2 | ||||||||||||||||
Financial liabilities | |||||||||||||||||
Deposits without stated maturities | Level 1 | ||||||||||||||||
Deposits with stated maturities | Level 2 | ||||||||||||||||
Short-term borrowings | Level 2 | ||||||||||||||||
Long-term borrowings | Level 2 | ||||||||||||||||
Junior subordinated debentures issued to capital trusts | Level 2 | ||||||||||||||||
Accrued interest payable (3) | Level 1 |
(1) | The carrying amount is presented gross without the allowance for credit losses. |
(2) | Included in other assets. |
(3) | Included in accrued expenses and other liabilities. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
June 30, 2020 | |||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||
Obligations of states and state agencies | ( | ) | |||||||||||||
Municipal bonds | ( | ) | |||||||||||||
Total obligations of states and political subdivisions | ( | ) | |||||||||||||
Residential mortgage-backed securities | ( | ) | |||||||||||||
Corporate and other debt securities | ( | ) | |||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | ) | $ | |||||||||
December 31, 2019 | |||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | ) | $ | |||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||
Obligations of states and state agencies | ( | ) | |||||||||||||
Municipal bonds | ( | ) | |||||||||||||
Total obligations of states and political subdivisions | ( | ) | |||||||||||||
Residential mortgage-backed securities | ( | ) | |||||||||||||
Corporate and other debt securities | ( | ) | |||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | ) | $ |
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, 2020 | |||||||||||||||||||||||
U.S. government agency securities | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||||||
Obligations of states and state agencies | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Municipal bonds | ( | ) | ( | ) | |||||||||||||||||||
Total obligations of states and political subdivisions | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Residential mortgage-backed securities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Corporate and other debt securities | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
December 31, 2019 | |||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||
U.S. government agency securities | ( | ) | ( | ) | |||||||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||||||
Obligations of states and state agencies | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Municipal bonds | ( | ) | ( | ) | |||||||||||||||||||
Total obligations of states and political subdivisions | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Residential mortgage-backed securities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Corporate and other debt securities | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
June 30, 2020 | |||||||
Amortized Cost | Fair Value | ||||||
(in thousands) | |||||||
Due in one year | $ | $ | |||||
Due after one year through five years | |||||||
Due after five years through ten years | |||||||
Due after ten years | |||||||
Residential mortgage-backed securities | |||||||
Total investment securities available for sale | $ | $ |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
June 30, 2020 | |||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||
U.S. government agency securities | |||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||
Obligations of states and state agencies | ( | ) | |||||||||||||
Municipal bonds | |||||||||||||||
Total obligations of states and political subdivisions | ( | ) | |||||||||||||
Residential mortgage-backed securities | ( | ) | |||||||||||||
Trust preferred securities | ( | ) | |||||||||||||
Corporate and other debt securities | ( | ) | |||||||||||||
Total investment securities held to maturity | $ | $ | $ | ( | ) | $ | |||||||||
December 31, 2019 | |||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | |||||||||||
U.S. government agency securities | ( | ) | |||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||
Obligations of states and state agencies | ( | ) | |||||||||||||
Municipal bonds | ( | ) | |||||||||||||
Total obligations of states and political subdivisions | ( | ) | |||||||||||||
Residential mortgage-backed securities | ( | ) | |||||||||||||
Trust preferred securities | ( | ) | |||||||||||||
Corporate and other debt securities | ( | ) | |||||||||||||
Total investment securities held to maturity | $ | $ | $ | ( | ) | $ |
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, 2020 | |||||||||||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||||||
Obligations of states and state agencies | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
Total obligations of states and political subdivisions | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Residential mortgage-backed securities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Trust preferred securities | ( | ) | ( | ) | |||||||||||||||||||
Corporate and other debt securities | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||
December 31, 2019 | |||||||||||||||||||||||
U.S. government agency securities | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | |||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||||||
Obligations of states and state agencies | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Municipal bonds | ( | ) | ( | ) | |||||||||||||||||||
Total obligations of states and political subdivisions | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Residential mortgage-backed securities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Trust preferred securities | ( | ) | ( | ) | |||||||||||||||||||
Corporate and other debt securities | ( | ) | ( | ) | |||||||||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
June 30, 2020 | |||||||
Amortized Cost | Fair Value | ||||||
(in thousands) | |||||||
Due in one year | $ | $ | |||||
Due after one year through five years | |||||||
Due after five years through ten years | |||||||
Due after ten years | |||||||
Residential mortgage-backed securities | |||||||
Total investment securities held to maturity | $ | $ |
AAA/AA/A Rated | BBB rated | Non-investment grade rated | Non-rated | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
June 30, 2020 | |||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | ||||||||||||||
U.S. government agency securities | |||||||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||
Obligations of states and state agencies | |||||||||||||||||||
Municipal bonds | |||||||||||||||||||
Total obligations of states and political subdivisions | |||||||||||||||||||
Residential mortgage-backed securities | |||||||||||||||||||
Trust preferred securities | |||||||||||||||||||
Corporate and other debt securities | |||||||||||||||||||
Total investment securities held to maturity | $ | $ | $ | $ | $ | ||||||||||||||
December 31, 2019 | |||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | ||||||||||||||
U.S. government agency securities | |||||||||||||||||||
Obligations of states and political subdivisions: | |||||||||||||||||||
Obligations of states and state agencies | |||||||||||||||||||
Municipal bonds | |||||||||||||||||||
Total obligations of states and political subdivisions | |||||||||||||||||||
Residential mortgage-backed securities | |||||||||||||||||||
Trust preferred securities | |||||||||||||||||||
Corporate and other debt securities | |||||||||||||||||||
Total investment securities held to maturity | $ | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(in thousands) | |||||||
Loans: | |||||||
Commercial and industrial * | $ | $ | |||||
Commercial real estate: | |||||||
Commercial real estate | |||||||
Construction | |||||||
Total commercial real estate loans | |||||||
Residential mortgage | |||||||
Consumer: | |||||||
Home equity | |||||||
Automobile | |||||||
Other consumer | |||||||
Total consumer loans | |||||||
Total loans | $ | $ |
* | Includes $ |
Past Due and Non-Accrual Loans | |||||||||||||||||||||||||||||||
30-59 Days Past Due Loans | 60-89 Days 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) | |||||||||||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||||||
Total commercial real estate loans | |||||||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||||||
Consumer loans: | |||||||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||||||
Automobile | |||||||||||||||||||||||||||||||
Other consumer | |||||||||||||||||||||||||||||||
Total consumer loans | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
Past Due and Non-Accrual Loans | |||||||||||||||||||||||||||
30-59 Days Past Due Loans | 60-89 Days 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 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||
Construction | |||||||||||||||||||||||||||
Total commercial real estate loans | |||||||||||||||||||||||||||
Residential mortgage | |||||||||||||||||||||||||||
Consumer loans: | |||||||||||||||||||||||||||
Home equity | |||||||||||||||||||||||||||
Automobile | |||||||||||||||||||||||||||
Other consumer | |||||||||||||||||||||||||||
Total consumer loans | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
Term Loans | ||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||
June 30, 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 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||
Total commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||
Risk Rating: | ||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||
Total commercial real estate | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Construction | ||||||||||||||||||||||||||||||||||||
Risk Rating: | ||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Special Mention | ||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||
Total construction | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Term Loans | ||||||||||||||||||||||||||||||||||||
Amortized Cost Basis by Origination Year | ||||||||||||||||||||||||||||||||||||
June 30, 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 | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
90 days or more past due | ||||||||||||||||||||||||||||||||||||
Total residential mortgage | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Consumer loans | ||||||||||||||||||||||||||||||||||||
Home equity | ||||||||||||||||||||||||||||||||||||
Performing | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
90 days or more past due | ||||||||||||||||||||||||||||||||||||
Total home equity | ||||||||||||||||||||||||||||||||||||
Automobile | ||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||
90 days or more past due | ||||||||||||||||||||||||||||||||||||
Total automobile | ||||||||||||||||||||||||||||||||||||
Other Consumer | ||||||||||||||||||||||||||||||||||||
Performing | ||||||||||||||||||||||||||||||||||||
90 days or more past due | ||||||||||||||||||||||||||||||||||||
Total other consumer | ||||||||||||||||||||||||||||||||||||
Total Consumer | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Credit exposure— by internally assigned risk rating | Special | Total Non-PCI | ||||||||||||||||||
Pass | Mention | Substandard | Doubtful | Loans | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||
Commercial real estate | ||||||||||||||||||||
Construction | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Credit exposure— by payment activity | Performing Loans | Non-Performing Loans | Total Non-PCI Loans | |||||||||
(in thousands) | ||||||||||||
December 31, 2019 | ||||||||||||
Residential mortgage | $ | $ | $ | |||||||||
Home equity | ||||||||||||
Automobile | ||||||||||||
Other consumer | ||||||||||||
Total | $ | $ | $ |
Credit exposure— by payment activity | Performing Loans | Non-Performing Loans | Total Non-PCI Loans | |||||||||
(in thousands) | ||||||||||||
December 31, 2019 | ||||||||||||
Commercial and industrial | $ | $ | $ | |||||||||
Commercial real estate | ||||||||||||
Construction | ||||||||||||
Residential mortgage | ||||||||||||
Consumer | ||||||||||||
Total | $ | $ | $ |
Three Months Ended June 30, | ||||||||||||||||||||||
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 | $ | $ | $ | $ | ||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||
Construction | ||||||||||||||||||||||
Total commercial real estate | ||||||||||||||||||||||
Residential mortgage | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||||||||||
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 | $ | $ | $ | $ | ||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||
Construction | ||||||||||||||||||||||
Total commercial real estate | ||||||||||||||||||||||
Residential mortgage | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended June 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Troubled Debt Restructurings Subsequently Defaulted | Number of Contracts | Amortized Cost | Number of Contracts | Recorded Investment | ||||||||||
($ in thousands) | ||||||||||||||
Commercial and industrial | $ | $ | ||||||||||||
Commercial real estate | ||||||||||||||
Residential mortgage | ||||||||||||||
Consumer | ||||||||||||||
Total | $ | $ |
Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Troubled Debt Restructurings Subsequently Defaulted | Number of Contracts | Amortized Cost | Number of Contracts | Recorded Investment | ||||||||||
($ in thousands) | ||||||||||||||
Commercial and industrial | $ | $ | ||||||||||||
Commercial real estate | ||||||||||||||
Residential mortgage | ||||||||||||||
Consumer | ||||||||||||||
Total | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(in thousands) | |||||||
Components of allowance for credit losses for loans: | |||||||
Allowance for loan losses | $ | $ | |||||
Allowance for unfunded credit commitments | |||||||
Total allowance for credit losses for loans | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Components of provision for credit losses for loans: | |||||||||||||||
Provision for loan losses | $ | $ | $ | $ | |||||||||||
Provision for unfunded credit commitments | ( | ) | ( | ) | |||||||||||
Total provision for credit losses for loans | $ | $ | $ | $ |
June 30, 2020 | |||
(in thousands) | |||
Commercial and industrial | $ | ||
Commercial real estate: | |||
Commercial real estate | |||
Construction | |||
Total commercial real estate loans | |||
Residential mortgage | |||
Home equity | |||
Total | $ |
Commercial and Industrial | Commercial Real Estate | Residential Mortgage | Consumer | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Three Months Ended June 30, 2020 | |||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | ||||||||||||||
Loans charged-off | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Charged-off loans recovered | |||||||||||||||||||
Net (charge-offs) recoveries | ( | ) | ( | ) | ( | ) | |||||||||||||
Provision for loan losses | ( | ) | |||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | ||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||
Allowance for losses: | |||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | ||||||||||||||
Loans charged-off | ( | ) | ( | ) | ( | ) | |||||||||||||
Charged-off loans recovered | |||||||||||||||||||
Net (charge-offs) recoveries | ( | ) | ( | ) | ( | ) | |||||||||||||
Provision for loan losses | |||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ |
Commercial and Industrial | Commercial Real Estate | Residential Mortgage | Consumer | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Six Months Ended June 30, 2020 | |||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | ||||||||||||||
Impact of ASU 2016-13 adoption* | |||||||||||||||||||
Loans charged-off | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Charged-off loans recovered | |||||||||||||||||||
Net (charge-offs) recoveries | ( | ) | ( | ) | ( | ) | |||||||||||||
Provision for loan losses | |||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | ||||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||
Allowance for losses: | |||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | ||||||||||||||
Loans charged-off | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Charged-off loans recovered | |||||||||||||||||||
Net (charge-offs) recoveries | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Provision for loan losses | ( | ) | |||||||||||||||||
Ending balance | $ | $ | $ | $ | $ |
* | Includes a $ |
Commercial and Industrial | Commercial Real Estate | Residential Mortgage | Consumer | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
June 30, 2020 | |||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||
Individually evaluated for credit losses | $ | $ | $ | $ | $ | ||||||||||||||
Collectively evaluated for credit losses | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Loans: | |||||||||||||||||||
Individually evaluated for credit losses | $ | $ | $ | $ | $ | ||||||||||||||
Collectively evaluated for credit losses | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
December 31, 2019 | |||||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||
Individually evaluated for credit losses | $ | $ | $ | $ | $ | ||||||||||||||
Collectively evaluated for credit losses | |||||||||||||||||||
Total | $ | $ | $ | $ | $ | ||||||||||||||
Loans: | |||||||||||||||||||
Individually evaluated for credit losses | $ | $ | $ | $ | $ | ||||||||||||||
Collectively evaluated for credit losses | |||||||||||||||||||
Loans acquired with discounts related to credit quality | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
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 | $ | $ | $ | $ | $ | ||||||||||||||
Commercial real estate: | |||||||||||||||||||
Commercial real estate | |||||||||||||||||||
Construction | |||||||||||||||||||
Total commercial real estate loans | |||||||||||||||||||
Residential mortgage | |||||||||||||||||||
Consumer loans: | |||||||||||||||||||
Home equity | |||||||||||||||||||
Total consumer loans | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
(in thousands) | |||||||
Balance, beginning of period | $ | $ | |||||
Accretion | ( | ) | ( | ) | |||
Net increase in expected cash flows | |||||||
Balance, end of period | $ | $ |
Business Segment / Reporting Unit* | |||||||||||||||||||
Wealth Management | Consumer Lending | Commercial Lending | Investment Management | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||
Goodwill from business combinations | |||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ |
* | Valley’s Wealth Management Division is comprised of trust, asset management and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes. |
Gross Intangible Assets | Accumulated Amortization | Valuation Allowance | Net Intangible Assets | ||||||||||||
(in thousands) | |||||||||||||||
June 30, 2020 | |||||||||||||||
Loan servicing rights | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
Core deposits | ( | ) | |||||||||||||
Other | ( | ) | |||||||||||||
Total other intangible assets | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
December 31, 2019 | |||||||||||||||
Loan servicing rights | $ | $ | ( | ) | $ | ( | ) | $ | |||||||
Core deposits | ( | ) | |||||||||||||
Other | ( | ) | |||||||||||||
Total other intangible assets | $ | $ | ( | ) | $ | ( | ) | $ |
Loan Servicing Rights | Core Deposits | Other | |||||||||
(in thousands) | |||||||||||
2020 | $ | $ | $ | ||||||||
2021 | |||||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 |
June 30, 2020 | December 31, 2019 | ||||||
(in thousands) | |||||||
FHLB advances | $ | $ | |||||
Federal funds purchased | |||||||
Securities sold under agreements to repurchase | |||||||
Total short-term borrowings | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
(in thousands) | |||||||
FHLB advances, net (1) | $ | $ | |||||
Subordinated debt, net (2) | |||||||
Securities sold under agreements to repurchase | |||||||
Other | |||||||
Total long-term borrowings | $ | $ |
(1) | FHLB advances are presented net of unamortized prepayment penalties and other purchase accounting adjustments totaling $1.2 million and $2.8 million at June 30, 2020 and December 31, 2019, respectively. |
(2) | Subordinated debt is presented net of unamortized debt issuance costs totaling $2.9 million and $1.2 million at June 30, 2020 and December 31, 2019, respectively. |
Year | Amount | |||
(in thousands) | ||||
2020 | $ | |||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
Total long-term FHLB advances | $ |
Year | Amount | |||
(in thousands) | ||||
2021 | $ | |||
2022 | ||||
Total long-term securities sold under agreements to repurchase | $ |
• | $ |
• | $ |
• | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
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 swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Fair value hedge interest rate swaps | |||||||||||||||||||||||
Total derivatives designated as hedging instruments | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Interest rate swaps and embedded derivatives | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Mortgage banking derivatives | |||||||||||||||||||||||
Total derivatives not designated as hedging instruments | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive loss to interest expense | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Amount of loss recognized in other comprehensive income | ( | ) | ( | ) | ( | ) | ( | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Derivative - interest rate swaps: | |||||||||||||||
Interest income | $ | $ | $ | $ | |||||||||||
Hedged item - loans: | |||||||||||||||
Interest income | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Line Item in the Statement of Financial Condition in Which the Hedged Item is Included | Carrying Amount of the Hedged Asset | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset | ||||||||||||||
June 30, 2020 | December 31, 2019 | June 30, 2020 | December 31, 2019 | |||||||||||||
(in thousands) | ||||||||||||||||
Loans | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Non-designated hedge interest rate swaps and credit derivatives | |||||||||||||||
Other non-interest expense | $ | $ | ( | ) | $ | $ | ( | ) |
Gross Amounts Not Offset | |||||||||||||||||||||||
Gross Amounts Recognized | Gross Amounts Offset | Net Amounts Presented | Financial Instruments | Cash Collateral | Net Amount | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
June 30, 2020 | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
Repurchase agreements | ( | ) | * | ||||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
Repurchase agreements | ( | ) | * | — | * | ||||||||||||||||||
Total | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
* | Represents the fair value of non-cash pledged investment securities. |
June 30, 2020 | December 31, 2019 | ||||||
(in thousands) | |||||||
Other Assets: | |||||||
Affordable housing tax credit investments, net | $ | $ | |||||
Other tax credit investments, net | |||||||
Total tax credit investments, net | $ | $ | |||||
Other Liabilities: | |||||||
Unfunded affordable housing tax credit commitments | $ | $ | |||||
Unfunded other tax credit commitments | |||||||
Total unfunded tax credit commitments | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Components of Income Tax Expense: | |||||||||||||||
Affordable housing tax credits and other tax benefits | $ | $ | $ | $ | |||||||||||
Other tax credit investment credits and tax benefits | |||||||||||||||
Total reduction in income tax expense | $ | $ | $ | $ | |||||||||||
Amortization of Tax Credit Investments: | |||||||||||||||
Affordable housing tax credit investment losses | $ | $ | $ | $ | |||||||||||
Affordable housing tax credit investment impairment losses | |||||||||||||||
Other tax credit investment losses | |||||||||||||||
Other tax credit investment impairment losses | |||||||||||||||
Total amortization of tax credit investments recorded in non-interest expense | $ | $ | $ | $ |
Three Months Ended June 30, 2020 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | $ | $ | $ | $ | ||||||||||||||
Interest income | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Interest expense | |||||||||||||||||||
Net interest income (loss) | ( | ) | |||||||||||||||||
Provision for credit losses | |||||||||||||||||||
Net interest income (loss) after provision for credit losses | ( | ) | |||||||||||||||||
Non-interest income | |||||||||||||||||||
Non-interest expense | |||||||||||||||||||
Internal expense transfer | ( | ) | |||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Return on average interest earning assets (pre-tax) | % | % | % | N/A | % |
Three Months Ended June 30, 2019 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | $ | $ | $ | $ | ||||||||||||||
Interest income | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Interest expense | |||||||||||||||||||
Net interest income (loss) | ( | ) | |||||||||||||||||
Provision for credit losses | |||||||||||||||||||
Net interest income (loss) after provision for credit losses | ( | ) | |||||||||||||||||
Non-interest income | |||||||||||||||||||
Non-interest expense | |||||||||||||||||||
Internal expense transfer | ( | ) | |||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Return on average interest earning assets (pre-tax) | % | % | % | N/A | % |
Six Months Ended June 30, 2020 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | $ | $ | $ | $ | ||||||||||||||
Interest income | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Interest expense | |||||||||||||||||||
Net interest income (loss) | ( | ) | |||||||||||||||||
Provision for credit losses | |||||||||||||||||||
Net interest income (loss) after provision for credit losses | ( | ) | |||||||||||||||||
Non-interest income | |||||||||||||||||||
Non-interest expense | |||||||||||||||||||
Internal expense transfer | ( | ) | |||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Return on average interest earning assets (pre-tax) | % | % | % | N/A | % |
Six Months Ended June 30, 2019 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | $ | $ | $ | $ | ||||||||||||||
Interest income | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Interest expense | |||||||||||||||||||
Net interest income (loss) | ( | ) | |||||||||||||||||
Provision for credit losses | |||||||||||||||||||
Net interest income (loss) after provision for credit losses | ( | ) | |||||||||||||||||
Non-interest income | |||||||||||||||||||
Non-interest expense | |||||||||||||||||||
Internal expense transfer | ( | ) | |||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | $ | ||||||||||||||
Return on average interest earning assets (pre-tax) | % | % | % | N/A | % |
• | the impact of COVID-19 on the U.S. and the global economies, including business disruptions, reductions in employment and an increase in business failures, specifically among our clients; |
• | the impact of COVID-19 on our employees and our ability to provide services to our customers and respond to their needs as more cases of COVID-19 arise in various locations, including Florida and Alabama; |
• | potential judgments, claims, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory and government actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic or as a result of our action in response to, or failure to implement or effectively implement, federal, state and local laws, rules or executive orders requiring that we grant forbearances or not act to collect our loans; |
• | the impact of forbearances or deferrals we are required or agree to as a result of customer requests and/or government actions, including, but not limited to our potential inability to recover fully deferred payments from the borrower or the collateral; |
• | damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent or trademark infringement, employment related claims, and other matters; |
• | a prolonged downturn 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; |
• | higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law; |
• | the inability to grow customer deposits to keep pace with loan growth; |
• | a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios; |
• | the need to supplement debt or equity capital to maintain or exceed internal capital thresholds; |
• | greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations; |
• | the loss of or decrease in lower-cost funding sources within our deposit base, including our inability to achieve deposit retention targets under Valley's branch transformation strategy; |
• | 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 Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities; |
• | our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings; |
• | unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather, the COVID-19 pandemic 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. |
• | Changes in the provision for credit losses can materially affect our financial results; |
• | Estimates relating to the allowance for credit losses require us to project future borrower performance, delinquencies and charge-offs, along with, when applicable, collateral values, based on a reasonable and supportable forecast period utilizing forward-looking economic scenarios in order to estimate probability of default and loss given default; |
• | The allowance for credit losses is influenced by factors outside of our control such as industry and business trends, geopolitical events and the effects of laws and regulations as well as economic conditions such as trends in housing prices, interest rates, gross domestic product (GDP), inflation, energy prices and unemployment; and |
• | Judgment is required to determine whether the models used to generate the allowance for credit losses produce an estimate that is sufficient to encompass the current view of lifetime expected credit losses. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Return on average assets | 0.92 | % | 0.94 | % | 0.92 | % | 1.17 | % | |||
Return on average assets, as adjusted | 0.92 | 0.96 | 0.93 | 0.95 | |||||||
Return on average shareholders’ equity | 8.54 | 8.79 | 8.23 | 11.04 | |||||||
Return on average shareholders’ equity, as adjusted | 8.57 | 9.05 | 8.29 | 8.94 | |||||||
Return on average tangible shareholders’ equity (ROATE) | 12.66 | 13.16 | 12.26 | 16.65 | |||||||
ROATE, as adjusted | 12.70 | 13.56 | 12.34 | 13.49 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Net income, as reported | $ | 95,601 | $ | 76,468 | $ | 182,869 | $ | 189,798 | |||||||
Add: Net impairment losses on securities (net of tax) | — | 2,078 | — | 2,078 | |||||||||||
Add: Losses (gains) on securities transactions (net of tax) | 29 | (8 | ) | 58 | 15 | ||||||||||
Add: Severance expense (net of tax) (1) | — | — | — | 3,433 | |||||||||||
Add: Tax credit investment impairment (net of tax) (2) | — | — | — | 1,757 | |||||||||||
Add: Merger related expenses (net of tax) (3) | 263 | 25 | 1,199 | 25 | |||||||||||
Add: Income tax expense (4) | — | 223 | — | 12,323 | |||||||||||
Less: Gain on sale-leaseback transaction (net of tax) (5) | — | — | — | (55,707 | ) | ||||||||||
Net income, as adjusted | $ | 95,893 | $ | 78,786 | $ | 184,126 | $ | 153,722 |
(3) | Merger related expenses are primarily within salary and employee benefits expense, professional and legal fees, and other non-interest expenses. |
(4) | Income tax expense related to reserves for uncertain tax positions. |
(5) | The gain on sale leaseback transactions is included in net gains on the sales of assets within other non-interest income. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
($ in thousands) | |||||||||||||||
Net income, as adjusted | $ | 95,893 | $ | 78,786 | $ | 184,126 | $ | 153,722 | |||||||
Average assets | $ | 41,503,514 | $ | 32,707,144 | $ | 39,800,441 | $ | 32,502,744 | |||||||
Annualized return on average assets, as adjusted | 0.92 | % | 0.96 | % | 0.93 | % | 0.95 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
($ in thousands) | |||||||||||||||
Net income, as adjusted | $ | 95,893 | $ | 78,786 | $ | 184,126 | $ | 153,722 | |||||||
Average shareholders' equity | $ | 4,477,446 | $ | 3,481,519 | $ | 4,443,016 | $ | 3,438,344 | |||||||
Annualized return on average shareholders' equity, as adjusted | 8.57 | % | 9.05 | % | 8.29 | % | 8.94 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
($ in thousands) | |||||||||||||||
Net income | $ | 95,601 | $ | 76,468 | $ | 182,869 | $ | 189,798 | |||||||
Net income, as adjusted | $ | 95,893 | $ | 78,786 | $ | 184,126 | $ | 153,722 | |||||||
Average shareholders’ equity | $ | 4,477,446 | $ | 3,481,519 | $ | 4,443,016 | $ | 3,438,344 | |||||||
Less: Average goodwill and other intangible assets | 1,456,781 | 1,156,703 | 1,458,885 | 1,158,596 | |||||||||||
Average tangible shareholders’ equity | $ | 3,020,665 | $ | 2,324,816 | $ | 2,984,131 | $ | 2,279,748 | |||||||
Annualized ROATE | 12.66 | % | 13.16 | % | 12.26 | % | 16.65 | % | |||||||
Annualized ROATE, as adjusted | 12.70 | % | 13.56 | % | 12.34 | % | 13.49 | % |
Three Months Ended | ||||||||||||||||||||||||||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | ||||||||||||||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||||||||||
Loans (1)(2) | $ | 32,041,200 | $ | 321,883 | 4.02 | % | $ | 29,999,428 | $ | 333,068 | 4.44 | % | $ | 25,552,415 | $ | 296,934 | 4.65 | % | ||||||||||||||
Taxable investments (3) | 3,673,090 | 22,539 | 2.45 | 3,557,913 | 25,334 | 2.85 | 3,453,676 | 25,284 | 2.93 | |||||||||||||||||||||||
Tax-exempt investments (1)(3) | 562,172 | 4,673 | 3.32 | 585,987 | 4,970 | 3.39 | 658,727 | 5,514 | 3.35 | |||||||||||||||||||||||
Interest bearing deposits with banks | 1,501,925 | 411 | 0.11 | 530,747 | 1,465 | 1.10 | 212,566 | 1,168 | 2.20 | |||||||||||||||||||||||
Total interest earning assets | 37,778,387 | 349,506 | 3.70 | 34,674,075 | 364,837 | 4.21 | 29,877,384 | 328,900 | 4.40 | |||||||||||||||||||||||
Allowance for loan losses | (284,184 | ) | (256,675 | ) | (156,747 | ) | ||||||||||||||||||||||||||
Cash and due from banks | 424,625 | 293,276 | 265,015 | |||||||||||||||||||||||||||||
Other assets | 3,540,513 | 3,378,372 | 2,744,661 | |||||||||||||||||||||||||||||
Unrealized gains (losses) on securities available for sale, net | 44,173 | 8,316 | (23,169 | ) | ||||||||||||||||||||||||||||
Total assets | $ | 41,503,514 | $ | 38,097,364 | $ | 32,707,144 | ||||||||||||||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||||||||
Savings, NOW and money market deposits | $ | 13,788,951 | $ | 16,627 | 0.48 | % | $ | 13,219,896 | $ | 34,513 | 1.04 | % | $ | 11,293,885 | $ | 38,020 | 1.35 | % | ||||||||||||||
Time deposits | 8,585,782 | 29,857 | 1.39 | 8,897,934 | 42,814 | 1.92 | 7,047,319 | 40,331 | 2.29 | |||||||||||||||||||||||
Total interest bearing deposits | 22,374,733 | 46,484 | 0.83 | 22,117,830 | 77,327 | 1.40 | 18,341,204 | 78,351 | 1.71 | |||||||||||||||||||||||
Short-term borrowings | 2,317,992 | 1,980 | 0.34 | 1,322,699 | 4,707 | 1.42 | 2,380,294 | 14,860 | 2.50 | |||||||||||||||||||||||
Long-term borrowings (4) | 2,886,016 | 17,502 | 2.43 | 2,775,049 | 16,420 | 2.37 | 1,607,046 | 14,297 | 3.56 | |||||||||||||||||||||||
Total interest bearing liabilities | 27,578,741 | 65,966 | 0.96 | 26,215,578 | 98,454 | 1.50 | 22,328,544 | 107,508 | 1.93 | |||||||||||||||||||||||
Non-interest bearing deposits | 8,463,230 | 6,694,102 | 6,358,034 | |||||||||||||||||||||||||||||
Other liabilities | 984,097 | 779,099 | 539,047 | |||||||||||||||||||||||||||||
Shareholders’ equity | 4,477,446 | 4,408,585 | 3,481,519 | |||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 41,503,514 | $ | 38,097,364 | $ | 32,707,144 | ||||||||||||||||||||||||||
Net interest income/interest rate spread (5) | $ | 283,540 | 2.74 | % | $ | 266,383 | 2.71 | % | $ | 221,392 | 2.47 | % | ||||||||||||||||||||
Tax equivalent adjustment | (981 | ) | (1,044 | ) | (1,158 | ) | ||||||||||||||||||||||||||
Net interest income, as reported | $ | 282,559 | $ | 265,339 | $ | 220,234 | ||||||||||||||||||||||||||
Net interest margin (6) | 2.99 | % | 3.06 | % | 2.95 | % | ||||||||||||||||||||||||||
Tax equivalent effect | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||||||||||||||||||||
Net interest margin on a fully tax equivalent basis (6) | 3.00 | % | 3.07 | % | 2.96 | % |
Six Months Ended | |||||||||||||||||||||
June 30, 2020 | June 30, 2019 | ||||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||||
($ in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Loans (1)(2) | $ | 31,020,314 | $ | 654,951 | 4.22 | % | $ | 25,404,396 | $ | 585,211 | 4.61 | % | |||||||||
Taxable investments (3) | 3,615,502 | 47,873 | 2.65 | 3,422,317 | 51,334 | 3.00 | |||||||||||||||
Tax-exempt investments (1)(3) | 574,080 | 9,643 | 3.36 | 674,116 | 11,595 | 3.44 | |||||||||||||||
Interest bearing deposits with banks | 1,016,336 | 1,876 | 0.37 | 220,186 | 2,261 | 2.05 | |||||||||||||||
Total interest earning assets | 36,226,232 | 714,343 | 3.94 | 29,721,015 | 650,401 | 4.38 | |||||||||||||||
Allowance for loan losses | (270,430 | ) | (154,864 | ) | |||||||||||||||||
Cash and due from banks | 358,951 | 276,170 | |||||||||||||||||||
Other assets | 3,459,443 | 2,694,473 | |||||||||||||||||||
Unrealized gains (losses) on securities available for sale, net | 26,245 | (34,050 | ) | ||||||||||||||||||
Total assets | $ | 39,800,441 | $ | 32,502,744 | |||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Savings, NOW and money market deposits | $ | 13,504,424 | $ | 51,140 | 0.76 | % | $ | 11,371,980 | $ | 74,303 | 1.31 | % | |||||||||
Time deposits | 8,741,858 | 72,671 | 1.66 | 7,130,628 | 78,502 | 2.20 | |||||||||||||||
Total interest bearing deposits | 22,246,282 | 123,811 | 1.11 | 18,502,608 | 152,805 | 1.65 | |||||||||||||||
Short-term borrowings | 1,820,346 | 6,687 | 0.73 | 2,196,880 | 27,409 | 2.50 | |||||||||||||||
Long-term borrowings (4) | 2,830,533 | 33,922 | 2.40 | 1,636,755 | 28,870 | 3.53 | |||||||||||||||
Total interest bearing liabilities | 26,897,161 | 164,420 | 1.22 | 22,336,243 | 209,084 | 1.87 | |||||||||||||||
Non-interest bearing deposits | 7,578,666 | 6,238,159 | |||||||||||||||||||
Other liabilities | 881,598 | 489,998 | |||||||||||||||||||
Shareholders’ equity | 4,443,016 | 3,438,344 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 39,800,441 | $ | 32,502,744 | |||||||||||||||||
Net interest income/interest rate spread (5) | $ | 549,923 | 2.72 | % | $ | 441,317 | 2.51 | % | |||||||||||||
Tax equivalent adjustment | (2,025 | ) | (2,435 | ) | |||||||||||||||||
Net interest income, as reported | $ | 547,898 | $ | 438,882 | |||||||||||||||||
Net interest margin (6) | 3.02 | % | 2.95 | % | |||||||||||||||||
Tax equivalent effect | 0.02 | % | 0.02 | % | |||||||||||||||||
Net interest margin on a fully tax equivalent basis (6) | 3.04 | % | 2.97 | % |
(1) | Interest income is presented on a tax equivalent basis using a 21 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 |
(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. |
Three Months Ended June 30, 2020 Compared to June 30, 2019 | Six Months Ended June 30, 2020 Compared to June 30, 2019 | ||||||||||||||||||||||
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* | $ | 68,741 | $ | (43,792 | ) | $ | 24,949 | $ | 121,530 | $ | (51,790 | ) | $ | 69,740 | |||||||||
Taxable investments | 1,533 | (4,278 | ) | (2,745 | ) | 2,787 | (6,248 | ) | (3,461 | ) | |||||||||||||
Tax-exempt investments* | (803 | ) | (38 | ) | (841 | ) | (1,686 | ) | (266 | ) | (1,952 | ) | |||||||||||
Interest bearing deposits with banks | 1,265 | (2,022 | ) | (757 | ) | 2,709 | (3,094 | ) | (385 | ) | |||||||||||||
Total increase (decrease) in interest income | 70,736 | (50,130 | ) | 20,606 | 125,340 | (61,398 | ) | 63,942 | |||||||||||||||
Interest Expense: | |||||||||||||||||||||||
Savings, NOW and money market deposits | 7,019 | (28,412 | ) | (21,393 | ) | 12,126 | (35,289 | ) | (23,163 | ) | |||||||||||||
Time deposits | 7,570 | (18,044 | ) | (10,474 | ) | 15,654 | (21,485 | ) | (5,831 | ) | |||||||||||||
Short-term borrowings | (379 | ) | (12,501 | ) | (12,880 | ) | (4,050 | ) | (16,672 | ) | (20,722 | ) | |||||||||||
Long-term borrowings and junior subordinated debentures | 8,791 | (5,586 | ) | 3,205 | 16,367 | (11,315 | ) | 5,052 | |||||||||||||||
Total increase (decrease) in interest expense | 23,001 | (64,543 | ) | (41,542 | ) | 40,097 | (84,761 | ) | (44,664 | ) | |||||||||||||
Total increase in net interest income | $ | 47,735 | $ | 14,413 | $ | 62,148 | $ | 85,243 | $ | 23,363 | $ | 108,606 |
* | Interest income is presented on a tax equivalent basis using 21 percent as the federal tax rate. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Trust and investment services | $ | 2,826 | $ | 3,096 | $ | 6,239 | $ | 6,000 | |||||||
Insurance commissions | 1,659 | 2,649 | 3,610 | 5,174 | |||||||||||
Service charges on deposit accounts | 3,557 | 5,827 | 9,237 | 11,730 | |||||||||||
(Losses) gains on securities transactions, net | (41 | ) | 11 | (81 | ) | (21 | ) | ||||||||
Net impairment losses on securities recognized in earnings | — | (2,928 | ) | — | (2,928 | ) | |||||||||
Fees from loan servicing | 2,227 | 2,367 | 4,975 | 4,797 | |||||||||||
Gains on sales of loans, net | 8,337 | 3,930 | 12,887 | 8,506 | |||||||||||
(Losses) gains on sales of assets, net | (299 | ) | (564 | ) | (178 | ) | 77,156 | ||||||||
Bank owned life insurance | 5,823 | 2,205 | 8,965 | 4,092 | |||||||||||
Other | 20,741 | 11,010 | 40,573 | 20,770 | |||||||||||
Total non-interest income | $ | 44,830 | $ | 27,603 | $ | 86,227 | $ | 135,276 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(in thousands) | |||||||||||||||
Salary and employee benefits expense | $ | 78,532 | $ | 76,183 | $ | 164,260 | $ | 159,288 | |||||||
Net occupancy and equipment expense | 33,217 | 29,700 | 65,658 | 57,586 | |||||||||||
FDIC insurance assessment | 6,135 | 4,931 | 10,011 | 11,052 | |||||||||||
Amortization of other intangible assets | 6,681 | 4,170 | 12,151 | 8,481 | |||||||||||
Professional and legal fees | 7,797 | 4,145 | 13,884 | 9,416 | |||||||||||
Amortization of tax credit investments | 3,416 | 4,863 | 6,644 | 12,036 | |||||||||||
Telecommunications expense | 2,866 | 2,351 | 5,153 | 4,619 | |||||||||||
Other | 18,522 | 15,394 | 35,061 | 27,054 | |||||||||||
Total non-interest expense | $ | 157,166 | $ | 141,737 | $ | 312,822 | $ | 289,532 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
($ in thousands) | |||||||||||||||
Total non-interest expense | $ | 157,166 | $ | 141,737 | $ | 312,822 | $ | 289,532 | |||||||
Less: Severance expense (pre-tax) | — | — | — | 4,838 | |||||||||||
Less: Amortization of tax credit investments (pre-tax) | 3,416 | 4,863 | 6,644 | 12,036 | |||||||||||
Less: Merger related expenses (pre-tax) | 366 | 35 | 1,668 | 35 | |||||||||||
Total non-interest expense, adjusted | $ | 153,384 | $ | 136,839 | $ | 304,510 | $ | 272,623 | |||||||
Net interest income | $ | 282,559 | $ | 220,234 | $ | 547,898 | $ | 438,882 | |||||||
Total non-interest income | 44,830 | 27,603 | 86,227 | 135,276 | |||||||||||
Less: Gain on sale-leaseback transaction (pre-tax) | — | — | — | 78,505 | |||||||||||
Add: Losses (gains) on securities transactions, net (pre-tax) | 41 | (11 | ) | 81 | 21 | ||||||||||
Add: Net impairment losses on securities (pre-tax) | — | 2,928 | — | 2,928 | |||||||||||
Total net interest income and non-interest income | $ | 327,430 | $ | 250,754 | $ | 634,206 | $ | 498,602 | |||||||
Efficiency ratio | 48.01 | % | 57.19 | % | 49.33 | % | 50.43 | % | |||||||
Efficiency ratio, adjusted | 46.84 | % | 54.57 | % | 48.01 | % | 54.68 | % |
Three Months Ended June 30, 2020 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | 7,214,368 | $ | 24,826,832 | $ | 5,737,187 | $ | — | $ | 37,778,387 | |||||||||
Income (loss) before income taxes | 29,561 | 102,567 | 7,530 | (10,591 | ) | 129,067 | |||||||||||||
Annualized return on average interest earning assets (before tax) | 1.64 | % | 1.65 | % | 0.52 | % | N/A | 1.37 | % |
Three Months Ended June 30, 2019 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | 6,756,322 | $ | 18,796,093 | $ | 4,324,969 | $ | — | $ | 29,877,384 | |||||||||
Income (loss) before income taxes | 18,658 | 90,652 | 6,917 | (12,227 | ) | 104,000 | |||||||||||||
Annualized return on average interest earning assets (before tax) | 1.10 | % | 1.93 | % | 0.64 | % | N/A | 1.39 | % |
Six Months Ended June 30, 2020 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | 7,215,756 | $ | 23,804,558 | $ | 5,205,918 | $ | — | $ | 36,226,232 | |||||||||
Income (loss) before income taxes | 45,802 | 205,362 | 15,360 | (21,060 | ) | 245,464 | |||||||||||||
Annualized return on average interest earning assets (before tax) | 1.27 | % | 1.73 | % | 0.59 | % | N/A | 1.36 | % |
Six Months Ended June 30, 2019 | |||||||||||||||||||
Consumer Lending | Commercial Lending | Investment Management | Corporate and Other Adjustments | Total | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average interest earning assets | $ | 6,788,511 | $ | 18,615,885 | $ | 4,316,619 | $ | — | $ | 29,721,015 | |||||||||
Income before income taxes | 37,713 | 173,164 | 15,659 | 47,990 | 274,526 | ||||||||||||||
Annualized return on average interest earning assets (before tax) | 1.11 | % | 1.86 | % | 0.73 | % | N/A | 1.85 | % |
Estimated Change in Future Net Interest Income | ||||||
Changes in Interest Rates | Dollar Change | Percentage Change | ||||
(in basis points) | ($ in thousands) | |||||
+200 | $ | 63,164 | 5.55 | % | ||
+100 | 35,521 | 3.12 | ||||
–100 | (21,298 | ) | (1.87 | ) |
June 30, 2020 | December 31, 2019 | ||||||
($ in thousands) | |||||||
FHLB advances: | |||||||
Average balance outstanding | $ | 1,383,104 | $ | 1,681,844 | |||
Maximum outstanding at any month-end during the period | 1,930,000 | 2,510,000 | |||||
Balance outstanding at end of period | 1,235,000 | 940,000 | |||||
Weighted average interest rate during the period | 0.28 | % | 1.88 | % | |||
Weighted average interest rate at the end of the period | 0.55 | 1.85 |
June 30, 2020 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(in thousands) | |||||||||||||||
Held to maturity investment grades: * | |||||||||||||||
AAA Rated | $ | 1,802,760 | $ | 61,704 | $ | (309 | ) | $ | 1,864,155 | ||||||
AA Rated | 199,665 | 6,870 | — | 206,535 | |||||||||||
A Rated | 16,032 | 462 | — | 16,494 | |||||||||||
BBB Rated | 5,000 | 348 | — | 5,348 | |||||||||||
Non-investment grade | 5,686 | — | (232 | ) | 5,454 | ||||||||||
Not rated | 104,284 | 403 | (7,797 | ) | 96,890 | ||||||||||
Total investment securities held to maturity | $ | 2,133,427 | $ | 69,787 | $ | (8,338 | ) | $ | 2,194,876 | ||||||
Available for sale investment grades: * | |||||||||||||||
AAA Rated | $ | 1,471,623 | $ | 46,898 | $ | (955 | ) | $ | 1,517,566 | ||||||
AA Rated | 53,538 | 864 | (28 | ) | 54,374 | ||||||||||
A Rated | 17,777 | 416 | — | 18,193 | |||||||||||
BBB Rated | 24,389 | 588 | (21 | ) | 24,956 | ||||||||||
Non-investment grade | 11,828 | 51 | (475 | ) | 11,404 | ||||||||||
Not rated | 62,122 | 1,168 | (395 | ) | 62,895 | ||||||||||
Total investment securities available for sale | $ | 1,641,277 | $ | 49,985 | $ | (1,874 | ) | $ | 1,689,388 |
* | Rated using external rating agencies. 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. |
June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Loans | |||||||||||||||||||
Commercial and industrial | $ | 6,884,689 | $ | 4,998,731 | $ | 4,825,997 | $ | 4,695,608 | $ | 4,615,765 | |||||||||
Commercial real estate: | |||||||||||||||||||
Commercial real estate | 16,571,877 | 16,390,236 | 15,996,741 | 13,365,454 | 12,798,017 | ||||||||||||||
Construction | 1,721,352 | 1,727,046 | 1,647,018 | 1,537,590 | 1,528,968 | ||||||||||||||
Total commercial real estate | 18,293,229 | 18,117,282 | 17,643,759 | 14,903,044 | 14,326,985 | ||||||||||||||
Residential mortgage | 4,405,147 | 4,478,982 | 4,377,111 | 4,133,331 | 4,072,450 | ||||||||||||||
Consumer: | |||||||||||||||||||
Home equity | 471,115 | 481,751 | 487,272 | 489,808 | 501,646 | ||||||||||||||
Automobile | 1,369,489 | 1,436,734 | 1,451,623 | 1,436,608 | 1,362,466 | ||||||||||||||
Other consumer | 890,942 | 914,587 | 913,446 | 908,760 | 922,850 | ||||||||||||||
Total consumer loans | 2,731,546 | 2,833,072 | 2,852,341 | 2,835,176 | 2,786,962 | ||||||||||||||
Total loans* | $ | 32,314,611 | $ | 30,428,067 | $ | 29,699,208 | $ | 26,567,159 | $ | 25,802,162 | |||||||||
As a percent of total loans: | |||||||||||||||||||
Commercial and industrial | 21.3 | % | 16.5 | % | 16.2 | % | 17.7 | % | 17.9 | % | |||||||||
Commercial real estate | 56.6 | 59.5 | 59.5 | 56.1 | 55.5 | ||||||||||||||
Residential mortgage | 13.6 | 14.6 | 14.7 | 15.5 | 15.8 | ||||||||||||||
Consumer loans | 8.5 | 9.4 | 9.6 | 10.7 | 10.8 | ||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
* | Includes net unearned discount and deferred loan fees of $131.3 million and $76.4 million at June 30, 2020 and March 31, 2020, respectively, and net unearned premiums and deferred loan fees of $12.6 million, $18.3 million and $19.6 million at December 31, 2019, September 30, 2019 and June 30, 2019, respectively. Net unearned discounts and deferred loan fees at June 30, 2020 and March 31, 2020 include the non-credit discount on PCD loans as well as $62.1 million of net unearned fees related to SBA PPP loans at June 30, 2020. |
June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Accruing past due loans: * | |||||||||||||||||||
30 to 59 days past due: | |||||||||||||||||||
Commercial and industrial | $ | 6,206 | $ | 9,780 | $ | 11,700 | $ | 5,702 | $ | 14,119 | |||||||||
Commercial real estate | 13,912 | 41,664 | 2,560 | 20,851 | 6,202 | ||||||||||||||
Construction | — | 7,119 | 1,486 | 11,523 | — | ||||||||||||||
Residential mortgage | 35,263 | 38,965 | 17,143 | 12,945 | 19,131 | ||||||||||||||
Total Consumer | 12,962 | 19,508 | 13,704 | 13,079 | 11,932 | ||||||||||||||
Total 30 to 59 days past due | 68,343 | 117,036 | 46,593 | 64,100 | 51,384 | ||||||||||||||
60 to 89 days past due: | |||||||||||||||||||
Commercial and industrial | 4,178 | 7,624 | 2,227 | 3,158 | 4,135 | ||||||||||||||
Commercial real estate | 1,543 | 15,963 | 4,026 | 735 | 354 | ||||||||||||||
Construction | — | 49 | 1,343 | 7,129 | 1,342 | ||||||||||||||
Residential mortgage | 4,169 | 9,307 | 4,192 | 4,417 | 3,635 | ||||||||||||||
Total Consumer | 3,786 | 2,309 | 2,527 | 1,577 | 1,484 | ||||||||||||||
Total 60 to 89 days past due | 13,676 | 35,252 | 14,315 | 17,016 | 10,950 | ||||||||||||||
90 or more days past due: | |||||||||||||||||||
Commercial and industrial | 5,220 | 4,049 | 3,986 | 4,133 | 3,298 | ||||||||||||||
Commercial real estate | — | 161 | 579 | 1,125 | — | ||||||||||||||
Residential mortgage | 3,812 | 1,798 | 2,042 | 1,347 | 1,054 | ||||||||||||||
Total Consumer | 2,082 | 1,092 | 711 | 756 | 359 | ||||||||||||||
Total 90 or more days past due | 11,114 | 7,100 | 7,318 | 7,361 | 4,711 | ||||||||||||||
Total accruing past due loans | $ | 93,133 | $ | 159,388 | $ | 68,226 | $ | 88,477 | $ | 67,045 | |||||||||
Non-accrual loans: * | |||||||||||||||||||
Commercial and industrial | $ | 130,876 | $ | 132,622 | $ | 68,636 | $ | 75,311 | $ | 76,216 | |||||||||
Commercial real estate | 43,678 | 41,616 | 9,004 | 9,560 | 6,231 | ||||||||||||||
Construction | 3,308 | 2,972 | 356 | 356 | — | ||||||||||||||
Residential mortgage | 25,776 | 24,625 | 12,858 | 13,772 | 12,069 | ||||||||||||||
Total Consumer | 6,947 | 4,095 | 2,204 | 2,050 | 1,999 | ||||||||||||||
Total non-accrual loans | 210,585 | 205,930 | 93,058 | 101,049 | 96,515 | ||||||||||||||
Other real estate owned (OREO) | 8,283 | 10,198 | 9,414 | 6,415 | 7,161 | ||||||||||||||
Other repossessed assets | 3,920 | 3,842 | 1,276 | 2,568 | 2,358 | ||||||||||||||
Non-accrual debt securities | 1,365 | 531 | 680 | 680 | 680 | ||||||||||||||
Total non-performing assets (NPAs) | $ | 224,153 | $ | 220,501 | $ | 104,428 | $ | 110,712 | $ | 106,714 | |||||||||
Performing troubled debt restructured loans | $ | 53,936 | $ | 48,024 | $ | 73,012 | $ | 79,364 | $ | 74,385 | |||||||||
Total non-accrual loans as a % of loans | 0.65 | % | 0.68 | % | 0.31 | % | 0.38 | % | 0.37 | % | |||||||||
Total NPAs as a % of loans and NPAs | 0.69 | 0.72 | 0.35 | 0.41 | 0.41 | ||||||||||||||
Total accruing past due and non-accrual loans as a % of loans | 0.94 | 1.20 | 0.54 | 0.71 | 0.63 | ||||||||||||||
Allowance for loan losses as a % of non-accrual loans | 147.03 | 137.59 | 173.83 | 160.17 | 160.71 |
* | Past due loans and non-accrual loans presented in periods prior to March 31, 2020 exclude PCI loans. PCI loans were accounted for on a pool basis and are were not subject to delinquency classification. |
• | Assumes that the COVID-19 crisis will persist and continue to meaningfully impact the economy; |
• | National unemployment rate will remain elevated throughout the remainder of the year and peak at 13.2 percent in the fourth quarter 2021; |
• | Federal funds interest rates will remain at or near zero for foreseeable future; and |
• | A prolonged downturn in the economy until the fourth quarter 2021. |
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Average loans outstanding | $ | 32,041,200 | $ | 29,999,428 | $ | 25,552,415 | $ | 31,020,314 | $ | 25,404,396 | |||||||||
Beginning balance - Allowance for credit losses for loans | 293,361 | 164,604 | 158,961 | 164,604 | 156,295 | ||||||||||||||
Impact of ASU No. 2016-13 adoption on January 1, 2020 (1) | — | 37,989 | — | 37,989 | — | ||||||||||||||
Allowance for purchased credit deteriorated (PCD) loans (1) | — | 61,643 | — | 61,643 | — | ||||||||||||||
Beginning balance, adjusted | 293,361 | 264,236 | 158,961 | 264,236 | 156,295 | ||||||||||||||
Loans charged-off: (2) | |||||||||||||||||||
Commercial and industrial | (14,024 | ) | (3,360 | ) | (3,073 | ) | (17,384 | ) | (7,355 | ) | |||||||||
Commercial real estate | (27 | ) | (44 | ) | — | (71 | ) | — | |||||||||||
Residential mortgage | (5 | ) | (336 | ) | — | (341 | ) | (15 | ) | ||||||||||
Total Consumer | (2,601 | ) | (2,565 | ) | (1,752 | ) | (5,166 | ) | (3,780 | ) | |||||||||
Total charge-offs | (16,657 | ) | (6,305 | ) | (4,825 | ) | (22,962 | ) | (11,150 | ) | |||||||||
Charged-off loans recovered: | |||||||||||||||||||
Commercial and industrial | 799 | 569 | 1,195 | 1,368 | 1,678 | ||||||||||||||
Commercial real estate | 31 | 73 | 22 | 104 | 43 | ||||||||||||||
Construction | 20 | 20 | — | 40 | — | ||||||||||||||
Residential mortgage | 545 | 50 | 9 | 595 | 10 | ||||||||||||||
Total Consumer | 509 | 794 | 617 | 1,303 | 1,103 | ||||||||||||||
Total recoveries | 1,904 | 1,506 | 1,843 | 3,410 | 2,834 | ||||||||||||||
Net charge-offs | (14,753 | ) | (4,799 | ) | (2,982 | ) | (19,552 | ) | (8,316 | ) | |||||||||
Provision charged for credit losses | 41,115 | 33,924 | 2,100 | 75,039 | 10,100 | ||||||||||||||
Ending balance - Allowance for credit for losses | $ | 319,723 | $ | 293,361 | $ | 158,079 | $ | 319,723 | $ | 158,079 | |||||||||
Components of allowance for credit losses for loans: | |||||||||||||||||||
Allowance for loan losses | $ | 309,614 | $ | 283,342 | $ | 155,105 | $ | 309,614 | $ | 155,105 | |||||||||
Allowance for unfunded credit commitments | 10,109 | 10,019 | 2,974 | 10,109 | 2,974 | ||||||||||||||
Allowance for credit losses for loans | $ | 319,723 | $ | 293,361 | $ | 158,079 | $ | 319,723 | $ | 158,079 | |||||||||
Components of provision for credit losses for loans: | |||||||||||||||||||
Provision for credit losses for loans | $ | 41,025 | $ | 33,851 | $ | 3,706 | $ | 74,876 | $ | 11,562 | |||||||||
Provision for unfunded credit commitments (3) | 90 | 73 | (1,606 | ) | 163 | (1,462 | ) | ||||||||||||
Total provision for credit losses for loans | $ | 41,115 | $ | 33,924 | $ | 2,100 | $ | 75,039 | $ | 10,100 | |||||||||
Annualized ratio of net charge-offs to average loans outstanding | 0.18 | % | 0.06 | % | 0.05 | % | 0.13 | % | 0.07 | % |
(1) | The adjustment represents an increase in the allowance for credit losses for loans as a result of the adoption of ASU 2016-13 effective January 1, 2020. |
(2) | Charge-offs and recoveries presented for periods prior to March 31, 2020 exclude loans formerly accounting for as PCI loans. |
(3) | Periods prior to March 31, 2020 represent the allowance and provision for unfunded letters of credit only. |
June 30, 2020 | March 31, 2020 | June 30, 2019 | ||||||||||||||||||
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 | $ | 132,039 | 1.92 | % | $ | 127,437 | 2.55 | % | $ | 94,384 | 2.11 | % | ||||||||
Commercial real estate loans: | ||||||||||||||||||||
Commercial real estate | 117,743 | 0.71 | % | 97,876 | 0.60 | % | 23,796 | 0.19 | % | |||||||||||
Construction | 13,959 | 0.81 | % | 13,709 | 0.79 | % | 25,182 | 1.65 | % | |||||||||||
Total commercial real estate loans | 131,702 | 0.72 | % | 111,585 | 0.62 | % | 48,978 | 0.34 | % | |||||||||||
Residential mortgage loans | 29,630 | 0.67 | % | 29,456 | 0.66 | % | 5,219 | 0.13 | % | |||||||||||
Consumer loans: | ||||||||||||||||||||
Home equity | 4,766 | 1.01 | % | 4,463 | 0.93 | % | 505 | 0.10 | % | |||||||||||
Auto and other consumer | 11,477 | 0.51 | % | 10,401 | 0.44 | % | 6,019 | 0.26 | % | |||||||||||
Total consumer loans | 16,243 | 0.59 | % | 14,864 | 0.52 | % | 6,524 | 0.23 | % | |||||||||||
Total allowance for loan losses | 309,614 | 0.96 | % | 283,342 | 0.93 | % | 155,105 | 0.60 | % | |||||||||||
Allowance for unfunded credit commitments | 10,109 | 10,019 | 2,974 | |||||||||||||||||
Total allowance for credit losses for loans | $ | 319,723 | $ | 293,361 | $ | 158,079 | ||||||||||||||
Allowance for credit losses for loans as a % loans | 0.99 | % | 0.96 | % | 0.61 | % |
* | CECL was adopted January 1, 2020. Prior periods reflect the allowance for credit losses for loans under the incurred loss model. |
Actual | Minimum Capital Requirements | To Be Well Capitalized Under Prompt Corrective Action Provision | ||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
As of June 30, 2020 | ||||||||||||||||||||
Total Risk-based Capital | ||||||||||||||||||||
Valley | $ | 3,672,021 | 12.19 | % | $ | 3,162,478 | 10.50 | % | N/A | N/A | ||||||||||
Valley National Bank | 3,688,957 | 12.25 | 3,161,772 | 10.50 | $ | 3,011,211 | 10.00 | % | ||||||||||||
Common Equity Tier 1 Capital | ||||||||||||||||||||
Valley | 2,864,828 | 9.51 | 2,108,319 | 7.00 | N/A | N/A | ||||||||||||||
Valley National Bank | 3,385,605 | 11.24 | 2,107,848 | 7.00 | 1,957,287 | 6.50 | ||||||||||||||
Tier 1 Risk-based Capital | ||||||||||||||||||||
Valley | 3,079,669 | 10.23 | 2,560,101 | 8.50 | N/A | N/A | ||||||||||||||
Valley National Bank | 3,385,605 | 11.24 | 2,559,530 | 8.50 | 2,408,969 | 8.00 | ||||||||||||||
Tier 1 Leverage Capital | ||||||||||||||||||||
Valley | 3,079,669 | 7.70 | 1,599,880 | 4.00 | N/A | N/A | ||||||||||||||
Valley National Bank | 3,385,605 | 8.47 | 1,599,569 | 4.00 | 1,999,461 | 5.00 | ||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||
Total Risk-based Capital | ||||||||||||||||||||
Valley | $ | 3,427,134 | 11.72 | % | $ | 3,070,687 | 10.50 | % | N/A | N/A | ||||||||||
Valley National Bank | 3,416,674 | 11.69 | 3,069,894 | 10.50 | $ | 2,923,709 | 10.00 | % | ||||||||||||
Common Equity Tier 1 Capital | ||||||||||||||||||||
Valley | 2,754,524 | 9.42 | 2,047,125 | 7.00 | N/A | N/A | ||||||||||||||
Valley National Bank | 3,152,070 | 10.78 | 2,046,596 | 7.00 | 1,900,411 | 6.50 | ||||||||||||||
Tier 1 Risk-based Capital | ||||||||||||||||||||
Valley | 2,968,530 | 10.15 | 2,485,795 | 8.50 | N/A | N/A | ||||||||||||||
Valley National Bank | 3,152,070 | 10.78 | 2,485,153 | 8.50 | 2,338,967 | 8.00 | ||||||||||||||
Tier 1 Leverage Capital | ||||||||||||||||||||
Valley | 2,968,530 | 8.76 | 1,355,378 | 4.00 | N/A | N/A | ||||||||||||||
Valley National Bank | 3,152,070 | 9.31 | 1,354,693 | 4.00 | 1,693,366 | 5.00 |
June 30, 2020 | December 31, 2019 | ||||||
($ in thousands, except for share data) | |||||||
Common shares outstanding | 403,795,699 | 403,278,390 | |||||
Shareholders’ equity | $ | 4,474,488 | $ | 4,384,188 | |||
Less: Preferred stock | 209,691 | 209,691 | |||||
Less: Goodwill and other intangible assets | 1,453,330 | 1,460,397 | |||||
Tangible common shareholders’ equity | $ | 2,811,467 | $ | 2,714,100 | |||
Tangible book value per common share | $ | 6.96 | $ | 6.73 | |||
Book value per common share | $ | 10.56 | $ | 10.35 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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, 2020 to April 30, 2020 | 1,254 | $ | 7.14 | — | 4,112,465 | ||||||||
May 1, 2020 to May 31, 2020 | 1,837 | 7.61 | — | 4,112,465 | |||||||||
June 1, 2020 to June 30, 2020 | 3,650 | 7.77 | — | 4,112,465 | |||||||||
Total | 6,741 | $ | 7.61 | — |
(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, 2020. |
Item 6. | Exhibits |
(3) | Articles of Incorporation and By-laws: | |
(3.1) | ||
(3.2) | ||
(10) | Material Contracts | |
(10.1) | ||
(31.1) | ||
(31.2) | ||
(32) | ||
(101) | Interactive Data File (XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) ** | |
(104) | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
** | Furnished herewith |
VALLEY NATIONAL BANCORP | |||||
(Registrant) | |||||
Date: | /s/ Ira Robbins | ||||
August 7, 2020 | Ira Robbins | ||||
Chairman of the Board, President | |||||
and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
Date: | /s/ Michael D. Hagedorn | ||||
August 7, 2020 | Michael D. Hagedorn | ||||
Senior Executive Vice President and | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
Andrew B. Abramson | 1455 Valley Road Wayne, NJ 07470 | |
Peter J. Baum | 1455 Valley Road Wayne, NJ 07470 | |
Eric P. Edelstein | 1455 Valley Road Wayne, NJ 07470 | |
Graham O. Jones | 1455 Valley Road Wayne, NJ 07470 | |
Marc J. Lenner | 1455 Valley Road Wayne, NJ 07470 | |
Kevin J. Lynch | 1455 Valley Road Wayne, NJ 07470 | |
Peter V. Maio | 1455 Valley Road Wayne, NJ 07470 | |
Ira Robbins | 1455 Valley Road Wayne, NJ 07470 | |
Suresh L. Sani | 1455 Valley Road Wayne, NJ 07470 | |
Lisa J. Schultz | 1455 Valley Road Wayne, NJ 07470 | |
Jennifer W. Steans | 1455 Valley Road Wayne, NJ 07470 | |
Jeffrey S. Wilks | 1455 Valley Road Wayne, NJ 07470 |
1. | Term. The Executive’s employment hereunder shall be effective as of the date (the “Effective Date”) of the closing of the merger (the “Merger”) provided for in that certain Agreement and Plan of Merger, dated as of July 25, 2017, between the Corporation and USAmeriBancorp, Inc. (the “Merger Agreement”) and shall continue until the third anniversary thereof, unless terminated earlier pursuant to Section 5 of this Agreement. If the Merger Agreement terminates for any reason before the Merger becomes effective, this Agreement will terminate and be of no further force and effect and there will be no liability of any kind under this Agreement. The period during which the Executive is employed by the Bank hereunder is hereinafter referred to as the “Employment Term”. |
2. | Position and Duties. |
2.1 | Position. During the Employment Term, the Executive shall serve as the Regional President of Florida West Coast (Tampa to Naples) and Alabama division of the Bank with officer title of Executive Vice President, reporting to the Chief Lending Officer, Senior Executive Vice President, currently Thomas Iadanza. In such position, the Executive shall have such duties, authority and responsibility as shall be determined from time to time by the Chief Lending Officer, Senior Vice President, |
2.2 | Duties. During the Employment Term, the Executive shall devote substantially all of his business time and attention to the performance of the Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise that would conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of the board of directors of the Bank (the “Board”). Notwithstanding the foregoing, the Executive will be permitted to, with the prior written consent of the Board (which consent will not be unreasonably withheld or delayed), act or serve as a director, trustee, committee member or principal of any type of for-profit business or civic or charitable organization as long as such activities are disclosed in writing to the Bank and do not interfere or conflict with the performance of the Executive’s duties and responsibilities to the Bank as provided hereunder, including, but not limited to, the obligations set forth in Section 2 hereof. The Executive has received prior written consent from the President of the Bank or the Bank Board to serve the for-profit businesses and civic or charitable organizations identified in Exhibit A hereto. |
3. | Place of Performance. The principal place of the Executive’s employment shall be the Bank’s offices in the Tampa/Clearwater offices; provided that, the Executive may be required to travel on Bank business during the Employment Term. |
4. | Compensation. |
4.1 | Base Salary. The Bank shall pay the Executive an annual rate of base salary of $510,000 in periodic installments in accordance with the Bank’s customary payroll practices, but no less frequently than monthly. The Executive’s base salary shall be reviewed at least annually by the executive management, consisting of the CEO, the President of the Bank and the President of the Corporation (“Executive Management”) and Executive Management may, but shall not be required to, adjust the base salary during the Employment Term. The Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as “Base Salary”. |
4.2 | Annual Bonus. For each calendar year of the Employment Term, the Executive shall be eligible to receive an annual bonus in cash (the “Annual Bonus”). However, the decision to provide any Annual Bonus and the amount and terms of any Annual Bonus shall be in the discretion of Executive Management . |
4.3 | Equity Awards. During the Employment Term, the Executive shall be eligible to receive annual equity awards under the Corporation’s 2016 Long-Term Stock Incentive Plan (the “2016 LTIP”) or any successor plan, as recommended by the Executive Management and determined by the Compensation Committee of the Corporation. |
4.4 | Fringe Benefits and Perquisites. During the Employment Term, the Executive shall be eligible to receive fringe benefits and perquisites as are available to other similarly situated executive officers of the Bank as determined by the Executive Management. |
4.5 | Employee Benefits. During the Employment Term, the Executive shall be entitled to participate in employee 401(k), life, health and disability benefit plans, practices and programs maintained by the Corporation and the Bank as in effect from time to time as determined by the Executive Management, subject to necessary Board of Directors oversight or approval (collectively, “Employee Benefit Plans”). The Bank and Executive Management reserve the right to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law. |
4.6 | Vacation; Paid Time-off. During the Employment Term, the Executive shall be entitled to receive paid vacation days per calendar year (prorated for partial years) in accordance with the Bank’s vacation policies for its senior executive officers as in effect from time to time. The Executive shall receive other paid time-off in accordance with the Bank’s policies for senior executive officers as such policies may exist from time to time. |
4.7 | Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Bank that is subject to recovery under the Bank’s or the Corporation’s clawback policies then in effect and any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such policy, law, government regulation or stock exchange listing requirement. |
4.8 | Expense Reimbursement. The Executive shall be reimbursed by the Bank for all reasonable travel, entertainment and other expenses incurred during the course of |
5. | Termination of Employment. The Employment Term and the Executive’s employment hereunder may be terminated by either the Bank or the Executive at any time and for any reason; provided that, unless otherwise provided herein, either Party shall be required to give the other Party written notice of termination of the Executive’s employment in accordance with Section 5.4 and Section 5.5 of this Agreement. Upon termination of the Executive’s employment during the Employment Term, the Executive shall be entitled to the compensation and benefits described in this Section 5 and shall have no further rights to any compensation or any other benefits from the Bank or any of its affiliates. |
(a) | The Executive’s employment hereunder may be terminated by the Bank for Cause or by the Executive without Good Reason. If the Executive’s employment is terminated by the Bank for Cause or by the Executive without Good Reason, the Executive shall be entitled to receive: |
(i) | any accrued but unpaid Base Salary and accrued but unused vacation days, which shall be paid within one (1) week following the Termination Date (as defined below) in accordance with the Bank’s customary payroll procedures; |
(ii) | any earned but unpaid Annual Bonus with respect to any completed calendar year immediately preceding the Termination Date, which shall be paid on the otherwise applicable payment date; provided that if the Executive’s employment is terminated by the Bank for Cause, then any such accrued but unpaid Annual Bonus shall be forfeited; |
(iii) | reimbursement for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the Bank’s expense reimbursement policy; and |
(iv) | such employee benefits (including equity compensation), if any, to which the Executive may be entitled under the Bank’s employee benefit plans as of the Termination Date; provided that in no event shall the Executive be entitled to any payments in the nature of |
(b) | For purposes of this Agreement, “Cause” shall mean: |
(i) | the Executive’s willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness); |
(ii) | the Executive’s willful failure to comply with any valid and legal directive of the Executive’s supervisor, the President of the Bank or the Board; |
(iii) | the Executive’s engagement in dishonesty, illegal conduct or misconduct, which is, in each case, injurious to the Bank or its affiliates; |
(iv) | the Executive’s embezzlement, misappropriation or fraud, whether or not related to the Executive’s employment with the Bank; |
(v) | the Executive’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude; or |
(vi) | any material failure by the Executive to comply with the Bank’s written policies or rules as may be in effect from time to time during the Employment Term. |
(c) | For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, in each case during the Employment Term without the Executive’s written consent: |
(i) | a material reduction in the Executive’s Base Salary other than a general reduction in Base Salary that affects all similarly situated executive officers in substantially the same proportions; or |
(ii) | a relocation of the Executive’s principal place of employment by more than twenty-five (25) miles. |
5.2 | Without Cause or for Good Reason. The Employment Term and the Executive’s employment hereunder may be terminated by the Executive for Good Reason or by the Bank without Cause. In the event of such termination, the Executive shall be entitled to receive the Accrued Amounts and subject to the Executive’s continued compliance with Section 6, Section 7, Section 8 and Section 9 of this Agreement and his execution of a release of claims in favor of the Corporation and the Bank, its affiliates and their respective officers and directors in substantially the form attached hereto as Exhibit B (the “Release”) and such Release becoming effective within thirty (30) days following the Termination Date (such thirty (30) day period, the “Release Execution Period”), the Executive shall be entitled to receive his normal Base Salary payments that the Executive would have earned had he remained employed until the greater of (i) twelve (12) months from the Termination Date, and (ii) the end of the Employment Term. In the event the Executive’s employment is terminated by the Executive for Good Reason or by the Bank without Cause on or within one (1) year following a change in control of the Corporation or the Bank (as defined under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)), the Executive shall instead be entitled to receive, within sixty (60) days of such termination, a lump sum payment equal to the greater of: (i) twenty- |
5.3 | Death or Disability. |
(a) | The Executive’s employment hereunder shall terminate automatically upon the Executive’s death during the Employment Term, and the Bank may terminate the Executive’s employment on account of the Executive’s Disability. |
(b) | If the Executive’s employment is terminated during the Employment Term on account of the Executive’s death or Disability, the Executive (or the Executive’s estate and/or beneficiaries, as the case may be) shall be entitled to receive only the Accrued Amounts. |
(c) | Notwithstanding any other provision contained herein, all payments made in connection with the Executive’s Disability shall be provided in a manner which is consistent with Federal and state law. |
(d) | For purposes of this Agreement, Disability shall mean the Executive is entitled to receive long-term disability benefits under the Bank’s long-term disability plan, or if there is no such plan, the Executive’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities under this Agreement for one hundred eighty (180) days out of any three hundred sixty-five (365) day period or one hundred twenty (120) consecutive days. |
5.4 | Notice of Termination. Any termination of the Executive’s employment hereunder by the Bank or by the Executive during the Employment Term (other than termination pursuant to Section 5.3(a) on account of the Executive’s death) shall be communicated by written notice of termination (“Notice of Termination”) to the other Party hereto in accordance with Section 23. The Notice of Termination shall specify: |
(a) | The termination provision of this Agreement relied upon; |
(b) | To the extent applicable, the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated; and |
(c) | The applicable Termination Date. |
5.5 | Termination Date. The Executive’s Termination Date shall be: |
(a) | If the Executive’s employment hereunder terminates on account of the Executive’s death, the date of the Executive’s death; |
(b) | If the Executive’s employment hereunder is terminated on account of the Executive’s Disability, the date that it is determined that the Executive has a Disability; |
(c) | If the Bank terminates the Executive’s employment hereunder for Cause, the date the Notice of Termination is delivered to the Executive; |
(d) | If the Bank terminates the Executive’s employment hereunder without Cause, the date specified in the Notice of Termination, which shall be no less than ten (10) days following the date on which the Notice of Termination is delivered; |
(e) | If the Executive terminates his employment hereunder (i) without Good Reason, the date specified in the Executive’s Notice of Termination, which shall be no less than sixty (60) days following the date on which the Notice of Termination is delivered, (ii) with Good Reason, the date specified in the Executive’s Notice of Termination, which shall be no less than ten (10) days following the date on which the Notice of Termination is delivered, plus, if applicable, an additional thirty (30) days during which the Corporation shall have the right to cure as provided in Section 5.1(c) hereof; provided that, in either case, the Bank may waive all or any part of the notice period for no consideration by giving written notice to the Executive and for all purposes of this Agreement, the Executive’s Termination Date shall be the date determined by the Bank; and |
5.6 | Resignation of All Other Positions. Upon termination of the Executive’s employment hereunder for any reason, the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer or member of the board of directors (or a committee thereof) of the Bank or any of its affiliates. |
6. | Cooperation. The Parties agree that certain matters in which the Executive will be involved during the Employment Term may necessitate the Executive’s cooperation in the future. Accordingly, following the termination of the Executive’s employment for any reason, to the extent reasonably requested by the Board, the Executive shall cooperate with the Bank in connection with matters arising out of the Executive’s service to the Bank; provided that the Bank shall make reasonable efforts to minimize disruption of the Executive’s other activities. The Bank shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation. |
7. | Confidential Information. The Executive understands and acknowledges that during the Employment Term, he will have access to and learn about Confidential Information as defined below. |
7.1 | Confidential Information Defined. |
(a) | Definition. |
(b) | Disclosure and Use Restrictions. |
8. | Restrictive Covenants. |
8.1 | Acknowledgment. The Executive understands that the nature of the Executive’s position gives him access to and knowledge of Confidential Information and places him in a position of trust and confidence with the Bank. The Executive understands and acknowledges that the intellectual services he provides to the Bank are unique, special or extraordinary. |
8.2 | Non-competition. Because of the Bank’s legitimate business interest as described herein and the good and valuable consideration offered to the Executive, during the Employment Term and for the two (2) year period thereafter, to run consecutively, beginning on the last day of the Executive’s employment with the Bank, for any reason or no reason and whether employment is terminated at the option of the Executive or the Bank, the Executive agrees and covenants not to engage in Prohibited Activity (as defined below) or become employed with an entity which engages in Prohibited Activity within fifty (50) miles of any location(s) in which the Corporation or the Bank has banking or other offices or has filed an application for regulatory approval to establish an office. |
8.3 | Non-solicitation of Employees. The Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Bank during a period of two (2) years, to run consecutively, beginning on the last day of the Executive’s employment with the Bank. |
8.4 | Non-solicitation of Customers. The Executive understands and acknowledges that because of the Executive’s experience with and relationship to the Bank, he will have access to and learn about much or all of the Bank’s customer information. “Customer information” includes, but is not limited to, names, phone numbers, addresses, e-mail addresses and other information identifying facts and circumstances specific to the customer and relevant to the Bank Business. |
9. | Non-disparagement. The Executive agrees and covenants that he will not, at any time, make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Bank or its businesses, or any of its employees, officers, existing and prospective customers, suppliers, investors or other associated third parties. |
10. | Additional Payment. The Bank will pay or cause USAmeriBank to pay a lump sum of $2,326,299 to the Executive immediately prior to the Effective Date representing the amount |
11. | Acknowledgement. The Executive acknowledges and agrees that the services to be rendered by him to the Bank are of a special and unique character; that the Executive will obtain knowledge and skill relevant to the Bank’s industry, methods of doing business and marketing strategies by virtue of the Executive’s employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interests of the Bank. |
12. | Waiver and Release of Rights under Change in Control Plan. In consideration of the benefits this Agreement confers upon the Executive and his employment by the Bank and conditioned upon the Bank’s performance in all material respects of its obligations under this Agreement, the Executive agrees to release and waive any and all rights he possesses under the Change in Control Plan effective immediately prior to the effective time of the Merger on the Effective Date. This waiver and release will remain in effect despite the discovery or existence of any new additional fact or any fact different from that which the Executive now knows or believes to be true. The Executive acknowledges the receipt and sufficiency of the consideration provided, that he has read this release and understands its terms, conditions, and comprehensive scope. This release is the Executive’s free act and deed, and the Executive has not been compelled to sign it by economic hardship or any other form of duress. |
13. | Remedies. In the event of a breach or threatened breach by the Executive of Section 7, Section 8 or Section 9 of this Agreement, the Executive hereby consents and agrees that the Bank shall |
14. | Governing Law; Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of the State of Florida without regard to conflicts of law principles. Any action or proceeding by either of the Parties to enforce this Agreement shall be brought only in a state or Federal court located in the State of Florida. The Parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue. |
15. | Entire Agreement. Unless specifically provided herein, this Agreement contains all of the understandings and representations between the Executive and the Bank pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The Parties mutually agree that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement. |
16. | Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Executive and by any executive officer of the Bank. No waiver by either of the Parties of any breach by the other Party hereto of any condition or provision of this Agreement to be performed by the other Party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the Parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege. |
17. | Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the Parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement. |
18. | Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph. |
19. | Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. |
20. | Tolling. Should the Executive violate any of the terms of the restrictive covenant obligations articulated herein, including, without limitation, Section 8 hereof, the obligation at issue will run from the first date on which the Executive ceases to be in violation of such obligation. |
21. | Section 409A. |
21.1 | General Compliance. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be |
21.2 | Specified Employees. Notwithstanding any other provision of this Agreement, if any payment or benefit provided to the Executive in connection with his termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and the Executive is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then solely to the extent necessary to comply with Section 409A, such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Termination Date (the “Specified Employee Payment Date”) or, if earlier, on the Executive’s death. The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. |
21.3 | Reimbursements. To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: |
(a) | the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; |
(b) | any reimbursement of an eligible expense shall be paid to the Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and |
(c) | any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit. |
22. | Successors and Assigns. This Agreement is personal to the Executive and shall not be assigned by the Executive. Any purported assignment by the Executive shall be null and void from the initial date of the purported assignment. If the Executive dies while he is entitled to payments under Section 5.2 of this Agreement, the payments shall continue to be made to his spouse or if he has no spouse at the time of his death, his estate. The Bank may assign this Agreement to any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Bank. This Agreement shall inure to the benefit of the Bank and its permitted successors and assigns. |
23. | Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, or by overnight carrier to the Parties at the addresses set forth below (or such other addresses as specified by the Parties by like notice): |
24. | Representations of the Executive. The Executive represents and warrants to the Bank that: |
24.1 | The Executive’s acceptance of employment with the Bank and the performance of his duties hereunder will not conflict with or result in a violation of, a breach of, or a default under any contract, agreement or understanding to which he is a party or is otherwise bound. |
24.2 | The Executive’s acceptance of employment with the Bank and the performance of his duties hereunder will not violate any non-solicitation, non-competition or other similar covenant or agreement of a prior employer. |
25. | Withholding. The Bank shall have the right to withhold from any amount payable hereunder any Federal, state and local taxes in order for the Bank to satisfy any withholding tax obligation it may have under any applicable law or regulation. |
26. | Survival. Upon the expiration or other termination of this Agreement, the respective rights and obligations of the Parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the Parties under this Agreement. |
27. | Acknowledgment of Full Understanding. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS AGREEMENT. |
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. |
/s/ Ira Robbins |
Ira Robbins |
Chairman of the Board, President and Chief Executive Officer |
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. |
/s/ Michael D. Hagedorn |
Michael D. Hagedorn |
Senior Executive Vice President and Chief Financial Officer |
/s/ Ira Robbins |
Ira Robbins |
Chairman of the Board, President and Chief Executive Officer |
August 7, 2020 |
/s/ Michael D. Hagedorn |
Michael D. Hagedorn |
Senior Executive Vice President and Chief Financial Officer |
August 7, 2020 |
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Allowance for credit losses | $ 1,593 | |
Preferred stock, par value (usd per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 650,000,000 | 650,000,000 |
Common stock, shares issued (in shares) | 403,823,728 | 403,322,773 |
Treasury stock, shares (in shares) | 28,029 | 44,383 |
Series A | ||
Preferred stock, shares issued (in shares) | 4,600,000 | 4,600,000 |
Series B | ||
Preferred stock, shares issued (in shares) | 4,000,000 | 4,000,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 95,601 | $ 76,468 | $ 182,869 | $ 189,798 |
Unrealized gains and losses on available for sale securities | ||||
Net gains arising during the period | 3,013 | 18,488 | 29,081 | 34,755 |
Less reclassification adjustment for net losses (gains) included in net income | 31 | (8) | 58 | 18 |
Total | 3,044 | 18,480 | 29,139 | 34,773 |
Unrealized gains and losses on derivatives (cash flow hedges) | ||||
Net losses on derivatives arising during the period | (1,280) | (683) | (2,337) | (1,065) |
Less reclassification adjustment for net (gains) losses included in net income | (308) | 274 | 130 | 482 |
Total | (1,588) | (409) | (2,207) | (583) |
Defined benefit pension plan | ||||
Amortization of actuarial net loss | 172 | 55 | 344 | 110 |
Total other comprehensive income | 1,628 | 18,126 | 27,276 | 34,300 |
Total comprehensive income | $ 97,229 | $ 94,594 | $ 210,145 | $ 224,098 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |||
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Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
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Cash dividends declared (usd per share) | $ 0.11 | $ 0.11 | ||
Preferred Series A | ||||
Cash dividends declared (usd per share) | 0.39 | $ 0.39 | 0.39 | $ 0.39 |
Preferred Series B | ||||
Cash dividends declared (usd per share) | 0.34 | 0.34 | 0.34 | 0.34 |
Common stock | ||||
Cash dividends declared (usd per share) | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.11 |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2020 | |
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. Certain prior period amounts have been reclassified to conform to the current presentation. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at June 30, 2020 and for all periods presented have been made. The results of operations for the three and six months ended on June 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period. 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, 2019. Significant Estimates. 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 require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment, 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. Actual amounts as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. Impact of COVID-19. During the first half of 2020, economies throughout the world were severely disrupted by the effects of quarantines, business closures, and the reluctance of individuals to leave their homes as a result of the outbreak of the novel coronavirus (COVID-19). Our primary market areas within New Jersey, New York, Florida and Alabama have all experienced significant outbreaks and disruptions during the COVID-19 pandemic. The full impact of COVID-19 is unknown and still evolving. The outbreak and any preventative or protective actions that Valley or its customers have taken or may take in respect of this virus have resulted and may continue to result in extended periods of disruption to Valley, its customers, service providers, and third parties. Any future financial impact cannot be reasonably estimated at this time but may materially affect the business and Valley’s financial condition and results of operations. The extent to which COVID-19 impacts Valley’s results will depend on future developments, which are highly uncertain and cannot be predicted. Banking and financial services have been designated essential businesses; therefore, Valley’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of Valley’s customers and employees, and to comply with applicable government directives.
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Business Combinations |
6 Months Ended |
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Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations On December 1, 2019, Valley completed its acquisition of Oritani Financial Corp. (Oritani) and its wholly-owned subsidiary, Oritani Bank. Oritani had approximately $4.3 billion in assets, $3.4 billion in net loans and $2.9 billion in deposits, after purchase accounting adjustments, and a branch network of 26 locations. The acquisition represents a significant addition to Valley's New Jersey franchise, and meaningfully enhanced its presence in the Bergen County market. The common shareholders of Oritani received 1.60 shares of Valley common stock for each Oritani share that they owned prior to the merger. The total consideration for the acquisition was approximately $835.3 million, consisting of 71.1 million shares of Valley common stock and the outstanding Oritani stock-based awards. Merger expenses totaled $366 thousand and $1.7 million for the three and six months ended June 30, 2020, respectively, which primarily related to professional and legal expenses and other expenses included in non-interest expense on the consolidated statements of income. During the first quarter 2020, Valley revised the estimated fair values of the acquired assets as of the Oritani acquisition date due to additional information obtained that existed as of December 1, 2019. The adjustments mostly related to the fair value of certain loans and deferred tax assets as of the acquisition date and resulted in a $1.8 million increase in goodwill (see Note 9 for amount of goodwill as allocated to Valley's business segments). If additional information (that existed as of the acquisition date) becomes available, the fair value estimates for acquired assets and assumed liabilities are subject to change for up to one year after the acquisition date.
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Earnings Per Common Share |
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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, 2020 and 2019:
Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of restricted stock units and common stock options to purchase Valley’s common shares. Common stock options with exercise prices that exceed the average market price per share 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 equaled approximately 2.7 million shares and 2.3 million shares for the three and six months ended June 30, 2020, respectively, and 482 thousand shares and 494 thousand shares for the three and six months ended June 30, 2019, respectively.
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Accumulated Other Comprehensive Loss |
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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, 2020:
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, 2020 and 2019:
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New Authoritative Accounting Guidance |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New Authoritative Accounting Guidance | New Authoritative Accounting Guidance New Accounting Guidance Adopted in 2020 Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The FASB issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (CECL) model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. 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 measurement of expected credit loss under the CECL methodology is applicable to financial assets measured at amortized cost, including loans, held to maturity investments and purchased financial assets with credit deterioration (PCD) assets. It also applies to certain off-balance sheet credit exposures. Valley adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective approach for all financial assets measured at amortized cost (except for PCD loans) and off-balance sheet credit exposures. Valley has established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used. At adoption, Valley recorded a $100.4 million increase to its allowance for credit losses, including reserves of $92.5 million, $7.1 million and $793 thousand related to loans, unfunded credit commitments and held to maturity debt securities, respectively. Of the $92.5 million in loan reserves, $61.6 million represents PCD loan related reserves which were recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity. The remaining non-credit discount of $97.7 million related to PCD loans is accreted into interest income over the life of the loans at the effective interest rate effective January 1, 2020. The non-PCD loan related increase to the allowance for credit losses of $38.8 million, including the reserves for unfunded loan commitments and held to maturity debt securities, was offset in shareholders' equity and deferred tax assets. For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) net of taxes will be phased in over the same time frame. 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 was effective for Valley on January 1, 2020 and Valley applied this new guidance in its annual goodwill impairment test performed during the second quarter 2020. New Accounting Guidance issued in 2020 ASU No. 2020-04, "Reference Rate Reform (Topic 848)" provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued, subject to meeting certain criteria. Under the new guidance, an entity can elect by accounting topic or industry subtopic to account for the modification of a contract affected by reference rate reform as a continuation of the existing contract, if certain conditions are met. In addition, the new guidance allows an entity to elect on a hedge-by-hedge basis to continue to apply hedge accounting for hedging relationships in which the critical terms change due to reference rate reform, if certain conditions are met. A one-time election to sell and/or transfer held-to-maturity debt securities that reference a rate affected by reference rate reform is also allowed. ASU No. 2020-04 became effective for all entities as of March 12, 2020 and will apply to all LIBOR reference rate modifications through December 31, 2022.
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Fair Value Measurement of Assets and Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement of Assets and Liabilities | Fair Value Measurement of Assets and Liabilities ASC Topic 820, “Fair Value Measurements” 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:
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, 2020 and December 31, 2019. The assets presented under “nonrecurring fair value measurements” in the tables 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).
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. Equity securities. The fair value of equity securities, primarily consists of one publicly traded mutual fund, is derived from quoted market prices in active markets. Equity securities also include Community Reinvestment Act (CRA) investment funds carried at quoted market prices if publicly traded, and at NAV if privately held. Available for sale securities. U.S. Treasury 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. In addition, Valley reviews the volume and level of activity for all available for securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume. In calculating the fair value of one impaired special revenue bond (within obligations of states and political subdivisions in the table above) under Level 3, Valley prepared its best estimate of the present value of the cash flows to determine an internal price estimate. In determining the internal price, Valley utilized recent financial information and developments provided by the issuer, as well as other unobservable inputs which reflect Valley’s own assumptions about the inputs that market participants would use in pricing of the defaulted security. A quoted price received from an independent pricing service was weighted with the internal price estimate to determine the fair value of the instrument at June 30, 2020 and December 31, 2019. Loans held for sale. 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. 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. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at June 30, 2020 and December 31, 2019 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 values of Valley’s derivatives are determined using third-party prices that are based on discounted cash flow analysis using observed market inputs, such as the LIBOR 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, 2020 and December 31, 2019), is determined based on the current market prices for similar instruments. The fair values of most of the derivatives incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its counterparties. The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at June 30, 2020 and December 31, 2019. 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. Collateral Dependent Loans. Collateral dependent loans are loans when foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all of the repayment is expected from the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral. Collateral values are estimated using Level 3 inputs, consisting of individual third-party appraisals that may be adjusted based on certain discounting criteria. Certain real estate appraisals may be discounted based on specific market data by location and property type. At June 30, 2020, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for credit loan losses and/or a specific valuation allowance allocation based on the fair value of the underlying collateral. At June 30, 2020, collateral dependent loans, primarily consisting of taxi medallion loans, with a total amortized cost of $110.9 million were reduced by specific valuation allowance allocations totaling $68.1 million to a reported total net carrying amount of $42.8 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, 2020, the fair value model used a blended prepayment speed (stated as constant prepayment rates) of 17.0 percent and a discount rate of 9.6 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. At June 30, 2020, certain loan servicing rights were re-measured at fair value totaling $14.4 million. See Note 9 for additional information. 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 using Level 3 inputs, consisting of a third-party appraisal adjusted to the lower of cost or estimated fair value, less estimated cost to sell. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value of the asset occur, an asset is re-measured and reported at fair value through a write-down recorded in non-interest expense. There were no discount adjustments of the appraisals of foreclosed assets at June 30, 2020. 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, 2020 and December 31, 2019 were as follows:
(3) Included in accrued expenses and other liabilities.
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities Equity Securities Equity securities carried at fair value totaled $54.4 million and $41.4 million at June 30, 2020 and December 31, 2019, respectively. Valley's equity securities consist mainly of one publicly traded money market mutual fund totaling $41.8 million and $41.4 million at June 30, 2020 and December 31, 2019, respectively. The remainder of the balance at June 30, 2020 represents investments made for CRA purposes. Available for Sale Debt Securities The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at June 30, 2020 and December 31, 2019 were as follows:
The age of unrealized losses and fair value of related securities available for sale at June 30, 2020 and December 31, 2019 were as follows:
Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 95 and 182 at June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, the fair value of available for sale debt securities that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $1.1 billion. The contractual maturities of available for sale debt securities at June 30, 2020 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.
Actual maturities of available for sale debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty. The weighted average remaining expected life for residential mortgage-backed securities available for sale was 4.8 years at June 30, 2020. Impairment Analysis of Available For Sale Debt Securities Valley's available for sale debt securities portfolio includes corporate bonds and special revenue bonds, among other securities, which 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, including due to the economic effects of COVID-19. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. In performing an assessment of whether any decline in fair value is due to a credit loss, Valley considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level such as credit deterioration of the issuer or collateral underlying the security. In assessing the impairment, Valley compares the present value of cash flows expected to be collected with the amortized cost basis of the security. If it is determined that the decline in fair value was due to credit losses, an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. The non-credit related decrease in the fair value, such as a decline due to changes in market interest rates, is recorded in other comprehensive income, net of tax. Valley also assesses the intent to sell the securities (as well as the likelihood of a near-term recovery). If Valley intends to sell an available for sale debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings. The obligations of states and political subdivisions classified as available for sale include special revenue bonds which had an aggregate amortized cost and fair value of $80.2 million and $81.8 million, respectively, at June 30, 2020. There were $56 thousand in gross unrealized losses associated with the special revenue bonds as of June 30, 2020. Approximately 54 percent of the special revenue bonds were issued by the states of (or municipalities within) Utah, Illinois, North Carolina and Florida. As part of Valley’s pre-purchase analysis and on-going quarterly assessment of impairment of the obligations of states and political subdivisions, our Credit Risk Management Department conducts a financial analysis and risk rating assessment of each security issuer based on the issuer’s most recently issued financial statements and other publicly available information. These investments are a mix of municipal bonds with investment grade ratings or non-rated revenue bonds paying in accordance with their contractual terms. The vast majority of the bonds not rated by the rating agencies are state housing finance agency revenue bonds secured by Ginnie Mae securities that are commonly referred to as Tax Exempt Mortgage Securities (TEMS). Valley continues to monitor the special revenue bond portfolio as part of its quarterly impairment analysis. Valley has evaluated available for sale debt securities that are in an unrealized loss position as of June 30, 2020 included in the table above and has determined that the declines in fair value are mainly attributable to 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 recognized no impairment during the three and six months ended June 30, 2020 and, as a result, there is no allowance for credit losses for available for sale debt securities at June 30, 2020. During the three months ended June 30, 2019, Valley recognized a $2.9 million other-than-temporary credit impairment charge on one special revenue bond classified as available for sale (within the obligations of states and state agencies in the tables above). The credit impairment was due to severe credit deterioration disclosed by the issuer in the second quarter of 2019, as well as the issuer's default on its contractual payment. At June 30, 2020, the impaired security had an adjusted amortized cost and fair value of $680 thousand and $1.4 million, respectively. Valley discontinues the recognition of interest on debt securities if the securities meet both of the following criteria: (i) regularly scheduled interest payments have not been paid or have been deferred by the issuer, and (ii) full collection of all contractual principal and interest payments is not deemed to be the most likely outcome, resulting in the recognition of other-than-temporary impairment of the security. Held to Maturity Debt Securities The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at June 30, 2020 and December 31, 2019 were as follows:
The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2020 and December 31, 2019 were as follows:
Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 26 and 82 at June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, the fair value of debt securities held to maturity that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $1.3 billion. The contractual maturities of investments in debt securities held to maturity at June 30, 2020 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.
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 3.9 years at June 30, 2020. Credit Quality Indicators Valley monitors the credit quality of the held to maturity debt securities through the use of the most current credit ratings from external rating agencies. The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at June 30, 2020 and December 31, 2019.
Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At June 30, 2020, most of the obligations of states and political subdivisions were rated investment grade and the "non-rated" category included mostly TEMS securities secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate bonds consist of debt primarily issued by banks. Allowance for Credit Losses for Held to Maturity Debt Securities Valley has a zero loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS. To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. The model is adjusted for a probability weighted multi-scenario economic forecast to estimate future credit losses. Valley uses 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 investment security. The economic forecast methodology and governance for debt securities is aligned with Valley's economic forecast used for the loan portfolio discussed in more detail in Note 8. Accrued interest receivable is excluded from the estimate of credit losses. At June 30, 2020, held to maturity debt securities were carried net of allowance for credit losses totaling $1.6 million. The provision was not material during three and six months ended June 30, 2020, respectively, and there were no net charge-offs of debt securities in the respective periods.
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Loans and Allowance for Credit Losses for Loans | Loans and Allowance for Credit Losses for Loans The detail of the loan portfolio as of June 30, 2020 and December 31, 2019 was as follows:
Total loans includes net unearned discounts and deferred loan fees of $131.3 million at June 30, 2020 and net unearned premiums and deferred loan costs of $12.6 million at December 31, 2019. Net unearned discounts and deferred loan fees at June 30, 2020 include the non-credit discount on PCD loans and net unearned fees related to SBA PPP loans. Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $104.2 million and $86.3 million at June 30, 2020 and December 31, 2019, respectively, and is presented separately in the consolidated statements of financial condition. Valley transferred and sold approximately $30.0 million and $216.3 million of residential mortgage loans from the loan portfolio to loans held for sale during the six months ended June 30, 2020 and 2019, respectively. Excluding the loan transfers, there were no sales of loans from the held for investment portfolio during the six months ended June 30, 2020 and 2019. 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 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. Credit Quality 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. A loan in which the borrowers’ obligation has not been released in bankruptcy courts may be restored to an accruing basis when it becomes well secured and is in the process of collection, or all past due amounts become current under the loan agreement and collectability is no longer doubtful. The following table presents past due, current and non-accrual loans without an allowance for credit losses by loan portfolio class (including PCD loans) at June 30, 2020.
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 June 30, 2020.
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 internal loan classification risk by loan portfolio class by origination year (including PCD loans) based on the most recent analysis performed at June 30, 2020:
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 June 30, 2020.
The following table presents the credit exposure by internally assigned risk rating by class of loans (excluding PCI loans) based on the most recent analysis performed at December 31, 2019:
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:
The following table summarizes information pertaining to loans that were identified as PCI loans by class based on individual loan payment activity as of December 31, 2019:
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. Performing TDRs (not reported as non-accrual loans) totaled $53.9 million and $73.0 million as of June 30, 2020 and December 31, 2019, respectively. Non-performing TDRs totaled $85.6 million and $65.1 million as of June 30, 2020 and December 31, 2019, respectively. The following table presents the pre- and post-modification amortized cost of loans by loan class modified as TDRs (excluding PCI loans prior to the adoption of ASU 2016-13) during the three and six months ended June 30, 2020 and 2019. Post-modification amounts are presented as of June 30, 2020 and 2019.
The total TDRs presented in the above table had allocated reserves for loan losses of $8.4 million and $11.7 million at June 30, 2020 and 2019, respectively. There were $2.9 million and $3.7 million of partial charge-offs related to TDRs for the three and six months ended June 30, 2020, respectively. There were $1.1 million and $2.0 million of partial charge-offs related to TDRs for the three and six months ended June 30, 2019, respectively. Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the three and six months ended June 30, 2020 and 2019. Loans modified as TDRs (excluding PCI loan modifications prior to the adoption of ASU 2016-13) within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and six months ended June 30, 2020 and 2019 were as follows:
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 were 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 up to 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 June 30, 2020, Valley had approximately 7,000 loans totaling approximately $3.1 billion in their contractual deferred payment period in accordance with short-term modification terms. Under the applicable guidance, none of these loans were considered TDRs as of June 30, 2020. Loans in Process of Foreclosure. Other real estate owned (OREO) totaled $8.3 million and $9.4 million at June 30, 2020 and December 31, 2019, respectively. OREO included foreclosed residential real estate properties totaling $2.5 million and $2.1 million at June 30, 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 June 30, 2020 and December 31, 2019, respectively. Allowance for Credit Losses for Loans The allowance for credit losses for loans under the new CECL standard adopted on January 1, 2020, consisted of: (1) the allowance for loan losses and (2) the allowance for unfunded credit commitments. Prior periods reflect the allowance for credit losses for loans under the incurred loss model. The following table summarizes the allowance for credit losses for loans at June 30, 2020 and December 31, 2019:
The following table summarizes the provision for credit losses for loans for the periods indicated:
Allowance for Loan Losses 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 common 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, (iv) the potential volume and migration of loan forbearances 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 common risk characteristics. Valley measures specific reserves for individual loans 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. The following table presents collateral dependent loans by class as of June 30, 2020:
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. Allowance for Unfunded Credit Commitments 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 $10.1 million at June 30, 2020 is included in accrued expenses and other liabilities on the consolidated statements of financial condition. The following table details the activity in the allowance for loan losses by loan portfolio segment for three and six months ended June 30, 2020 and 2019:
The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at June 30, 2020 and December 31, 2019.
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. The following table presents information about impaired loans by loan portfolio class at December 31, 2019:
Purchased Credit-Impaired Loans The table below includes disclosure requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020, and presents the changes in the accretable yield for PCI loans during the three and six months ended June 30, 2019:
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill as allocated to our business segments, or reporting units thereof, for goodwill impairment analysis were:
During the six months ended June 30, 2020, Valley recorded additional goodwill as set forth in the table above related to the Oritani acquisition, reflecting the effect of the combined adjustments to the fair value of certain loans and deferred tax assets as of the acquisition date. Certain estimates for acquired assets and assumed liabilities are subject to change for up to one year after the acquisition date. See Note 2 for details. During the second quarter 2020, Valley performed the annual goodwill impairment test at its normal assessment date. As a result, there was no charge for impairment of goodwill during the three and six months ended June 30, 2020 and 2019. The following table summarizes other intangible assets as of June 30, 2020 and December 31, 2019:
Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from 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. Valley recorded net impairment charges on its loan servicing rights totaling $669 thousand and $778 thousand for the three and six months ended June 30, 2020, respectively. Valley recorded net recoveries of impairment charges on its loan servicing rights totaling $107 thousand and $83 thousand for the three and six months ended June 30, 2019, respectively. See the “Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis” section of Note 6 for additional information regarding the fair valuation. Core deposits are amortized using an accelerated method and have a weighted average amortization period of 8.9 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 7.6 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, 2020 and 2019. The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2020 through 2024:
Valley recognized amortization expense on other intangible assets, including net impairment (or recovery of impairment) charges on loan servicing rights, totaling approximately $6.7 million and $4.2 million for the three months ended June 30, 2020 and 2019, respectively, and $12.2 million and $8.5 million for the six months ended June 30, 2020 and 2019, respectively.
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Borrowed Funds |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowed Funds | Borrowed Funds Short-Term Borrowings Short-term borrowings at June 30, 2020 and December 31, 2019 consisted of the following:
The contractual weighted average interest rate for short-term borrowings was 0.37 percent and 1.68 percent at June 30, 2020 and December 31, 2019, respectively. Short-term FHLB advances totaling $500 million were hedged with cash flow interest rate swaps during the six months ended June 30, 2020. See Note 12 for additional details. Long-Term Borrowings Long-term borrowings at June 30, 2020 and December 31, 2019 consisted of the following:
FHLB advances. Long-term FHLB advances had a weighted average interest rate of 2.13 percent and 2.23 percent at June 30, 2020 and December 31, 2019, respectively. FHLB advances are secured by pledges of certain eligible collateral, including but not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans. The long-term FHLB advances at June 30, 2020 are scheduled for contractual balance repayments as follows:
There are no FHLB advances with scheduled repayments in years 2020 and thereafter, reported in the table above, which are callable for early redemption by the FHLB during 2020. Securities sold under agreements to repurchase (repos). The long-term repos had a weighted average interest rate of 2.88 percent and 1.94 percent at June 30, 2020 and December 31, 2019, respectively. The long-term repos at June 30, 2020 are scheduled for contractual balance repayments as follows:
Subordinated debt. On June 5, 2020, Valley issued $115.0 million of 5.25 percent Fixed-to-Floating Rate subordinated notes due June 15, 2030. Interest on the subordinated notes during the initial five year term through June 15, 2025 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on Three-Month Term SOFR plus 514 basis points and paid quarterly through maturity of the notes. The subordinated notes had a carrying value of $113.1 million at June 30, 2020, net of debt issuance costs. Valley also had the following subordinated debt outstanding at June 30, 2020:
See Note 11 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2019 for further details.
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Stock-Based Compensation |
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Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock–Based Compensation Valley currently has one active employee stock 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 2016 Stock Plan is administered by the Compensation and Human Resources Committee (the Committee) appointed by Valley's Board of Directors. The Committee can grant awards to officers and key employees of Valley. The primary purpose of the 2016 Stock 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 (for acting in their roles as board members). As of June 30, 2020, 2.5 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 Units (RSUs). Valley granted 142 thousand and 92 thousand of time-based RSUs during the three months ended June 30, 2020 and 2019, respectively, and 1.2 million and 826 thousand during the six months ended June 30, 2020 and 2019, respectively. Generally, time-based RSUs vest ratably one-third each year over a three-year vesting period. The average grant date fair value of the RSUs granted during the six months ended June 30, 2020 and 2019 was $10.48 per share and $10.40 per share, respectively. Valley granted 589 thousand and 532 thousand of performance-based RSUs to certain executive officers for the six months ended June 30, 2020 and 2019, respectively. The performance-based RSU awards include RSUs with vesting conditions based upon certain levels of growth in Valley's tangible book value per share plus dividends and RSUs with vesting conditions based upon Valley's total shareholder return as compared to our peer group. The RSUs “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 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, 2020 and 2019 was $10.82 per share and $10.43 per share, respectively. |
Derivative Instruments and Hedging Activities |
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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 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. During the six months ended June 30, 2020, Valley entered into new interest rate swap agreements designated as cash flow hedges with a total notional amount of $900 million. The swaps are intended to hedge the changes in cash flows associated with certain FHLB advances and brokered deposits. Valley is required to pay fixed-rates of interest ranging from 0.46 percent to 0.67 percent and receives variable rates of interest that reset quarterly based on three-month LIBOR. Expiration dates for the swaps range from April 2021 to March 2022. 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 has used 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. Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the participation type. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. At June 30, 2020, Valley had 22 credit swaps with an aggregate notional amount of $166.4 million related to risk participation agreements. At June 30, 2020, Valley had two “steepener” swaps, each with a current notional amount of $10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month LIBOR rate and therefore provide an effective economic hedge. 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 rate 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:
The Chicago Mercantile Exchange and London Clearing House variation margins are classified 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 interest rate swaps assets and designated and non-designated interest rate swaps liabilities were offset by variation margins posted by (with) the applicable counterparties and reported in the table above on a net basis at June 30, 2020 and December 31, 2019. Gains (losses) included in the consolidated statements of income and other comprehensive income, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows:
The accumulated net after-tax losses related to effective cash flow hedges included in accumulated other comprehensive loss were $5.9 million and $3.7 million at June 30, 2020 and December 31, 2019, 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 $4.5 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:
The following table presents the hedged items related to interest rate derivatives designated as hedges of fair value and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at June 30, 2020 and December 31, 2019.
The net losses (gains) included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows:
Other non-interest income included fee income related to non-designated hedge derivative interest rate swaps (not designated as hedging instruments) executed with commercial loan customers totaling $14.7 million and $5.4 million for the three months ended June 30, 2020 and 2019, respectively, and $28.9 million and $9.5 million for the six months ended June 30, 2020 and 2019, respectively. 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, 2020, Valley was in compliance with all of the provisions of its derivative counterparty agreements. As of June 30, 2020, 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 $176.7 million. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.
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Balance Sheet Offsetting |
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Offsetting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Offsetting | Balance Sheet Offsetting Certain financial instruments, including interest rate swap derivatives 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 (i.e., the threshold for posting collateral is reduced to zero, subject to certain minimum transfer amounts). 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, 2020 and December 31, 2019.
* Represents the fair value of non-cash pledged investment securities.
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Tax Credit Investments |
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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 in the consolidated statements of income using the equity method of accounting. After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable. 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, 2020 and December 31, 2019:
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, 2020 and 2019:
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Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments Valley has four business segments that it monitors and reports on to manage Valley’s business operations. These segments are consumer lending, commercial lending, investment management, and corporate and other adjustments. Valley’s reportable segments have been determined based upon its 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 transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average earning assets and/or liabilities outstanding for the period. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution. The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data. The following tables represent the financial data for Valley’s four business segments for the three and six months ended June 30, 2020 and 2019:
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New Authoritative Accounting Guidance (Policies) |
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Jun. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
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. |
Reclassification | Certain prior period amounts have been reclassified to conform to the current presentation. |
Significant Estimates | Significant Estimates. 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 require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment, 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. Actual amounts as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.
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New Accounting Guidance Adopted and Not Yet Adopted | New Accounting Guidance Adopted in 2020 Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" amends the accounting guidance on the impairment of financial instruments. The FASB issued an amendment to replace the incurred loss impairment methodology under prior accounting guidance with a new current expected credit loss (CECL) model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. 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 measurement of expected credit loss under the CECL methodology is applicable to financial assets measured at amortized cost, including loans, held to maturity investments and purchased financial assets with credit deterioration (PCD) assets. It also applies to certain off-balance sheet credit exposures. Valley adopted ASU No. 2016-13 on January 1, 2020 using the modified retrospective approach for all financial assets measured at amortized cost (except for PCD loans) and off-balance sheet credit exposures. Valley has established a governance structure to implement the CECL accounting guidance and has developed a methodology and set of models to be used. At adoption, Valley recorded a $100.4 million increase to its allowance for credit losses, including reserves of $92.5 million, $7.1 million and $793 thousand related to loans, unfunded credit commitments and held to maturity debt securities, respectively. Of the $92.5 million in loan reserves, $61.6 million represents PCD loan related reserves which were recognized through a gross-up that increases the amortized cost basis of loans with a corresponding increase to the allowance for credit losses, and therefore results in no impact to shareholders' equity. The remaining non-credit discount of $97.7 million related to PCD loans is accreted into interest income over the life of the loans at the effective interest rate effective January 1, 2020. The non-PCD loan related increase to the allowance for credit losses of $38.8 million, including the reserves for unfunded loan commitments and held to maturity debt securities, was offset in shareholders' equity and deferred tax assets. For regulatory capital purposes, in connection with the Federal Reserve Board’s final interim rule as of April 3, 2020, 100 percent of the CECL Day 1 impact to shareholders' equity equaling $28.2 million after-tax will be deferred over a two-year period ending January 1, 2022, at which time it will be phased in on a pro-rata basis over a three-year period ending January 1, 2025. Additionally, 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) net of taxes will be phased in over the same time frame. 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 was effective for Valley on January 1, 2020 and Valley applied this new guidance in its annual goodwill impairment test performed during the second quarter 2020. New Accounting Guidance issued in 2020 ASU No. 2020-04, "Reference Rate Reform (Topic 848)" provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued, subject to meeting certain criteria. Under the new guidance, an entity can elect by accounting topic or industry subtopic to account for the modification of a contract affected by reference rate reform as a continuation of the existing contract, if certain conditions are met. In addition, the new guidance allows an entity to elect on a hedge-by-hedge basis to continue to apply hedge accounting for hedging relationships in which the critical terms change due to reference rate reform, if certain conditions are met. A one-time election to sell and/or transfer held-to-maturity debt securities that reference a rate affected by reference rate reform is also allowed. ASU No. 2020-04 became effective for all entities as of March 12, 2020 and will apply to all LIBOR reference rate modifications through December 31, 2022.
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Impairment Analysis of Available For Sale Debt Securities and Allowance for Credit Losses for Held to Maturity Debt Securities | Impairment Analysis of Available For Sale Debt Securities Valley's available for sale debt securities portfolio includes corporate bonds and special revenue bonds, among other securities, which 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, including due to the economic effects of COVID-19. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. In performing an assessment of whether any decline in fair value is due to a credit loss, Valley considers the extent to which the fair value is less than the amortized cost, changes in credit ratings, any adverse economic conditions, as well as all relevant information at the individual security level such as credit deterioration of the issuer or collateral underlying the security. In assessing the impairment, Valley compares the present value of cash flows expected to be collected with the amortized cost basis of the security. If it is determined that the decline in fair value was due to credit losses, an allowance for credit losses is recorded, limited to the amount the fair value is less than amortized cost basis. The non-credit related decrease in the fair value, such as a decline due to changes in market interest rates, is recorded in other comprehensive income, net of tax. Valley also assesses the intent to sell the securities (as well as the likelihood of a near-term recovery). If Valley intends to sell an available for sale debt security or it is more likely than not that Valley will be required to sell the security before recovery of its amortized cost basis, the debt security is written down to its fair value and the write down is charged to the debt security’s fair value at the reporting date with any incremental impairment reported in earnings. The obligations of states and political subdivisions classified as available for sale include special revenue bonds which had an aggregate amortized cost and fair value of $80.2 million and $81.8 million, respectively, at June 30, 2020. There were $56 thousand in gross unrealized losses associated with the special revenue bonds as of June 30, 2020. Approximately 54 percent of the special revenue bonds were issued by the states of (or municipalities within) Utah, Illinois, North Carolina and Florida. As part of Valley’s pre-purchase analysis and on-going quarterly assessment of impairment of the obligations of states and political subdivisions, our Credit Risk Management Department conducts a financial analysis and risk rating assessment of each security issuer based on the issuer’s most recently issued financial statements and other publicly available information. These investments are a mix of municipal bonds with investment grade ratings or non-rated revenue bonds paying in accordance with their contractual terms. The vast majority of the bonds not rated by the rating agencies are state housing finance agency revenue bonds secured by Ginnie Mae securities that are commonly referred to as Tax Exempt Mortgage Securities (TEMS). Valley continues to monitor the special revenue bond portfolio as part of its quarterly impairment analysis. Valley has evaluated available for sale debt securities that are in an unrealized loss position as of June 30, 2020 included in the table above and has determined that the declines in fair value are mainly attributable to 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 recognized no impairment during the three and six months ended June 30, 2020 and, as a result, there is no allowance for credit losses for available for sale debt securities at June 30, 2020. During the three months ended June 30, 2019, Valley recognized a $2.9 million other-than-temporary credit impairment charge on one special revenue bond classified as available for sale (within the obligations of states and state agencies in the tables above). The credit impairment was due to severe credit deterioration disclosed by the issuer in the second quarter of 2019, as well as the issuer's default on its contractual payment. At June 30, 2020, the impaired security had an adjusted amortized cost and fair value of $680 thousand and $1.4 million, respectively. Valley discontinues the recognition of interest on debt securities if the securities meet both of the following criteria: (i) regularly scheduled interest payments have not been paid or have been deferred by the issuer, and (ii) full collection of all contractual principal and interest payments is not deemed to be the most likely outcome, resulting in the recognition of other-than-temporary impairment of the security. Allowance for Credit Losses for Held to Maturity Debt Securities Valley has a zero loss expectation for certain securities within the held to maturity portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following securities types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS. To measure the expected credit losses on held to maturity debt securities that have loss expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. The model is adjusted for a probability weighted multi-scenario economic forecast to estimate future credit losses. Valley uses 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 investment security. The economic forecast methodology and governance for debt securities is aligned with Valley's economic forecast used for the loan portfolio discussed in more detail in Note 8.Allowance for Unfunded Credit Commitments 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 $10.1 million at June 30, 2020 is included in accrued expenses and other liabilities on the consolidated statements of financial condition. Allowance for Loan Losses 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 common 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, (iv) the potential volume and migration of loan forbearances 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 common risk characteristics. Valley measures specific reserves for individual loans 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.
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Earnings Per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and 2019:
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Accumulated Other Comprehensive Loss (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020:
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Reclassification from Each Component 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, 2020 and 2019:
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Fair Value Measurement of Assets and Liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 and December 31, 2019. The assets presented under “nonrecurring fair value measurements” in the tables 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).
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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, 2020 and December 31, 2019 were as follows:
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Available for Sale | The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at June 30, 2020 and December 31, 2019 were as follows:
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Age of Unrealized Losses and Fair Value of Related Debt Securities Available for Sale | The age of unrealized losses and fair value of related securities available for sale at June 30, 2020 and December 31, 2019 were as follows:
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Contractual Maturities of Debt Securities Available for Sale | The contractual maturities of available for sale debt securities at June 30, 2020 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.
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Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Held to Maturity | The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at June 30, 2020 and December 31, 2019 were as follows:
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Age of Unrealized Losses and Fair Value of Related Debt Securities Held to Maturity | The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2020 and December 31, 2019 were as follows:
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Contractual Maturities of Debt Securities Held to Maturity | The contractual maturities of investments in debt securities held to maturity at June 30, 2020 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.
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Amortized Cost of Debt Securities Held to Maturity by External Credit Rating | The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at June 30, 2020 and December 31, 2019.
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Loans and Allowance for Credit Losses for Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loan Portfolio | The detail of the loan portfolio as of June 30, 2020 and December 31, 2019 was as follows:
* Includes $2.2 billion of loans originated under the SBA Paycheck Protection Program (PPP), net of unearned fees totaling $62.1 million at June 30, 2020.
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Past Due, Non-Accrual and Current Loans by Loan Portfolio Class | The following table presents past due, current and non-accrual loans without an allowance for credit losses by loan portfolio class (including PCD loans) at June 30, 2020.
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 June 30, 2020.
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Risk Category of Loans | The following table presents the internal loan classification risk by loan portfolio class by origination year (including PCD loans) based on the most recent analysis performed at June 30, 2020:
The following table presents the credit exposure by internally assigned risk rating by class of loans (excluding PCI loans) based on the most recent analysis performed at December 31, 2019:
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Schedule Of Recorded Investment In Loan Classes Based On Payment Activity | The following table presents the recorded investment in those loan classes based on payment activity as of December 31, 2019:
The following table summarizes information pertaining to loans that were identified as PCI loans by class based on individual loan payment activity as of December 31, 2019:
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Pre-Modification and Post-Modification Outstanding Recorded Investments and Non-PCI Loans that Subsequently Defaulted | Loans modified as TDRs (excluding PCI loan modifications prior to the adoption of ASU 2016-13) within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and six months ended June 30, 2020 and 2019 were as follows:
The following table presents the pre- and post-modification amortized cost of loans by loan class modified as TDRs (excluding PCI loans prior to the adoption of ASU 2016-13) during the three and six months ended June 30, 2020 and 2019. Post-modification amounts are presented as of June 30, 2020 and 2019.
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Summary of Allowance for Credit Losses | The following table summarizes the allowance for credit losses for loans at June 30, 2020 and December 31, 2019:
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Summary of Provision for Credit Losses | The following table summarizes the provision for credit losses for loans for the periods indicated:
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Summary of Collateral Dependent Loans | The following table presents collateral dependent loans by class as of June 30, 2020:
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Summary of Activity in Allowance for Loan Losses | The following table details the activity in the allowance for loan losses by loan portfolio segment for three and six months ended June 30, 2020 and 2019:
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Summary of Allocation of Allowance for Loan Losses and Related Loans by Loan Portfolio Segment Disaggregated Based on Allowance Measurement 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 allowance measurement methodology at June 30, 2020 and December 31, 2019.
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Schedule of Impaired Loans by Portfolio Class | The following table presents information about impaired loans by loan portfolio class at December 31, 2019:
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Schedule Of Accretable Yield For PCI Loans | The table below includes disclosure requirements prior to the adoption of ASU No. 2016-13 on January 1, 2020, and presents the changes in the accretable yield for PCI loans during the three and six months ended June 30, 2019:
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Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill as allocated to our business segments, or reporting units thereof, for goodwill impairment analysis were:
* Valley’s Wealth Management Division is comprised of trust, asset management and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.
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Other Intangible Assets | The following table summarizes other intangible assets as of June 30, 2020 and December 31, 2019:
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Estimated Future Amortization Expense | The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2020 through 2024:
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Borrowed Funds (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Borrowings | Short-term borrowings at June 30, 2020 and December 31, 2019 consisted of the following:
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Schedule of Long-Term Borrowings | Long-term borrowings at June 30, 2020 and December 31, 2019 consisted of the following:
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Schedule of FHLB Repayment | The long-term FHLB advances at June 30, 2020 are scheduled for contractual balance repayments as follows:
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Schedule of Repayment of Long-Term Borrowings for Securities Sold Under Agreements to Repurchase | The long-term repos at June 30, 2020 are scheduled for contractual balance repayments as follows:
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Derivative Instruments and Hedging Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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(Losses) Gains Related to Interest Rate Derivatives Designated as Hedges of Cash Flows | osses) included in the consolidated statements of income and other comprehensive income, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows:
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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:
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Interest Rate Derivatives Designated as Hedges | The following table presents the hedged items related to interest rate derivatives designated as hedges of fair value and the cumulative basis fair value adjustment included in the net carrying amount of the hedged items at June 30, 2020 and December 31, 2019.
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Net Gains (Losses) Related to Derivative Instruments Not Designated as Hedging Instruments | The net losses (gains) included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows:
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Balance Sheet Offsetting (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Assets | 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, 2020 and December 31, 2019.
* Represents the fair value of non-cash pledged investment securities.
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Offsetting Liabilities | 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, 2020 and December 31, 2019.
* Represents the fair value of non-cash pledged investment securities.
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Tax Credit Investments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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, 2020 and December 31, 2019:
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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, 2020 and 2019:
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Business Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Data for Business Segments | The following tables represent the financial data for Valley’s four business segments for the three and six months ended June 30, 2020 and 2019:
|
Business Combinations (Details) $ in Thousands, shares in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 01, 2019
USD ($)
office
shares
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Business Acquisition [Line Items] | ||||
Loans | $ 32,004,997 | $ 32,004,997 | $ 29,537,449 | |
Oritani | ||||
Business Acquisition [Line Items] | ||||
Assets | $ 4,300,000 | |||
Loans | 3,400,000 | |||
Deposits | $ 2,900,000 | |||
Number of branches | office | 26 | |||
Conversion ratio for shares issued | 1.60 | |||
Consideration transferred | $ 835,300 | |||
Shares issued in connection with acquisition (in shares) | shares | 71.1 | |||
Merger expenses | 366 | $ 1,700 | ||
Goodwill increase | $ 1,800 |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share Reconciliation | ||||
Net income available to common shareholders | $ 92,429 | $ 73,296 | $ 176,525 | $ 183,454 |
Basic weighted average number of common shares outstanding (in shares) | 403,790,242 | 331,748,552 | 403,654,665 | 331,675,313 |
Plus: Common stock equivalents (in shares) | 841,603 | 1,211,250 | 1,388,518 | 1,254,046 |
Diluted weighted average number of common shares outstanding (in shares) | 404,631,845 | 332,959,802 | 405,043,183 | 332,929,359 |
Earnings per common share: | ||||
Basic (usd per share) | $ 0.23 | $ 0.22 | $ 0.44 | $ 0.55 |
Diluted (usd per share) | $ 0.23 | $ 0.22 | $ 0.44 | $ 0.55 |
Anti-dilutive common stock options and warrants (in shares) | 2,700,000 | 482,000 | 2,300,000 | 494,000 |
Fair Value Measurement of Assets and Liabilities - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Fair Value Disclosures [Abstract] | ||
Collateral dependent loans, charge-offs | $ 938 | |
Collateral dependent loans amortized cost | $ 110,900 | |
Specific valuation allowance allocations | 68,100 | |
Reported net carrying amount of collateral dependent loans | $ 42,800 | |
Valuation of loan servicing rights, prepayment rate | 17.00% | |
Valuation of loan servicing rights, discount rate | 9.60% | |
Loan servicing rights | $ 14,400 |
Investment Securities - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Amortized Cost | ||
Due in one year | $ 26,643 | |
Due after one year through five years | 97,248 | |
Due after five years through ten years | 104,076 | |
Due after ten years | 72,696 | |
Residential mortgage-backed securities | 1,340,614 | |
Amortized Cost | 1,641,277 | $ 1,558,787 |
Fair Value | ||
Due in one year | 26,742 | |
Due after one year through five years | 99,501 | |
Due after five years through ten years | 106,154 | |
Due after ten years | 74,265 | |
Residential mortgage-backed securities | 1,382,726 | |
Total investment securities available for sale | $ 1,689,388 | $ 1,566,801 |
Investment Securities - Contractual Maturities of Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Amortized Cost | ||
Due in one year | $ 92,432 | |
Due after one year through five years | 171,778 | |
Due after five years through ten years | 203,555 | |
Due after ten years | 214,081 | |
Residential mortgage-backed securities | 1,451,581 | |
Amortized Cost | 2,133,427 | $ 2,336,095 |
Fair Value | ||
Due in one year | 93,313 | |
Due after one year through five years | 179,833 | |
Due after five years through ten years | 215,200 | |
Due after ten years | 210,931 | |
Residential mortgage-backed securities | 1,495,599 | |
Total investment securities held to maturity | $ 2,194,876 | $ 2,358,720 |
Loans and Allowance for Credit Losses for Loans - Summary of Allowance for Credit Losses (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|---|---|
Receivables [Abstract] | ||||||
Allowance for loan losses | $ 309,614 | $ 283,342 | $ 161,759 | $ 155,105 | $ 154,381 | $ 151,859 |
Allowance for unfunded credit commitments | 10,109 | 2,845 | ||||
Total allowance for credit losses | $ 319,723 | $ 164,604 |
Loans and Allowance for Credit Losses for Loans - Summary of Provision for Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Receivables [Abstract] | ||||
Provision for loan losses | $ 41,025 | $ 3,706 | $ 74,876 | $ 11,562 |
Provision for unfunded credit commitments | 90 | (1,606) | 163 | (1,462) |
Total provision for credit losses for loans | $ 41,115 | $ 2,100 | $ 75,039 | $ 10,100 |
Loans and Allowance for Credit Losses for Loans - Summary of Collateral Dependent Loans (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | $ 194,396 |
Commercial and Industrial | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | 124,323 |
Commercial real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | 54,216 |
Commercial real estate | Commercial real estate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | 51,386 |
Commercial real estate | Construction | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | 2,830 |
Residential mortgage | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | 15,581 |
Consumer | Home equity | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Collateral dependent loans | $ 276 |
Loans and Allowance for Credit Losses for Loans - Changes in Accretable Yield (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance, beginning of period | $ 890,771 | $ 875,958 |
Accretion | (55,014) | (108,506) |
Net increase in expected cash flows | 18,130 | 86,435 |
Balance, end of period | $ 853,887 | $ 853,887 |
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 1,373,625 |
Goodwill from business combinations | 1,784 |
Goodwill, ending balance | 1,375,409 |
Consumer Lending | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 306,572 |
Goodwill from business combinations | 121 |
Goodwill, ending balance | 306,693 |
Commercial Lending | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 825,767 |
Goodwill from business combinations | 1,654 |
Goodwill, ending balance | 827,421 |
Investment Management | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 220,068 |
Goodwill from business combinations | 9 |
Goodwill, ending balance | 220,077 |
Wealth Management | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 21,218 |
Goodwill from business combinations | 0 |
Goodwill, ending balance | $ 21,218 |
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Net impairment (net recovery) | $ 669,000 | $ 107,000 | $ 778,000 | $ 83,000 |
Goodwill impairment | 0 | 0 | 0 | 0 |
Amortization of other intangible assets | 6,681,000 | 4,170,000 | $ 12,151,000 | 8,481,000 |
Core Deposits | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average amortization period, years | 8 years 10 months 24 days | |||
Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted average amortization period, years | 7 years 7 months 6 days | |||
Core Deposits and Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of core deposits and other intangibles | $ 0 | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible Assets | $ 203,232 | $ 199,932 |
Accumulated Amortization | (124,486) | (113,113) |
Valuation Allowance | (825) | (47) |
Net Intangible Assets | 77,921 | 86,772 |
Loan servicing rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible Assets | 98,127 | 94,827 |
Accumulated Amortization | (74,624) | (70,095) |
Valuation Allowance | (825) | (47) |
Net Intangible Assets | 22,678 | 24,685 |
Core deposits | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible Assets | 101,160 | 101,160 |
Accumulated Amortization | (47,118) | (40,384) |
Valuation Allowance | 0 | 0 |
Net Intangible Assets | 54,042 | 60,776 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Intangible Assets | 3,945 | 3,945 |
Accumulated Amortization | (2,744) | (2,634) |
Valuation Allowance | 0 | 0 |
Net Intangible Assets | $ 1,201 | $ 1,311 |
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Loan Servicing Rights | |
Finite-Lived Intangible Assets [Line Items] | |
2020 | $ 5,161 |
2021 | 4,179 |
2022 | 3,226 |
2023 | 2,483 |
2024 | 1,931 |
Core Deposits | |
Finite-Lived Intangible Assets [Line Items] | |
2020 | 6,629 |
2021 | 11,607 |
2022 | 9,876 |
2023 | 8,146 |
2024 | 6,537 |
Other | |
Finite-Lived Intangible Assets [Line Items] | |
2020 | 110 |
2021 | 206 |
2022 | 191 |
2023 | 131 |
2024 | $ 117 |
Borrowed Funds - Schedule of Short-Term Borrowings (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Total short-term borrowings | $ 2,082,880 | $ 1,093,280 |
Short-term borrowings | ||
Debt Instrument [Line Items] | ||
FHLB advances | 1,235,000 | 940,000 |
Federal funds purchased | 678,900 | 0 |
Securities sold under agreements to repurchase | 168,980 | 153,280 |
Total short-term borrowings | $ 2,082,880 | $ 1,093,280 |
Borrowed Funds - Schedule of Long-Term Borrowings (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Net subordinated note carrying value | $ 113,100 | |
Long-term borrowings | ||
Debt Instrument [Line Items] | ||
FHLB advances, net | 2,153,052 | $ 1,480,012 |
Net subordinated note carrying value | 404,455 | 292,414 |
Securities sold under agreements to repurchase | 350,000 | 350,000 |
Other | 28 | 0 |
Total long-term borrowings | 2,907,535 | 2,122,426 |
Unamortized prepayment penalties and other purchase accounting adjustments | 1,200 | 2,800 |
Deferred issuance costs | $ 2,900 | $ 1,200 |
Borrowed Funds - Schedule of FHLB Repayment (Detail) - Long-term borrowings $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2020 | $ 30,000 |
2021 | 994,769 |
2022 | 121,420 |
2023 | 428,164 |
2024 | 300,000 |
Thereafter | 279,931 |
Total long-term FHLB advances | $ 2,154,284 |
Borrowed Funds - Schedule of Repayment of Long-Term Borrowings for Securities Sold Under Agreements to Repurchase (Detail) - Long-Term Borrowings $ in Thousands |
Jun. 30, 2020
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2021 | $ 300,000 |
2022 | 50,000 |
Net Amounts Presented | $ 350,000 |
Derivative Instruments and Hedging Activities - Interest Rate Derivatives Designated as Cash Flow Hedges (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items] | ||||
Amount of gain (loss) reclassified from accumulated other comprehensive loss to interest expense | $ (65,966) | $ (107,508) | $ (164,420) | $ (209,084) |
Amount of loss recognized in other comprehensive income | (1,773) | (962) | (3,253) | (1,512) |
Amounts Reclassified from Accumulated Other Comprehensive Loss | ||||
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items] | ||||
Amount of gain (loss) reclassified from accumulated other comprehensive loss to interest expense | $ 438 | $ (383) | $ (177) | $ (673) |
Derivative Instruments and Hedging Activities - Gains (Losses) on Interest Rate Derivatives Designated as Fair Value Hedges (Details) - Fair value hedge - Interest income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Interest rate swaps | ||||
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items] | ||||
Gain (loss) related to derivative interest rate swaps | $ 71 | $ 49 | $ 82 | $ 73 |
Loans | Derivatives designated as hedging instruments | ||||
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items] | ||||
Gain (loss) related to hedged loans | $ (71) | $ (49) | $ (82) | $ (73) |
Derivative Instruments and Hedging Activities - Interest Rate Derivatives Designated as Hedges (Details) - Fair value hedge - Derivatives designated as hedging instruments - Interest rate swaps - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative [Line Items] | ||
Carrying Amount of the Hedged Asset | $ 7,294 | $ 7,510 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset | $ 147 | $ 229 |
Derivative Instruments and Hedging Activities - Net Losses Related to Derivatives Not Designated as Hedges (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Non-designated hedge interest rate swaps and credit derivatives | ||||
Other non-interest expense | $ 1,416 | $ (347) | $ 1,505 | $ (757) |
Tax Credit Investments - Balance Sheet Disclosures (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Assets | ||
Other Assets: | ||
Affordable housing tax credit investments, net | $ 22,874 | $ 25,049 |
Other tax credit investments, net | 51,569 | 59,081 |
Total tax credit investments, net | 74,443 | 84,130 |
Other Liabilities | ||
Other Liabilities: | ||
Unfunded affordable housing tax credit commitments | 1,402 | 1,539 |
Unfunded other tax credit commitments | 1,139 | 1,139 |
Total unfunded tax credit commitments | $ 2,541 | $ 2,678 |
Tax Credit Investments - Income Statement Disclosures (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Components of Income Tax Expense: | ||||
Affordable housing tax credits and other tax benefits | $ 1,393 | $ 1,708 | $ 2,627 | $ 3,421 |
Other tax credit investment credits and tax benefits | 2,540 | 2,158 | 3,840 | 4,961 |
Total reduction in income tax expense | 3,933 | 3,866 | 6,467 | 8,382 |
Non-Interest Expenses | ||||
Amortization of Tax Credit Investments: | ||||
Affordable housing tax credit investment losses | 537 | 593 | 1,091 | 1,266 |
Affordable housing tax credit investment impairment losses | 665 | 794 | 1,083 | 1,524 |
Other tax credit investment losses | 679 | 2,509 | 1,223 | 3,496 |
Other tax credit investment impairment losses | 1,535 | 967 | 3,247 | 5,750 |
Total amortization of tax credit investments recorded in non-interest expense | $ 3,416 | $ 4,863 | $ 6,644 | $ 12,036 |
Business Segments - Additional Information (Detail) - segment |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting [Abstract] | ||||
Number of business segments | 4 | 4 | 4 | 4 |
Business Segments - Schedule of Financial Data for Business Segments (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Average interest earning assets | $ 37,778,387 | $ 29,877,384 | $ 36,226,232 | $ 29,721,015 |
Interest income | 348,525 | 327,742 | 712,318 | 647,966 |
Interest expense | 65,966 | 107,508 | 164,420 | 209,084 |
Net Interest Income | 282,559 | 220,234 | 547,898 | 438,882 |
Provision for credit losses | 41,156 | 2,100 | 75,839 | 10,100 |
Net Interest Income After Provision for Credit Losses | 241,403 | 218,134 | 472,059 | 428,782 |
Non-interest income | 44,830 | 27,603 | 86,227 | 135,276 |
Non-interest expense | 157,166 | 141,737 | 312,822 | 289,532 |
Internal expense transfer | 0 | 0 | 0 | 0 |
Income Before Income Taxes | $ 129,067 | $ 104,000 | $ 245,464 | $ 274,526 |
Return on average interest earning assets (pre-tax) | 1.37% | 1.39% | 1.36% | 1.85% |
Consumer Lending | ||||
Segment Reporting Information [Line Items] | ||||
Average interest earning assets | $ 7,214,368 | $ 6,756,322 | $ 7,215,756 | $ 6,788,511 |
Interest income | 66,807 | 67,617 | 135,062 | 135,644 |
Interest expense | 11,469 | 23,428 | 31,169 | 45,952 |
Net Interest Income | 55,338 | 44,189 | 103,893 | 89,692 |
Provision for credit losses | 3,106 | 885 | 9,891 | 2,983 |
Net Interest Income After Provision for Credit Losses | 52,232 | 43,304 | 94,002 | 86,709 |
Non-interest income | 17,175 | 13,037 | 31,852 | 26,819 |
Non-interest expense | 20,440 | 18,392 | 40,311 | 37,097 |
Internal expense transfer | 19,406 | 19,291 | 39,741 | 38,718 |
Income Before Income Taxes | $ 29,561 | $ 18,658 | $ 45,802 | $ 37,713 |
Return on average interest earning assets (pre-tax) | 1.64% | 1.10% | 1.27% | 1.11% |
Commercial Lending | ||||
Segment Reporting Information [Line Items] | ||||
Average interest earning assets | $ 24,826,832 | $ 18,796,093 | $ 23,804,558 | $ 18,615,885 |
Interest income | 255,152 | 229,366 | 520,027 | 449,650 |
Interest expense | 40,640 | 65,141 | 102,826 | 126,012 |
Net Interest Income | 214,512 | 164,225 | 417,201 | 323,638 |
Provision for credit losses | 38,009 | 1,215 | 65,148 | 7,117 |
Net Interest Income After Provision for Credit Losses | 176,503 | 163,010 | 352,053 | 316,521 |
Non-interest income | 16,172 | 7,688 | 31,771 | 14,470 |
Non-interest expense | 23,250 | 26,324 | 47,408 | 51,568 |
Internal expense transfer | 66,858 | 53,722 | 131,054 | 106,259 |
Income Before Income Taxes | $ 102,567 | $ 90,652 | $ 205,362 | $ 173,164 |
Return on average interest earning assets (pre-tax) | 1.65% | 1.93% | 1.73% | 1.86% |
Investment Management | ||||
Segment Reporting Information [Line Items] | ||||
Average interest earning assets | $ 5,737,187 | $ 4,324,969 | $ 5,205,918 | $ 4,316,619 |
Interest income | 27,623 | 31,966 | 59,392 | 65,190 |
Interest expense | 9,728 | 14,994 | 22,488 | 29,220 |
Net Interest Income | 17,895 | 16,972 | 36,904 | 35,970 |
Provision for credit losses | 41 | 0 | 800 | 0 |
Net Interest Income After Provision for Credit Losses | 17,854 | 16,972 | 36,104 | 35,970 |
Non-interest income | 5,823 | 2,560 | 8,965 | 4,678 |
Non-interest expense | 642 | 216 | 1,029 | 303 |
Internal expense transfer | 15,505 | 12,399 | 28,680 | 24,686 |
Income Before Income Taxes | $ 7,530 | $ 6,917 | $ 15,360 | $ 15,659 |
Return on average interest earning assets (pre-tax) | 0.52% | 0.64% | 0.59% | 0.73% |
Corporate and Other Adjustments | ||||
Segment Reporting Information [Line Items] | ||||
Average interest earning assets | $ 0 | $ 0 | $ 0 | $ 0 |
Interest income | (1,057) | (1,207) | (2,163) | (2,518) |
Interest expense | 4,129 | 3,945 | 7,937 | 7,900 |
Net Interest Income | (5,186) | (5,152) | (10,100) | (10,418) |
Provision for credit losses | 0 | 0 | 0 | 0 |
Net Interest Income After Provision for Credit Losses | (5,186) | (5,152) | (10,100) | (10,418) |
Non-interest income | 5,660 | 4,318 | 13,639 | 89,309 |
Non-interest expense | 112,834 | 96,805 | 224,074 | 200,564 |
Internal expense transfer | (101,769) | (85,412) | (199,475) | (169,663) |
Income Before Income Taxes | $ (10,591) | $ (12,227) | $ (21,060) | $ 47,990 |
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