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Borrowed Funds
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Borrowed Funds
BORROWED FUNDS (Note 10)
Short-Term Borrowings
Short-term borrowings at December 31, 2022 and 2021 consisted of the following: 
20222021
 
FHLB advances$24,035 $500,000 
Securities sold under agreements to repurchase114,694 155,726 
Total short-term borrowings$138,729 $655,726 
The weighted average interest rate for short-term FHLB advances was 1.60 percent and 0.37 percent at December 31, 2022 and 2021, respectively. The interest payments on the FHLB advances totaling $500 million at December 31, 2021 were hedged with interest rate swaps that expired during 2022. See Note 15 for details on our derivative hedging activities.
Long-Term Borrowings
Long-term borrowings at December 31, 2022 and 2021 consisted of the following: 
20222021
 
FHLB advances, net (1)
$788,419 $789,033 
Subordinated debt, net (2)
754,639 634,643 
Total long-term borrowings$1,543,058 $1,423,676 
(1)
FHLB advances are presented net of unamortized premiums totaling $419 thousand and $1.0 million at December 31, 2022 and 2021, respectively.
(2)
Subordinated debt is presented net of unamortized debt issuance costs totaling $6.9 million and $5.8 million at December 31, 2022 and 2021, respectively.
FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 1.88 percent at December 31, 2022 and 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.
In June 2021, Valley prepaid $247.5 million of long-term FHLB advances with maturities scheduled through 2025 and a weighted average effective interest rate of 1.82 percent. The transactions were funded with excess cash liquidity and accounted for as an early debt extinguishment resulting in a loss of $8.4 million reported within non-interest expense for the year ended December 31, 2021.
Long-Term Borrowings
The long-term FHLB advances at December 31, 2022 are scheduled for contractual balance repayments as follows: 
YearAmount
 (in thousands)
2023$350,000 
2024165,000 
2025273,000 
Total long-term FHLB advances$788,000 
There are no FHLB advances with scheduled repayments in years 2024 and thereafter, reported in the table above, which are callable for early redemption by the FHLB during 2023.
Subordinated Debt. At December 31, 2022, Valley had the following subordinated debt outstanding by its maturity date:
•$125 million of 5.125 percent subordinated notes issued in September 2013 and due September 27, 2023 with no call dates or prepayments allowed, unless certain conditions exist. Interest on the subordinated debentures is payable semi-annually in arrears on March 27 and September 27 of each year. In conjunction with the issuance, Valley entered into an interest rate swap transaction used to hedge the change in the fair value of the subordinated notes. In August 2016, the fair value interest rate swap with a notional amount of $125 million was terminated resulting in an adjusted fixed annual interest rate of 3.32 percent on the subordinated notes, after amortization of the derivative valuation adjustment recorded at the termination date. The subordinated notes had a net carrying value of $126.6 million and $128.6 million at December 31, 2022 and 2021, respectively.
•$100 million of 4.55 percent subordinated debentures (notes) issued in June 2015 and due June 30, 2025 with no call dates or prepayments allowed unless certain conditions exist. Interest on the subordinated notes is payable semi-annually in arrears on June 30 and December 30 of each year. The subordinated notes had a net carrying value of $99.7 million and $99.6 million at December 31, 2022 and 2021, respectively.
•$115 million of 5.25 percent Fixed-to-Floating Rate subordinated notes issued in June 2020 and due June 15, 2030 callable in whole or in part on or after June 15, 2025 or upon the occurrence of certain events. 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 net carrying value of $113.6 million and $113.4 million at December 31, 2022 and 2021, respectively.
•$300 million of 3.00 percent Fixed-to-Floating Rate subordinated notes issued in May 2021 and due June 15, 2031. The subordinated notes are callable in whole or in part on or after June 15, 2026 or upon the occurrence of certain events. Interest on the subordinated notes during the initial five-year term through June 15, 2026 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on three-month Term SOFR plus 236 basis points and paid quarterly through maturity of the notes. The subordinated notes had a carrying value of $267.1 million and $293.0 million, net of unamortized debt issuance costs and fair value of hedging adjustment at December 31, 2022 and 2021, respectively. During June 2021, Valley entered into an interest rate swap transaction used to hedge the change in the fair value of the $300 million in subordinated notes. See Note 15 for additional details.
•$150 million of 6.25 percent fixed-to-floating rate subordinated notes issued on September 20, 2022 and 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 will be set based on three-month Term SOFR plus 278 basis points and paid quarterly through maturity of the notes. The subordinated notes had a net carrying value of $147.6 million at December 31, 2022.
On April 1, 2021, Valley redeemed, at par value, $60 million of its callable 6.25 percent subordinated notes originally due April 1, 2026. No gain or loss was incurred on this transaction.
Pledged Securities. The fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit, FHLB advances and for other purposes required by law approximated $1.1 billion and $1.7 billion for December 31, 2022 and 2021, respectively.