Borrowed Funds

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Borrowed Funds

Borrowed Funds

Short-Term Borrowings

Short-term borrowings at September 30, 2022 and December 31, 2021 consisted of the following:

	September 30, 2022		December 31, 2021
	(in thousands)
FHLB advances	$	785,767	$	500,000
Securities sold under agreements to repurchase	133,516		155,726
Total short-term borrowings	$	919,283	$	655,726

The weighted average interest rate for short-term FHLB advances was 3.21 percent and 0.37 percent at September 30, 2022 and December 31, 2021, respectively.

Long-Term Borrowings

Long-term borrowings at September 30, 2022 and December 31, 2021 consisted of the following:

	September 30, 2022		December 31, 2021
	(in thousands)
FHLB advances, net (1)	$	788,574	$	789,033
Subordinated debt, net (2)	752,523		634,643
Total long-term borrowings	$	1,541,097	$	1,423,676

(1)	FHLB advances are presented net of unamortized premiums totaling $574 thousand and $1.0 million at September 30, 2022 and December 31, 2021, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $7.3 million and $5.8 million at September 30, 2022 and December 31, 2021, respectively.

FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 1.88 percent at both September 30, 2022 and December 31, 2021. 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 September 30, 2022 are scheduled for contractual balance repayments as follows:

Year	Amount
	(in thousands)
2023	$	350,000
2024	165,000
2025	273,000
Total long-term FHLB advances	$	788,000

There are no FHLB advances with scheduled repayments in years 2023 and thereafter, reported in the table above, which are callable for early redemption by the FHLB during the next 12 months.

Subordinated debt. On September 20, 2022, Valley issued $150 million of 6.25 percent fixed-to-floating rate subordinated notes due September 30, 2032. Interest on the subordinated notes during the initial five year term through September 30, 2027, is payable semi-annually in arrears on March 30 and September 30, commencing on March 30, 2023. Thereafter, interest is expected to be set based on three-month Secured Overnight Financing Rate (SOFR) plus 278 basis points and paid quarterly through maturity of the notes. At September 30, 2022, the subordinated notes had a carrying value of $147.5 million, net of unamortized debt issuance costs.

Valley also had the following subordinated debt outstanding at September 30, 2022:

•$125 million aggregate principal amount of 5.125 percent subordinated notes due September 27, 2023 with no call dates or prepayments allowed except upon the occurrence of certain events;

•$100 million aggregate principal amount of 4.55 percent subordinated notes due June 30, 2025 with no call dates or prepayments allowed except upon the occurrence of certain events;

•$115 million aggregate principal amount of 5.25 percent fixed-to-floating rate subordinated notes due June 15, 2030 and callable in whole or in part on or after June 15, 2025 or upon the occurrence of certain events; and

•$300 million aggregate principal amount of 3.00 percent fixed-to-floating rate subordinated notes due June 15, 2031 and are callable in whole or in part on or after June 15, 2026 or upon the occurrence of certain events.