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Investment Securities
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
INVESTMENT SECURITIES (Note 4)
Equity Securities
Equity securities totaled $48.7 million and $36.5 million at December 31, 2022 and 2021, respectively. See Note 3 for further details on equity securities.
Trading Debt Securities
The fair value of trading debt securities totaled $13.4 million and $38.1 million at December 31, 2022 and 2021, respectively. Net trading gains were included in net gains and losses on securities transactions within non-interest income. See the “Realized Gains and Losses” section below.
Available for Sale Debt Securities
The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at December 31, 2022 and 2021 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
 (in thousands)
December 31, 2022
U.S. Treasury securities $308,137 $— $(28,639)$279,498 
U.S. government agency securities29,494 47 (2,577)26,964 
Obligations of states and political subdivisions:
Obligations of states and state agencies10,899 — (493)10,406 
Municipal bonds171,586 — (35,181)136,405 
Total obligations of states and political subdivisions182,485 — (35,674)146,811 
Residential mortgage-backed securities719,868 64 (90,114)629,818 
Corporate and other debt securities197,927 — (19,621)178,306 
Total$1,437,911 $111 $(176,625)$1,261,397 
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 related available for sale debt securities at December 31, 2022 and 2021 were as follows: 
 Less than
Twelve Months		More than
Twelve Months		Total
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
 (in thousands)
December 31, 2022
U.S. Treasury securities$279,498 $(28,639)$— $— $279,498 $(28,639)
U.S. government agency securities
$22,831 $(2,538)$1,116 $(39)$23,947 $(2,577)
Obligations of states and political subdivisions:
Obligations of states and state agencies
2,943 (54)7,462 (439)10,405 (493)
Municipal bonds112,029 (26,044)24,127 (9,137)136,156 (35,181)
Total obligations of states and political subdivisions
114,972 (26,098)31,589 (9,576)146,561 (35,674)
Residential mortgage-backed securities
311,836 (27,152)314,834 (62,962)626,670 (90,114)
Corporate and other debt securities
144,924 (12,581)33,382 (7,040)178,306 (19,621)
Total$874,061 $(97,008)$380,921 $(79,617)$1,254,982 $(176,625)
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 securities
371,256 (4,770)25,960 (993)397,216 (5,763)
Corporate and other debt securities
59,039 (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 at December 31, 2022 was 730 as compared to 139 at December 31, 2021.
As of December 31, 2022, the fair value of securities available for sale that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $333.3 million.
The contractual maturities of available for sale debt securities at December 31, 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. 
 December 31, 2022
Amortized CostFair Value
 (in thousands)
Due in one year$3,319 $3,297 
Due after one year through five years188,292 179,452 
Due after five years through ten years271,859 246,415 
Due after ten years254,573 202,415 
Residential mortgage-backed securities719,868 629,818 
Total$1,437,911 $1,261,397 
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 7.75 years at December 31, 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 the COVID-19 pandemic, and their potential negative effect on the future performance of the security issuers.
Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. See Note 1 for further information regarding Valley's accounting policy. Valley has evaluated available for sale debt securities that are in an unrealized loss position as of December 31, 2022 included in the tables above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, 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 years ended December 31, 2022, 2021 and 2020, and, as a result, there was no allowance for credit losses for available for sale debt securities at December 31, 2022 and 2021.
Held to Maturity Debt Securities
The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at December 31, 2022 and 2021 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair ValueAllowance for Credit LossesNet Carrying Value
 (in thousands)
December 31, 2022
U.S. Treasury securities$66,911 $— $(1,022)$65,889 $— $66,911 
U.S. government agency securities260,392 — (47,680)212,712 — 260,392 
Obligations of states and political subdivisions:
Obligations of states and state agencies99,238 305 (3,869)95,674 252 98,986 
Municipal bonds381,060 76 (23,615)357,521 41 381,019 
Total obligations of states and political subdivisions480,298 381 (27,484)453,195 293 480,005 
Residential mortgage-backed securities2,909,106 1,723 (415,032)2,495,797 — 2,909,106 
Trust preferred securities37,043 1 (5,938)31,106 888 36,155 
Corporate and other debt securities75,234 — (4,463)70,771 465 74,769 
Total$3,828,984 $2,105 $(501,619)$3,329,470 $1,646 $3,827,338 
December 31, 2021
U.S. Treasury securities$67,558 $4,103 $— $71,661 $— $67,558 
U.S. government agency securities6,265 113 — 6,378 — 6,265 
Obligations of states and political subdivisions:
Obligations of states and state agencies141,015 3,065 (312)143,768 267 140,748 
Municipal bonds196,947 3,536 (87)200,396 15 196,932 
Total obligations of states and political subdivisions337,962 6,601 (399)344,164 282 337,680 
Residential mortgage-backed securities2,166,142 14,599 (28,440)2,152,301 — 2,166,142 
Trust preferred securities37,020 5 (5,109)31,916 531 36,489 
Corporate and other debt securities53,750 559 (124)54,185 352 53,398 
Total$2,668,697 $25,980 $(34,072)$2,660,605 $1,165 $2,667,532 
The age of unrealized losses and fair value of related debt securities held to maturity at December 31, 2022 and 2021 were as follows:
 Less than
Twelve Months		More than
Twelve Months		Total
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
 (in thousands)
December 31, 2022
U.S. Treasury securities$65,889 $(1,022)$— $— $65,889 $(1,022)
U.S. government agency securities209,863 (47,508)1,673 (172)211,536 (47,680)
Obligations of states and political subdivisions:
Obligations of states and state agencies62,443 (2,020)18,231 (1,849)80,674 (3,869)
Municipal bonds251,970 (20,457)15,534 (3,158)267,504 (23,615)
Total obligations of states and political subdivisions314,413 (22,477)33,765 (5,007)348,178 (27,484)
Residential mortgage-backed securities
962,690 (109,532)1,413,590 (305,500)2,376,280 (415,032)
Trust preferred securities— — 30,105 (5,938)30,105 (5,938)
Corporate and other debt securities57,245 (2,989)13,525 (1,474)70,770 (4,463)
Total$1,610,100 $(183,528)$1,492,658 $(318,091)$3,102,758 $(501,619)
December 31, 2021
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 securities32,627 (124)— — 32,627 (124)
Total$1,440,435 $(22,830)$242,949 $(11,242)$1,683,384 $(34,072)
Within the securities held to maturity portfolio, the total number of security positions in an unrealized loss position was 802 and 108 at December 31, 2022 and 2021, respectively.
As of December 31, 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 $771.8 million.
The contractual maturities of investments in debt securities held to maturity at December 31, 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. 
 December 31, 2022
 Amortized CostFair Value
 (in thousands)
Due in one year$61,885 $61,217 
Due after one year through five years140,907 138,074 
Due after five years through ten years85,773 80,934 
Due after ten years631,313 553,448 
Residential mortgage-backed securities2,909,106 2,495,797 
Total$3,828,984 $3,329,470 
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 10.2 years at December 31, 2022.
Credit Quality Indicators
Valley monitors the credit quality of the held to maturity debt securities utilizing 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 December 31, 2022 and 2021.
AAA/AA/A RatedBBB ratedNon-investment grade ratedNon-ratedTotal
 (in thousands)
December 31, 2022
U.S. Treasury securities$66,911 $— $— $— $66,911 
U.S. government agency securities260,392 — — — 260,392 
Obligations of states and political subdivisions:
Obligations of states and state agencies74,943 — 5,497 18,798 99,238 
Municipal bonds333,488 — — 47,572 381,060 
Total obligations of states and political subdivisions408,431 — 5,497 66,370 480,298 
Residential mortgage-backed securities2,909,106 — — — 2,909,106 
Trust preferred securities— — 37,043 37,043 
Corporate and other debt securities2,000 6,000 — 67,234 75,234 
Total$3,646,840 $6,000 $5,497 $170,647 $3,828,984 
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 subdivisions267,222 — 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 December 31, 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 security 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. 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. See Note 1 for further details.
Held to maturity debt securities are carried net of an allowance for credit losses. The following table details the activity in the allowance for credit losses for the years ended December 31, 2022, 2021and 2020: 
202220212020
(in thousands)
Beginning balance$1,165 $1,428 $— 
Adoption of ASU No. 2016-13 on January 1, 2020— — 793
Provision (credit) for credit losses481 (263)635
Ending balance$1,646 $1,165 $1,428 
There were no net charge-offs of held to maturity debt securities in the respective periods presented in the table above.
Realized Gains and Losses
Gross gains and losses realized on sales, maturities and other securities transactions related to available for sale securities and net gains on trading debt securities included in earnings for the years ended December 31, 2022, 2021 and 2020 were as follows:
202220212020
 (in thousands)
Sales transactions:
Gross gains
$— $1,370 $665 
Gross losses— (550)(9)
Total$— $820 $656 
Maturities and other securities transactions:
Gross gains
$171 $10 $34 
Gross losses(76)(285)(166)
Total95 (275)(132)
Net (losses) gains on trading debt securities(1,325)1,213 — 
(Losses) gains on securities transactions, net$(1,230)$1,758 $524