Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Summary of Income Tax Expense

Income tax expense for the years ended December 31, 2021, 2020 and 2019 consisted of the following:

	2021		2020		2019
	(in thousands)
Current expense:
Federal	$	92,823	$	96,057	$	95,317
State	47,249		48,463		36,457
	140,072		144,520		131,774
Deferred expense (benefit):
Federal	19,709		(3,109)		10,444
State	7,118		(1,951)		4,784
	26,827		(5,060)		15,228
Total income tax expense	$	166,899	$	139,460	$	147,002

Summary of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to the significant portions of the deferred tax assets and liabilities as of December 31, 2021 and 2020 were as follows:

	2021		2020
	(in thousands)
Deferred tax assets:
Allowance for credit losses	$	102,704	$	96,508
Employee benefits	22,587		20,888
Net operating loss carryforwards	15,859		17,814
Purchase accounting	8,971		10,354
Other	11,689		24,677
Total deferred tax assets	161,810		170,241
Deferred tax liabilities:
Pension plans	30,119		22,705
Depreciation	10,343		3,829
Investment securities	3,728		12,690
Other investments	12,069		9,584
Core deposit intangibles	11,888		12,960
Other	14,133		12,226
Total deferred tax liabilities	82,280		73,994
Valuation Allowance	916		916
Net deferred tax asset (included in other assets)	$	78,614	$	95,331

Summary of Income Tax Reconciliation

Reconciliation between the reported income tax expense and the amount computed by multiplying consolidated income before taxes by the statutory federal income tax rate of 21 percent for the years ended December 31, 2021, 2020, and 2019 were as follows: 

	2021		2020		2019
	(in thousands)
Federal income tax at expected statutory rate	$	134,556	$	111,314	$	95,927
Increase (decrease) due to:
State income tax expense, net of federal tax effect	42,950		36,744		32,581
Tax-exempt interest, net of interest incurred to carry tax-exempt securities	(2,298)		(2,786)		(3,118)
Bank owned life insurance	(1,759)		(2,026)		(1,637)
Tax credits from securities and other investments	(9,942)		(10,071)		(11,636)
FDIC insurance premium	2,457		3,283		2,507
Addition to reserve for uncertainties	—		—		31,123
Other, net	935		3,002		1,255
Income tax expense	$	166,899	$	139,460	$	147,002

Summary of Reconciliation of Gross Unrecognized Tax Benefits

A reconciliation of Valley’s reserve for uncertain tax liability positions for 2021, 2020 and 2019 is presented in the table below:

	2021		2020		2019
	(in thousands)
Beginning balance	$	31,918	$	31,918	$	—
Additions based on tax positions related to prior years	—		—		31,918
Settlements with taxing authorities	(1,559)		—		—
Ending balance	$	30,359	$	31,918	$	31,918