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Investment Securities
 6 Months Ended
Jun. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Equity Securities

Equity securities totaled $41.7 million and $36.5 million at June 30, 2022 and December 31, 2021, respectively. See Note 6 for further details on equity securities.

Trading Debt Securities

The fair value of trading debt securities, wholly consisting of municipal bonds, totaled $38.1 million at December 31, 2021. There were no trading debt securities at June 30, 2022. Net trading gains and losses were included in net gains and losses on securities transactions within non-interest income. We recorded net trading losses of $387 thousand and $1.4 million for three and six months ended June 30, 2022, respectively. Net trading gains totaled $489 thousand and $707 thousand for the three and six months ended June 30, 2021, respectively.
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, 2022 and December 31, 2021 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
 (in thousands)
June 30, 2022
U.S. Treasury securities$305,371 $— $(12,973)$292,398 
U.S. government agency securities31,083 42 (592)30,533 
Obligations of states and political subdivisions:
Obligations of states and state agencies13,252 10 (331)12,931 
Municipal bonds173,450 13 (28,916)144,547 
Total obligations of states and political subdivisions186,702 23 (29,247)157,478 
Residential mortgage-backed securities780,624 216 (59,804)721,036 
Corporate and other debt securities191,155 288 (10,337)181,106 
Total $1,494,935 $569 $(112,953)$1,382,551 
December 31, 2021
U.S. government agency securities$20,323 $608 $(6)$20,925 
Obligations of states and political subdivisions:
Obligations of states and state agencies26,088 132 (93)26,127 
Municipal bonds53,530 349 (116)53,763 
Total obligations of states and political subdivisions79,618 481 (209)79,890 
Residential mortgage-backed securities895,279 14,986 (5,763)904,502 
Corporate and other debt securities120,871 3,177 (556)123,492 
Total$1,116,091 $19,252 $(6,534)$1,128,809 
The age of unrealized losses and fair value of the related available for sale debt securities at June 30, 2022 and December 31, 2021 were as follows: 
 Less than
Twelve Months		More than
Twelve Months		Total
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
 (in thousands)
June 30, 2022
U.S. Treasury securities$292,397 $(12,973)$— $— $292,397 $(12,973)
U.S. government agency securities26,224 (575)1,202 (17)27,426 (592)
Obligations of states and political subdivisions:
Obligations of states and state agencies
9,315 (331)— — 9,315 (331)
Municipal bonds141,951 (28,916)— — 141,951 (28,916)
Total obligations of states and political subdivisions
151,266 (29,247)— — 151,266 (29,247)
Residential mortgage-backed securities660,060 (52,782)51,630 (7,022)711,690 (59,804)
Corporate and other debt securities148,818 (10,337)— — 148,818 (10,337)
Total$1,278,765 $(105,914)$52,832 $(7,039)$1,331,597 $(112,953)
December 31, 2021
U.S. government agency securities$— $— $1,326 $(6)$1,326 $(6)
Obligations of states and political subdivisions:
Obligations of states and state agencies
10,549 (93)— — 10,549 (93)
Municipal bonds19,100 (116)— — 19,100 (116)
Total obligations of states and political subdivisions
29,649 (209)— — 29,649 (209)
Residential mortgage-backed securities371,256 (4,770)25,960 (993)397,216 (5,763)
Corporate and other debt securities59,039 (556)— — 59,039 (556)
Total$459,944 $(5,535)$27,286 $(999)$487,230 $(6,534)
Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 655 and 139 at June 30, 2022 and December 31, 2021, respectively.
As of June 30, 2022, 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 $446.4 million.
The contractual maturities of available for sale debt securities at June 30, 2022 are set forth in the following table. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.
 June 30, 2022
 Amortized
Cost		Fair
Value
 (in thousands)
Due in one year$13,002 $12,941 
Due after one year through five years179,567 176,480 
Due after five years through ten years249,507 237,046 
Due after ten years272,235 235,048 
Residential mortgage-backed securities780,624 721,036 
Total $1,494,935 $1,382,551 
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 5.3 years at June 30, 2022.
Impairment Analysis of Available For Sale Debt Securities

Valley's available for sale debt securities portfolio includes corporate bonds and revenue bonds, among other securities. These types of securities 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 current economic conditions and the effects of the COVID-19 pandemic.

Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. Valley has evaluated available for sale debt securities that are in an unrealized loss position as of June 30, 2022 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, 2022 and 2021. There was no allowance for credit losses for available for sale debt securities at June 30, 2022 and December 31, 2021.
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, 2022 and December 31, 2021 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
 (in thousands)
June 30, 2022
U.S. Treasury securities$67,238 $573 $(29)$67,782 
U.S. government agency securities259,711 138 (16,495)243,354 
Obligations of states and political subdivisions:
Obligations of states and state agencies102,677 222 (2,468)100,431 
Municipal bonds402,090 520 (16,707)385,903 
Total obligations of states and political subdivisions504,767 742 (19,175)486,334 
Residential mortgage-backed securities2,775,928 814 (284,005)2,492,737 
Trust preferred securities37,033 3 (5,583)31,453 
Corporate and other debt securities75,300 31 (3,276)72,055 
Total $3,719,977 $2,301 $(328,563)$3,393,715 
December 31, 2021
U.S. Treasury securities$67,558 $4,103 $— $71,661 
U.S. government agency securities6,265 113 — 6,378 
Obligations of states and political subdivisions:
Obligations of states and state agencies141,015 3,065 (312)143,768 
Municipal bonds196,947 3,536 (87)200,396 
Total obligations of states and political subdivisions337,962 6,601 (399)344,164 
Residential mortgage-backed securities2,166,142 14,599 (28,440)2,152,301 
Trust preferred securities37,020 5 (5,109)31,916 
Corporate and other debt securities53,750 559 (124)54,185 
Total $2,668,697 $25,980 $(34,072)$2,660,605 
The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2022 and December 31, 2021 were as follows: 
 Less than
Twelve Months		More than
Twelve Months		Total
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
 (in thousands)
June 30, 2022
U.S. Treasury securities$34,914 $(29)$— $— $34,914 $(29)
U.S. government agency securities220,737 (16,495)— — 220,737 (16,495)
Obligations of states and political subdivisions:
Obligations of states and state agencies
61,460 (1,466)9,610 (1,002)71,070 (2,468)
Municipal bonds251,294 (16,606)1,311 (101)252,605 (16,707)
Total obligations of states and political subdivisions
312,754 (18,072)10,921 (1,103)323,675 (19,175)
Residential mortgage-backed securities
1,931,648 (197,148)524,191 (86,857)2,455,839 (284,005)
Trust preferred securities— — 30,450 (5,583)30,450 (5,583)
Corporate and other debt securities67,524 (3,276)— — 67,524 (3,276)
Total$2,567,577 $(235,020)$565,562 $(93,543)$3,133,139 $(328,563)
December 31, 2021
Obligations of states and political subdivisions:
Obligations of states and state agencies$17,000 $(254)$5,517 $(58)$22,517 $(312)
Municipal bonds9,403 (87)— — 9,403 (87)
Total obligations of states and political subdivisions
26,403 (341)5,517 (58)31,920 (399)
Residential mortgage-backed securities
1,381,405 (22,365)206,520 (6,075)1,587,925 (28,440)
Trust preferred securities— — 30,912 (5,109)30,912 (5,109)
Corporate and other debt securities
32,627 (124)— — 32,627 (124)
Total$1,440,435 $(22,830)$242,949 $(11,242)$1,683,384 $(34,072)

Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 717 and 108 at June 30, 2022 and December 31, 2021, respectively.
As of June 30, 2022, 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 $892.6 million.
The contractual maturities of investments in debt securities held to maturity at June 30, 2022 are set forth in the table below. Maturities may differ from contractual maturities in residential mortgage-backed securities because the mortgages underlying the securities may be prepaid without any penalties. Therefore, residential mortgage-backed securities are not included in the maturity categories in the following summary.  
 June 30, 2022
 Amortized
Cost		Fair
Value
 (in thousands)
Due in one year$33,206 $33,186 
Due after one year through five years220,521 219,462 
Due after five years through ten years73,729 72,398 
Due after ten years616,593 575,932 
Residential mortgage-backed securities2,775,928 2,492,737 
Total$3,719,977 $3,393,715 
Actual maturities of held to maturity debt securities may differ from those presented above since certain obligations provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.
The weighted-average remaining expected life for residential mortgage-backed securities held to maturity was 7.7 years at June 30, 2022.
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, 2022 and December 31, 2021.
AAA/AA/A RatedBBB ratedNon-investment grade ratedNon-ratedTotal
 (in thousands)
June 30, 2022
U.S. Treasury securities$67,238 $— $— $— $67,238 
U.S. government agency securities259,711 — — — 259,711 
Obligations of states and political subdivisions:
Obligations of states and state agencies76,322 — 5,537 20,818 102,677 
Municipal bonds346,261 — — 55,829 402,090 
Total obligations of states and political subdivisions
422,583 — 5,537 76,647 504,767 
Residential mortgage-backed securities2,775,928 — — — 2,775,928 
Trust preferred securities— — — 37,033 37,033 
Corporate and other debt securities2,000 6,000 — 67,300 75,300 
Total $3,527,460 $6,000 $5,537 $180,980 $3,719,977 
December 31, 2021
U.S. Treasury securities$67,558 $— $— $— $67,558 
U.S. government agency securities6,265 — — — 6,265 
Obligations of states and political subdivisions:
Obligations of states and state agencies118,368 — 5,576 17,071 141,015 
Municipal bonds148,854 — — 48,093 196,947 
Total obligations of states and political subdivisions
267,222 — 5,576 65,164 337,962 
Residential mortgage-backed securities2,166,142 — — — 2,166,142 
Trust preferred securities— — — 37,020 37,020 
Corporate and other debt securities2,000 6,000 — 45,750 53,750 
Total$2,509,187 $6,000 $5,576 $147,934 $2,668,697 

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At June 30, 2022, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included 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. government agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds called TEMS.

Held to maturity debt securities were carried net of allowance for credit losses totaling $1.5 million at June 30, 2022 and $1.2 million at December 31, 2021. Valley recorded a provision for credit losses of $286 thousand and $343
thousand for the three and six months ended June 30, 2022, respectively, and a credit (negative) provision for credit losses of $30 thousand and $388 thousand, respectively, for the three and six months ended June 30, 2021.