10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2023

OR

☐ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number 1-11277 

 Valley National Bancorp

(Exact name of registrant as specified in its charter)

New Jersey		22-2477875
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
One Penn Plaza
New York,	NY	10119
(Address of principal executive office)		(Zip code)

973-305-8800

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of exchange on which registered
Common Stock, no par value	VLY	The Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series A, no par value	VLYPP	The Nasdaq Stock Market LLC
Non-Cumulative Perpetual Preferred Stock, Series B, no par value	VLYPO	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☒	Accelerated filer	☐	Smaller reporting company	☐
Non-accelerated filer	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common Stock (no par value), of which 507,634,731 shares were outstanding as of August 7, 2023.

TABLE OF CONTENTS

		Page Number
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition as of June 30, 2023 and December 31, 2022	2
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2023 and 2022	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	4
	Consolidated Statements of Changes in Shareholders' Equity for the Three and Six Months Ended June 30, 2023 and 2022	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	86
Item 4.	Controls and Procedures	86
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	87
Item 1A.	Risk Factors	87
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88
Item 5.	Other Information	88
Item 6.	Exhibits	89
SIGNATURES		89

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except for share data)

	June 30, 2023		December 31, 2022
Assets	(Unaudited)
Cash and due from banks	$	463,318	$	444,325
Interest bearing deposits with banks	1,491,091		503,622
Investment securities:
Equity securities	61,010		48,731
Trading debt securities	3,409		13,438
Available for sale debt securities	1,236,946		1,261,397
Held to maturity debt securities (net of allowance for credit losses of $1,351 at June 30, 2023 and $1,646 at December 31, 2022)	3,765,487		3,827,338
Total investment securities	5,066,852		5,150,904
Loans held for sale, at fair value	33,044		18,118
Loans	49,877,248		46,917,200
Less: Allowance for loan losses	(436,432)		(458,655)
Net loans	49,440,816		46,458,545
Premises and equipment, net	386,584		358,556
Lease right of use assets	359,751		306,352
Bank owned life insurance	717,681		717,177
Accrued interest receivable	225,918		196,606
Goodwill	1,868,936		1,868,936
Other intangible assets, net	177,946		197,456
Other assets	1,471,756		1,242,152
Total Assets	$	61,703,693	$	57,462,749
Liabilities
Deposits:
Non-interest bearing	$	12,434,307	$	14,463,645
Interest bearing:
Savings, NOW and money market	22,277,326		23,616,812
Time	14,908,182		9,556,457
Total deposits	49,619,815		47,636,914
Short-term borrowings	1,088,899		138,729
Long-term borrowings	2,443,533		1,543,058
Junior subordinated debentures issued to capital trusts	56,934		56,760
Lease liabilities	420,972		358,884
Accrued expenses and other liabilities	1,498,356		1,327,602
Total Liabilities	55,128,509		51,061,947
Shareholders’ Equity
Preferred stock, no par value; 50,000,000 authorized shares:
Series A (4,600,000 shares issued at June 30, 2023 and December 31, 2022)	111,590		111,590
Series B (4,000,000 shares issued at June 30, 2023 and December 31, 2022)	98,101		98,101
Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at June 30, 2023 and December 31, 2022)	178,187		178,185
Surplus	4,974,507		4,980,231
Retained earnings	1,379,534		1,218,445
Accumulated other comprehensive loss	(164,747)		(164,002)
Treasury stock, at cost (277,480 common shares at June 30, 2023 and 1,522,432 common shares at December 31, 2022)	(1,988)		(21,748)
Total Shareholders’ Equity	6,575,184		6,400,802
Total Liabilities and Shareholders’ Equity	$	61,703,693	$	57,462,749

See accompanying notes to consolidated financial statements.

2

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands, except for per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest Income
Interest and fees on loans	$	715,172	$	415,577	$	1,370,398	$	732,942
Interest and dividends on investment securities:
Taxable	31,919		27,534		64,208		45,973
Tax-exempt	5,575		5,191		10,900		7,708
Dividends	7,517		3,076		12,702		4,752
Interest on federal funds sold and other short-term investments	27,276		1,569		49,481		2,030
Total interest income	787,459		452,947		1,507,689		793,405
Interest Expense
Interest on deposits:
Savings, NOW and money market	164,842		17,122		315,608		26,749
Time	125,764		3,269		206,062		6,100
Interest on short-term borrowings	50,208		4,083		84,156		4,889
Interest on long-term borrowings and junior subordinated debentures	26,880		10,313		46,078		19,838
Total interest expense	367,694		34,787		651,904		57,576
Net Interest Income	419,765		418,160		855,785		735,829
(Credit) provision for credit losses for available for sale and held to maturity securities	(282)		286		4,705		343
Provision for credit losses for loans	6,332		43,712		15,782		47,212
Net Interest Income After Provision for Credit Losses	413,715		374,162		835,298		688,274
Non-Interest Income
Wealth management and trust fees	11,176		9,577		20,763		14,708
Insurance commissions	3,139		3,463		5,559		5,322
Capital markets	16,967		14,711		27,859		29,071
Service charges on deposit accounts	10,542		10,067		21,018		16,279
Gains (losses) on securities transactions, net	217		(309)		595		(1,381)
Fees from loan servicing	2,702		2,717		5,373		5,498
Gains on sales of loans, net	1,240		3,602		1,729		4,588
Bank owned life insurance	2,443		2,113		5,027		4,159
Other	11,649		12,592		26,451		19,559
Total non-interest income	60,075		58,533		114,374		97,803
Non-Interest Expense
Salary and employee benefits expense	149,594		154,798		294,580		262,531
Net occupancy expense	25,949		22,429		49,205		44,420
Technology, furniture and equipment expense	32,476		49,866		68,984		75,880
FDIC insurance assessment	10,426		5,351		19,581		9,509
Amortization of other intangible assets	9,812		11,400		20,331		15,837
Professional and legal fees	21,406		30,409		38,220		45,158
Amortization of tax credit investments	5,018		3,193		9,271		6,089
Other	28,290		22,284		54,965		37,646
Total non-interest expense	282,971		299,730		555,137		497,070
Income Before Income Taxes	190,819		132,965		394,535		289,007
Income tax expense	51,759		36,552		108,924		75,866
Net Income	139,060		96,413		285,611		213,141
Dividends on preferred stock	4,030		3,172		7,904		6,344
Net Income Available to Common Shareholders	$	135,030	$	93,241	$	277,707	$	206,797
Earnings Per Common Share:
Basic	$	0.27	$	0.18	$	0.55	$	0.45
Diluted	0.27		0.18		0.55		0.44

See accompanying notes to consolidated financial statements.

3

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	139,060	$	96,413	$	285,611	$	213,141
Other comprehensive loss, net of tax:
Unrealized gains and losses on available for sale securities
Net losses arising during the period	(18,051)		(52,269)		(881)		(91,161)
Less reclassification adjustment for net gains included in net income	—		—		—		(10)
Total	(18,051)		(52,269)		(881)		(91,171)
Unrealized gains and losses on derivatives (cash flow hedges)
Net (losses) gains on derivatives arising during the period	(3,573)		(23)		(775)		195
Less reclassification adjustment for net losses (gains) included in net income	516		(80)		895		306
Total	(3,057)		(103)		120		501
Defined benefit pension and postretirement benefit plans
Amortization of actuarial net loss	8		133		16		265
Total other comprehensive loss	(21,100)		(52,239)		(745)		(90,405)
Total comprehensive income	$	117,960	$	44,174	$	284,866	$	122,736

See accompanying notes to consolidated financial statements.

4

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

For the Six Months Ended June 30, 2023

			Common Stock							Accumulated
	Preferred Stock		Shares	Amount		Surplus		Retained Earnings		Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity
	(in thousands)
Balance - December 31, 2022	$	209,691	506,374	$	178,185	$	4,980,231	$	1,218,445	$	(164,002)	$	(21,748)	$	6,400,802
Adjustment due to the adoption of ASU 2022-02	—		—	—		—		990		—		—		990
Balance - January 1, 2023	209,691		506,374	178,185		4,980,231		1,219,435		(164,002)		(21,748)		6,401,792
Net income	—		—	—		—		146,551		—		—		146,551
Other comprehensive income, net of tax	—		—	—		—		—		20,355		—		20,355
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.52 per share	—		—	—		—		(2,077)		—		—		(2,077)
Common stock, $0.11 per share	—		—	—		—		(56,488)		—		—		(56,488)
Effect of stock incentive plan, net	—		1,061	1		(12,569)		(3,994)		—		16,057		(505)
Common stock issued	—		327	—		—		(650)		—		4,400		3,750
Balance - March 31, 2023	$	209,691	507,762	$	178,186	$	4,967,662	$	1,300,980	$	(143,647)	$	(1,291)	$	6,511,581
Net income	—		—	—		—		139,060		—		—		139,060
Other comprehensive loss, net of tax	—		—	—		—		—		(21,100)		—		(21,100)
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.56 per share	—		—	—		—		(2,233)		—		—		(2,233)
Common stock, $0.11 per share	—		—	—		—		(56,474)		—		—		(56,474)
Effect of stock incentive plan, net	—		157	1		6,845		(2)		—		1,395		8,239
Common stock repurchased	—		(300)	—		—		—		—		(2,092)		(2,092)
Balance - June 30, 2023	$	209,691	507,619	$	178,187	$	4,974,507	$	1,379,534	$	(164,747)	$	(1,988)	$	6,575,184

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (continued)

5

For the Six Months Ended June 30, 2022

			Common Stock							Accumulated
	Preferred Stock		Shares	Amount		Surplus		Retained Earnings		Other Comprehensive Loss		Treasury Stock		Total Shareholders’ Equity
	(in thousands)
Balance - December 31, 2021	$	209,691	421,437	$	148,482	$	3,883,035	$	883,645	$	(17,932)	$	(22,855)	$	5,084,066
Net income	—		—	—		—		116,728		—		—		116,728
Other comprehensive loss, net of tax	—		—	—		—		—		(38,166)		—		(38,166)
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(46,803)		—		—		(46,803)
Effect of stock incentive plan, net	—		972	—		(10,799)		(5,173)		—		13,220		(2,752)
Common stock repurchased	—		(1,015)	—		—		—		—		(13,517)		(13,517)
Balance - March 31, 2022	$	209,691	421,394	$	148,482	$	3,872,236	$	945,225	$	(56,098)	$	(23,152)	$	5,096,384
Net income	—		—	—		—		96,413		—		—		96,413
Other comprehensive loss, net of tax	—		—	—		—		—		(52,239)		—		(52,239)
Cash dividends declared:
Preferred stock, Series A, $0.39 per share	—		—	—		—		(1,797)		—		—		(1,797)
Preferred stock, Series B, $0.34 per share	—		—	—		—		(1,375)		—		—		(1,375)
Common stock, $0.11 per share	—		—	—		—		(56,211)		—		—		(56,211)
Effect of stock incentive plan, net	—		72	1		5,125		(109)		—		892		5,909
Common stock issued	—		84,863	29,702		1,088,127		—		—		—		1,117,829
Balance - June 30, 2022	$	209,691	506,329	$	178,185	$	4,965,488	$	982,146	$	(108,337)	$	(22,260)	$	6,204,913

See accompanying notes to consolidated financial statements.

6

VALLEY NATIONAL BANCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	285,611	$	213,141
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,425		18,297
Stock-based compensation	16,773		13,420
Provision for credit losses	20,487		47,555
Net amortization of premiums and accretion of discounts on securities and borrowings	(639)		9,680
Amortization of other intangible assets	20,331		15,837
Losses (gains) on available for sale and held to maturity debt securities, net	33		(69)
Proceeds from sales of loans held for sale	72,925		331,298
Gains on sales of loans, net	(1,729)		(4,588)
Originations of loans held for sale	(76,943)		(210,048)
(Gains) losses on sales of assets, net	(286)		265
Net change in:
Fair value of borrowings hedged by derivative transactions	(291)		(20,194)
Trading debt securities	10,029		39,580
Lease right of use assets	(53,412)		521
Cash surrender value of bank owned life insurance	(5,722)		(4,159)
Accrued interest receivable	(29,312)		(12,083)
Other assets	(230,017)		(191,597)
Accrued expenses and other liabilities	233,419		558,675
Net cash provided by operating activities	282,682		805,531
Cash flows from investing activities:
Net loan originations and purchases	(3,009,649)		(3,495,486)
Equity securities:
Purchases	(9,662)		(1,538)
Sales	771		1,110
Held to maturity debt securities:
Purchases	(114,544)		(545,934)
Maturities, calls and principal repayments	175,492		294,052
Available for sale debt securities:
Purchases	(41,470)		(38,000)
Sales	17,910		12,846
Maturities, calls and principal repayments	44,534		150,262
Death benefit proceeds from bank owned life insurance	5,218		3,089
Proceeds from sales of real estate property and equipment	490		7,265
Purchases of real estate property and equipment	(49,468)		(35,164)
Cash and cash equivalent acquired in acquisitions, net	—		321,540
Net cash used in investing activities	(2,980,378)		(3,325,958)

7

VALLEY NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (continued) (in thousands)
	Six Months Ended June 30,
	2023		2022
Cash flows from financing activities:
Net change in deposits	$	1,982,901	$	1,218,642
Net change in short-term borrowings	950,170		763,284
Proceeds from issuance of long-term borrowings, net	1,250,000		—
Repayments of long-term borrowings	(350,000)		—
Cash dividends paid to preferred shareholders	(7,904)		(6,344)
Cash dividends paid to common shareholders	(113,611)		(92,618)
Purchase of common shares to treasury	(11,133)		(23,886)
Common stock issued, net	3,750		106
Other, net	(15)		(365)
Net cash provided by financing activities	3,704,158		1,858,819
Net change in cash and cash equivalents	1,006,462		(661,608)
Cash and cash equivalents at beginning of year	947,947		2,049,920
Cash and cash equivalents at end of period	$	1,954,409	$	1,388,312
Supplemental disclosures of cash flow information:
Cash payments for:
Interest on deposits and borrowings	$	571,741	$	57,151
Federal and state income taxes	122,130		77,285
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	$	903	$	—
Transfer of loans to loans held for sale	10,000		—
Lease right of use assets obtained in exchange for operating lease liabilities	81,727		24,745
Acquisitions:
Non-cash assets acquired:
Equity securities	—		6,239
Investment securities available for sale	—		505,928
Investment securities held to maturity	—		806,627
Loans, net	—		5,844,070
Premises and equipment, net	—		38,827
Lease right of use assets	—		49,434
Bank owned life insurance	—		126,861
Accrued interest receivable	—		25,717
Goodwill	—		407,522
Other intangible assets, net	—		159,587
Other assets	—		158,352
Total non-cash assets acquired	$	—	$	8,129,164
Liabilities assumed:
Deposits	—		7,029,997
Short-term borrowings	—		103,794
Lease liabilities	—		79,844
Accrued expenses and other liabilities	—		119,240
Total liabilities assumed	$	—	$	7,332,875
Non-cash net assets acquired	—		796,289
Net cash and cash equivalents acquired in acquisition	$	—	$	321,540
Common stock issued in acquisition	$	—	$	1,117,829

See accompanying notes to consolidated financial statements.

8

VALLEY NATIONAL BANCORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey Corporation (Valley) include the accounts of Valley National Bank (the Bank) and all other entities in which Valley has a controlling financial interest. All inter-company transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to U.S. generally accepted accounting principles (U.S. GAAP) and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. Certain prior period amounts have been reclassified to conform to the current presentation.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at June 30, 2023 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022.

Significant Estimates. In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Actual results may differ from those estimates. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.

Note 2. Business Combinations

Acquisitions

Bank Leumi Le-Israel Corporation. On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as "Bank Leumi USA". Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida. The common shareholders of Bank Leumi USA received 3.8025 shares of Valley common stock and $5.08 in cash for each Bank Leumi USA common share that they owned. As a result, Valley issued approximately 85 million shares of common stock and paid $113.4 million in cash in the transaction. Based on Valley’s closing stock price on March 31, 2022, the transaction was valued at $1.2 billion, inclusive of the value of options. As a result of the acquisition, Bank Leumi Le-Israel B.M. owned approximately 14 percent of Valley's common stock as of April 1, 2022.

Merger expenses, primarily consisting of salary and employee benefit expense, totaled $4.1 million for the six months ended June 30, 2023. There were no merger expenses for the three months ended June 30, 2023. Merger expenses totaled $54.5 million and $58.9 million for the three and six months ended June 30, 2022, respectively,

9

and largely consisted of salary and employee benefit expense, professional and legal fees and technology related costs within non-interest expense on the consolidated statements of income.

The following table sets forth assets acquired and liabilities assumed in the Bank Leumi USA acquisition, at their estimated fair values as of the closing date of the transaction:

	April 1, 2022
	(in thousands)
Assets acquired:
Cash and cash equivalents	$	443,588
Equity securities	6,239
Available for sale debt securities	505,928
Held to maturity debt securities	806,627
Loans	5,914,389
Allowance for loan losses	(70,319)
Loans, net	5,844,070
Premises and equipment	38,827
Lease right of use assets	49,273
Bank owned life insurance	126,861
Accrued interest receivable	25,717
Goodwill	400,582
Other intangible assets	153,380
Other assets	160,921
Total assets acquired	$	8,562,013
Liabilities assumed:
Deposits:
Non-interest bearing	$	4,511,537
Interest bearing:
Savings, NOW and money market	2,224,834
Time	293,626
Total deposits	7,029,997
Short-term borrowings	103,794
Lease liabilities	79,683
Accrued expense and other liabilities	117,269
Total liabilities assumed	$	7,330,743
Common stock issued in acquisition	1,117,829
Cash paid in acquisition	113,441

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Note 3. Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except for share and per share data)
Net income available to common shareholders	$	135,030	$	93,241	$	277,707	$	206,797
Basic weighted average number of common shares outstanding	507,690,043		506,302,464		507,402,268		464,172,210
Plus: Common stock equivalents	952,982		2,176,742		1,674,035		2,148,473
Diluted weighted average number of common shares outstanding	508,643,025		508,479,206		509,076,303		466,320,683
Earnings per common share:
Basic	$	0.27	$	0.18	$	0.55	$	0.45
Diluted	0.27		0.18		0.55		0.44

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of restricted stock units and common stock options to purchase Valley’s common shares. Common stock options with exercise prices that exceed the average market price per share of Valley’s common stock during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation along with restricted stock units. Potential anti-dilutive weighted common shares totaled approximately 7.2 million and 2.2 million for the three months ended June 30, 2023 and 2022, respectively, and 3.0 million and 1.1 million for the six months ended June 30, 2023 and 2022, respectively.

Note 4. Accumulated Other Comprehensive Loss

The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2023:

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension and Postretirement Benefit Plans
	(in thousands)
Balance at March 31, 2023	$	(110,648)	$	5,410	$	(38,409)	$	(143,647)
Other comprehensive loss before reclassification	(18,051)		(3,573)		—		(21,624)
Amounts reclassified from other comprehensive loss	—		516		8		524
Other comprehensive (loss) income, net	(18,051)		(3,057)		8		(21,100)
Balance at June 30, 2023	$	(128,699)	$	2,353	$	(38,401)	$	(164,747)

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	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension and Postretirement Benefit Plans
	(in thousands)
Balance at December 31, 2022	$	(127,818)	$	2,233	$	(38,417)	$	(164,002)
Other comprehensive loss before reclassification	(881)		(775)		—		(1,656)
Amounts reclassified from other comprehensive loss	—		895		16		911
Other comprehensive (loss) income, net	(881)		120		16		(745)
Balance at June 30, 2023	$	(128,699)	$	2,353	$	(38,401)	$	(164,747)

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and six months ended June 30, 2023 and 2022:

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,				Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2023		2022		2023		2022		Income Statement Line Item
	(in thousands)
Unrealized gains on AFS securities before tax	$	—	$	—	$	—	$	14	Gains (losses) on securities transactions, net
Tax effect	—		—		—		(4)
Total net of tax	—		—		—		10
Unrealized gains (losses) on derivatives (cash flow hedges) before tax	(725)		116		(1,256)		(426)		Interest income, interest expense
Tax effect	209		(36)		361		120
Total net of tax	(516)		80		(895)		(306)
Defined benefit pension and postretirement benefit plans:
Amortization of actuarial net loss	(11)		(184)		(22)		(367)		*
Tax effect	3		51		6		102
Total net of tax	(8)		(133)		(16)		(265)
Total reclassifications, net of tax	$	(524)	$	(53)	$	(911)	$	(561)

* Amortization of actuarial net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

Note 5. New Authoritative Accounting Guidance

New Accounting Guidance Adopted in 2023

Accounting Standards Update (ASU) No. 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging –Portfolio Layer Method” expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges. This method allows entities to designate multiple hedging relationships with a single closed portfolio, and therefore a larger portion of the interest rate risk associated with such a portfolio is eligible to be hedged. ASU No. 2022-01 also clarifies that no assets may be added to a closed portfolio once it is designated in a portfolio layer method hedge. Valley adopted ASU No. 2022-01 on January 1, 2023 and the guidance did not have a significant impact on Valley's consolidated financial statements.

ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” eliminates the troubled debt restructuring (TDR) accounting model for creditors, such as Valley, that

12

have adopted Topic 326, “Financial Instruments – Credit Losses.” ASU No. 2022-02 requires all loan modifications to be accounted for under the general loan modification guidance in Subtopic 310-20. On a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 vintage disclosure requirements are also required to prospectively disclose current-period gross write-off information by vintage. Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition method. Valley adopted ASU No. 2022-02 on January 1, 2023 and elected to apply the modified retrospective transition method. The adoption of ASU No. 2022-02 resulted in a $1.4 million decrease in the allowance for loan losses, and a $990 thousand increase to retained earnings, net of taxes. See Note 8 for required disclosures.

New Accounting Guidance Issued in 2023

ASU No. 2023-02, Investments –“Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” is intended to improve the accounting and disclosures for investments in certain tax credit structures. ASU No. 2023-02 allows the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. ASU No. 2023-02 will be effective on January 1, 2024 and it can be early adopted in any interim period. The new guidance can also be applied either on a modified retrospective or a retrospective basis, with any adjustments resulting from adoption recognized in earnings on the date of adoption. Valley is currently evaluating the impact of ASU No. 2023-02, but it is not expected to have a significant impact on Valley's consolidated financial statements.

Note 6. Fair Value Measurement of Assets and Liabilities

ASC Topic 820, “Fair Value Measurement” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

•Level 1    - Unadjusted exchange quoted prices in active markets for identical assets or liabilities, or identical liabilities traded as assets that the reporting entity has the ability to access at the measurement date.

•Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly (i.e., quoted prices on similar assets) for substantially the full term of the asset or liability.

•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022. The assets presented under “non-recurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

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	June 30, 2023		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities	$	23,635	$	23,635	$	—	$	—
Equity securities at net asset value (NAV)	12,328		—		—		—
Trading debt securities	3,409		3,409		—		—
Available for sale debt securities:
U.S. Treasury securities	282,398		282,398		—		—
U.S. government agency securities	24,192		—		24,192		—
Obligations of states and political subdivisions	171,043		—		171,043		—
Residential mortgage-backed securities	594,636		—		594,636		—
Corporate and other debt securities	164,677		—		164,677		—
Total available for sale debt securities	1,236,946		282,398		954,548		—
Loans held for sale (1)	23,044		—		23,044		—
Other assets (2)	571,620		—		571,620		—
Total assets	$	1,870,982	$	309,442	$	1,549,212	$	—
Liabilities
Other liabilities (2)	$	599,226	$	—	$	599,226	$	—
Total liabilities	$	599,226	$	—	$	599,226	$	—
Non-recurring fair value measurements:
Non-performing loans held for sale	$	10,000	$	—	$	10,000	$	—
Collateral dependent loans	63,972		—		—		63,972
Foreclosed assets	2,132		—		—		2,132
Total	$	76,104	$	—	$	10,000	$	66,104

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			Fair Value Measurements at Reporting Date Using:
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities	$	23,494	$	23,494	$	—	$	—
Equity securities at net asset value (NAV)	10,099		—		—		—
Trading debt securities	13,438		3,282		10,156		—
Available for sale debt securities:
U.S. Treasury securities	279,498		279,498		—		—
U.S. government agency securities	26,964		—		26,964		—
Obligations of states and political subdivisions	146,811		—		146,811		—
Residential mortgage-backed securities	629,818		—		629,818		—
Corporate and other debt securities	178,306		—		178,306		—
Total available for sale debt securities	1,261,397		279,498		981,899		—
Loans held for sale (1)	18,118		—		18,118		—
Other assets (2)	467,127		—		467,127		—
Total assets	$	1,793,673	$	306,274	$	1,477,300	$	—
Liabilities
Other liabilities (2)	$	607,237	$	—	$	607,237	$	—
Total liabilities	$	607,237	$	—	$	607,237	$	—
Non-recurring fair value measurements:
Collateral dependent loans	$	92,923	$	—	$	—	$	92,923
Foreclosed assets	1,937		—		—		1,937
Total	$	94,860	$	—	$	—	$	94,860

(1)Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $23.0 million and $17.9 million at June 30, 2023 and December 31, 2022, respectively.

(2)Derivative financial instruments are included in this category.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance, excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Equity securities. The fair value of equity securities consists of a publicly traded mutual fund, a Community Reinvestment Act (CRA) investment fund and an investment related to the development of new financial technologies that are carried at quoted prices in active markets.

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Equity securities at NAV. Valley also has privately held CRA funds at fair value measured at NAV using the most recently available financial information from the investee. Investments measured at NAV (or its equivalent) as a practical expedient are excluded from fair value hierarchy levels in the tables above.

Trading debt securities. The fair value of trading debt securities, consisting of U.S. Treasury securities are reported at fair value utilizing Level 1 inputs at June 30, 2023. At December 31, 2022, trading debt securities consisted of U.S. Treasury securities and municipal bonds reported at fair value utilizing Level 1 and Level 2 inputs, respectively. The prices for municipal bonds investments were derived from market quotations and matrix pricing obtained through an independent pricing service. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data.

Available for sale debt securities. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data. In addition, Valley reviews the volume and level of activity for all available for sale debt securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.

Loans held for sale. Residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at June 30, 2023 and December 31, 2022 based on the short duration these assets were held, and the credit quality of these loans.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair values of Valley’s derivatives are determined using third-party prices that are based on discounted cash flow analysis using observed market inputs, such as the Overnight Index Swap and Secured Overnight Financing Rate (SOFR) curves. The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at June 30, 2023 and December 31, 2022), is determined based on the current market prices for similar instruments. The fair values of most of the derivatives incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its counterparties. The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at June 30, 2023 and December 31, 2022.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

The following valuation techniques were used for certain non-financial assets measured at fair value on a non-recurring basis, including collateral dependent loans reported at the fair value of the underlying collateral and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Non-performing loans held for sale. Valley transferred one non-performing construction loan totaling $10.0 million, net of charge-offs, to loans held for sale at June 30, 2023. The transfer at the loan's fair value resulted in a $4.2 million charge-off to the allowance of loan losses for the three months ended June 30, 2023. The fair value of the loan was determined using Level 2 inputs, including bids from a third party broker engaged to solicit interest from potential purchasers. The broker coordinated loan level due diligence with interested parties and established a

16

formal bidding process in which each participant was required to provide an indicative non-binding bid. Fair value was determined based on a non-binding sale agreement selected by Valley during the bidding process that is expected to close during the third quarter 2023.

Collateral dependent loans. Collateral dependent loans are loans when foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all of the repayment is expected from the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral. Collateral values are estimated using Level 3 inputs, consisting of individual third-party appraisals that may be adjusted based on certain discounting criteria. Certain real estate appraisals may be discounted based on specific market data by location and property type. At June 30, 2023, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for loan losses based on the fair value of the underlying collateral. At June 30, 2023, collateral dependent loans with a total amortized cost of $125.0 million, including our taxi medallion loan portfolio, were reduced by specific allowance for loan losses allocations totaling $61.0 million to a reported total net carrying amount of $64.0 million.

Foreclosed assets. Certain foreclosed assets (consisting of other real estate owned and other repossessed assets included in other assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value using Level 3 inputs, consisting of a third-party appraisal less estimated cost to sell. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value of the asset occur, an asset is re-measured and reported at fair value through a write-down recorded in non-interest expense. There were no adjustments to the appraisals of foreclosed assets at June 30, 2023 and December 31, 2022.

Other Fair Value Disclosures

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operations, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments. In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

17

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022 were as follows: 

	Fair Value Hierarchy	June 30, 2023				December 31, 2022
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	463,318	$	463,318	$	444,325	$	444,325
Interest bearing deposits with banks	Level 1	1,491,091		1,491,091		503,622		503,622
Equity securities (1)	Level 3	25,047		25,047		15,138		15,138
Held to maturity debt securities:
U.S. Treasury securities	Level 1	66,579		65,675		66,911		65,889
U.S. government agency securities	Level 2	261,197		215,039		260,392		212,712
Obligations of states and political subdivisions	Level 2	465,115		438,991		480,298		453,195
Residential mortgage-backed securities	Level 2	2,861,227		2,461,519		2,909,106		2,495,797
Trust preferred securities	Level 2	37,052		29,344		37,043		31,106
Corporate and other debt securities	Level 2	75,668		68,380		75,234		70,771
Total held to maturity debt securities (2)		3,766,838		3,278,948		3,828,984		3,329,470
Net loans	Level 3	49,440,816		47,472,065		46,458,545		44,910,049
Accrued interest receivable	Level 1	225,918		225,918		196,606		196,606
Federal Reserve Bank and Federal Home Loan Bank stock (3)	Level 2	326,959		326,959		238,056		238,056
Financial liabilities
Deposits without stated maturities	Level 1	34,711,633		34,711,633		38,080,457		38,080,457
Deposits with stated maturities	Level 2	14,908,182		14,783,271		9,556,457		9,443,253
Short-term borrowings	Level 1	1,088,899		1,066,450		138,729		138,729
Long-term borrowings	Level 2	2,443,533		2,340,324		1,543,058		1,395,991
Junior subordinated debentures issued to capital trusts	Level 2	56,934		48,117		56,760		50,923
Accrued interest payable (4)	Level 1	125,873		125,873		45,617		45,617

(1)Represents equity securities without a readily determinable fair value measured at cost less impairment, if any.

(2)The carrying amount is presented gross without the allowance for credit losses.

(3)Included in other assets.

(4)Included in accrued expenses and other liabilities.

Note 7. Investment Securities

Equity Securities

Equity securities totaled $61.0 million and $48.7 million at June 30, 2023 and December 31, 2022, respectively. See Note 6 for further details on equity securities.

Trading Debt Securities

The fair value of trading debt securities totaled $3.4 million and $13.4 million at June 30, 2023 and December 31, 2022, respectively. Net trading gains and losses were included in net gains and losses on securities transactions within non-interest income. We recorded net trading gains of $226 thousand and $628 thousand for the three and six months ended June 30, 2023, respectively. We recorded net trading losses of $387 thousand and $1.4 million for the three and six months ended June 30, 2022, respectively.

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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, 2023 and December 31, 2022 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	310,936	$	—	$	(28,538)	$	282,398
U.S. government agency securities	26,799		19		(2,626)		24,192
Obligations of states and political subdivisions:
Obligations of states and state agencies	9,425		—		(776)		8,649
Municipal bonds	193,920		—		(31,526)		162,394
Total obligations of states and political subdivisions	203,345		—		(32,302)		171,043
Residential mortgage-backed securities	681,513		20		(86,897)		594,636
Corporate and other debt securities	192,087		—		(27,410)		164,677
Total	$	1,414,680	$	39	$	(177,773)	$	1,236,946
December 31, 2022
U.S. Treasury securities	$	308,137	$	—	$	(28,639)	$	279,498
U.S. government agency securities	29,494		47		(2,577)		26,964
Obligations of states and political subdivisions:
Obligations of states and state agencies	10,899		—		(493)		10,406
Municipal bonds	171,586		—		(35,181)		136,405
Total obligations of states and political subdivisions	182,485		—		(35,674)		146,811
Residential mortgage-backed securities	719,868		64		(90,114)		629,818
Corporate and other debt securities	197,927		—		(19,621)		178,306
Total	$	1,437,911	$	111	$	(176,625)	$	1,261,397

Accrued interest on investments, which is excluded from the amortized cost of available for sale debt securities, totaled $4.9 million and $5.6 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

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The age of unrealized losses and fair value of the related available for sale debt securities at June 30, 2023 and December 31, 2022 were as follows: 

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	—	$	—	$	282,398	$	(28,538)	$	282,398	$	(28,538)
U.S. government agency securities	—		—		22,818		(2,626)		22,818		(2,626)
Obligations of states and political subdivisions:
Obligations of states and state agencies	1,223		(20)		7,426		(756)		8,649		(776)
Municipal bonds	1,405		(20)		137,180		(31,506)		138,585		(31,526)
Total obligations of states and political subdivisions	2,628		(40)		144,606		(32,262)		147,234		(32,302)
Residential mortgage-backed securities	30,949		(1,919)		562,383		(84,978)		593,332		(86,897)
Corporate and other debt securities	44,404		(7,239)		120,273		(20,171)		164,677		(27,410)
Total	$	77,981	$	(9,198)	$	1,132,478	$	(168,575)	$	1,210,459	$	(177,773)
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 bonds	112,029		(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)

Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 725 and 730 at June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, 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 $847.1 million.

The contractual maturities of available for sale debt securities at June 30, 2023 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.

20

	June 30, 2023
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	2,350	$	2,322
Due after one year through five years	282,534		265,870
Due after five years through ten years	175,056		148,811
Due after ten years	273,227		225,307
Residential mortgage-backed securities	681,513		594,636
Total	$	1,414,680	$	1,236,946

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 7.68 years at June 30, 2023.

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 changes in market interest rates, unpredictable nature of the U.S. economy 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. Based on a comparison of the present value of expected cash flows to the amortized cost, Valley recognized a credit related impairment of one corporate bond issued by Signature Bank resulting in a provision for credit losses and full charge-off of the bond totaling $5.0 million during the three months ended March 31, 2023. Valley also evaluated available for sale debt securities that are in an unrealized loss position as of June 30, 2023 included in the table 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. There was no impairment recognized during the three months ended June 30, 2023 and the three and six months ended June 30, 2022.

The following table details the activity in the allowance for credit losses for the six months ended June 30, 2023.

		Six Months Ended June 30, 2023
	(in thousands)
Beginning balance		$	—
Provision for credit losses		5,000
Charge-offs		(5,000)
Ending balance		$	—

Valley does not intend to sell any of its available for sale debt securities in an unrealized loss position prior to recovery of their amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of their amortized cost basis. None of the available for sale debt securities were past due as of June 30, 2023 and there was no allowance for credit losses for available for sale debt securities at June 30, 2023, December 31, 2022 and June 30, 2022.

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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, 2023 and December 31, 2022 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses		Net Carrying Value
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	66,579	$	—	$	(904)	$	65,675	$	—	$	66,579
U.S. government agency securities	261,197		—		(46,158)		215,039		—		261,197
Obligations of states and political subdivisions:
Obligations of states and state agencies	88,561		91		(5,112)		83,540		409		88,152
Municipal bonds	376,554		27		(21,130)		355,451		57		376,497
Total obligations of states and political subdivisions	465,115		118		(26,242)		438,991		466		464,649
Residential mortgage-backed securities	2,861,227		906		(400,614)		2,461,519		—		2,861,227
Trust preferred securities	37,052		1		(7,709)		29,344		559		36,493
Corporate and other debt securities	75,668		—		(7,288)		68,380		326		75,342
Total	$	3,766,838	$	1,025	$	(488,915)	$	3,278,948	$	1,351	$	3,765,487
December 31, 2022
U.S. Treasury securities	$	66,911	$	—	$	(1,022)	$	65,889	$	—	$	66,911
U.S. government agency securities	260,392		—		(47,680)		212,712		—		260,392
Obligations of states and political subdivisions:
Obligations of states and state agencies	99,238		305		(3,869)		95,674		252		98,986
Municipal bonds	381,060		76		(23,615)		357,521		41		381,019
Total obligations of states and political subdivisions	480,298		381		(27,484)		453,195		293		480,005
Residential mortgage-backed securities	2,909,106		1,723		(415,032)		2,495,797		—		2,909,106
Trust preferred securities	37,043		1		(5,938)		31,106		888		36,155
Corporate and other debt securities	75,234		—		(4,463)		70,771		465		74,769
Total	$	3,828,984	$	2,105	$	(501,619)	$	3,329,470	$	1,646	$	3,827,338

Accrued interest on investments, which is excluded from the amortized cost of held to maturity debt securities, totaled $13.6 million and $13.5 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition. Held to maturity debt securities are carried net of an allowance for credit losses.

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The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2023 and December 31, 2022 were as follows: 

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	30,998	$	(598)	$	34,677	$	(306)	$	65,675	$	(904)
U.S. government agency securities	—		—		213,885		(46,158)		213,885		(46,158)
Obligations of states and political subdivisions:
Obligations of states and state agencies	25,298		(623)		44,869		(4,489)		70,167		(5,112)
Municipal bonds	84,224		(1,437)		200,924		(19,693)		285,148		(21,130)
Total obligations of states and political subdivisions	109,522		(2,060)		245,793		(24,182)		355,315		(26,242)
Residential mortgage-backed securities	182,290		(6,756)		2,107,464		(393,858)		2,289,754		(400,614)
Trust preferred securities	—		—		28,343		(7,709)		28,343		(7,709)
Corporate and other debt securities	18,056		(1,194)		50,324		(6,094)		68,380		(7,288)
Total	$	340,866	$	(10,608)	$	2,680,486	$	(478,307)	$	3,021,352	$	(488,915)
December 31, 2022
U.S. Treasury securities	$	65,889	$	(1,022)	$	—	$	—	$	65,889	$	(1,022)
U.S. government agency securities	209,863		(47,508)		1,673		(172)		211,536		(47,680)
Obligations of states and political subdivisions:
Obligations of states and state agencies	62,443		(2,020)		18,231		(1,849)		80,674		(3,869)
Municipal bonds	251,970		(20,457)		15,534		(3,158)		267,504		(23,615)
Total obligations of states and political subdivisions	314,413		(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 securities	57,245		(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)

Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 811 and 802 at June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, 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 $2.4 billion.

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The contractual maturities of investments in debt securities held to maturity at June 30, 2023 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, 2023
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	68,033	$	67,619
Due after one year through five years	126,908		123,033
Due after five years through ten years	95,472		87,948
Due after ten years	615,198		538,829
Residential mortgage-backed securities	2,861,227		2,461,519
Total	$	3,766,838	$	3,278,948

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 10.05 years at June 30, 2023.

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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, 2023 and December 31, 2022.

	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	66,579	$	—	$	—	$	—	$	66,579
U.S. government agency securities	261,197		—		—		—		261,197
Obligations of states and political subdivisions:
Obligations of states and state agencies	65,768		—		5,416		17,377		88,561
Municipal bonds	321,860		—		—		54,694		376,554
Total obligations of states and political subdivisions	387,628		—		5,416		72,071		465,115
Residential mortgage-backed securities	2,861,227		—		—		—		2,861,227
Trust preferred securities	—		—		—		37,052		37,052
Corporate and other debt securities	—		6,000		—		69,668		75,668
Total	$	3,576,631	$	6,000	$	5,416	$	178,791	$	3,766,838
December 31, 2022
U.S. Treasury securities	$	66,911	$	—	$	—	$	—	$	66,911
U.S. government agency securities	260,392		—		—		—		260,392
Obligations of states and political subdivisions:
Obligations of states and state agencies	74,943		—		5,497		18,798		99,238
Municipal bonds	333,488		—		—		47,572		381,060
Total obligations of states and political subdivisions	408,431		—		5,497		66,370		480,298
Residential mortgage-backed securities	2,909,106		—		—		—		2,909,106
Trust preferred securities	—		—		—		37,043		37,043
Corporate and other debt securities	2,000		6,000		—		67,234		75,234
Total	$	3,646,840	$	6,000	$	5,497	$	170,647	$	3,828,984

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At June 30, 2023, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included tax exempt mortgage securities (TEMS) secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate and other debt securities in the non-rated category mostly consist of high quality foreign issued bonds.

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 TEMS collateralized municipal bonds.

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The following table details the activity in the allowance for credit losses for the three and six months ended June 30, 2023 and 2022: 

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(in thousands)
Beginning balance	$	1,633	$	1,222	$	1,646	$	1,165
(Credit) provision for credit losses	(282)		286		(295)		343
Ending balance	$	1,351	$	1,508	$	1,351	$	1,508

There were no sales of available for sale and held to maturity debt securities during the three and six months ended June 30, 2023 and 2022, respectively.

Note 8. Loans and Allowance for Credit Losses for Loans

The detail of the loan portfolio as of June 30, 2023 and December 31, 2022 was as follows: 

	June 30, 2023		December 31, 2022
	(in thousands)
Loans:
Commercial and industrial	$	9,287,309	$	8,804,830
Commercial real estate:
Commercial real estate	27,793,072		25,732,033
Construction	3,815,761		3,700,835
Total commercial real estate loans	31,608,833		29,432,868
Residential mortgage	5,560,356		5,364,550
Consumer:
Home equity	535,493		503,884
Automobile	1,632,875		1,746,225
Other consumer	1,252,382		1,064,843
Total consumer loans	3,420,750		3,314,952
Total loans	$	49,877,248	$	46,917,200

Total loans include net unearned discounts and deferred loan fees of $119.1 million and $120.5 million at June 30, 2023 and December 31, 2022, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $202.1 million and $175.9 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

During the three months ended June 30, 2023, Valley transferred a non-performing construction loan totaling $10.0 million, net of $4.2 million charge-offs from the held for investment loan portfolio to loans held for sale. See Note 6 for further details. There were no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2023 and 2022.

Credit Risk Management

For all of its loan types, Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors annually. Credit authority relating to a

26

significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee. A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification, concentrations of credit, loan delinquencies, non-performing, and potential problem loans. Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances. Additionally, Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes. See Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for further details.

Credit Quality

The following table presents past due, current and non-accrual loans without an allowance for loan losses by loan portfolio class at June 30, 2023 and December 31, 2022:

	Past Due and Non-Accrual Loans
	30-59  Days  Past Due Loans		60-89  Days  Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Loan Losses
	(in thousands)
June 30, 2023
Commercial and industrial	$	6,229	$	7,468	$	6,599	$	84,449	$	104,745	$	9,182,564	$	9,287,309	$	8,221
Commercial real estate:
Commercial real estate	3,612		—		2,242		82,712		88,566		27,704,506		27,793,072		76,438
Construction	—		—		3,990		63,043		67,033		3,748,728		3,815,761		15,476
Total commercial real estate loans	3,612		—		6,232		145,755		155,599		31,453,234		31,608,833		91,914
Residential mortgage	15,565		1,348		1,165		20,819		38,897		5,521,459		5,560,356		16,151
Consumer loans:
Home equity	959		46		—		2,737		3,742		531,751		535,493		—
Automobile	5,963		568		332		248		7,111		1,625,764		1,632,875		—
Other consumer	1,509		3,512		674		83		5,778		1,246,604		1,252,382		—
Total consumer loans	8,431		4,126		1,006		3,068		16,631		3,404,119		3,420,750		—
Total	$	33,837	$	12,942	$	15,002	$	254,091	$	315,872	$	49,561,376	$	49,877,248	$	116,286

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	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89  Days Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Loan Losses
	(in thousands)
December 31, 2022
Commercial and industrial	$	11,664	$	12,705	$	18,392	$	98,881	$	141,642	$	8,663,188	$	8,804,830	$	5,659
Commercial real estate:
Commercial real estate	6,638		3,167		2,292		68,316		80,413		25,651,620		25,732,033		66,066
Construction	—		—		3,990		74,230		78,220		3,622,615		3,700,835		16,120
Total commercial real estate loans	6,638		3,167		6,282		142,546		158,633		29,274,235		29,432,868		82,186
Residential mortgage	16,146		3,315		1,866		25,160		46,487		5,318,063		5,364,550		14,224
Consumer loans:
Home equity	955		254		—		2,810		4,019		499,865		503,884		117
Automobile	5,974		630		1		271		6,876		1,739,349		1,746,225		—
Other consumer	2,158		695		46		93		2,992		1,061,851		1,064,843		—
Total consumer loans	9,087		1,579		47		3,174		13,887		3,301,065		3,314,952		117
Total	$	43,535	$	20,766	$	26,587	$	269,761	$	360,649	$	46,556,551	$	46,917,200	$	102,186

Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as "Pass," "Special Mention," "Substandard," "Doubtful," and "Loss." Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses, and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories but pose weaknesses that deserve management’s close attention are deemed Special Mention. Pass rated loans do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants.

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The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

	Term Loans
	Amortized Cost Basis by Origination Year
June 30, 2023	2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	978,383	$	1,233,039	$	987,984	$	490,159	$	267,719	$	565,910	$	4,420,712	$	306	$	8,944,212
Special Mention	16,582		43,260		3,257		19,948		4,125		7,005		131,677		1,488		227,342
Substandard	6,056		754		3,288		1,706		1,703		2,819		25,681		—		42,007
Doubtful	1,500		669		2,768		—		2,674		63,427		2,710		—		73,748
Total commercial and industrial	$	1,002,521	$	1,277,722	$	997,297	$	511,813	$	276,221	$	639,161	$	4,580,780	$	1,794	$	9,287,309
Commercial real estate
Risk Rating:
Pass	$	3,006,116	$	6,675,372	$	4,997,069	$	3,073,019	$	2,453,918	$	6,040,604	$	542,644	$	3,310	$	26,792,052
Special Mention	86,078		52,939		51,208		111,268		100,524		205,971		6,621		—		614,609
Substandard	10,972		30,664		35,577		27,280		36,320		237,578		7,830		—		386,221
Doubtful	—		—		—		190		—		—		—		—		190
Total commercial real estate	$	3,103,166	$	6,758,975	$	5,083,854	$	3,211,757	$	2,590,762	$	6,484,153	$	557,095	$	3,310	$	27,793,072
Construction
Risk Rating:
Pass	$	390,550	$	702,031	$	342,403	$	32,129	$	18,878	$	20,230	$	2,251,552	$	—	$	3,757,773
Substandard	8,538		12,969		7,427		—		955		17,668		3,501		—		51,058
Doubtful	—		6,930		—		—		—		—		—		—		6,930
Total construction	$	399,088	$	721,930	$	349,830	$	32,129	$	19,833	$	37,898	$	2,255,053	$	—	$	3,815,761
Gross loan charge-offs	$	—	$	7,288	$	24,658	$	6,479	$	908	$	2,524	$	26	$	—	$	41,883

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	Term Loans
	Amortized Cost Basis by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	1,600,747	$	1,089,386	$	590,406	$	322,564	$	250,031	$	386,085	$	4,307,163	$	144	$	8,546,526
Special Mention	31,557		3,367		19,492		4,732		4,369		3,558		51,021		7		118,103
Substandard	288		1,734		4,121		1,412		4,256		4,879		31,698		—		48,388
Doubtful	886		20,844		—		2,692		—		64,158		3,233		—		91,813
Total commercial and industrial	$	1,633,478	$	1,115,331	$	614,019	$	331,400	$	258,656	$	458,680	$	4,393,115	$	151	$	8,804,830
Commercial real estate
Risk Rating:
Pass	$	6,815,115	$	5,168,127	$	3,246,885	$	2,672,223	$	1,536,327	$	5,027,128	$	452,461	$	3,504	$	24,921,770
Special Mention	93,286		48,007		60,169		45,447		62,111		125,414		8,188		—		442,622
Substandard	15,088		34,475		32,630		34,622		59,337		183,341		7,986		—		367,479
Doubtful	—		—		—		—		—		162		—		—		162
Total commercial real estate	$	6,923,489	$	5,250,609	$	3,339,684	$	2,752,292	$	1,657,775	$	5,336,045	$	468,635	$	3,504	$	25,732,033
Construction
Risk Rating:
Pass	$	942,380	$	512,046	$	61,131	$	22,845	$	8,676	$	20,599	$	2,040,866	$	—	$	3,608,543
Special Mention	—		—		—		—		—		—		14,268		—		14,268
Substandard	12,969		12,601		—		974		—		17,599		20,138		—		64,281
Doubtful	—		—		—		—		—		13,743		—		—		13,743
Total construction	$	955,349	$	524,647	$	61,131	$	23,819	$	8,676	$	51,941	$	2,075,272	$	—	$	3,700,835

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For residential mortgages, automobile, home equity and other consumer loan portfolio classes, Valley also evaluates credit quality based on the aging status of the loan and by payment activity. The following table presents the amortized cost in those loan classes based on payment activity, by origination year as of June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

	Term Loans
	Amortized Cost Basis by Origination Year
June 30, 2023	2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	369,607	$	1,304,327	$	1,524,988	$	562,263	$	455,463	$	1,263,659	$	73,983	$	—	$	5,554,290
90 days or more past due	—		178		—		—		797		5,091		—		—		6,066
Total residential mortgage	$	369,607	$	1,304,505	$	1,524,988	$	562,263	$	456,260	$	1,268,750	$	73,983	$	—	$	5,560,356
Consumer loans
Home equity
Performing	$	19,442	$	45,601	$	11,873	$	4,326	$	4,660	$	17,396	$	392,898	$	38,391	$	534,587
90 days or more past due	—		—		—		—		—		—		263		643		906
Total home equity	19,442		45,601		11,873		4,326		4,660		17,396		393,161		39,034		535,493
Automobile
Performing	205,170		633,269		437,528		161,245		123,616		71,682		—		—		1,632,510
90 days or more past due	47		105		73		—		9		131		—		—		365
Total automobile	205,217		633,374		437,601		161,245		123,625		71,813		—		—		1,632,875
Other consumer
Performing	17,973		20,979		(1,549)		3,729		8,720		12,707		1,189,191		—		1,251,750
90 days or more past due	—		—		—		—		—		38		594		—		632
Total other consumer	17,973		20,979		(1,549)		3,729		8,720		12,745		1,189,785		—		1,252,382
Total consumer	$	242,632	$	699,954	$	447,925	$	169,300	$	137,005	$	101,954	$	1,582,946	$	39,034	$	3,420,750
Gross loan charge-offs	$	11	$	226	$	206	$	90	$	428	$	953	$	103	$	—	$	2,017

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	Term Loans
	Amortized Cost Basis by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	1,302,279	$	1,502,622	$	571,390	$	500,197	$	338,062	$	1,073,995	$	66,706	$	—	$	5,355,251
90 days or more past due	—		197		217		1,835		2,876		4,174		—		—		9,299
Total residential mortgage	$	1,302,279	$	1,502,819	$	571,607	$	502,032	$	340,938	$	1,078,169	$	66,706	$	—	$	5,364,550
Consumer loans
Home equity
Performing	$	47,084	$	12,432	$	4,592	$	5,024	$	5,581	$	13,007	$	376,608	$	38,570	$	502,898
90 days or more past due	—		—		—		—		—		—		276		710		986
Total home equity	47,084		12,432		4,592		5,024		5,581		13,007		376,884		39,280		503,884
Automobile
Performing	724,557		525,017		204,578		166,103		80,012		45,415		—		—		1,745,682
90 days or more past due	38		116		36		180		101		72		—		—		543
Total automobile	724,595		525,133		204,614		166,283		80,113		45,487		—		—		1,746,225
Other consumer
Performing	24,140		10,144		8,206		7,435		7,406		15,736		991,737		—		1,064,804
90 days or more past due	—		—		—		—		—		38		1		—		39
Total other consumer	24,140		10,144		8,206		7,435		7,406		15,774		991,738		—		1,064,843
Total consumer	$	795,819	$	547,709	$	217,412	$	178,742	$	93,100	$	74,268	$	1,368,622	$	39,280	$	3,314,952

Loan modifications to borrowers experiencing financial difficulty. From time to time, Valley may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties. Prior to 2023, a loan was classified as a troubled debt restructuring (TDR) if the borrower was experiencing financial difficulties and a concession has been made at the time of such modification.

Effective January 1, 2023, Valley adopted ASU No. 2022-02 which eliminated the accounting guidance for TDR loans while enhancing disclosure requirements for certain loan modifications by creditors when a borrower is experiencing financial difficulty. Valley adopted ASU No. 2022-02 using the modified retrospective transition method. At the date of adoption, Valley was no longer required to utilize a loan-level discounted cash flow approach for determining the allowance for certain modified loans previously classified as TDR loans. As a result, Valley elected to utilize its collective reserve methodology for pools of loans that share common risk characteristic for determining the reserves for the modified loans formerly classified as TDR loans. This change resulted in the recognition of a cumulative-effect adjustment which decreased the allowance for loan losses with an offsetting entry to retained earnings, net of deferred taxes, at January 1, 2023.

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The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at June 30, 2023 that were modified during the three and six months ended June 30, 2023, disaggregated by class of financing receivable and type of modification. Each of the types of modifications was less than one percent of their respective loan categories.

	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Term extension		Term extension and interest rate reduction		Total		Term extension		Term extension and interest rate reduction		Total
	($ in thousands)
Commercial and industrial	$	37,762	$	1,482	$	39,244	$	39,033	$	2,003	$	41,036
Commercial real estate	3,512		3,754		7,266		49,617		3,754		53,371
Residential mortgage	578		—		578		790		—		790
Consumer	—		—		—		53		—		53
Total	$	41,852	$	5,236	$	47,088	$	89,493	$	5,757	$	95,250

The following table describes the types of modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023:

	Types of Modifications
Commercial and industrial	12 month term extensions; and one 12 month term extension combined with a reduction in interest rate from 9.38 percent to 6.50 percent
Commercial real estate	6 to 36 month term extensions and one term extension combined with a reduction in interest rate from 8.75 percent to 6.00 percent
Residential mortgage	12 month term extensions
Consumer	60 month term extensions

Valley closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of modification efforts. All loans to borrowers experiencing financial difficulty that have been modified during the three and six months ended June 30, 2023 were current to their contractual payments as of June 30, 2023.

Valley did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the three and six months ended June 30, 2023.

Troubled debt restructured loans. The following tables present the pre- and post-modification amortized cost of TDR loans by loan class during the three and six months ended June 30, 2022. Post-modification amounts are presented as of June 30, 2022 using the allowance methodology for TDRs prior to the adoption of ASU 2022-02.

	Three Months Ended June 30, 2022
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	49	$	82,120	$	78,051
Commercial real estate	1	8,811		8,735
Residential mortgage	7	4,970		4,969
Consumer	1	125		124
Total	58	$	96,026	$	91,879

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		Six Months Ended June 30, 2022
Troubled Debt Restructurings		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial		60	$	91,804	$	87,685
Commercial real estate		3	14,072		13,986
Residential mortgage		8	5,090		5,087
Consumer		1	125		124
Total		72	$	111,091	$	106,882

The total TDRs presented in the above tables had allocated allowance for loan losses of $56.0 million at June 30, 2022. There were $1.5 million in charge-offs related to TDRs for the three and six months ended June 30, 2022. Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the three and six months ended June 30, 2022.

Performing TDRs (not reported as non-accrual loans) and non-performing TDRs totaled $67.3 million and $154.4 million as of June 30, 2022.

Loans modified as TDRs within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and six months ended June 30, 2022 were as follows:

	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Construction	2	$	17,599	2	$	17,599
Total	2	$	17,599	2	$	17,599

Loans in process of foreclosure. Other real estate owned (OREO) totaled $824 thousand and $286 thousand at June 30, 2023 and December 31, 2022, respectively. There were no foreclosed residential real estate properties included in OREO at June 30, 2023 and December 31, 2022. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $454 thousand and $2.6 million at June 30, 2023 and December 31, 2022, respectively.

Collateral dependent loans. Loans are collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. When Valley determines that foreclosure is probable, the collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in the Bank’s collection process.

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The following table presents collateral dependent loans by class as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
Collateral dependent loans:
Commercial and industrial *	$	77,364	$	94,433
Commercial real estate	138,032		130,199
Residential mortgage	16,151		33,865
Home equity	—		195
Total	$	231,547	$	258,692

* Commercial and industrial loans presented in the table above are primarily collateralized by taxi medallions.

Allowance for Credit Losses for Loans

The allowance for credit losses (ACL) for loans consists of the allowance for loan losses and the allowance for unfunded credit commitments. The ACL for loans decreased $24.6 million at June 30, 2023 as compared to December 31, 2022.

The following table summarizes the ACL for loans at June 30, 2023 and December 31, 2022: 

	June 30, 2023		December 31, 2022
	(in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses	$	436,432	$	458,655
Allowance for unfunded credit commitments	22,244		24,600
Total allowance for credit losses for loans	$	458,676	$	483,255

The following table summarizes the provision for credit losses for loans for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	8,159	$	38,310	$	18,138	$	41,568
(Credit) provision for unfunded credit commitments	(1,827)		5,402		(2,356)		5,644
Total provision for credit losses for loans	$	6,332	$	43,712	$	15,782	$	47,212

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The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and six months ended June 30, 2023 and 2022: 

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Three Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance	$	127,992	$	243,332	$	41,708	$	23,866	$	436,898
Loans charged-off	(3,865)		(6,273)		(149)		(1,040)		(11,327)
Charged-off loans recovered	2,173		4		135		390		2,702
Net charge-offs	(1,692)		(6,269)		(14)		(650)		(8,625)
Provision for loan losses	1,945		2,632		2,459		1,123		8,159
Ending balance	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Three Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	101,203	$	219,949	$	28,189	$	13,169	$	362,510
Allowance for purchased credit deteriorated (PCD) loans *	33,452		36,618		206		43		70,319
Loans charged-off	(4,540)		—		(1)		(726)		(5,267)
Charged-off loans recovered	1,952		224		74		697		2,947
Net (charge-offs) recoveries	(2,588)		224		73		(29)		(2,320)
Provision for loan losses	12,472		20,436		1,421		3,981		38,310
Ending balance	$	144,539	$	277,227	$	29,889	$	17,164	$	468,819

Six Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance	$	139,941	$	259,408	$	39,020	$	20,286	$	458,655
Impact of the adoption of ASU No. 2022-02	(739)		(589)		(12)		(28)		(1,368)
Beginning balance, adjusted	$	139,202	$	258,819	$	39,008	$	20,258	$	457,287
Loans charged-off	(29,912)		(11,971)		(149)		(1,868)		(43,900)
Charged-off loans recovered	3,572		28		156		1,151		4,907
Net (charge-offs) recoveries	(26,340)		(11,943)		7		(717)		(38,993)
Provision (credit) for loan losses	15,383		(7,181)		5,138		4,798		18,138
Ending balance	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Six Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	103,090	$	217,490	$	25,120	$	13,502	$	359,202
Allowance for PCD loans *	33,452		36,618		206		43		70,319
Loans charged-off	(6,111)		(173)		(27)		(1,551)		(7,862)
Charged-off loans recovered	2,776		331		531		1,954		5,592
Net (charge-offs) recoveries	(3,335)		158		504		403		(2,270)
Provision for loan losses	11,332		22,961		4,059		3,216		41,568
Ending balance	$	144,539	$	277,227	$	29,889	$	17,164	$	468,819

*    Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.

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The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at June 30, 2023 and December 31, 2022.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2023
Allowance for loan losses:
Individually evaluated for credit losses	$	54,311	$	6,749	$	34	$	—	$	61,094
Collectively evaluated for credit losses	73,934		232,946		44,119		24,339		375,338
Total	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Loans:
Individually evaluated for credit losses	$	77,364	$	138,032	$	16,151	$	—	$	231,547
Collectively evaluated for credit losses	9,209,945		31,470,801		5,544,205		3,420,750		49,645,701
Total	$	9,287,309	$	31,608,833	$	5,560,356	$	3,420,750	$	49,877,248
December 31, 2022
Allowance for loan losses:
Individually evaluated for credit losses	$	68,745	$	13,174	$	337	$	4,338	$	86,594
Collectively evaluated for credit losses	71,196		246,234		38,683		15,948		372,061
Total	$	139,941	$	259,408	$	39,020	$	20,286	$	458,655
Loans:
Individually evaluated for credit losses	$	117,644	$	213,522	$	28,869	$	14,058	$	374,093
Collectively evaluated for credit losses	8,687,186		29,219,346		5,335,681		3,300,894		46,543,107
Total	$	8,804,830	$	29,432,868	$	5,364,550	$	3,314,952	$	46,917,200

Note 9. Goodwill and Other Intangible Assets

The carrying amounts of goodwill allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis at both June 30, 2023 and December 31, 2022 were as follows:

Business Segment / Reporting Unit *
Wealth Management		Consumer Banking		Commercial Banking		Total
(in thousands)
$	49,767	$	284,873	$	1,534,296	$	1,868,936

*    Valley’s Wealth Management and Insurance Division is comprised of trust, asset management, brokerage, insurance and tax credit advisory services. This reporting unit is included in the Consumer Banking segment for financial reporting purposes.

During the second quarter 2023, Valley performed the annual goodwill impairment test at its normal assessment date. The results of the 2023 annual impairment test resulted in no impairment of goodwill. During the six months ended June 30, 2023, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount. There was no impairment of goodwill recognized during the three and six months ended June 30, 2022.

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The following table summarizes other intangible assets as of June 30, 2023 and December 31, 2022: 

	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
	(in thousands)
June 30, 2023
Loan servicing rights	$	120,764	$	(98,453)	$	22,311
Core deposits	215,620		(99,129)		116,491
Other	50,393		(11,249)		39,144
Total other intangible assets	$	386,777	$	(208,831)	$	177,946
December 31, 2022
Loan servicing rights	$	119,943	$	(96,136)	$	23,807
Core deposits	223,670		(92,486)		131,184
Other	51,299		(8,834)		42,465
Total other intangible assets	$	394,912	$	(197,456)	$	197,456

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. There was no net impairment recognized during the three and six months ended June 30, 2023 and 2022.

Core deposits are amortized using an accelerated method over a period of 10.0 years. The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 13.4 years.

Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and six months ended June 30, 2023 and 2022.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2023 through 2027: 

Year	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2023	$	1,579	$	14,054	$	3,201
2024	2,863		24,897		5,951
2025	2,506		21,048		5,380
2026	2,181		17,223		4,805
2027	1,890		13,544		4,205

Valley recognized amortization expense on other intangible assets totaling approximately $9.8 million and $11.4 million for the three months ended June 30, 2023 and 2022, respectively and $20.3 million and $15.8 million for the six months ended June 30, 2023 and 2022, respectively.

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Note 10. Deposits

Included in time deposits are certificates of deposit over $250 thousand totaling $2.0 billion and $1.8 billion at June 30, 2023 and December 31, 2022, respectively. Interest expense on time deposits of $250 thousand or more totaled $5.1 million and $444 thousand for the three months ended June 30, 2023 and 2022, respectively and $7.5 million and $545 thousand for the six months ended June 30, 2023 and 2022, respectively.

The scheduled maturities of time deposits as of June 30, 2023 were as follows: 

Year	Amount
	(in thousands)
2023	8,020,778
2024	6,574,934
2025	70,994
2026	160,144
2027	41,691
Thereafter	39,641
Total time deposits	$	14,908,182

Note 11. Borrowed Funds

Short-Term Borrowings

Short-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances	$	1,000,000	$	24,035
Securities sold under agreements to repurchase	88,899		114,694
Total short-term borrowings	$	1,088,899	$	138,729

The weighted average interest rate for short-term FHLB advances was 5.30 percent and 1.60 percent at June 30, 2023 and December 31, 2022, respectively.

Long-Term Borrowings

Long-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances, net (1)	$	1,688,311	$	788,419
Subordinated debt, net (2)	755,222		754,639
Total long-term borrowings	$	2,443,533	$	1,543,058

(1)	FHLB advances are presented net of unamortized premiums totaling $311 thousand and $419 thousand at June 30, 2023 and December 31, 2022, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $6.0 million and $6.9 million at June 30, 2023 and December 31, 2022, respectively.

FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 3.75 percent and 1.88 percent at June 30, 2023 and December 31, 2022, respectively. 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

39

assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans.

The long-term FHLB advances at June 30, 2023 are scheduled for contractual balance repayments as follows:

Year	Amount
	(in thousands)
2024	$	165,000
2025	273,000
2026	350,000
2027	675,000
Thereafter	225,000
Total long-term FHLB advances	$	1,688,000

There are no FHLB advances reported in the table above, which are callable for early redemption by the FHLB during the next 12 months.

Subordinated debt. There were no new issuances of the subordinated debt during the six months ended June 30, 2023. See Note 10 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for details on the outstanding subordinated debt.

Note 12. Stock–Based Compensation

On April 25, 2023, Valley's shareholders approved the Valley National Bancorp 2023 Incentive Compensation Plan (the 2023 Plan). The purpose of the 2023 Plan is to provide additional long-term incentives to employees, directors and officers whose contributions are essential to the continued growth and success of Valley. Upon shareholder approval of the 2023 Plan, Valley ceased granting awards under the Valley National Bancorp 2021 Incentive Compensation Plan (the 2021 Plan). Under the 2023 Plan, Valley may issue awards to its officers, employees and non-employee directors in amounts up to 14.5 million shares of common stock, less one share for every share granted after December 31, 2022 under the 2021 Plan.

Restricted stock units are awarded as performance-based RSUs and time-based RSUs. The performance-based RSU awards are granted to certain officers and include RSUs with vesting conditions based upon certain levels of growth in Valley's tangible book value per share, plus dividends; and RSUs, with vesting conditions based upon Valley's total shareholder return as compared to its peer group.

The table below summarizes RSU awards granted and average grant date fair values for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except per share data)
Award shares granted:
Performance-based RSUs	—		52		723		619
Time-based RSUs	178		937		1,731		2,104
Average grant date fair value per share:
Performance-based RSUs	$	—	$	13.60	$	12.80	$	14.72
Time-based RSUs	$	8.35	$	12.85	$	11.55	$	13.51

Stock award fair values are expensed over the shorter of the vesting or required service period. Valley recorded total stock-based compensation expense of $8.7 million and $6.2 million for the three months ended June 30, 2023

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and 2022, respectively and $16.8 million and $13.4 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $49.4 million. This expense will be recognized over an average remaining vesting period of approximately 2.0 years. See Note 12 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for details on the stock-based compensation awards.

Note 13. Derivative Instruments and Hedging Activities

Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest and currency rates.

Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, Valley uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively.

During the second quarter 2023, Valley terminated six interest rate swaps with a total notional amount of $600 million. The terminated swaps, originally maturing between November 2024 to November 2026, were used to hedge the changes in cash flows associated with certain variable rate loans. The transaction resulted in a pre-tax gain totaling $3.6 million reported in accumulated other comprehensive loss within shareholders' equity that will be amortized to interest income over the life of the previously hedged loans.

Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of fixed-rate subordinated debt due to changes in interest rates. Valley uses interest rate swaps to manage its exposure to changes in fair value on fixed rate debt instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the receipt of variable rate payments from a counterparty in exchange for Valley making fixed rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings.

Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide a service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes. Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third party, such that Valley minimizes its net risk exposure resulting from such transactions. As these interest rate swaps do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the participation type. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. At June 30, 2023, Valley had 36 credit swaps with an aggregate notional amount of $492.8 million related to risk participation agreements. 

At June 30, 2023, Valley had two “steepener” swaps, each with a current notional amount of $10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in

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opposite directions with changes in the three-month LIBOR rate (modified to the three-month Term SOFR rate effective July 1, 2023) and, therefore, provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rate on Valley's commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

Valley enters into foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments. Upon the origination of a certain foreign currency denominated transactions (including foreign currency holdings and non-U.S. dollar denominated loans) with a client, we enter into a respective hedging contract with a third party financial institution to mitigate the economic impact of foreign currency exchange rate fluctuation.

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows: 

	June 30, 2023						December 31, 2022
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps	$	—	$	—	$	—	$	3,971	$	4	$	600,000
Fair value hedge interest rate swaps	—		28,992		300,000		—		29,794		300,000
Total derivatives designated as hedging instruments	$	—	$	28,992	$	300,000	$	3,971	$	29,798	$	900,000
Derivatives not designated as hedging instruments:
Interest rate swaps and other contracts*	$	548,592	$	548,217	$	15,837,195	$	449,280	$	564,678	$	14,753,330
Foreign currency derivatives	22,635		21,710		1,331,575		13,709		12,604		1,273,735
Mortgage banking derivatives	393		307		105,948		167		157		31,299
Total derivatives not designated as hedging instruments	$	571,620	$	570,234	$	17,274,718	$	463,156	$	577,439	$	16,058,364

* Other derivative contracts include risk participation agreements.

During the second quarter 2023, certain cash flow hedges and other non-designated derivative hedging instruments previously cleared through the Chicago Mercantile Exchange and London Clearing House were no longer subject to the variation margin netting under the single-unit of account. At December 31, 2022, fair value of these non-designated derivative instruments were reported net of variation margin as settlements using a single-unit of account.

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Gains (losses) included in the consolidated statements of income and other comprehensive loss, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Amount of (loss) gain reclassified from accumulated other comprehensive loss to interest income and expense	$	(725)	$	116	$	(1,256)	$	(426)
Amount of (loss) gain recognized in other comprehensive loss	(4,991)		121		(1,093)		441

The accumulated after-tax gains related to effective cash flow hedges included in accumulated other comprehensive loss were $2.4 million and $2.2 million at June 30, 2023 and December 31, 2022, respectively.

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest income and expense as interest payments are received and paid on the hedged variable interest rate assets and liabilities. Valley estimates that $1.2 million and $238 thousand (before tax) will be reclassified as an increase to interest income and a decrease to interest expense, respectively, over the next 12 months.

(Losses) gains included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Derivative - interest rate swap:
Interest expense	$	(3,790)	$	76	$	902	$	606
Hedged item - subordinated debt
Interest expense	$	3,952	$	(147)	$	(820)	$	(477)

The changes in the fair value of the hedged item designated as a qualifying hedge are captured as an adjustment to the carrying amount of the hedged item (basis adjustment). The following table presents the hedged item related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged item at June 30, 2023 and December 31, 2022, respectively.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included	Net Carrying Amount of the Hedged Liability *		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
	(in thousands)
June 30, 2023
Long-term borrowings	$	268,300	$	(29,312)
December 31, 2022
Long-term borrowings	$	267,076	$	(30,132)

*    Net carrying amount includes unamortized debt issuance costs of $2.4 million and $2.8 million at June 30, 2023 and December 31, 2022, respectively.

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The net (gains) losses included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$	(368)	$	1,143	$	(160)	$	(1,654)

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commercial loan customers and foreign exchange contracts (not designated as hedging instruments) with a combined total of $14.1 million and $13.2 million for the three months ended June 30, 2023 and 2022, respectively and $24.0 million and $27.6 million for the six months ended June 30, 2023 and 2022, respectively.

Collateral Requirements and Credit Risk Related Contingent Features. By using derivatives, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction with Valley’s consolidated counterparty risk management process. Valley’s counterparties and the risk limits monitored by management are periodically reviewed and approved by the Board of Directors.

Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements. Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating. If Valley’s credit rating is reduced below investment grade, or such rating is withdrawn or suspended, then the counterparties could terminate the derivative positions and Valley would be required to settle its obligations under the agreements. As of June 30, 2023, Valley was in compliance with all of the provisions of its derivative counterparty agreements. The aggregate fair value of all derivative financial instruments with credit risk-related contingent features in a net liability position at June 30, 2023 was not material. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.

Note 14. Balance Sheet Offsetting

Certain financial instruments, including certain over-the-counter (OTC) derivatives (mostly interest rate swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition and/or subject to master netting arrangements or similar agreements. OTC derivatives include interest rate swaps executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house (presented in the table below). The credit risk associated with bilateral OTC derivatives is managed through obtaining collateral and enforceable master netting agreements.

Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by the counterparty with net liability positions in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the swap or repurchase agreement should Valley be in default. The total amount of collateral held or pledged cannot exceed the net derivative fair values with the counterparty.

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The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of June 30, 2023 and December 31, 2022.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral *		Net Amount
	(in thousands)
June 30, 2023
Assets
Interest rate swaps	$	548,592	$	—	$	548,592	$	9,929	$	(468,200)	$	90,321
Liabilities
Interest rate swaps	$	577,209	$	—	$	577,209	$	(9,929)	$	—	$	567,280
December 31, 2022
Assets
Interest rate swaps	$	453,251	$	—	$	453,251	$	12,766	$	(342,480)	$	123,537
Liabilities
Interest rate swaps	$	594,476	$	—	$	594,476	$	(12,766)	$	(432)	$	581,278

*    Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contacts in an asset/liability position.

Note 15. Tax Credit Investments

Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act. Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense.

Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of accounting. After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable.

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	21,427	$	24,198
Other tax credit investments, net	80,145		56,551
Total tax credit investments, net	$	101,572	$	80,749
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	1,327	$	1,338
Total unfunded tax credit commitments	$	1,327	$	1,338

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The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and six months ended June 30, 2023 and 2022: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,460	$	1,614	$	2,919	$	2,358
Other tax credit investment credits and tax benefits	3,430		2,539		6,651		5,090
Total reduction in income tax expense	$	4,890	$	4,153	$	9,570	$	7,448
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	938	$	653	$	1,875	$	1,068
Affordable housing tax credit investment impairment losses	448		363		896		625
Other tax credit investment losses	719		386		725		695
Other tax credit investment impairment losses	2,913		1,791		5,775		3,701
Total amortization of tax credit investments recorded in non-interest expense	$	5,018	$	3,193	$	9,271	$	6,089

Note 16. Operating Segments

Valley manages its business operations under reportable segments consisting of Consumer Banking, Commercial Banking and Treasury and Corporate Other. Each operating segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount). Valley regularly assesses its strategic plans, operations and reporting structures to identify its reportable segments and no changes to the reportable segments were determined necessary during the first half of 2023.

Consumer Banking is mainly comprised of residential mortgages and automobile loans, and to a lesser extent, secured personal lines of credit, home equity loans and other consumer loans. The duration of the residential mortgage loan portfolio is subject to movements in the market level of interest rates and forecasted prepayment speeds. The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest rates. However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles. Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.

Commercial Banking is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans. Due to the portfolio’s interest rate characteristics, Commercial Banking is Valley’s operating segment that is most sensitive to movements in market interest rates.

Treasury and Corporate Other largely consists of the Treasury managed held to maturity debt securities and available for sale debt securities portfolios mainly utilized in the liquidity management needs of our lending segments and income and expense items resulting from support functions not directly attributable to a specific segment. Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to the Consumer and Commercial Banking segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and

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funding costs based on each segment's respective mix of average interest earning assets and or liabilities outstanding for the period.

The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The following tables represent the financial data for Valley’s operating segments for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,904,483		$	40,553,454		$	7,893,871		$	57,351,808
Interest income	$	90,602		$	624,569		$	72,288		$	787,459
Interest expense	55,198			250,871			61,625			367,694
Net interest income	35,404			373,698			10,663			419,765
Provision (credit) for credit losses	3,492			2,840			(282)			6,050
Net interest income after provision for credit losses	31,912			370,858			10,945			413,715
Non-interest income	25,529			14,361			20,185			60,075
Non-interest expense	23,223			35,365			224,383			282,971
Internal transfer expense (income)	22,018			102,395			(124,413)			—
Income (loss) before income taxes	$	12,200		$	247,459		$	(68,840)		$	190,819
Return on average interest earning assets (pre-tax)	0.55		%	2.44		%	(3.49)		%	1.33		%

	Three Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,967,305		$	34,549,982		$	6,373,943		$	48,891,230
Interest income	$	63,137		$	352,440		$	37,370		$	452,947
Interest expense	4,723			19,735			10,329			34,787
Net interest income	58,414			332,705			27,041			418,160
Provision for credit losses	5,402			38,310			286			43,998
Net interest income after provision for credit losses	53,012			294,395			26,755			374,162
Non-interest income	17,086			14,425			27,022			58,533
Non-interest expense	18,791			24,448			256,491			299,730
Internal transfer expense (income)	37,629			157,365			(194,994)			—
Income (loss) before income taxes	$	13,678		$	127,007		$	(7,720)		$	132,965
Return on average interest earning assets (pre-tax)	0.69		%	1.47		%	(0.48)		%	1.09		%

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	Six Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,836,859		$	39,826,630		$	7,699,305		$	56,362,794
Interest income	$	175,918		$	1,194,479		$	137,292		$	1,507,689
Interest expense	98,204			442,594			111,106			651,904
Net interest income	77,714			751,885			26,186			855,785
Provision for credit losses	9,936			5,846			4,705			20,487
Net interest income after provision for credit losses	67,778			746,039			21,481			835,298
Non-interest income	39,819			30,108			44,447			114,374
Non-interest expense	41,472			71,088			442,577			555,137
Internal transfer expense (income)	52,901			233,990			(286,891)			—
Income (loss) before income taxes	$	13,224		$	471,069		$	(89,758)		$	394,535
Return on average interest earning assets (pre-tax)	0.30		%	2.37		%	(2.33)		%	1.40		%

	Six Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,848,764		$	30,743,387		$	6,017,817		$	44,609,968
Interest income	$	122,596		$	610,346		$	60,463		$	793,405
Interest expense	7,930			31,062			18,584			57,576
Net interest income	114,666			579,284			41,879			735,829
Provision for credit losses	7,275			39,937			343			47,555
Net interest income after provision for credit losses	107,391			539,347			41,536			688,274
Non-interest income	30,903			31,305			35,595			97,803
Non-interest expense	35,359			49,533			412,178			497,070
Internal transfer expense (income)	66,276			257,281			(323,557)			—
Income (loss) before income taxes	$	36,659		$	263,838		$	(11,490)		$	289,007
Return on average interest earning assets (pre-tax)	0.93		%	1.72		%	(0.38)		%	1.30		%

Item 2. Management’s Discussion and Analysis (MD&A) of Financial Condition and Results of Operations

The following MD&A should be read in conjunction with the consolidated financial statements and notes thereto appearing in Part I, Item 1 of this report. The words "Valley," the "Company," "we," "our" and "us" refer to Valley National Bancorp and its subsidiaries, unless we indicate otherwise. Additionally, Valley’s principal subsidiary, Valley National Bank, is commonly referred to as the “Bank” in this MD&A.

The MD&A contains supplemental financial information, described in the sections that follow, which has been determined by methods other than U.S. generally accepted accounting principles (U.S. GAAP) that management uses in its analysis of our performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding our underlying operational performance, our business and performance trends and facilitate comparisons with the performance of others in the financial services industry. These non-GAAP financial measures should not be considered in isolation or as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

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Cautionary Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q, both in the MD&A and elsewhere, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about our business, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to:

•the impact of Federal Reserve actions affecting the level of market interest rates and increases in business failures, specifically among our clients, as well as on our business, our employees and our ability to provide services to our customers;

•the impact of recent and possible future bank failures on the business environment in which we operate and resulting market volatility and reduced confidence in depository institutions, including impact on stock price, customer deposit withdrawals from Valley National Bank, or business disruptions or liquidity issues that have or may affect our customers;

•the impact of unfavorable macroeconomic conditions or downturns, instability or volatility in financial markets, unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by and factors outside of our control, such as geopolitical instabilities or events; natural and other disasters (including severe weather events) and health emergencies, acts of terrorism or other external events;

•risks associated with our acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA), including (i) the inability to realize expected cost savings and synergies from the acquisition in the amounts or timeframe anticipated and (ii) greater than expected costs or difficulties relating to integration matters;

•the loss of or decrease in lower-cost funding sources within our deposit base;

•the need to supplement debt or equity capital to maintain or exceed internal capital thresholds;

•the inability to attract new customer deposits to keep pace with loan growth strategies;

•a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;

•greater than expected technology related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;

•the risks related to the replacement of the London Interbank Offered Rate with Secured Overnight Financing Rate and other reference rates, including increased expenses, risk of litigation and the effectiveness of hedging strategies;

•cyber-attacks, ransomware attacks, computer viruses or other malware that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data, disable or degrade service, or sabotage our systems;

•damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of

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fiduciary responsibility, negligence, fraud, environmental laws, patent or trademark infringement, employment related claims, and other matters;

•changes to laws and regulations, including changes affecting oversight of the financial services industry; changes in the enforcement and interpretation of such laws and regulations; and changes in accounting and reporting standards;

•higher or lower than expected income tax expense or tax rates, including increases or decreases resulting from changes in uncertain tax position liabilities, tax laws, regulations and case law;

•results of examinations by the Office of the Comptroller of the Currency (OCC), the Federal Reserve Bank (FRB), the Consumer Financial Protection Bureau (CFPB) and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;

•our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory restrictions or limitations, changes in our capital requirements or a decision to increase capital by retaining more earnings;

•a prolonged downturn in the economy, mainly in New Jersey, New York, Florida, Alabama, California, and Illinois, as well as an unexpected decline in commercial real estate values within our market areas; and

•unexpected significant declines in the loan portfolio due to the lack of economic expansion, increased competition, large prepayments, changes in regulatory lending guidance or other factors.

A detailed discussion of factors that could affect our results is included in our SEC filings, including the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, and in Part II, Item 1A of this Form 10-Q.

We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Critical Accounting Estimates

Valley’s accounting policies are fundamental to understanding management’s discussion and analysis of its financial condition and results of operations. In preparing the consolidated financial statements, management has made estimates, judgments and assumptions in accordance with these policies that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. At June 30, 2023, we identified our policies on the allowance for credit losses, goodwill and other intangible assets, and income taxes to be critical accounting policies because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. Management has reviewed the application of these policies and estimates with the Audit Committee of Valley’s Board of Directors. Our critical accounting policies and estimates are described in detail in Part II, Item 7 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022, and there have been no material changes in such policies and estimates since the date of such report.

New Authoritative Accounting Guidance

See Note 5 to the consolidated financial statements for a description of new authoritative accounting guidance, including the respective dates of adoption and effects on results of operations and financial condition.

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Executive Summary

Company Overview. At June 30, 2023, Valley had consolidated total assets of approximately $61.7 billion, total net loans of $49.4 billion, total deposits of $49.6 billion and total shareholders’ equity of $6.6 billion. Valley operates many convenient branch office locations and commercial banking offices in northern and central New Jersey, the New York City Boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, California, Alabama and Illinois. Of our current 230 branch network, 56 percent, 18 percent, and 18 percent of the branches are in New Jersey, New York and Florida, respectively, with the remaining 8 percent of the branches in Alabama, California, and Illinois combined. We have grown significantly both in asset size and locations over the past several years both through organic efforts and bank acquisitions, including our acquisition of Bank Leumi USA on April 1, 2022.

Industry Developments. The combination of rapidly rising interest rates, increased competition and economic uncertainty continues to weigh on the banking industry in the wake of the recent bank failures. We have consistently operated the Bank with a focus on diversification to maintain stability through various economic cycles. During the second quarter 2023, we continued to position our balance sheet to mitigate potential risks from the market uncertainty affecting the banking industry in general and Valley, its clients and communities in particular.

•Total assets decreased to $61.7 billion at June 30, 2023, a decrease of 4.1 percent from March 31, 2023. Liquidity remained strong with total liquid assets of approximately $13.1 billion at June 30, 2023, representing 6.0 percent of interest earning assets. We continue to maintain significant access to readily available, diverse funding sources to fulfill both short-term and long-term funding needs. See "Bank Liquidity" section for additional information.

•Total deposits increased $2.0 billion to $49.6 billion at June 30, 2023 as compared to $47.6 billion at March 31, 2023 largely due to higher CD balances. See the "Deposits and Other Borrowings" section for more details.

•Capital remained strong with ratios of both Valley and the Bank exceeding all capital adequacy requirements at June 30, 2023. Total shareholders' equity increased $63.6 million to $6.6 billion at June 30, 2023 as compared to March 31, 2023. See the "Capital Adequacy" section for additional details.

•Total loans increased $1.2 billion, or 10.0 percent on an annualized basis to $49.9 billion at June 30, 2023 from March 31, 2023 mainly due to continued organic loan growth in commercial loan categories and relatively low levels of prepayment activity during the second quarter 2023. See "Loan Portfolio" section for more information.

•Asset quality continued to reflect our disciplined underwriting and lending practices during the second quarter 2023. Non-performing assets (NPAs) as a percentage of total loans and NPAs totaled 0.51 percent and 0.50 percent at June 30, 2023 and March 31, 2023, respectively. See the "Non-Performing Assets" section for additional information.

•Total investment securities were $5.1 billion, or 8.2 percent of total assets, at June 30, 2023 and remained relatively unchanged as compared to March 31, 2023. See the "Investment Securities Portfolio" section for more details.

Quarterly Results. Net income for the second quarter 2023 was $139.1 million, or $0.27 per diluted common share as compared to $96.4 million, or $0.18 per diluted common share, for the second quarter 2022. The $42.6 million increase in quarterly net income as compared to the same quarter one year ago was mainly due to the following changes:

•a $37.9 million decrease in our provision for credit losses mainly due to a provision related to non-PCD loans and unfunded credit commitments acquired from Bank Leumi USA in the second quarter 2022;

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•a $1.6 million increase in net interest income mainly due to increased yields on both new loan originations and adjustable-rate loans and higher average loan balances, largely offset by the increased cost of deposits;

•a $1.5 million increase in non-interest income primarily due to an increase in capital markets fees and wealth management and trust fees, partially offset by lower net gains on sales of loans; and

•a $16.8 million decrease in non-interest expense was due, in part, to a $40.2 million decrease in merger expenses, partially offset by a $11.2 million restructuring charge and various other increases;

These items were partially offset by:

•a $15.2 million increase in income tax expense mostly due to higher pre-tax income in the second quarter 2023.

See the "Net Interest Income", "Non-Interest Income", "Non-Interest Expense" and "Income Taxes" sections below for more details on the impact of the items above on our second quarter 2023 results.

U.S. Economic Conditions. During the second quarter 2023, real gross domestic product (GDP) increased at an annual rate of 2.4 percent as compared to an increase of 2.0 percent during the first quarter 2023. The 2.4 percent increase in real GDP reflected robust consumer spending, private inventory investment, nonresidential fixed investment, and government spending, as well as improved supply chain. Inflation moderately cooled, but remained well above the Federal Reserve’s target of 2 percent in the second quarter 2023.

During the first quarter 2023, the Federal Reserve raised the target range for the federal funds rate by an additional 25 basis points in May 2023 and paused rate increases in June to observe the full impact of its changes over the past year. In July 2023, the Federal Reserve raised the target again by another 25 basis points to a range of 5.25 to 5.5 percent.

The 10-year U.S. Treasury note yield ended the second quarter 2023 at 3.81 percent, or 33 basis points higher as compared to the first quarter 2023, and the 2-year U.S. Treasury note yield ended the second quarter 2023 at 4.87 percent, or 81 basis points higher as compared to the first quarter 2023.

For all U.S. commercial banks, commercial and industrial loans decreased approximately by 1.3 percent at June 30, 2023 as compared to March 31, 2023, while consumer loans increased by 1.3 percent. Alternatively, demand for commercial real estate loans remained flat compared to the prior quarter. Overall the commercial real estate market was constricted by the financial environment this quarter as rising interest rates eroded investment profitability. Despite higher mortgage rates, demand for residential real estate remained steady, although sales were constrained by low inventories.

While many economic measures continue to defy recessionary concerns, further increases in market interest rates, the inverted yield curve, high inflation, and the potential for additional fallout from the recent banking crisis, including bank regulatory actions, among other factors, have added a higher level of uncertainty to the future path of the U.S. economy and created a challenging banking environment. Should economic conditions deteriorate, causing business activity, spending and investment to decline, it may adversely impact our financial results, as highlighted in this MD&A.

Deposits and Other Borrowings

Overall, average deposits increased by $311.6 million to $47.5 billion for the second quarter 2023 as compared to the first quarter 2023 mostly due to higher time deposits driven by successful retail CD generation and increased utilization of fully insured indirect customer (i.e., brokered) deposits, partially offset by a decrease in average non-interest bearing deposits. The decline in non-interest bearing deposits was largely due to a moderate shift in customer balances to our interest bearing deposit products in a rising interest rate environment and outflows due to attractive investment alternatives to deposits in the marketplace. Average non-interest-bearing deposits; savings,

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NOW and money market deposits; and time deposits represented approximately 27 percent, 47 percent and 26 percent of total deposits as of June 30, 2023, respectively.

Actual ending balances for deposits increased $2.0 billion to approximately $49.6 billion at June 30, 2023 from March 31, 2023 mainly due to a $3.8 billion increase in time deposits, partially offset by decreases in non-interest bearing deposits, and savings, NOW and money market deposits totaling $1.1 billion and $626.1 million, respectively. The increase in time deposits from March 31, 2023 was partially driven by higher fully-insured indirect customer CD balances at June 30, 2023. Total fully-insured indirect customer deposits, consisting of both brokered time deposit and money market accounts, increased $3.2 billion to $10.3 billion at June 30, 2023 from March 31, 2023. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 25 percent, 45 percent and 30 percent of total deposits as of June 30, 2023, respectively, as compared to 29 percent, 48 percent and 23 percent of total deposits as of March 31, 2023, respectively.

The following table lists, by maturity, uninsured certificates of deposit at June 30, 2023:

	(in thousands)
Less than three months	$	410,010
Three to six months	445,585
Six to twelve months	922,713
More than twelve months	261,279
Total	$	2,039,587

Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits (i.e., deposits eliminated in consolidation), totaled approximately $12.1 billion, or 24 percent of total deposits, at June 30, 2023 as compared to $14.9 billion, or 31 percent of total deposits, at March 31, 2023.

While our diversified commercial and consumer deposit base has remained relatively stable during the early stages of the third quarter 2023, deposit gathering initiatives could remain challenging due to market competition, attractive investment alternatives, such as U.S. Treasury securities, and other factors. As a result, we cannot guarantee that we will be able to maintain deposit levels at or near those reported at June 30, 2023.

The following table presents average short-term and long-term borrowings for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	(in thousands)
Average short-term borrowings:
FHLB advances	$	3,656,593	$	2,513,983	$	822,913	$	3,088,445	$	629,753
Securities sold under repurchase agreements	99,327		99,546		142,790		99,436		145,666
Federal funds purchased	122,537		190,214		637,495		156,188		326,116
Total	$	3,878,457	$	2,803,743	$	1,603,198	$	3,344,069	$	1,101,535
Average long-term borrowings:
FHLB advances	$	1,523,500	$	875,053	$	788,803	$	1,201,068	$	788,879
Subordinated debt	759,334		754,972		617,291		757,165		624,135
Junior subordinated debentures issued to capital trusts	56,893		56,805		56,544		56,848		56,501
Total	$	2,339,727	$	1,686,830	$	1,462,638	$	2,015,081	$	1,469,515

Average short-term borrowings increased $1.1 billion during the second quarter 2023 as compared to the first quarter 2023 mostly due to the higher utilization of FHLB advances in March 2023 to increase our excess liquidity

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position. Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) increased $652.9 million as compared to the first quarter 2023 mainly due to the new FHLB advances issued in March 2023 and the second quarter 2023.

Actual ending balances for short-term borrowings decreased $5.3 billion to $1.1 billion at June 30, 2023 as compared to March 31, 2023 mainly due to maturities and repayment of FHLB advances. In March 2023, we increased our short-term borrowings to bolster our liquidity position out of an abundance of caution in the wake of the two bank failures and subsequently managed these balances to a lower level during the second quarter 2023, partially through the greater use of time deposits. We continue to closely monitor changes in the current banking environment and have substantial access to additional liquidity. Actual ending balances for long-term borrowings totaled $2.4 billion at June 30, 2023 and remained relatively unchanged as compared to March 31, 2023. See the "Bank Liquidity" section for more details on our available funding sources.

Non-GAAP Financial Measures

The table below presents selected performance indicators, their comparative non-GAAP measures and the (non-GAAP) efficiency ratio for the periods indicated. Valley believes that the non-GAAP financial measures provide useful supplemental information to both management and investors in understanding its underlying operational performance, business, and performance trends, and may facilitate comparisons of current and prior performance with the performance of others in the financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes. Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management. These non-GAAP financial measures should not be considered in isolation, as a substitute for or superior to financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar measures disclosed by other companies.

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The following table presents our annualized performance ratios:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Selected Performance Indicators	($ in thousands)
GAAP measures:
Net income, as reported	$	139,060		$	96,413		$	285,611		$	213,141
Return on average assets	0.90		%	0.72		%	0.94		%	0.88		%
Return on average shareholders’ equity	8.50			6.18			8.80			7.51
Non-GAAP measures:
Net income, as adjusted	$	147,081		$	165,803		$	301,611		$	286,116
Return on average assets, as adjusted	0.95		%	1.25		%	0.99		%	1.18		%
Return on average shareholders' equity, as adjusted	8.99			10.63			9.29			10.09
Return on average tangible shareholders' equity (ROATE)	12.37			9.33			12.87			11.07
ROATE, as adjusted	13.09			16.05			13.59			14.87
Efficiency ratio	55.59			50.78			54.69			51.81

	June 30, 2023		December 31, 2022
Common Equity Per Share Data:
Book value per common share (GAAP)	$	12.54	$	12.23
Tangible book value per common share (non-GAAP)	8.51		8.15

Non-GAAP Reconciliations to GAAP Financial Measures

Adjusted net income is computed as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Net income, as reported (GAAP)	$	139,060	$	96,413	$	285,611	$	213,141
Add: Losses (gains) on available for sale and held to maturity debt securities, net (net of tax) (a)	6		(56)		23		(50)
Add: Restructuring charge (net of tax) (b)	8,015		—		8,015		—
Add: Provision for credit losses for available for sale securities (c)	—		—		5,000		—
Add: Non-PCD provision for credit losses, (net of tax) (d)	—		29,282		—		29,282
Add: Merger related expenses (net of tax) (e)	—		40,164		2,962		43,743
Net income, as adjusted (non-GAAP)	$	147,081	$	165,803	$	301,611	$	286,116

(a)    Included in gains (losses) on securities transactions, net.

(b)    Represents severance expense related to workforce reductions within salary and employee benefits expense.

(c)    Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).

(d)    Represents provision for credit losses for non-PCD loans and unfunded credit commitments acquired during the period.

(e)    Included primarily within salary and employee benefits expense.

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In addition to the items used to calculate net income, as adjusted, in the table above, our net income is, from time to time, impacted by fluctuations in the level of net gains on sales of loans, wealth management fees, and swap fees recognized from commercial loan customer transactions reported in capital markets fees. These amounts can vary widely from period to period due to, among other factors, the amount of residential mortgage loans originated for sale, loan portfolio sales, brokerage fees, and commercial loan customer demand for certain products. See the “Non-Interest Income” section below for more details.

Adjusted annualized return on average assets is computed by dividing adjusted net income by average assets, as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	($ in thousands)
Net income, as adjusted (non-GAAP)	$	147,081		$	165,803		$	301,611		$	286,116
Average assets	$	61,877,464		$	53,211,422		$	60,877,792		$	48,417,469
Annualized return on average assets, as adjusted (non-GAAP)	0.95		%	1.25		%	0.99		%	1.18		%

Adjusted annualized return on average shareholders' equity is computed by dividing adjusted net income by average shareholders' equity, as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	($ in thousands)
Net income, as adjusted (non-GAAP)	$	147,081		$	165,803		$	301,611		$	286,116
Average shareholders' equity	$	6,546,452		$	6,238,985		$	6,493,627		$	5,673,014
Annualized return on average shareholders' equity, as adjusted (non-GAAP)	8.99		%	10.63		%	9.29		%	10.09		%

ROATE and adjusted ROATE are computed by dividing net income and adjusted net income, respectively, by average shareholders’ equity less average goodwill and average other intangible assets, as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	($ in thousands)
Net income, as reported (GAAP)	$	139,060		$	96,413		$	285,611		$	213,141
Net income, as adjusted (non-GAAP)	147,081			165,803			301,611			286,116
Average shareholders’ equity (GAAP)	$	6,546,452		$	6,238,985		$	6,493,627		$	5,673,014
Less: Average goodwill and other intangible assets	2,051,591			2,105,585			2,056,487			1,823,538
Average tangible shareholders’ equity (non-GAAP)	$	4,494,861		$	4,133,400		$	4,437,140		$	3,849,476
Annualized ROATE (non-GAAP)	12.37		%	9.33		%	12.87		%	11.07		%
Annualized ROATE, as adjusted (non-GAAP)	13.09		%	16.05		%	13.59		%	14.87		%

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The efficiency ratio is computed as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	($ in thousands)
Total non-interest expense, as reported (GAAP)	$	282,971		$	299,730		$	555,137		$	497,070
Less: Restructuring charge (pre-tax) (a)	11,182			—			11,182			—
Less: Amortization of tax credit investments (pre-tax)	5,018			3,193			9,271			6,089
Less: Merger related expenses (pre-tax) (b)	—			54,496			4,133			59,124
Total non-interest expense, as adjusted (non-GAAP)	$	266,771		$	242,041		$	530,551		$	431,857
Net interest income, as reported (GAAP)	$	419,765		$	418,160		$	855,785		$	735,829
Total non-interest income, as reported (GAAP)	60,075			58,533			114,374			97,803
Add: Losses (gains) on available for sale and held to maturity debt securities, net (pre-tax) (c)	9			(78)			33			(69)
Total net interest income and non-interest income, as adjusted (non-GAAP)	$	479,849		$	476,615		$	970,192		$	833,563
Efficiency ratio (non-GAAP)	55.59		%	50.78		%	54.69		%	51.81		%

(a)    Represents severance expense related to workforce reductions within salary and employee benefits expense.

(b)    Included primarily within salary and employee benefits expense.

(c)    Included in gains (losses) on securities transactions, net.

Tangible book value per common share is computed by dividing shareholders’ equity less preferred stock, goodwill and other intangible assets by common shares outstanding, as follows: 

	June 30, 2023		December 31, 2022
	($ in thousands, except for share data)
Common shares outstanding	507,619,430		506,374,478
Shareholders’ equity (GAAP)	$	6,575,184	$	6,400,802
Less: Preferred stock	209,691		209,691
Less: Goodwill and other intangible assets	2,046,882		2,066,392
Tangible common shareholders’ equity (non-GAAP)	$	4,318,611	$	4,124,719
Book value per common share (GAAP)	$	12.54	$	12.23
Tangible book value per common share (non-GAAP)	$	8.51	$	8.15

Net Interest Income

Net interest income on a tax equivalent basis totaling $421.3 million for the second quarter 2023 decreased $16.2 million as compared to the first quarter 2023 and increased $1.7 million as compared to the second quarter 2022. The decrease as compared to the first quarter 2023 was mainly due to a $3.3 billion increase in average interest bearing liabilities and higher interest rates on most interest bearing deposit products and short-term borrowings, partially offset by higher loan yields. As a result, interest expense increased $83.5 million to $367.7 million for the second quarter 2023 as compared to the first quarter 2023. Interest income on a tax equivalent basis increased $67.3 million to $789.0 million in the second quarter 2023 as compared to the first quarter 2023. The increase was mostly due to higher yields on both new originations and adjustable rate loans in our portfolio and a $1.6 billion increase in average loan balances driven by organic new loan volumes and a continuation of slower loan prepayments.

Average interest earning assets increased $8.5 billion to $57.4 billion for the second quarter 2023 as compared to the second quarter 2022 mainly due to a $6.9 billion increase in average loan balances and $1.4 billion increase in average interest bearing cash balances largely due to higher excess cash held overnight as part of our prudent liquidity management navigating the fallout from the recent bank failures. Compared to the first quarter 2023,

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average interest earning assets increased by $2.0 billion during the second quarter 2023. The increase was primarily driven by a $1.6 billion increase in average loan balances mainly due to organic commercial loan growth and a $351.6 million increase in average interest bearing cash as compared to the prior linked quarter.

Average interest bearing liabilities increased $11.2 billion to $40.9 billion for the second quarter 2023 as compared to the second quarter 2022 mainly due to increases of $8.1 billion and $2.3 billion in average time deposits and short-term borrowings, respectively. The increases in average time deposits and short-term borrowings were largely due to the enhanced liquidity management efforts during the first half of 2023, including increased usage of fully FDIC-insured indirect customer CD and successful retail CD initiatives. As compared to the first quarter 2023, average interest bearing liabilities increased by $3.3 billion in the second quarter 2023 largely due to a $2.5 billion increase in average time deposits mainly driven by increased usage of fully FDIC-insured indirect customer CD and successful retail CD initiatives, as well as an increase in short-term borrowings, as part of our funding and liquidity sources. See additional information under "Deposits and Other Borrowings" in the Executive Summary section above.

Net interest margin on a tax equivalent basis of 2.94 percent for the second quarter 2023 decreased by 22 basis points and 49 basis points from 3.16 percent and 3.43 percent for the first quarter 2023 and the second quarter 2022, respectively. The decrease as compared to the first quarter 2023 was largely driven by higher interest rates on interest bearing deposits and short-term borrowings, partially offset by a 29 basis point increase in the yield on average interest earning assets. The yield on average loans increased by 30 basis points to 5.78 percent for the second quarter 2023 as compared to the first quarter 2023 largely due to higher interest rates on new originations and adjustable rate loans. The yields on average taxable and non-taxable investments also increased 13 basis points and 16 basis points, respectively, from the first quarter 2023 mostly due to investment maturities and prepayments redeployed into new higher yielding securities during the first half of 2023. Our cost of total average deposits increased to 2.45 percent for the second quarter 2023 from 1.96 percent and 0.19 percent for the first quarter 2023 and the second quarter 2022, respectively. The overall cost of average interest bearing liabilities also increased 57 basis points to 3.59 percent for the second quarter 2023 as compared to the first quarter 2023 primarily driven by the rising market interest rates on deposits during the first half of 2023.

Based upon our current estimates at June 30, 2023, we anticipate net interest income growth in the low single digits (i.e., less than 10 percent) for the full year of 2023, revised down from 16 to 18 percent previously estimated in the MD&A of Valley's Form 10-K for the year ended December 31, 2022. While we are seeing initial signs of stabilization in net interest income and margin as compared to the declines in both experienced in the first quarter 2023, we cannot provide any assurances with respect to the future trajectory of market interest rates or that our net interest margin or income will remain at the levels reported for the second quarter 2023.

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The following table reflects the components of net interest income for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022:

Quarterly Analysis of Average Assets, Liabilities and Shareholders’ Equity and

Net Interest Income on a Tax Equivalent Basis

	Three Months Ended
	June 30, 2023						March 31, 2023						June 30, 2022
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	49,457,937	$	715,195	5.78	%	$	47,859,371	$	655,250	5.48	%	$	42,517,287	$	415,602	3.91	%
Taxable investments (3)	5,065,812		39,436		3.11		5,033,134		37,474		2.98		4,912,994		30,610		2.49
Tax-exempt investments (1)(3)	629,342		7,062		4.49		623,145		6,739		4.33		684,471		6,571		3.84
Interest bearing deposits with banks	2,198,717		27,276		4.96		1,847,140		22,205		4.81		776,478		1,569		0.81
Total interest earning assets	57,351,808		788,969		5.50		55,362,790		721,668		5.21		48,891,230		454,352		3.72
Allowance for credit losses	(446,098)						(466,837)						(428,193)
Cash and due from banks	415,075						445,005						426,187
Other assets	4,709,061						4,702,376						4,362,789
Unrealized gains on securities available for sale, net	(152,382)						(176,332)						(40,591)
Total assets	$	61,877,464					$	59,867,002					$	53,211,422
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	22,512,128	$	164,843	2.93	%	$	23,389,569	$	150,766	2.58	%	$	23,027,347	$	17,122	0.30	%
Time deposits	12,195,479		125,764		4.12		9,738,608		80,298		3.30		3,601,088		3,269		0.36
Total interest bearing deposits	34,707,607		290,607		3.35		33,128,177		231,064		2.79		26,628,435		20,391		0.31
Short-term borrowings	3,878,457		50,207		5.18		2,803,743		33,948		4.84		1,603,198		4,083		1.02
Long-term borrowings (4)	2,339,727		26,880		4.60		1,686,830		19,198		4.55		1,462,638		10,313		2.82
Total interest bearing liabilities	40,925,791		367,694		3.59		37,618,750		284,210		3.02		29,694,271		34,787		0.47
Non-interest bearing deposits	12,756,862						14,024,742						16,267,946
Other liabilities	1,648,359						1,783,295						1,010,220
Shareholders’ equity	6,546,452						6,440,215						6,238,985
Total liabilities and shareholders’ equity	$	61,877,464					$	59,867,002					$	53,211,422
Net interest income/interest rate spread (5)			$	421,275	1.91	%			$	437,458	2.19	%			$	419,565	3.25	%
Tax equivalent adjustment			(1,510)						(1,438)						(1,405)
Net interest income, as reported			$	419,765					$	436,020					$	418,160
Net interest margin (6)					2.93	%					3.15	%					3.42	%
Tax equivalent effect					0.01						0.01						0.01
Net interest margin on a fully tax equivalent basis (6)					2.94	%					3.16	%					3.43	%

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The following table reflects the components of net interest income for the six months ended June 30, 2023 and 2022:

	Six Months Ended
	June 30, 2023						June 30, 2022
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
	($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)	$	48,663,070	$	1,370,446	5.63	%	$	38,592,151	$	732,991	3.80	%
Taxable investments (3)	5,049,563		76,910		3.05		4,377,990		50,725		2.32
Tax-exempt investments (1)(3)	626,261		13,800		4.41		543,646		9,757		3.59
Interest bearing deposits with banks	2,023,900		49,481		4.89		1,096,181		2,030		0.37
Total interest earning assets	56,362,794		1,510,637		5.36		44,609,968		795,503		3.57
Allowance for credit losses	(456,410)						(398,258)
Cash and due from banks	429,957						354,433
Other assets	4,705,742						3,864,997
Unrealized gains on securities available for sale, net	(164,291)						(13,671)
Total assets	$	60,877,792					$	48,417,469
Liabilities and shareholders’ equity
Interest bearing liabilities:
Savings, NOW and money market deposits	$	22,948,425	$	315,608	2.75	%	$	21,781,907	$	26,749	0.25	%
Time deposits	10,973,830		206,062		3.76		3,577,933		6,100		0.34
Total interest bearing deposits	33,922,255		521,670		3.08		25,359,840		32,849		0.26
Short-term borrowings	3,344,069		84,156		5.03		1,101,535		4,889		0.89
Long-term borrowings (4)	2,015,081		46,078		4.57		1,469,515		19,838		2.70
Total interest bearing liabilities	39,281,405		651,904		3.32		27,930,890		57,576		0.41
Non-interest bearing deposits	13,387,299						13,989,897
Other liabilities	1,715,461						823,668
Shareholders’ equity	6,493,627						5,673,014
Total liabilities and shareholders’ equity	$	60,877,792					$	48,417,469
Net interest income/interest rate spread (5)			$	858,733	2.04	%			$	737,927	3.16	%
Tax equivalent adjustment			(2,948)						(2,098)
Net interest income, as reported			$	855,785					$	735,829
Net interest margin (6)					3.04	%					3.30	%
Tax equivalent effect					0.01						0.01
Net interest margin on a fully tax equivalent basis (6)					3.05	%					3.31	%

_____________

(1)Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.

(2)Loans are stated net of unearned income and include non-accrual loans.

(3)The yield for securities that are classified as available for sale is based on the average historical amortized cost.

(4)Includes junior subordinated debentures issued to capital trusts which are presented separately on the consolidated

statements of financial condition.

(5)Interest rate spread represents the difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a fully tax equivalent basis.

(6)Net interest income as a percentage of total average interest earning assets.

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The following table demonstrates the relative impact on net interest income of changes in the volume of interest earning assets and interest bearing liabilities and changes in rates earned and paid by us on such assets and liabilities. Variances resulting from a combination of changes in volume and rates are allocated to the categories in proportion to the absolute dollar amounts of the change in each category.

Change in Net Interest Income on a Tax Equivalent Basis

	Three Months Ended June 30, 2023 Compared to June 30, 2022						Six Months Ended June 30, 2023 Compared to June 30, 2022
	Change Due to Volume		Change Due to Rate		Total Change		Change Due to Volume		Change Due to Rate		Total Change
	(in thousands)
Interest Income:
Loans*	$	76,106	$	223,487	$	299,593	$	223,680	$	413,775	$	637,455
Taxable investments	978		7,848		8,826		8,583		17,602		26,185
Tax-exempt investments*	(558)		1,049		491		1,618		2,425		4,043
Interest bearing deposits with banks	6,755		18,952		25,707		3,078		44,373		47,451
Total increase in interest income	83,281		251,336		334,617		236,959		478,175		715,134
Interest Expense:
Savings, NOW and money market deposits	(392)		148,113		147,721		1,509		287,350		288,859
Time deposits	22,935		99,560		122,495		34,214		165,748		199,962
Short-term borrowings	11,897		34,227		46,124		24,064		55,203		79,267
Long-term borrowings and junior subordinated debentures	8,083		8,484		16,567		9,146		17,094		26,240
Total increase in interest expense	42,523		290,384		332,907		68,933		525,395		594,328
Total increase (decrease) in net interest income	$	40,758	$	(39,048)	$	1,710	$	168,026	$	(47,220)	$	120,806

*Interest income is presented on a tax equivalent basis using 21 percent as the federal tax rate.

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Non-Interest Income

Non-interest income increased $1.5 million and $16.6 million for the three and six months ended June 30, 2023, respectively, as compared to the same period of 2022. The following table presents the components of non-interest income for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Wealth management and trust fees	$	11,176	$	9,577	$	20,763	$	14,708
Insurance commissions	3,139		3,463		5,559		5,322
Capital markets	16,967		14,711		27,859		29,071
Service charges on deposit accounts	10,542		10,067		21,018		16,279
Gains (losses) on securities transactions, net	217		(309)		595		(1,381)
Fees from loan servicing	2,702		2,717		5,373		5,498
Gains on sales of loans, net	1,240		3,602		1,729		4,588
Bank owned life insurance	2,443		2,113		5,027		4,159
Other	11,649		12,592		26,451		19,559
Total non-interest income	$	60,075	$	58,533	$	114,374	$	97,803

Wealth management and trust fees income increased $1.6 million and $6.1 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022. The increase as compared to the second quarter 2022 was mainly driven by higher revenues generated by our advisory firm, Dudley Ventures, LLC, specializing in the investment and management of tax credit investments. The increase for the six months ended June 30, 2023 was largely related to higher brokerage fees related to our broker dealer subsidiary, Valley Financial Management, Inc., acquired on April 1, 2022 from Bank Leumi USA. Brokerage fees totaled $9.7 million and $4.9 million for the six months ended June 30, 2023 and 2022, respectively.

Capital markets income increased $2.3 million and decreased $1.2 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022 mainly due to changes in volume of interest rate swap transactions executed for commercial loan customers.

Service charges on deposit accounts increased $4.7 million for the six months ended June 30, 2023 compared to the same period in 2022 largely due to the additional deposit accounts acquired from Bank Leumi USA on April 1, 2022.

Net gains on sales of loans decreased $2.4 million and $2.9 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022 mostly due to lower loan sale volumes as we continued to retain a higher percentage of new loan volumes during the first half of 2023. During the six months ended June 30, 2023, we sold $71.8 million of residential mortgage loans as compared to $326.2 million for same period in 2022.

Other non-interest income increased $6.9 million for the six months ended June 30, 2023 as compared to the same period in 2022. The increase for the six months ended June 30, 2023 was mostly due to incremental increases in several operating non-interest income categories caused by the acquisition of Bank Leumi USA and organic growth of our business operations over the last 12 months.

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Non-Interest Expense

Non-interest expense decreased $16.8 million and increased $58.1 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022. The following table presents the components of non-interest expense for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Salary and employee benefits expense	$	149,594	$	154,798	$	294,580	$	262,531
Net occupancy expense	25,949		22,429		49,205		44,420
Technology, furniture and equipment expense	32,476		49,866		68,984		75,880
FDIC insurance assessment	10,426		5,351		19,581		9,509
Amortization of other intangible assets	9,812		11,400		20,331		15,837
Professional and legal fees	21,406		30,409		38,220		45,158
Amortization of tax credit investments	5,018		3,193		9,271		6,089
Other	28,290		22,284		54,965		37,646
Total non-interest expense	$	282,971	$	299,730	$	555,137	$	497,070

Salary and employee benefits expense decreased $5.2 million and increased $32.0 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022. As compared to second quarter 2022, the decline was largely due to decreases in cash incentive compensation expense and Bank Leumi USA merger related costs (which totaled $28.0 million in the second quarter 2022), partially offset by higher salary expense and a restructuring charge of $11.2 million, consisting of severance expense related to recent workforce reductions. The increase for the six months ended June 30, 2023 was primarily driven by higher headcount from the Bank Leumi USA acquisition and organic growth in our operations, the aforementioned restructuring charge, and inflationary pressures on our overall labor costs. These increases were partially offset by lower cash incentive compensation expense and merger related costs. The merger related costs totaled $4.1 million for the six months ended June 30, 2023 as compared to $28.0 million for the same period in 2022.

Net occupancy expense increased $3.5 million and $4.8 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022 mainly driven by increased lease expense.

Technology, furniture and equipment expense decreased $17.4 million and $6.9 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022. The second quarter 2023 decrease was largely due to Bank Leumi USA merger related expenses (largely consisting of technology related costs) totaling $15.3 million for the second quarter 2022. The decrease for the six months ended June 30, 2023 was mainly due to decline in merger related expense, partially offset by higher depreciation expense as compared to the same period in 2022.

FDIC insurance assessment expense increased $5.1 million and $10.1 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods of 2022 mainly due to growth in our balance sheet, as well as a two basis point increase in the initial base rate effective for 2023.

Amortization of other intangible assets increased $4.5 million for the six months ended June 30, 2023 as compared to the same period in 2022 mainly due to higher amortization expense of core deposits and other intangible assets resulting from Bank Leumi USA acquisition. See Note 9 to the consolidated financial statements for additional information.

Professional and legal fees decreased $9.0 million and $6.9 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022, largely due to declines in merger related expense, partially offset by higher technology transformation consulting and managed services. Within the category, merger

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related expenses (related to the Bank Leumi USA acquisition) totaled $11.4 million and $12.2 million for the three and six months ended June 30, 2023 and 2022, respectively.

Other non-interest expense increased $6.0 million and $17.3 million for the three and six months ended June 30, 2023, respectively, as compared to the same periods in 2022 primarily due to general increases in several categories caused by our acquired and organic growth in operations, higher charitable contributions, and increased charges related to collateral liabilities in connection with derivative transactions.

We continuously monitor and closely manage our non-interest expense in an effort to optimize our operating efficiency. To offset the current headwinds impacting our net interest income and margin, we began the implementation of a new cost saving initiative in late June 2023. The identified cost savings are expected to primarily come from workforce reductions, more efficient third-party consulting and service usage, and specific technology cost reductions. As noted above, we incurred $11.2 million of severance expense associated with these efforts during the second quarter 2023. Overall, the new initiative is expected to generate more than $40 million of annual pre-tax cost savings and be realized over the next 12 months.

Income Taxes

Income tax expense totaled $51.8 million for the second quarter 2023 as compared to $57.2 million and $36.6 million for the first quarter 2023 and second quarter 2022, respectively. Our effective tax rate was 27.1 percent, 28.1 percent and 27.5 percent for the second quarter 2023, first quarter 2023 and second quarter 2022, respectively. The decline in the effective tax rate in the second quarter 2023 was primarily due to the release of a state valuation allowance related to New Jersey net operating loss carryforwards.

U.S. GAAP requires that any change in judgment or change in measurement of a tax position taken in a prior annual period be recognized as a discrete event in the quarter in which it occurs, rather than being recognized as a change in effective tax rate for the current year. Our adherence to these tax guidelines may result in volatile effective income tax rates in future quarterly and annual periods. Factors that could impact management’s judgment include changes in income, tax laws and regulations and tax planning strategies.

Operating Segments

Valley manages its business operations under reportable segments consisting of Consumer Banking, Commercial Banking and Treasury and Corporate Other. Each operating segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount). Valley regularly assesses its strategic plans, operations and reporting structures to identify its reportable segments and no changes to the reportable segments were determined necessary during the first half of 2023.

The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to those of any other financial institution. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

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The following tables present the financial data for Valley's operating segments for the three months ended June 30, 2023 and 2022:

	Three Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,904,483		$	40,553,454		$	7,893,871		$	57,351,808
Income (loss) before income taxes	12,200			247,459			(68,840)			190,819
Annualized return on average interest earning assets (before tax)	0.55		%	2.44		%	(3.49)		%	1.33		%

	Three Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,967,305		$	34,549,982		$	6,373,943		$	48,891,230
Income (loss) before income taxes	13,678			127,007			(7,720)			132,965
Annualized return on average interest earning assets (before tax)	0.69		%	1.47		%	(0.48)		%	1.09		%

See Note 16 to the consolidated financial statements for additional details.

Consumer Banking

Consumer Banking represented 18.0 percent of our loan portfolio at June 30, 2023, and was mainly comprised of residential mortgage loans and automobile loans, and to a lesser extent, home equity loans, secured personal lines of credit and other consumer loans (including credit card loans). The duration of the residential mortgage loan portfolio (which represented 11.1 percent of our loan portfolio at June 30, 2023) is subject to movements in the market level of interest rates and forecasted prepayment speeds. The weighted average life of the automobile loans (which represented 3.3 percent of total loans at June 30, 2023) is relatively unaffected by movements in the market level of interest rates. However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles. Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.

Average interest earning assets within Consumer Banking increased $937.2 million to $8.9 billion for the three months ended June 30, 2023 as compared to the same period of 2022. The increase was largely due to new residential mortgage loan volumes originated for investment rather than sale over the last 12-month period, and, to a lesser extent, growth in home equity and secured personal lines of credit.

Income before income taxes for Consumer Banking decreased $1.5 million to $12.2 million for the second quarter 2023 as compared to the second quarter 2022 mainly driven by lower net interest income and, to a lesser extent, an increase in non-interest expense. Net interest income decreased $23.0 million in the second quarter 2023 as compared to the same period of 2022 due to additional interest expense generated from higher average deposit and other borrowing balances, as well as an increase in the cost of such interest bearing liabilities. The negative impact of these items was partially offset by an increase in non-interest income and lower internal transfer expense. Non-interest income increased $8.4 million mainly due to increases in wealth management and trust fees, capital markets and service charges on deposit accounts, partially offset by lower gains on sales of loans. Internal transfer expense decreased $15.6 million for the second quarter 2023 as compared to the second quarter 2022 due to the lower allocation of non-interest expense over the same period. The provision for loan losses decreased $1.9 million for the three months ended June 30, 2023 due to a decrease in non-economic qualitative factors as compared to one year ago. See further details in the “Allowance for Credit Losses” section of this MD&A.

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Net interest margin on the Consumer Banking portfolio decreased 134 basis points to 1.60 percent for the second quarter 2023 as compared to the second quarter 2022 mainly due to a 224 basis point increase in the costs associated with our funding sources, partially offset by a 90 basis point increase in the yield on average loans. The increase in our funding costs was mainly driven by higher interest rates on most of our interest bearing commercial and retail deposit products, increased utilization of fully FDIC-insured indirect customer deposits and higher cost of other borrowings held during the second quarter 2023. The 90 basis point increase in loan yield was largely due to higher yielding new loan volumes and adjustable rate loans in our portfolio. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our net interest margin and funding sources.

The return on average interest earning assets before income taxes for the consumer banking segment was 0.55 percent for the second quarter 2023 compared to 0.69 percent for the second quarter 2022.

Commercial Banking

Commercial Banking is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans. Due to the portfolio’s interest rate characteristics, Commercial Banking is Valley’s business segment that is most sensitive to movements in market interest rates. Commercial and industrial loans totaled approximately $9.3 billion and represented 18.6 percent of the total loan portfolio at June 30, 2023. Commercial real estate loans and construction loans totaled $31.6 billion and represented 63.4 percent of the total loan portfolio at June 30, 2023.

Average interest earning assets in Commercial Banking increased $6.0 billion to $40.6 billion for the three months ended June 30, 2023 as compared to the second quarter 2022 primarily due to strong organic loan growth concentrated in the commercial real estate loan portfolio.

Income before income taxes for Commercial Banking increased $120.5 million to $247.5 million for the three months ended June 30, 2023 as compared to the same period of 2022 mainly due to an increase in net interest income and decreases in the provision for credit losses and internal transfer expense, partially offset by higher non-interest expense. Net interest income for this segment increased $41.0 million to $373.7 million for the second quarter 2023 as compared to the same period in 2022 primarily due to higher average commercial loan balances and higher interest rates on new and adjustable loans. Internal transfer expense decreased $55.0 million to $102.4 million for the three months ended June 30, 2023 as compared to the second quarter 2022. The provision for credit losses decreased $35.5 million to $2.8 million as compared to the same period in 2022 mainly due to elevated provision for credit losses for the second quarter 2022 related to non-PCD loans and unfunded credit commitments acquired from Bank Leumi USA. See details in the "Allowance for Credit Losses for Loans" section of this MD&A. Non-interest expense increased $10.9 million to $35.4 million for three months ended June 30, 2023 as compared to the second quarter 2022.

The net interest margin for this segment decreased 16 basis points to 3.69 percent for the second quarter 2023 as compared to the second quarter 2022 due to a 224 basis point increase in the cost of our funding sources, partially offset by a 208 basis point increase in the yield on average loans.

The return on average interest earning assets before income taxes for the commercial banking segment was 2.44 percent for the three months ended June 30, 2023 compared to 1.47 percent for the same period in 2022.

Treasury and Corporate Other

Treasury and Corporate Other largely consists of the Treasury managed held to maturity and available for sale debt securities portfolios mainly utilized in the liquidity management needs of our lending segments and income and expense items resulting from support functions not directly attributable to a specific segment. Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to the Consumer Banking and Commercial Banking segments. Interest

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expense and internal transfer expense (for general corporate expenses) are allocated to each business segment utilizing a transfer pricing methodology, which involves the allocation of operating and funding costs based on each segment's respective mix of average interest earning assets and/or liabilities outstanding for the period. Other items disclosed in this segment include net gains and losses on available for sale and held to maturity securities transactions, interest expense related to subordinated notes, amortization of tax credit investments, as well as other non-core items, including merger expenses.

Average interest earning assets within Treasury and Corporate Other increased $1.5 billion to $7.9 billion for the three months ended June 30, 2023 mainly due to a $1.4 billion increase in average overnight interest bearing deposits with banks as compared to the same period in 2022. Our average overnight cash levels increased in the second quarter 2023 as a cautionary liquidity management measure resulting from the bank failures in March and April 2023.

For the three months ended June 30, 2023, loss before income taxes in this segment totaled $68.8 million compared to $7.7 million for the same period in 2022. The $61.1 million increase in the pre-tax loss during the second quarter 2023 period was mainly due to lower internal transfer income and net interest income, partially offset by a decrease in non-interest expense. The internal transfer income decreased $70.6 million to $124.4 million for the three months ended June 30, 2023 as compared to the same period a year ago due to the lower allocation of non-interest expense over the same period. Non-interest expense decreased $32.1 million to $224.4 million during the three months ended June 30, 2023 as compared to the same period in 2022 mainly attributable to merger expenses incurred during the second quarter 2022 resulting from the Bank Leumi USA acquisition. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A.

The net interest margin for this segment decreased 93 basis points to 1.19 percent for the second quarter 2023 as compared to the second quarter 2022 due to a 224 basis point increase in cost of our funding sources, partially offset by a 131 basis point increase in the yield on average investments. The increase in the yield on average investments as compared to the same period a year ago was largely driven by new higher yielding investments and a reduction in premium amortization expense mostly caused by slower principal repayments in the rising interest rate environment.

The following tables present the financial data for Valley's operating segments for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,836,859		$	39,826,630		$	7,699,305		$	56,362,794
Income before income taxes	13,224			471,069			(89,758)			394,535
Annualized return on average interest earning assets (before tax)	0.30		%	2.37		%	(2.33)		%	1.40		%

	Six Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,848,764		$	30,743,387		$	6,017,817		$	44,609,968
Income (loss) before income taxes	36,659			263,838			(11,490)			289,007
Annualized return on average interest earning assets (before tax)	0.93		%	1.72		%	(0.38)		%	1.30		%

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Consumer Banking

Consumer Banking's average interest earning assets increased $988.1 million to $8.8 billion for the six months ended June 30, 2023 as compared to the same period in 2022. The increase was largely due to new residential mortgage loan volumes originated for investment rather than sale over the last 12-month period, as well as growth in home equity loans and secured personal lines of credit.

Income before income taxes generated by Consumer Banking decreased $23.4 million to $13.2 million for the six months ended June 30, 2023 as compared to the same period in 2022 mainly driven by lower net interest income, and, to a lesser extent, increases in non-interest expense and the provision for loan losses. Net interest income decreased $37.0 million for the six months ended June 30, 2023 as compared to the same period in 2022 mainly due to additional interest expense generated from higher average deposit balances, as well as an increase in interest rates on such balances. The provision for loan losses increased $2.7 million for the six months ended June 30, 2023 due to additional reserves related to residential loan growth, and changes in the economic forecast component within our CECL model as compared to one year ago. See further details in the “Allowance for Credit Losses” section of this MD&A. The negative impact of these items was partially offset by an $8.9 million increase in non-interest income coupled with a $13.4 million decrease in the internal transfer expense for the six months ended June 30, 2023 as compared to the same period in 2022. The increase in non-interest income was mainly driven by increases in wealth management and trust fees and service charges on deposit accounts.

Net interest margin on the Consumer Banking portfolio decreased 116 basis points to 1.76 percent for the six months ended June 30, 2023 as compared to the same period one year ago mainly due to a 202 basis point increase in the costs associated with our funding sources, partially offset by an 86 basis point increase in the yield on average loans. The 86 basis point increase in loan yield was largely due to higher yielding new loan volumes and adjustable rate loans in our portfolio. See the "Executive Summary" and the "Net Interest Income" sections above for more details on our net interest margin and funding sources.

The return on average interest earning assets before income taxes for the consumer banking segment was 0.30 percent for the six months ended June 30, 2023 compared to 0.93 percent as compared to the same period one year ago.

Commercial Banking

Average interest earning assets in Commercial Banking increased $9.1 billion to $39.8 billion for the six months ended June 30, 2023 as compared to the same period in 2022. This increase was primarily due to strong organic loan growth, especially in the commercial real estate portfolio over the 12-month period ended June 30, 2023, as well as loans acquired from Bank Leumi USA on April 1, 2022.

For the six months ended June 30, 2023, income before income taxes for Commercial Banking increased $207.2 million to $471.1 million as compared to the same period in 2022 mainly due to an increase in net interest income and a lower provision for credit losses, partially offset by higher non-interest expense. Net interest income increased $172.6 million to $751.9 million for the six months ended June 30, 2023 as compared to the same period in 2022 primarily due to higher average commercial loan balances and higher interest rates on new and adjustable loans. The provision for credit losses decreased $34.1 million to $5.8 million during the six months ended June 30, 2023 as compared to $39.9 million for the same period in 2022 mainly due to a provision for non-PCD loans and unfunded credit commitments acquired from Bank Leumi in the second quarter 2022. See details in the "Allowance for Credit Losses for Loans" section of this MD&A. Non-interest expense increased $21.6 million to $71.1 million for the six months ended June 30, 2023 as compared to the same period in 2022 mainly due to acquired and organic growth in our commercial operations. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A.

The net interest margin for this segment increased 1 basis point to 3.78 percent for the six months ended June 30, 2023 as compared to the same period in 2022 due to a 203 basis point increase in yield on average loans, partially offset by a 202 basis point increase in the cost of our funding sources.

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The return on average interest earning assets before income taxes for the commercial banking segment was 2.37 percent for the six months ended June 30, 2023 compared to 1.72 percent for the same period in 2022.

Treasury and Corporate Other

Treasury and Corporate Other's average interest earning assets increased $1.7 billion during the six months ended June 30, 2023 as compared to the same period in 2022 mainly due to investment securities acquired from Bank Leumi USA, as well as other select new investment securities purchases over the last 12-month period. Average interest bearing deposits with banks increased $47.5 million as compared to the same period in 2022 due to additional cash held as a cautionary liquidity management measure starting in March 2023 and through most of the second quarter 2023.

The loss before income taxes for this segment totaled $89.8 million for the six months ended June 30, 2023 as compared to $11.5 million for the same period in 2022. The $78.3 million increase in pre-tax loss was mainly due to an increase in non-interest expense and decreases in both net interest income and internal transfer income, partially offset by higher non-interest income. Non-interest expense increased $30.4 million to $442.6 million for the six months ended June 30, 2023 as compared to the same period in 2022 largely due to expenses related to our expanded banking operations and organic business growth including higher salary and employee benefits expense, technology, furniture and equipment and professional and legal fees. Internal transfer income decreased $36.7 million to $286.9 million for the six months ended June 30, 2023 as compared to the same period in 2022 due to the higher allocation of non-interest expense over the same period. Non-interest income increased $8.9 million during the six months ended June 30, 2023 as compared to the same period in 2022 mostly due to incremental increases in several operating non-interest income categories caused by acquired and organic growth of our business operations over the last 12-month period. See further details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A. Provision for credit losses increased $4.4 million mainly due to a corporate bond issued by Signature Bank within our AFS debt securities portfolio that was fully charged-off during the first quarter 2023.

Treasury and Corporate Other's net interest margin decreased 46 basis points to 1.35 percent for the six months ended June 30, 2023 as compared to the same period in 2022 due to a 202 basis point increase in cost of our funding sources, partially offset by a 156 basis point increase in the yield on average investments. The increased yield on average investments as compared to the same period in 2022 was largely driven by new higher yielding investments and a reduction in premium amortization expense mostly caused by slower principal repayments in the rising interest rate environment.

ASSET/LIABILITY MANAGEMENT

Interest Rate Risk

Our success is largely dependent upon our ability to manage interest rate risk. Interest rate risk can be defined as the exposure of our interest rate sensitive assets and liabilities to the movement in interest rates. Our Asset/Liability Management Committee is responsible for managing such risks and establishing policies that monitor and coordinate our sources and uses of funds. Asset/Liability management is a continuous process due to the constant change in interest rate risk factors. In assessing the appropriate interest rate risk levels for us, management weighs the potential benefit of each risk management activity within the desired parameters of liquidity, capital levels and management’s tolerance for exposure to income fluctuations. Many of the actions undertaken by management utilize fair value analysis and attempt to achieve consistent accounting and economic benefits for financial assets and their related funding sources. We have predominantly focused on managing our interest rate risk by attempting to match the inherent risk and cash flows of financial assets and liabilities. Specifically, management employs multiple risk management activities such as optimizing the level of new residential mortgage originations retained in our mortgage portfolio through increasing or decreasing loan sales in the secondary market, product pricing levels, the desired maturity levels for new originations, the composition levels of both our interest earning assets and interest bearing liabilities, as well as several other risk management activities.

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We use a simulation model to analyze net interest income sensitivity to movements in interest rates. The simulation model projects net interest income based on various interest rate scenarios over a 12-month and 24-month period. The model is based on the actual maturity and re-pricing characteristics of rate sensitive assets and liabilities. The model incorporates certain assumptions which management believes to be reasonable regarding the impact of changing interest rates and the prepayment assumptions of certain assets and liabilities as of June 30, 2023. The model assumes immediate changes in interest rates without any proactive change in the composition or size of the balance sheet, or other future actions that management might undertake to mitigate this risk. In the model, the forecasted shape of the yield curve remains static as of June 30, 2023. The impact of interest rate derivatives, such as interest rate swaps, is also included in the model.

Our simulation model is based on market interest rates and prepayment speeds prevalent in the market as of June 30, 2023. Although the size of Valley’s balance sheet is forecasted to remain static as of June 30, 2023 in our model, the composition is adjusted to reflect new interest earning assets and funding originations coupled with rate spreads utilizing our actual originations during the second quarter 2023. The model also utilizes an immediate parallel shift in market interest rates at June 30, 2023.

The assumptions used in the net interest income simulation are inherently uncertain. Actual results may differ significantly from those presented in the table below due to the frequency and timing of changes in interest rates and changes in spreads between maturity and re-pricing categories. Overall, our net interest income is affected by changes in interest rates and cash flows from our loan and investment portfolios. We actively manage these cash flows in conjunction with our liability mix, duration and interest rates to optimize the net interest income, while structuring the balance sheet in response to actual or potential changes in interest rates. Additionally, our net interest income is impacted by the level of competition within our marketplace. Competition can negatively impact the level of interest rates attainable on loans and increase the cost of deposits, which may result in downward pressure on our net interest margin in future periods. Other factors, including, but not limited to, the slope of the yield curve and projected cash flows will impact our net interest income results and may increase or decrease the level of asset sensitivity of our balance sheet.

Convexity is a measure of how the duration of a financial instrument changes as market interest rates change. Potential movements in the convexity of bonds held in our investment portfolio, as well as the duration of the loan portfolio may have a positive or negative impact on our net interest income in varying interest rate environments. As a result, the increase or decrease in forecasted net interest income may not have a linear relationship to the results reflected in the table below. Management cannot provide any assurance about the actual effect of changes in interest rates on our net interest income.

The following table reflects management’s expectations of the change in our net interest income over the next 12- month period considering the aforementioned assumptions. While an instantaneous and severe shift in interest rates was used in this simulation model, we believe that any actual shift in interest rates would likely be more gradual and would therefore have a more modest impact than shown in the table below.

	Estimated Change in Future Net Interest Income
Changes in Interest Rates	Dollar Change		Percentage Change
(in basis points)	($ in thousands)
+300	$	215,671	12.16	%
+200	143,021		8.06
+100	70,754		3.99
–100	(72,077)		(4.06)
–200	(143,067)		(8.06)
–300	(213,209)		(12.02)

As noted in the table above, a 100 basis point immediate increase in interest rates combined with a static balance sheet where the size, mix, and proportions of assets and liabilities remain unchanged is projected to increase net

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interest income over the next 12-month period by 3.99 percent. Management believes the interest rate sensitivity of our balance sheet remains within an acceptable tolerance range at June 30, 2023. However, the level of net interest income sensitivity may increase or decrease in the future as a result of several factors, including potential changes in our balance sheet strategies, the slope of the yield curve and projected cash flows.

Liquidity and Cash Requirements

Bank Liquidity

Liquidity measures Valley's ability to satisfy its current and future cash flow needs. Our objective is to have liquidity available to fulfill loan demands, repay deposits and other liabilities, and execute balance sheet strategies in all market conditions while adhering to internal controls and income targets. Valley's liquidity program is managed by the Treasury Department and routinely monitored by the Asset and Liability Management Committee and two board committees. Among other actions, Treasury actively monitors Valley's current liquidity profile, sources and stability of funding, availability of assets for pledging or sale, opportunities to gather additional funds, and anticipated future funding needs, including the level of unfunded commitments.

The Bank adheres to certain internal liquidity measures including ratios of loans to deposits below 110 percent and wholesale funding to total funding below 25 percent, as summarized in the table below. Management maintains flexibility to temporarily exceed these thresholds in certain operating environments.

The following table presents Valley's loan to deposits and wholesale funding to total funding ratios at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Loans to deposits	100.5	%	98.5	%
Wholesale funding to total funding	24.8		13.8

Valley's short and long-term cash requirements include contractual obligations under borrowings, deposits, payments related to leases, capital expenditures and other purchase commitments. In the ordinary course of operations, the Bank also enters into various financial obligations, including contractual obligations that may require future cash payments. Management believes the Bank has the ability to generate and obtain adequate amounts of cash to meet its short-term and long-term obligations as they come due by utilizing various cash resources described below.

On the asset side of the balance sheet, the Bank has numerous sources of liquid funds in the form of cash and due from banks, interest bearing deposits with banks (including the Federal Reserve Bank of New York) and other sources. The following table summarizes Valley's sources of liquid assets:

	June 30, 2023		December 31, 2022
	(in thousands)
Cash and due from banks	$	463,318	$	444,325
Interest bearing deposits with banks	1,491,091		503,622
Trading debt securities	3,409		13,438
Held to maturity debt securities (1)	182,280		177,614
Available for sale debt securities (2)	1,236,946		1,261,397
Loans held for sale	33,044		18,118
Total liquid assets	$	3,410,088	$	2,418,514

(1)     Represents securities that are maturing within 90 days or would otherwise qualify as maturities if sold (i.e., 85 percent of original cost basis has been repaid) within the held to maturity debt security portfolio.

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(2)     Includes approximately $847 million and $333 million of various investment securities that were pledged to counterparties to support our earning asset funding strategies at June 30, 2023 and December 31, 2022, respectively.

Total liquid assets represented 6.0 percent and 4.6 percent of earning assets at June 30, 2023 and December 31, 2022, respectively.

Other sources of funds on the asset side are derived from scheduled loan payments of principal and interest, as well as prepayments received. At June 30, 2023, estimated cash inflows from total loans are projected to be approximately $14.7 billion over the next 12-month period. As a contingency plan for any liquidity constraints, liquidity could also be derived from the sale of conforming residential mortgages from our loan portfolio or alleviated from the temporary curtailment of lending activities. We anticipate the receipt of approximately $386.2 million in principal payments from securities in the total investment portfolio at June 30, 2023 over the next 12-month period due to normally scheduled principal repayments and expected prepayments of certain securities, primarily residential mortgage-backed securities.

On the liability side of the balance sheet, we utilize multiple sources of funds to meet liquidity needs, including retail and commercial deposits, fully FDIC-insured indirect customer deposits, collateralized municipal deposits, and short-term and long-term borrowings. Our core deposit base, which generally excludes all fully insured indirect customer deposits, as well as retail certificates of deposit over $250 thousand, represents the largest of these sources. Average core deposits totaled approximately $42.0 billion and $38.1 billion for the six months ended June 30, 2023 and for the year ended December 31, 2022, respectively, representing 74.6 percent and 79.2 percent of average interest earning assets for the respective periods. The level of interest bearing deposits is affected by interest rates offered, which is often influenced by our need for funds, rates prevailing in the capital markets, competition, and the need to manage interest rate risk sensitivity.

In addition to customer deposits, the Bank has ample access to readily available borrowing sources available to supplement its current and projected funding needs. The following table presents short-term borrowings outstanding at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances	$	1,000,000	$	24,035
Securities sold under agreements to repurchase	88,899		114,694
Total short-term borrowings	$	1,088,899	$	138,729

The following table summarizes the Bank's estimated unused available non-deposit borrowing capacities at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB borrowing capacity*	$	13,093,000	$	6,891,000
Unused FRB discount window*	7,684,000		2,099,000
Unused federal funds lines available from commercial banks	2,065,000		1,940,000
Unencumbered investment securities	1,326,000		3,502,000
Total	$	24,168,000	$	14,432,000

*     FHLB and FRB borrowings are collateralized by certain pledged securities, including but not limited to U.S. government and agency mortgage-backed securities and blanket qualifying first lien on certain real estate and residential mortgage secured loans.

Additionally, the Federal Reserve established the Bank Term Funding Program on March 12, 2023 as a funding source for eligible depository institutions. The Program can provide short-term liquidity (up to one year) against the par value of certain high-quality collateral, such as U.S. Treasury securities, and eliminate the potential need for an

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institution to sell those securities in times of stress. Advances under the Program can be requested until March 11, 2024. This Program is currently another short-term liquidity source for Valley. Valley had no outstanding borrowings under the Program at June 30, 2023.

Corporation Liquidity

Valley’s recurring cash requirements primarily consist of dividends to preferred and common shareholders and interest expense on subordinated notes and junior subordinated debentures issued to capital trusts. As part of our ongoing asset/liability management strategies, Valley could also use cash to repurchase shares of its outstanding common stock under its share repurchase program or redeem its callable junior subordinated debentures and subordinated notes (including $125 million of 5.125 percent subordinated notes which are maturing on September 27, 2023). Valley's cash needs are routinely satisfied by dividends collected from the Bank. Projected cash flows from the Bank are expected to be adequate to pay preferred and common dividends, if declared, and interest expense payable to subordinated note holders and capital trusts, given the current capital levels and current profitable operations of the Bank. In addition to dividends received from the Bank, Valley can satisfy its cash requirements by utilizing its own cash and potential new funds borrowed from outside sources or capital issuances. Valley also has the right to defer interest payments on the junior subordinated debentures, and therefore distributions on its trust preferred securities for consecutive quarterly periods of up to five years, but not beyond the stated maturity dates, and subject to other conditions.

Investment Securities Portfolio

As of June 30, 2023, we had $61.0 million, $1.2 billion, and $3.8 billion in equity, available for sale debt securities and held to maturity debt securities, respectively. The available for sale and held to maturity debt securities portfolios, which comprise the majority of the securities we own, include: U.S. Treasury securities, U.S. government agency securities, tax-exempt and taxable issuances of states and political subdivisions, residential mortgage-backed securities, single-issuer trust preferred securities principally issued by bank holding companies and high quality corporate bonds. Among other securities, our available for sale debt securities include securities such as bank issued and other corporate bonds, as well as municipal special revenue bonds, which may pose a higher risk of future impairment charges to us as a result of the uncertain economic environment and its potential negative effect on the future performance of the security issuers. The equity securities consisted of two publicly traded mutual funds, CRA investments and several other equity investments we have made in companies that develop new financial technologies and in partnerships that invest in such companies. Our CRA and other equity investments are a mix of both publicly traded entities and privately held entities. We also had $3.4 million of trading debt securities at June 30, 2023 consisting of U.S. Treasury securities.

We continually evaluate our investment securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability, and the level of interest rate risk to which we are exposed to. These evaluations may cause us to change the level of funds we deploy into investment securities, change the composition of our investment securities portfolio, and change the proportion of investments primarily made into the available for sale and held to maturity debt securities portfolios.

Allowance for Credit Losses and Impairment Analysis

Available for sale debt securities. Available for sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. In assessing whether a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses,

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such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes.

We have evaluated all available for sale debt securities that are in an unrealized loss position as of June 30, 2023 and December 31, 2022 and determined that the declines in fair value were mainly attributable to changes in market volatility, due to factors such as interest rates and spread factors, but not attributable to credit quality or other factors. Based on a comparison of the present value of expected cash flows to the amortized cost, Valley recognized a credit related impairment of one corporate bond issued by Signature Bank resulting in both a provision for credit losses and full charge-off of the security totaling $5.0 million during the six months ended June 30, 2023. There was no other impairment recognized within the available for sale debt securities portfolio during the three months ended June 30, 2023 and the three and six months ended June 30, 2022.

Valley does not intend to sell any of its available for sale debt securities in an unrealized loss position prior to

recovery of our amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of our amortized cost basis. None of the available for sale debt securities were past due as of June 30, 2023 and there was no allowance for credit losses for available for sale debt securities at June 30, 2023 and December 31, 2022.

Held to maturity debt securities. Valley estimates the expected credit losses on held to maturity debt securities that have loss expectations using a discounted cash flow model developed by a third party. Valley has a zero-loss expectation for certain securities within the held to maturity portfolio, including U.S. Treasury securities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and collateralized municipal bonds. 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. Assumptions used in the model for pools of securities with common risk characteristics include the historical lifetime probability of default and severity of loss in the event of default, with the model incorporating several economic cycles of loss history data to calculate expected credit losses given default at the individual security level. Held to maturity debt securities were carried net of an allowance for credit losses totaling approximately $1.4 million and $1.6 million at June 30, 2023 and December 31, 2022, respectively.

Investment grades. The investment grades in the table below reflect the most current independent analysis performed by third parties of each security as of the date presented and not necessarily the investment grades at the date of our purchase of the securities. For many securities, the rating agencies may not have performed an independent analysis of the tranches owned by us, but rather an analysis of the entire investment pool. For this and other reasons, we believe the assigned investment grades may not accurately reflect the actual credit quality of each security and should not be viewed in isolation as a measure of the quality of our investment portfolio.

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The following table presents the available for sale and held to maturity debt investment securities portfolios by investment grades at June 30, 2023:

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Available for sale investment grades: *
AAA Rated	$	1,052,295	$	39	$	(124,114)	$	928,220
AA Rated	149,623		—		(27,011)		122,612
A Rated	17,213		—		(3,000)		14,213
BBB Rated	69,905		—		(8,598)		61,307
Non-investment grade	5,000		—		(1,222)		3,778
Not rated	120,644		—		(13,828)		106,816
Total	$	1,414,680	$	39	$	(177,773)	$	1,236,946
Held to maturity investment grades: *
AAA Rated	$	3,333,395	$	918	$	(455,892)	$	2,878,421
AA Rated	237,338		105		(15,184)		222,259
A Rated	5,898		1		(145)		5,754
BBB Rated	6,000		—		(780)		5,220
Non-investment grade	5,416		—		(872)		4,544
Not rated	178,791		1		(16,042)		162,750
Total	$	3,766,838	$	1,025	$	(488,915)	$	3,278,948
Allowance for credit losses	1,351		—		—		1,351
Total, net of allowance for credit losses	$	3,765,487	$	1,025	$	(488,915)	$	3,277,597

* Rated using external rating agencies. Ratings categories include the entire range. For example, “A rated” includes A+, A, and A-. Split rated securities with two ratings are categorized at the higher of the rating levels.

The unrealized losses in the AAA and AA rated categories of both the available for sale and held to maturity debt securities portfolios (in the above table) were largely related to residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac and continued to be driven by the rising interest rate environment during the last 12 months. The investment securities available for sale and held to maturity portfolio included $120.6 million and $178.8 million, respectively, of investments not rated by the rating agencies with aggregate unrealized losses of $13.8 million and $16.0 million, respectively, at June 30, 2023. The unrealized losses within non-rated available for sale debt securities mostly related to several large corporate bonds negatively impacted by rising interest rates, and not changes in underlying credit. The unrealized losses within non-rated held to maturity debt

securities mostly related to four single-issuer bank trust preferred issuances with a combined amortized cost of $36.1 million and several corporate and other debt securities.

See Note 7 to the consolidated financial statements for additional information regarding our investment securities portfolio.

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Loan Portfolio

The following table reflects the composition of the loan portfolio as of the dates presented:

	June 30, 2023			March 31, 2023			December 31, 2022
	($ in thousands)
Loans
Commercial and industrial	$	9,287,309		$	9,043,946		$	8,804,830
Commercial real estate:
Commercial real estate	27,793,072			27,051,111			25,732,033
Construction	3,815,761			3,725,967			3,700,835
Total commercial real estate	31,608,833			30,777,078			29,432,868
Residential mortgage	5,560,356			5,486,280			5,364,550
Consumer:
Home equity	535,493			516,592			503,884
Automobile	1,632,875			1,717,141			1,746,225
Other consumer	1,252,382			1,118,929			1,064,843
Total consumer loans	3,420,750			3,352,662			3,314,952
Total loans*	$	49,877,248		$	48,659,966		$	46,917,200
As a percent of total loans:
Commercial and industrial	18.6		%	18.6		%	18.8		%
Commercial real estate	63.4			63.2			62.7
Residential mortgage	11.1			11.3			11.4
Consumer loans	6.9			6.9			7.1
Total	100.0		%	100.0		%	100.0		%

*     Includes net unearned discount and deferred loan fees of $119.1 million, $125.4 million and $120.5 million at June 30, 2023, March 31, 2023 and December 31, 2022, respectively.

Total loans increased $1.2 billion, or 10.0 percent on an annualized basis to $49.9 billion at June 30, 2023 from March 31, 2023 mainly due to continued organic loan growth in commercial loan categories and relatively low levels of loan prepayment activity during the second quarter 2023. Residential mortgage loans held for sale at fair value totaled $23.0 million and $17.2 million at June 30, 2023 and March 31, 2023, respectively. At June 30, 2023, loans held for sale also included one non-performing construction loan totaling $10.0 million, net of charge-offs, transferred from the loan portfolio during the second quarter 2023.

Commercial and industrial loans increased $243.4 million to $9.3 billion at June 30, 2023 as compared to March 31, 2023. The organic and diverse growth was mainly a result of new loan volumes from our pre-existing long-term customer base.

Commercial real estate loans (excluding construction loans) increased $742.0 million to $27.8 billion at June 30, 2023 from March 31, 2023 reflecting solid organic growth mainly within non-owner occupied and multi-family loans across our geographic market areas. At June 30, 2023, commercial real estate loans collateralized by office buildings were approximately $3.2 billion of the $27.8 billion portfolio. These loans are geographically disbursed largely across Florida, Alabama, New Jersey, New York, and Manhattan with a combined weighted average loan to value ratio of 52 percent and debt service coverage ratio of 1.78.

Construction loans increased only $89.8 million to $3.8 billion at June 30, 2023 from March 31, 2023 and was largely due to advances on pre-existing construction loan projects in New Jersey, New York and Florida.

Residential mortgage loans increased $74.1 million, or 5.4 percent on an annualized basis, during the second quarter 2023 as we largely originated new loans for the held for investment portfolio rather than for sale. New and refinanced residential mortgage loan originations totaled $188.0 million for the second quarter 2023 as compared to

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$194.4 million and $540.7 million for the first quarter 2023 and second quarter 2022, respectively. Florida originations totaled $63.2 million and represented 33.61 percent of total residential mortgage loan originations in the quarter. During the second quarter 2023, we retained approximately 73.2 percent of the total residential mortgage originations in our held for investment loan portfolio. Of the total originations in the second quarter 2023, $50.4 million of residential mortgage loans were originated for sale rather than held for investment as compared to $61.9 million during the second quarter 2022. Additionally, the volume of both new and refinanced loan applications has remained relatively low in the early stages of the third quarter 2023 due to the high level of mortgage interest rates and tight housing inventories and may challenge our ability to grow this loan category.

Home equity loans increased by $18.9 million to $535.5 million at June 30, 2023 compared to March 31, 2023 as a result of lower new originations and line utilization in an unfavorable high interest rate environment.

Automobile loans decreased by $84.3 million, or 19.6 percent on an annualized basis, to $1.6 billion at June 30, 2023 as compared to March 31, 2023 largely due to continued low consumer demand for new and used vehicle financing because of the higher interest rate environment. During the second quarter 2023, the interest rates on new car loans reached the highest level since 2008. We originated $16.2 million in auto loans through our Florida dealership network during the second quarter 2023 as compared to $31.5 million in the first quarter 2023. Of the total originations, our Florida dealership network represented approximately 20 percent of new loans, during the second quarter 2023. Despite adequate new automobile inventories available to consumers, we anticipate that the impact of inflation on average new vehicle prices coupled with rising interest rates could continue to have a negative impact on our ability to grow this loan category during the third quarter 2023.

Other consumer loans increased $133.5 million to $1.3 billion at June 30, 2023 as compared to March 31, 2023 mainly due to moderate growth in our collateralized personal lines of credit portfolio.

A significant part of our lending is in northern and central New Jersey, New York City, Long Island and Florida. To mitigate our geographic risks, we make efforts to maintain a diversified portfolio as to type of borrower and loan to guard against a potential downward turn in any one economic sector.

Annualized loan growth slowed to 10 percent during the second quarter 2023 from 16 percent in the first quarter 2023 as we worked through the majority of the strong loan pipeline that was present at the beginning of 2023. We will continue to be selective on the lending side and generally supportive of compelling projects led by our high quality and tenured customer base. Moving forward, we anticipate moderate levels of overall loan growth in the mid to high single digits on an annualized basis for the remainder of 2023.

Non-performing Assets

Non-performing assets (NPA) include non-accrual loans, other real estate owned (OREO), and other repossessed assets (which primarily consist of automobiles and taxi medallions) at June 30, 2023. Loans are generally placed on non-accrual status when they become past due in excess of 90 days as to payment of principal or interest. Exceptions to the non-accrual policy may be permitted if the loan is sufficiently collateralized and in the process of collection. OREO is acquired through foreclosure on loans secured by land or real estate. OREO and other repossessed assets are reported at lower of cost or fair value, less estimated cost to sell.

Our NPAs increased $11.2 million to $256.1 million at June 30, 2023 as compared to March 31, 2023 mostly due to increases in both non-accrual commercial real estate loans and commercial and industrial loans, partially offset by decreases in construction loans and residential mortgage loans. NPAs as a percentage of total loans and NPAs totaled 0.51 percent and 0.50 percent at June 30, 2023 and March 31, 2023, respectively (as shown in the table below). Our total NPAs has remained relatively low as a percentage of the total loan portfolio and the level of NPAs, which is reflective of our consistent approach to the loan underwriting criteria for both Valley originated loans and loans purchased from third parties. For additional details, see the "Credit quality indicators" section in Note 8 to the consolidated financial statements.

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Our lending strategy is based on underwriting standards designed to maintain high credit quality and we remain optimistic regarding the overall future performance of our loan portfolio. During the six months ended June 30, 2023, our overall credit trends have remained stable, and our business and borrowers continued to demonstrate resilience and growth despite the recent challenges across the banking system, slower economic growth, elevated inflation and the overall uncertain economy. However, management cannot provide assurance that the non-performing assets will not materially increase from the levels reported at June 30, 2023 due to the aforementioned or other factors potentially impacting our lending customers.

The following table sets forth by loan category accruing past due and non-performing assets at the dates indicated in conjunction with our asset quality ratios: 

	June 30, 2023			March 31, 2023			December 31, 2022
	($ in thousands)
Accruing past due loans:
30 to 59 days past due:
Commercial and industrial	$	6,229		$	20,716		$	11,664
Commercial real estate	3,612			13,580			6,638
Residential mortgage	15,565			12,599			16,146
Total consumer	8,431			7,845			9,087
Total 30 to 59 days past due	33,837			54,740			43,535
60 to 89 days past due:
Commercial and industrial	7,468			24,118			12,705
Commercial real estate	—			—			3,167
Residential mortgage	1,348			2,133			3,315
Total consumer	4,126			1,519			1,579
Total 60 to 89 days past due	12,942			27,770			20,766
90 or more days past due:
Commercial and industrial	6,599			8,927			18,392
Commercial real estate	2,242			—			2,292
Construction	3,990			6,450			3,990
Residential mortgage	1,165			1,668			1,866
Total consumer	1,006			747			47
Total 90 or more days past due	15,002			17,792			26,587
Total accruing past due loans	$	61,781		$	100,302		$	90,888
Non-accrual loans:
Commercial and industrial	$	84,449		$	78,606		$	98,881
Commercial real estate	82,712			67,938			68,316
Construction	63,043			68,649			74,230
Residential mortgage	20,819			23,483			25,160
Total consumer	3,068			3,318			3,174
Total non-accrual loans	254,091			241,994			269,761
Other real estate owned (OREO)	824			1,189			286
Other repossessed assets	1,230			1,752			1,937
Total non-performing assets (NPAs)	$	256,145		$	244,935		$	271,984
Total non-accrual loans as a % of loans	0.51		%	0.50		%	0.57		%
Total NPAs as a % of loans and NPAs	0.51			0.50			0.58
Total accruing past due and non-accrual loans as a % of loans	0.63			0.70			0.77
Allowance for loan losses as a % of non-accrual loans	171.76			180.54			170.02

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Loans past due 30 to 59 days decreased $20.9 million to $33.8 million at June 30, 2023 as compared to March 31, 2023 due, in part, to the commercial real estate loans totaling $10.2 million included in this delinquency category at March 31, 2023 that reclassified to non-accrual loans at June 30, 2023. Commercial and industrial loans 30 to 59 days past due decreased $14.5 million mainly due to improved performance during the second quarter 2023.

Loans past due 60 to 89 days decreased $14.8 million to $12.9 million at June 30, 2023 as compared to March 31, 2023 largely due to a commercial and industrial loan relationship totaling $21.2 million included in this delinquency category at March 31, 2023 that became current to all its contractual payments at June 30, 2023.

Loans 90 days or more past due and still accruing interest decreased $2.8 million to $15.0 million at June 30, 2023 as compared to March 31, 2023 mainly due to decreases in the commercial and industrial and construction loan categories, partially offset by one new matured commercial real estate loan of $2.2 million expected to be paid off in the near term. All loans 90 days or more past due and still accruing interest are well-secured and in the process of collection.

Non-accrual loans increased $12.1 million to $254.1 million at June 30, 2023 as compared to $242.0 million at March 31, 2023 mostly driven by an increase in the commercial real estate loan category. Non-accrual commercial real estate loans increased $14.8 million to $82.7 million at June 30, 2023 due, in part, to the aforementioned migration of two loans totaling $10.2 million from the 30 to 59 days past due delinquency category at March 31, 2023 and one new $4.5 million non-performing loan at June 30, 2023. Non-accrual construction loans decreased $5.6 million to $63.0 million at June 30, 2023 from March 31, 2023 primarily due to the $4.2 million partial charge-off of one loan, which was transferred to loans held for sale at June 30, 2023.

Although the timing of collection is uncertain, management believes that the majority of the non-accrual loans at June 30, 2023, are well secured and largely collectible based in part, on our quarterly review of collateral dependent loans and the valuation of the underlying collateral, if applicable. Any estimated shortfall in each collateral valuation results in an allocation of specific reserves within our allowance for credit losses for loans.

Non-performing taxi medallion loans totaled $65.8 million of the $84.4 million non-accrual commercial and industrial loans at June 30, 2023. At June 30, 2023, all taxi medallion loans in the loan portfolio were on non-accrual status and had related reserves of $41.7 million, or 63.4 percent of such loans, within the allowance for loan losses. Potential further declines in the market valuation of taxi medallions and the current operating environment mainly within New York City may negatively impact the performance of this portfolio.

OREO properties totaled $824 thousand at June 30, 2023 and decreased $365 thousand as compared to March 31, 2023. The sales of OREO properties and net gains on sales of OREO during the three and six months ended June 30, 2023 and 2022 were not material. The residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $454 thousand and $2.6 million at June 30, 2023 and December 31, 2022, respectively.

Allowance for Credit Losses for Loans

The allowance for credit losses (ACL) for loans includes the allowance for loan losses and the reserve for unfunded credit commitments. Under CECL, our methodology to establish the allowance for loan losses has two basic components: (i) a collective reserve component for estimated expected credit losses for pools of loans that share common risk characteristics and (ii) an individual reserve component for loans that do not share risk characteristics, consisting of collateral dependent loans. Valley also maintains a separate allowance for unfunded credit commitments mainly consisting of undisbursed non-cancellable lines of credit, new loan commitments and commercial standby letters of credit.

Valley estimated the collective ACL using a current expected credit losses methodology which is based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the loan balances. In estimating the component of the allowance on a collective basis, we use a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating

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probability of default and loss given default metrics. The metrics are based on the migration of loans within the commercial and industrial loan categories from performing to loss by credit quality rating or delinquency categories using historical life-of-loan analysis periods for each loan portfolio pool and the severity of loss based on the aggregate net lifetime losses. The model's expected losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) the impact of the reasonable and supportable economic forecast, relative probability weightings and reversion period, (ii) other asset specific risks to the extent that they do not exist in the historical loss information, and (iii) net expected recoveries of charged-off loan balances. These adjustments are based on qualitative factors not reflected in the quantitative model but are likely to impact the measurement of estimated credit losses. The expected lifetime loss rate is the life of loan loss percentage from the transition matrix model plus the impact of the adjustments for qualitative factors. The expected credit losses are the product of multiplying the model’s expected lifetime loss rate by the exposure at default at period end on an undiscounted basis.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan on a straight-line basis. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses and is governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. We have identified and selected key variables that most closely correlated to our historical credit performance, which include: GDP, unemployment and the Case-Shiller Home Price Index.

At June 30, 2023, Valley continued to maintain the majority of its probability weighting used in the economic forecast to the Moody’s Baseline scenario with less emphasis on the S-3 downside and S-4 adverse scenarios. However, the standalone Moody's Baseline scenario reflected a more pessimistic outlook as compared to March 31, 2023 in terms of GDP growth, unemployment levels and potential near term negative economic impacts given the present uncertain economic conditions.

At June 30, 2023, the Moody's Baseline forecast included the following specific assumptions:

•GDP expansion of approximately 0.6 percent in the third quarter 2023;

•Unemployment of 3.6 percent in the third quarter 2023 and 3.8 to 4.3 percent over the remainder of the forecast period ending in the second quarter 2025;

•Continued concerns about increased debt burden pushed by rising interest rates, high inflation, and elevated house prices;

•Consumer spending remained a source of growth and its contribution grew to the largest in nearly two years, as the cost-of-living adjusted boosted after-tax income adding another 2.5 percent to growth;

•The Federal Reserve opted to pause its rate hikes in June 2023, keeping the federal funds rate at 5 - 5.25 percent with possible additional reductions in 2023; and

•Inflation remains elevated but continues to trend downward, while reporting at approximately 4 percent in May 2023.

See more details regarding our allowance for credit losses for loans in Note 8 to the consolidated financial statements.

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The table below summarizes the relationship among loans, loans charged-off, loan recoveries, the provision for credit losses and the allowance for credit losses for loans for the periods indicated:

	Three Months Ended									Six Months Ended
	June 30, 2023			March 31, 2023			June 30, 2022			June 30, 2023			June 30, 2022
	($ in thousands)
Allowance for credit losses for loans
Beginning balance	$	460,969		$	483,255		$	379,252		$	483,255		$	375,702
Impact of the adoption of ASU No. 2022-02 (1)	—			(1,368)			—			(1,368)			—
Allowance for purchased credit deteriorated (PCD) loans, net (2)	—			—			70,319			—			70,319
Beginning balance, adjusted	460,969			481,887			449,571			481,887			446,021
Loans charged-off:
Commercial and industrial	(3,865)			(26,047)			(4,540)			(29,912)			(6,111)
Commercial real estate	(2,065)			—			—			(2,065)			(173)
Construction	(4,208)			(5,698)			—			(9,906)			—
Residential mortgage	(149)			—			(1)			(149)			(27)
Total consumer	(1,040)			(828)			(726)			(1,868)			(1,551)
Total charge-offs	(11,327)			(32,573)			(5,267)			(43,900)			(7,862)
Charged-off loans recovered:
Commercial and industrial	2,173			1,399			1,952			3,572			2,776
Commercial real estate	4			24			224			28			331
Residential mortgage	135			21			74			156			531
Total consumer	390			761			697			1,151			1,954
Total recoveries	2,702			2,205			2,947			4,907			5,592
Total net loan charge-offs	(8,625)			(30,368)			(2,320)			(38,993)			(2,270)
Provision charged for credit losses	6,332			9,450			43,712			15,782			47,212
Ending balance	$	458,676		$	460,969		$	490,963		$	458,676		$	490,963
Components of allowance for credit losses for loans:
Allowance for loan losses	$	436,432		$	436,898		$	468,819		$	436,432		$	468,819
Allowance for unfunded credit commitments	22,244			24,071			22,144			22,244			22,144
Allowance for credit losses for loans	$	458,676		$	460,969		$	490,963		$	458,676		$	490,963
Components of provision for credit losses for loans:
Provision for credit losses for loans	$	8,159		$	9,979		$	38,310		$	18,138		$	41,568
Provision for unfunded credit commitments	(1,827)			(529)			5,402			(2,356)			5,644
Total provision for credit losses for loans	$	6,332		$	9,450		$	43,712		$	15,782		$	47,212
Allowance for credit losses for loans as a % of total loans	0.92		%	0.95		%	1.13		%	0.92		%	1.13		%

(1) Represents the opening adjustment for the adoption of ASU No. 2022-02 effective January 1, 2023.

(2) Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.

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The following table presents the relationship among net loans charged-off and recoveries, and average loan balances outstanding for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30, 2023		March 31, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	($ in thousands)
Net loan (charge-offs) recoveries
Commercial and industrial	$	(1,692)	$	(24,648)	$	(2,588)	$	(26,340)	$	(3,335)
Commercial real estate	(2,061)		24		224		(2,037)		158
Construction	(4,208)		(5,698)		—		(9,906)		—
Residential mortgage	(14)		21		73		7		504
Total consumer	(650)		(67)		(29)		(717)		403
Total	$	(8,625)	$	(30,368)	$	(2,320)	$	(38,993)	$	(2,270)
Average loans outstanding
Commercial and industrial	$	9,043,832	$	8,754,853	$	8,304,822	$	8,304,822	$	7,017,820
Commercial real estate	27,808,278		26,555,421		23,319,419		26,735,384		21,303,889
Construction	3,787,183		3,780,615		2,925,741		3,721,735		2,421,678
Residential mortgage	5,489,501		5,363,421		4,727,481		5,337,320		4,706,695
Total consumer	3,329,143		3,405,061		3,239,824		3,268,712		3,142,069
Total	$	49,457,937	$	47,859,371	$	42,517,287	$	47,367,973	$	38,592,151
Annualized net loan charge-offs (recoveries) to average loans outstanding
Commercial and industrial	0.07%		1.13%		0.12%		0.63%		0.10%
Commercial real estate	0.03		0.00		0.00		0.02		0.00
Construction	0.44		0.60		0.00		0.53		0.00
Residential mortgage	0.00		0.00		(0.01)		0.00		(0.02)
Total consumer	0.08		0.01		0.00		0.04		(0.03)
Total loans	0.07		0.25		0.02		0.16		0.01

Net loan charge-offs totaled $8.6 million for the second quarter 2023 as compared to $30.4 million and $2.3 million for the first quarter 2023 and the second quarter 2022, respectively. The decrease from the first quarter 2023 was mainly due to the elevated net loan charges-offs during the first quarter 2023 largely related to one commercial and industrial loan participation charged-off. Gross charge-offs totaled $11.3 million for the second quarter 2023 and included the $4.2 million partial charge-off related to the valuation of a non-performing construction loan transferred from the held for investment loan portfolio to loans held for sale at June 30, 2023. This construction loan had specific reserves of $5.2 million within the allowance for loan losses at March 31, 2023 and, as a result, the partial charge-off was fully reserved for prior to the second quarter 2023.

The amount of net loan charge-offs (as presented in the above table) and the low level of individual loan charge-offs for the second quarter 2023 continued to trend within management's expectations for the credit quality of the loan portfolio at June 30, 2023.

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The following table summarizes the allocation of the allowance for credit losses for loans to loan portfolio categories and the allocations as a percentage of each loan category:

	June 30, 2023				March 31, 2023				June 30, 2022
	Allowance Allocation		Allocation as a % of Loan Category		Allowance Allocation		Allocation as a % of Loan Category		Allowance Allocation		Allocation as a % of Loan Category
	($ in thousands)
Loan Category:
Commercial and industrial loans	$	128,245	1.38	%	$	127,992	1.42	%	$	144,539	1.70	%
Commercial real estate loans:
Commercial real estate	194,177		0.70		190,420		0.70		227,457		0.97
Construction	45,518		1.19		52,912		1.42		49,770		1.47
Total commercial real estate loans	239,695		0.76		243,332		0.79		277,227		1.03
Residential mortgage loans	44,153		0.79		41,708		0.76		29,889		0.60
Consumer loans:
Home equity	4,020		0.75		4,417		0.86		3,907		0.91
Auto and other consumer	20,319		0.70		19,449		0.69		13,257		0.49
Total consumer loans	24,339		0.71		23,866		0.71		17,164		0.55
Allowance for loan losses	436,432		0.88		436,898		0.90		468,819		1.08
Allowance for unfunded credit commitments	22,244				24,071				22,144
Total allowance for credit losses for loans	$	458,676			$	460,969			$	490,963
Allowance for credit losses for loans as a % total loans			0.92	%			0.95	%			1.13	%

The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 0.92 percent at June 30, 2023 as compared to 0.95 percent and 1.13 percent at March 31, 2023 and June 30, 2022, respectively. During the second quarter 2023, the provision for credit losses for loans totaled $6.3 million as compared to $9.5 million and $43.7 million for the first quarter 2023 and second quarter 2022, respectively. At June 30, 2023, our allowance for credit losses for loans as a percentage of total loans decreased as compared to March 31, 2023 as higher economic forecast reserves driven by a more pessimistic Moody's Baseline outlook was more than offset by lower non-economic qualitative reserves for commercial loans. The net impact of other changes in quantitative reserves for each loan category was not significant to the total allowance for loan losses at June 30, 2023.

Capital Adequacy

A significant measure of the strength of a financial institution is its shareholders’ equity. At June 30, 2023 and December 31, 2022, shareholders’ equity totaled approximately $6.6 billion and $6.4 billion, which represented 10.7 percent and 11.1 percent of total assets, respectively.

During the six months ended June 30, 2023, total shareholders’ equity increased by approximately $174.4 million primarily due to the following:

•net income of $285.6 million,

•a $7.7 million increase attributable to the effect of our stock incentive plan,

•additional capital issued totaling $3.8 million,

•a $990 thousand net cumulative effect adjustment to retained earnings for the adoption of ASU 2022-02, partially offset by

•cash dividends declared on common and preferred stock totaling a combined $120.9 million,

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•repurchases of $2.1 million of our common stock with these shares held in treasury stock and

•other comprehensive loss of $745 thousand.

Valley and Valley National Bank are subject to the regulatory capital requirements administered by the Federal Reserve Bank and the OCC. Quantitative measures established by regulation to ensure capital adequacy require Valley and Valley National Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets, as defined in the regulations.

We are required to maintain common equity Tier 1 capital to risk-weighted assets ratio of 4.5 percent, Tier 1 capital to risk-weighted assets ratio of 6.0 percent, ratio of total capital to risk-weighted assets of 8.0 percent, and a minimum leverage ratio of 4.0 percent, plus a 2.5 percent capital conservation buffer added to the minimum requirements for capital adequacy purposes. As of June 30, 2023 and December 31, 2022, Valley and Valley National Bank exceeded all capital adequacy requirements (see table below).

For regulatory capital purposes, in accordance with the Federal Reserve Board’s final interim rule as of April 3, 2020, we deferred 100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for credit losses less net charge-offs) for a two-year period ending January 1, 2022. On January 1, 2022, the deferral amount totaling $47.3 million after-tax started to be phased-in by 25 percent and will increase 25 percent per year until fully phased-in on January 1, 2025. As of June 30, 2023, approximately $23.6 million of the $47.3 million deferral amount was recognized as a reduction to regulatory capital and, as a result, decreased our risk-based capital ratios by approximately 6 basis points.

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The following table presents Valley’s and Valley National Bank’s actual capital positions and ratios under Basel III risk-based capital guidelines at June 30, 2023 and December 31, 2022:

	Actual				Minimum Capital Requirements				To Be Well Capitalized Under Prompt Corrective Action Provision
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	($ in thousands)
As of June 30, 2023
Total Risk-based Capital
Valley	$	5,735,239	11.52	%	$	5,227,963	10.50	%	N/A		N/A
Valley National Bank	5,824,996		11.70		5,225,830		10.50		$	4,976,981	10.00	%
Common Equity Tier 1 Capital
Valley	4,497,984		9.03		3,485,309		7.00		N/A		N/A
Valley National Bank	5,446,582		10.94		3,483,887		7.00		3,235,038		6.50
Tier 1 Risk-based Capital
Valley	4,712,825		9.47		4,232,161		8.50		N/A		N/A
Valley National Bank	5,446,582		10.94		4,230,434		8.50		3,981,585		8.00
Tier 1 Leverage Capital
Valley	4,712,825		7.86		2,399,186		4.00		N/A		N/A
Valley National Bank	5,446,582		9.08		2,399,094		4.00		2,998,868		5.00
As of December 31, 2022
Total Risk-based Capital
Valley	$	5,569,639	11.63	%	$	5,026,621	10.50	%	N/A		N/A
Valley National Bank	5,659,511		11.84		5,018,129		10.50		$	4,779,170	10.00	%
Common Equity Tier 1 Capital
Valley	4,315,659		9.01		3,351,080		7.00		N/A		N/A
Valley National Bank	5,284,372		11.06		3,345,419		7.00		3,106,461		6.50
Tier 1 Risk-based Capital
Valley	4,530,500		9.46		4,069,169		8.50		N/A		N/A
Valley National Bank	5,284,372		11.06		4,062,295		8.50		3,823,336		8.00
Tier 1 Leverage Capital
Valley	4,530,500		8.23		2,200,822		4.00		N/A		N/A
Valley National Bank	5,284,372		9.60		2,200,891		4.00		2,751,114		5.00

Typically, our primary source of capital growth is through retention of earnings. Our rate of earnings retention is derived by dividing undistributed earnings per common share by earnings (or net income available to common shareholders) per common share. Our retention ratio was approximately 60.0 percent for the six months ended June 30, 2023 as compared to 61.4 percent for the year ended December 31, 2022.

Cash dividends declared amounted to $0.22 per common share for each of the six months ended June 30, 2023 and 2022. The Board is committed to examining and weighing relevant facts and considerations, including its commitment to shareholder value, each time it makes a cash dividend decision.

Off-Balance Sheet Arrangements, Contractual Obligations and Other Matters

For a discussion of Valley’s off-balance sheet arrangements and contractual obligations see information included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 in the MD&A section - “Liquidity and Cash Requirements” and Notes 13 and 14 to the consolidated financial statements included in this report.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices, and commodity prices. Valley’s market risk is composed primarily of interest rate risk. See page 69 for a discussion of interest rate risk.

Item 4. Controls and Procedures

(a) Disclosure control and procedures. Valley maintains disclosure controls and procedures which, consistent with Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), are defined to mean controls and other procedures that are designed to ensure that information required to be disclosed in the reports that Valley files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that such information is accumulated and communicated to Valley’s management, including Valley’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.

Valley’s CEO and CFO, with the assistance of other members of Valley’s management, have evaluated the effectiveness of Valley’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, Valley’s CEO and CFO have concluded that Valley’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Changes in internal control over financial reporting. Valley’s CEO and CFO have also concluded that there have not been any changes in Valley’s internal control over financial reporting in the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, Valley’s internal control over financial reporting.

Valley’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and all fraud. A system of internal control, no matter how well conceived and operated, provides reasonable, not absolute, assurance that the objectives of the system of internal control are met. The design of a system of internal control reflects resource constraints and the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Valley have been or will be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of a simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of internal control is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all future conditions; over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II - OTHER INFORMATION 

Item 1. Legal Proceedings

In the normal course of business, we are a party to various outstanding legal proceedings and claims. There have been no material changes in the legal proceedings, if any, previously disclosed under Part I, Item 3 of Valley’s Annual Report on Form 10-K for the year ended December 31, 2022.

Item 1A. Risk Factors

There have been no material changes in the risk factors previously disclosed in the section titled "Risk Factors" in Part I, Item 1A of Valley’s Annual Report on Form 10-K for the year ended December 31, 2022, except as described below, and previously disclosed in Valley’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023:

Our financial results and condition may be adversely impacted by recent events in the banking industry or any future similar events.

Recent events impacting the banking industry, including the bank failures in March and April 2023, have resulted in significant disruption and volatility in the capital markets, reduced current valuations of bank securities, and decreased confidence in banks among depositors and other counterparties as well as investors. These events occurred in the context of rapidly rising interest rates which, among other things, have resulted in unrealized losses in longer duration debt securities and loans held by banks, increased competition for deposits and potentially increased the risk of recession. These events have had, and may continue to have, an adverse impact on the market price of our common stock.

While the Department of the Treasury, the Federal Reserve, and the FDIC took steps to ensure that depositors of recently failed banks would have access to their insured and uninsured deposits, and to facilitate sales of certain failed banks, there is no assurance that these or similar actions will restore customer confidence in the banking system, and we may be further impacted by concerns regarding the soundness of other financial institutions, or other future bank failures or disruptions. Any loss of client deposits or changes in our credit ratings could increase the cost of funding, limit access to capital markets or negatively impact our overall liquidity or capitalization. The cost of resolving the recent bank failures may also prompt the FDIC to increase its premiums above current levels or to issue additional special assessments.

These recent events and any future similar events may also result in changes to laws or regulations governing bank holding companies and banks, including higher capital requirements, or the imposition of restrictions through supervisory or enforcement activities, which could materially impact our business.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter, we did not sell any equity securities not registered under the Securities Act of 1933, as amended. Purchases of equity securities by the issuer and affiliated purchasers during the three months ended June 30, 2023 were as follows:

ISSUER PURCHASES OF EQUITY SECURITIES 

Period	Total  Number of Shares  Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
April 1, 2023 to April 30, 2023	27,407	$	9.24	—	25,000,000
May 1, 2023 to May 31, 2023	300,493	6.98		300,000	24,700,000
June 1, 2023 to June 30, 2023	25,042	7.38		—	24,700,000
Total	352,942	$	7.18	300,000

(1)Includes repurchases made in connection with the vesting of employee restricted stock awards.

(2)On April 26, 2022, Valley publicly announced a stock repurchase program for up to 25 million shares of Valley common stock. The authorization to repurchase will expire on April 25, 2024.

Item 5. Other Information

a.None.

b.None.

c.None.

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Item 6. Exhibits

(3)	Articles of Incorporation and By-laws:
	(3.1)	Restated Certificate of Incorporation of the Registrant, incorporated herein by reference to Exhibit 3.1 to the Registrant's Form 10-Q Quarterly Report filed on August 7, 2020.
	(3.2)	By-laws of the Registrant, as amended and restated, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Form 8-K Current Report filed on October 24, 2018.
(10)	Material Contracts:
	(10.1)	Valley National Bancorp 2023 Incentive Compensation Plan.* +
	(10.2)	Form of Change in Control Agreement for Senior Executive Vice President, dated January 16, 2019, incorporated herein by reference to Exhibit 10 DD to the Registrant’s Form 10-K filed on February 28, 2019 (covering Raja Dakkuri).+
(31.1)	Certification of Ira Robbins, Chairman of the Board and Chief Executive Officer of the Company, pursuant to Securities Exchange Rule 13a-14(a).*
(31.2)	Certification of Michael D. Hagedorn, Senior Executive Vice President and Chief Financial Officer of the Company, pursuant to Securities Exchange Rule 13a-14(a).*
(32)	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Ira Robbins, Chairman of the Board and Chief Executive Officer of the Company, and Michael D. Hagedorn, Senior Executive Vice President and Chief Financial Officer of the Company.**
(101)	Interactive Data File (XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) **
(104)	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith.
+	Management contract and compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VALLEY NATIONAL BANCORP
	(Registrant)
Date:	/s/ Ira Robbins
August 7, 2023	Ira Robbins
	Chairman of the Board and
	Chief Executive Officer
	(Principal Executive Officer)
Date:	/s/ Michael D. Hagedorn
August 7, 2023	Michael D. Hagedorn
	Senior Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

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EX-10.1

VALLEY NATIONAL BANCORP

2023 INCENTIVE COMPENSATION PLAN

I. INTRODUCTION

1.1.Purposes. The purposes of the Valley National Bancorp 2023 Incentive Compensation Plan (as amended from time to time, the “Plan”) are (i) to align the interests of the Company’s shareholders and the recipients of Awards under the Plan by increasing the proprietary interest of such recipients in the Company’s growth and success, (ii) to advance the interests of the Company by attracting and retaining officers, other employees and Non-Employee Directors, and (iii) to motivate such persons to act in the long-term best interests of the Company and its shareholders.

1.2.Certain Definitions.

(a)“Award” shall mean any options to purchase Shares in the form of Incentive Stock Options or Nonqualified Stock Options, SARs in the form of Tandem SARs or Free-Standing SARs, Stock Awards in the form of Restricted Stock, Restricted Stock Units or Unrestricted Stock, Performance Awards and Other Cash-Based Awards granted under the Plan.

(b)“Award Agreement” shall mean any written or electronic agreement, contract or other instrument or document evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by the eligible person to whom it has been so granted. Each Award Agreement shall be subject to the terms and conditions of the Plan.

(c)“Blackout Period” shall have the meaning set forth in Section 3.1(b).

(d)“Board” shall mean the Board of Directors of the Company.

(e)“Change in Control” shall have the meaning set forth in Section 7.7(b).

(f)“Code” shall mean the Internal Revenue Code of 1986, as amended.

(g)“Committee” shall mean the Compensation and Human Resources Committee of the Board, or a subcommittee thereof, consisting of two or more members of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the rules of The Nasdaq Stock Market LLC or, if Shares are not listed on The Nasdaq Stock Market LLC, within the meaning of the rules of the principal stock exchange on which Shares are then traded; provided, however, that the “Committee” in regard to exercising any authority and responsibility to grant awards under the Plan to participants who are Non-Employee Directors and to make or take, as the case may be, all required or appropriate determinations and actions in respect of such grants shall mean the Nominating and Corporate Governance Committee of the Board or another Board committee and/or the Board itself, if so determined by the Board.

(h)“Common Stock” shall mean the common stock, no par value per share, of the Company, and all rights appurtenant thereto.

(i)“Company” shall mean Valley National Bancorp, a New Jersey corporation, and its successors by operation of law.

(j)“Continuing Directors” shall have the meaning set forth in Section 7.7(b).

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(k)“Control Person” shall have the meaning set forth in Section 7.7(b).

(l)“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(m)“Fair Market Value” shall mean, unless otherwise determined by the Committee from time to time, the closing transaction price of a Share as reported on the Nasdaq Global Select Market on the date as of which such value is being determined or, if Shares are not listed on the Nasdaq Global Select Market, the closing transaction price of a Share on the principal national stock exchange on which Shares are traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if Shares are not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate and in compliance with Section 409A of the Code.

(n)“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, Shares (which may be Restricted Stock) or, to the extent provided in the applicable Award Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one Share on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

(o)“Incentive Stock Option” shall mean an option to purchase Shares that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option.

(p)“Non-Control Transaction” shall have the meaning set forth in Section 7.7(b).

(q)“Non-Employee Director” shall mean any director of the Company who is not an officer or employee of the Company or any Subsidiary.

(r)“Non-qualified Stock Option” shall mean an option to purchase Shares which is not an Incentive Stock Option.

(s)“Other Cash-based Award” shall mean a cash-denominated award granted under Section 6.1 of the Plan.

(t)“Performance Award” shall mean a right to receive an amount of cash, Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.

(u)“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the Shares subject to such Award, or, in the case of a Restricted Stock Unit Award or Performance Award, to the holder’s receipt of the Shares subject to such Award or of payment with respect to such Award. Such criteria and objectives may be one or more of the following company-wide or subsidiary, division, operating unit or individual measures, including without limitation: the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time; increase in shareholder value; earnings per share; return on or net assets; return on equity; return on investments; return on capital or invested capital; total shareholder

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return; earnings or income of the Company before or after taxes and/or interest; earnings before interest, taxes, depreciation and amortization; operating income; revenues; operating expenses, attainment of expense levels or cost reduction goals; market share; cash flow, cash flow per share, cash flow margin or free cash flow; book value, tangible book value or growth in book value or tangible book value, interest expense; economic value created; gross profit or margin; operating profit or margin; net cash provided by operations; price-to-earnings growth; and strategic business criteria, or any other objective or subjective measures determined by the Committee. Each such goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Company (including the performance of one or more subsidiaries, divisions, or operating units) or the past or current performance of other companies or an index of other companies (or a combination of such past and current performance). The applicable performance measures may be applied on a pre- or post-tax basis and may be adjusted to include or exclude one or more components of any performance measure, including, without limitation, restructuring or impairment charges, acquisitions or dispositions, foreign exchange, debt refinancing costs, extraordinary or noncash items, unusual, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles.

(v)“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an Award shall be measured and (ii) the conditions to vesting applicable to an Award shall remain in effect.

(w)“Prior Plans” shall mean the Valley National Bancorp 2016 Long-Term Stock Incentive Plan and the 2021 Incentive Compensation Plan, each as amended from time to time.

(x)“Restricted Stock” shall mean Shares which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

(y)“Restricted Stock Award” shall mean an award of Restricted Stock under the Plan.

(z)“Restricted Stock Unit” shall mean a right to receive one Share or, in lieu thereof, the Fair Market Value of such Share in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

(aa)“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under the Plan.

(ab)“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in the Plan or the Agreement relating to such Award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.

(ac)“Retirement” with respect to employees means, except as otherwise set forth in the applicable Award Agreement, the retirement from active employment with the Company, but only if such person meets one of the requirements contained below in either clause (i), clause (ii) or clause (iii).

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(i) the person has a minimum combined total of Years of Service and age equal to eighty (80); and the person is age fifty-five (55) or older; or

(ii) the person has a minimum of five (5) Years of Service; and the person is age sixty-five (65) or older; or

(iii) the person has a minimum of ten (10) Years of Service; and the person is age sixty (60) or older, and

in the case of (i), (ii) and (iii) only if the person provides thirty (30) days prior written notice to the Company of the retirement.

For Non-Employee Directors, the term “Retirement” shall mean the date on which the Director ceases to be a member of the Board after both attaining age sixty-five (65) and completing at least five (5) years of service on the Board.

(ad)“SAR” shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.

(ae)“Shares” shall mean the shares of the Company’s Common Stock. If there has been an adjustment or substitution pursuant to Section 7.6, the term “Shares” shall also include any shares of stock or other securities that are substituted for the Common Stock or into which the Common Stock is adjusted pursuant to Section 7.6.

(af)“Stock Award” shall mean a Restricted Stock Award, Restricted Stock Unit Award or Unrestricted Stock Award.

(ag)“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.

(ah)“Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation or acquisition of property or stock.

(ai)“Surviving Corporation” shall have the meaning set forth in Section 7.7(b).

(aj)“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, Shares (which may be Restricted Stock) or, to the extent provided in the applicable Award Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one Share on the date of exercise over the base price of such SAR, multiplied by the number of Shares subject to such option, or portion thereof, which is surrendered.

(ak)“Tax Date” shall have the meaning set forth in Section 7.4.

(al)“Ten Percent Holder” shall have the meaning set forth in Section 3.1(a).

(am)“Unrestricted Stock” shall mean Shares which are not subject to a Restriction Period or Performance Measures.

(an)“Unrestricted Stock Award” shall mean an Award of Unrestricted Stock under the Plan.

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(ao)“Years of Service” shall mean each twelve consecutive month period commencing on the participant’s employment date, after which he or she remains employed by the Company or an affiliate. Partial years of service will not be considered. For the avoidance of doubt, Years of Service for an individual who becomes an employee in connection with an asset or stock purchase, merger, or other corporate transaction involving his or her prior employer (an “Acquired Entity”) will not include the period of employment with the Acquired Entity.

1.3.Administration. This Plan shall be administered by the Committee. The Committee shall have full power and authority in its sole discretion, subject to the provisions of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to: (i) select eligible persons to whom Awards may from time to time be granted; (ii) determine the type or types of Awards, not inconsistent with the provisions of the Plan, to be granted to each participant; (iii) determine the number of Shares or dollar value to be covered by each Award; (iv) determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled in cash, Shares, or other property; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other property, and other amounts payable with respect to an Award made under the Plan shall be deferred, either automatically or at the election of the participant; (vii) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards; (viii) determine whether, to what extent, and under what circumstances any Award shall be canceled or suspended; (ix) interpret and administer the Plan and any instrument or agreement entered into under or in connection with the Plan, including any Award Agreement; (x) correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner, and to the extent, that the Committee shall deem desirable to carry it into effect; (xi) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (xii) determine whether any Award (other than a Stock Option or SAR) will have dividend equivalents; and (xiii) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

The Committee shall in its sole discretion, subject to the terms of the Plan, interpret the Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of the Plan and may impose, incidental to the grant of an Award, conditions with respect to the Award, such as limiting competitive employment or other activities. All such interpretations, rules, regulations and conditions shall be conclusive and binding on any person receiving or claiming Awards.

The Committee may delegate some or all of its power and authority hereunder to the Board or, subject to applicable law, to the Chief Executive Officer or such other executive officer of the Company as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to the Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in the Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an Award to such an officer, director or other person.

No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full

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extent permitted by law and under any directors’ and officers’ liability insurance that may be in effect from time to time.

1.4.Eligibility. Participants in the Plan shall consist of such officers, other employees, and Non-Employee Directors of the Company and persons expected to become officers, other employees, and Non-Employee Directors of the Company as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in the Plan at any time shall not require the Committee to select such person to participate in the Plan at any other time. Except as provided otherwise in an Award Agreement, for purposes of the Plan, references to employment by the Company shall also mean employment by a Subsidiary, and references to employment shall include service as a Non-Employee Director. The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during any periods during which such participant is on a leave of absence.

1.5.Treatment of Dividends and Dividend Equivalents on Unvested Awards. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that provides for or includes a right to dividends or dividend equivalents, if dividends are declared during the period that an equity Award is outstanding, such dividends (or dividend equivalents) shall either (i) not be paid or credited with respect to such Award or (ii) be accumulated but remain subject to vesting requirement(s) to the same extent as the applicable Award and shall only be paid at the time or times such vesting requirement(s) are satisfied.

II.SHARES AVAILABLE

2.1Initial Share Reserve. Subject to adjustment as provided in Section 7.6 below, 14,500,000 Shares shall initially be available for all Awards under the Plan, less one (1) Share for every one (1) Share granted under any Prior Plan after December 31, 2022. Subject to adjustment as provided in Section 7.6, no more than 7,500,000 Shares in the aggregate may be issued under the Plan in connection with Incentive Stock Options. After the effective date of the Plan (as provided in Section 7.1), no awards may be granted under any Prior Plan.

2.2Permitted Addbacks to Share Reserve. If (i) any Shares subject to an Award are forfeited, an Award expires or an Award is settled for cash (in whole or in part), or (ii) after December 31, 2022 any Shares subject to an award under the Prior Plans are forfeited, an award under the Prior Plans expires or is settled for cash (in whole or in part), then in each such case the Shares subject to such Award or award under the Prior Plans shall, to the extent of such forfeiture, expiration or cash settlement, be added to the shares available for Awards under Section 2.1 of the Plan. In the event that withholding tax liabilities arising from an Award other than an Option or SAR or, after December 31, 2022, an award other than an option or stock appreciation right under the Prior Plans are satisfied by the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the Company, the Shares so tendered or withheld shall be added to the Shares available for Awards under Section 2.1 of the Plan; provided, however, that Shares that again become available for issuance under the Plan pursuant to the preceding clause (ii) shall not increase the numbers of shares that may be granted under the Plan in connection with Incentive Stock Options.

2.3No Recycling of Options or SARs. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the shares authorized for grant under Section 2.1: (i) Shares tendered by the Participant or withheld by the Company in payment of the purchase price of an Option or, after December 31, 2022, an option under the Prior Plans, (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to Options or SARs or, after December 31, 2022, options or stock appreciation rights under the Prior Plans, (iii)

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Shares subject to a SAR or, after December 31, 2022, a stock appreciation right under the Prior Plans that are not issued in connection with its stock settlement on exercise thereof, and (iv) Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options or, after December 31, 2022, options under the Prior Plans.

2.4Substitute Awards. Substitute Awards shall not reduce the Shares authorized for grant under the Plan, nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided in Section 2.2 above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Non-Employee Directors prior to such acquisition or combination.

2.5Source of Shares. Shares of Common Stock to be delivered under the Plan shall be made available from authorized and unissued Shares, authorized and issued Shares reacquired and held as treasury shares or otherwise or a combination thereof.

2.6Director Limit. The maximum number of Shares subject to Awards granted during a single fiscal year to any Non-Employee Director, taken together with any cash fees paid during the fiscal year to the Non-Employee Director in respect of such Director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), shall not exceed $500,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes).

III.STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

3.1.Stock Options. The Committee may, in its discretion, grant options to purchase Shares to such eligible participants as may be selected by the Committee. Each option, or portion thereof, that is not an Incentive Stock Option shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under the Plan or any other plan of the Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Nonqualified Stock Options.

Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem advisable:

(a)Number of Shares and Purchase Price. The number of Shares subject to an option and the purchase price per share purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such option;

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providedfurther, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any parent or Subsidiary) (a “TenPercentHolder”), the purchase price per share shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate purchase price of such shares.

(b)Option Period and Exercisability. The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than ten (10) years after its date of grant; providedfurther, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant; provided, further, that with respect to a Nonqualified Stock Option, if the expiration date of such option occurs during any period when the participant is prohibited from trading in securities of the Company pursuant to the Company’s insider trading policy or other policy of the Company or during a period when the exercise of such option would violate applicable securities laws (each, a “BlackoutPeriod”), then the period during which such option shall be exercisable shall be extended to the date that is 30 days after the expiration of such Blackout Period (to the extent permitted by Section 409A of the Code); provided,further that no extension will be made if the purchase price of such Option at the date the initial term would otherwise expire is above the Fair Market Value. The Committee may, in its sole discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an option or to the exercisability of all or a portion of an option. The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable option, or portion thereof, may be exercised only with respect to whole Shares.

(c)Method of Exercise. An option may be exercised (i) by giving written notice to the Company specifying the number of whole Shares to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of Shares having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole Shares which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the option, (ii) if applicable, by surrendering to the Company any Tandem SARs which are cancelled by reason of the exercise of the option and (iii) by executing such documents as the Company may reasonably request. No Shares shall be issued and no certificate representing Shares shall be delivered until the full purchase

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price therefor and any withholding taxes thereon, as described in Section 7.4, have been paid (or arrangement made for such payment to the Company’s satisfaction).

3.2.Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee. The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem advisable:

(a)Number of SARs and Base Price. The number of SARs subject to an Award shall be determined by the Committee. Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of the related option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such SAR (or, if earlier, the date of grant of the option for which the SAR is exchanged or substituted).

Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such shares.

(b)Exercise Period and Exercisability. The period for the exercise of an SAR shall be determined by the Committee; provided, however, that no SAR shall be exercised later than ten (10) years after its date of grant; providedfurther, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related option; provided, further, if the expiration date of an SAR occurs during any Blackout Period, then the period during which such SAR shall be exercisable shall be extended to the date that is 30 days after the expiration of such Blackout Period (to the extent permitted by Section 409A of the Code);provided,further that no extension will be made if the base price of such SAR at the date the initial term would otherwise expire is above the Fair Market Value. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR. The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole Shares and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 4.3(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a shareholder of the Company as determined pursuant to Section 4.3(c). Prior to the exercise of a stock-settled SAR, the

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holder of such SAR shall have no rights as a shareholder of the Company with respect to the Shares subject to such SAR.

(c)Method of Exercise. A Tandem SAR may be exercised (i) by giving written notice to the Company specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may reasonably request. A Free-Standing SAR may be exercised (A) by giving written notice to the Company specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request. No Shares shall be issued and no certificate representing Shares shall be delivered until any withholding taxes thereon, as described in Section 7.4, have been paid (or arrangement made for such payment to the Company’s satisfaction).

3.3.Termination of Employment or Service. All of the terms relating to the exercise, cancellation or other disposition of an option or SAR upon a termination of employment with or service to the Company of the holder of such option or SAR, as the case may be, whether by reason of disability, Retirement, death or any other reason, shall be determined by the Committee and set forth in the applicable Award Agreement.

3.4.No Repricing. The Committee may not without the approval of the shareholders of the Company, (i) reduce the purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower purchase price or base price or (iii) cancel any previously granted option or SAR in exchange for cash or another Award if the purchase price of such option or the base price of such SAR exceeds the Fair Market Value of a Share on the date of such cancellation, in each case, other than in connection with a Change in Control or the adjustment provisions set forth in Section 7.6.

3.5.Dividend Equivalents. Notwithstanding anything in an Award Agreement to the contrary, the holder of an option or SAR shall not be entitled to receive dividend equivalents with respect to the number of Shares subject to such option or SAR.

IV.STOCK AWARDS

3.1.Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award, Restricted Stock Unit Award or Unrestricted Stock Award.

3.2.Terms of Unrestricted Stock Awards. The number of Shares subject to an Unrestricted Stock Award shall be determined by the Committee. Unrestricted Stock Awards shall not be subject to any Restriction Periods or Performance Measures. Upon the grant of an Unrestricted Stock Award, subject to the Company’s right to require payment of any taxes in accordance with Section 7.4, a certificate or certificates evidencing ownership of the requisite number of Shares shall be delivered to the holder of such Award or such shares shall be transferred to the holder in book entry form.

3.3.Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem advisable.

(a)Number of Shares and Other Terms. The number of Shares subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any)

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and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

(b)Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of the Plan, for the vesting of the Shares subject to such Award (i) if the holder of such Award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the Shares subject to such Award (x) if the holder of such Award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.

(c)Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 7.5, indicating that the ownership of the Shares represented by such certificate is subject to the restrictions, terms and conditions of the Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the Shares subject to the Restricted Stock Award in the event such Award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 7.4, the restrictions shall be removed from the requisite number of any Shares that are held in book entry form, and all certificates evidencing ownership of the requisite number of Shares shall be delivered to the holder of such Award.

(d)Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such Award shall have all rights as a shareholder of the Company, including, but not limited to, voting rights, the right to receive dividends subject to Section 1.5, and the right to participate in any capital adjustment applicable to all holders of Common Stock.

3.4.Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem advisable.

(a)Number of Shares and Other Terms. The number of Shares subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

(b)Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of the Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such Award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met in whole or in part

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during a specified Performance Period, and for the forfeiture of the Shares subject to such Award (x) if the holder of such Award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met in whole or in part during a specified Performance Period.

(c)Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such Award may be settled in Shares or cash or a combination thereof and (ii) subject to Section 1.5 , whether the holder thereof shall be entitled to receive dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of Shares subject to such Award. Prior to the settlement of a Restricted Stock Unit Award, the holder of such Award shall have no rights as a shareholder of the Company with respect to the Shares subject to such Award.

3.5.Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such Award upon a termination of employment with or service to the Company of the holder of such Award, whether by reason of disability, Retirement, death or any other reason, shall be determined by the Committee and set forth in the applicable Award Agreement.

V.PERFORMANCE AWARDS

3.1.Performance Awards. The Committee may, in its discretion, grant Performance Awards to such eligible persons as may be selected by the Committee.

3.2.Terms of Performance Awards. Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem advisable.

(a)Value of Performance Awards and Performance Measures. The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee.

(b)Vesting and Forfeiture. The Agreement relating to a Performance Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of the Plan, for the vesting of such Performance Award if the specified Performance Measures are satisfied or met in whole or in part during the specified Performance Period and for the forfeiture of such Award if the specified Performance Measures are not satisfied or met in whole or in part during the specified Performance Period.

(c)Settlement of Vested Performance Awards. The Agreement relating to a Performance Award shall specify whether such Award may be settled in Shares (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 4.3(c) and the holder of such Restricted Stock shall have such rights as a shareholder of the Company as determined pursuant to Section 4.3(d). Prior to the settlement of a Performance Award in Shares, including Restricted Stock, the holder of such Award shall have no rights as a shareholder of the Company.

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3.3.Termination of Employment or Service. All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such Award upon a termination of employment with or service to the Company of the holder of such Award, whether by reason of disability, Retirement, death or any other reason, shall be determined by the Committee and set forth in the applicable Award Agreement.

VI.OTHER CASH-BASED AWARDS

3.1.Other Cash-Based Awards. The Committee may grant cash-based Awards to such eligible persons as may be selected by the Committee that provide the opportunity to earn or receive cash payments. Other Cash-Based Awards may be granted as an element of or a supplement to any other Award under the Plan or as a stand-alone Award. The terms and conditions relating to Other Cash-Based Awards shall be set forth in the applicable Award Agreement.

VII.GENERAL

3.1.Effective Date and Term of Plan. This Plan shall be submitted to the shareholders of the Company for approval and, if approved, shall become effective as of the date of such shareholder approval. This Plan shall terminate on the tenth anniversary of the date on which the Company’s shareholders approve the Plan, unless earlier terminated by the Board; provided, however, that no Incentive Stock Options shall be granted after the tenth anniversary of the date on which the Plan was approved by the Board. Termination of the Plan shall not affect the terms or conditions of any Award granted prior to termination. Awards hereunder may be made at any time prior to the termination of the Plan.

3.2.Amendments. The Board may amend the Plan as it shall deem advisable; provided, however, that no amendment to the Plan shall be effective without the approval of the Company’s shareholders if (i) shareholder approval is required by applicable law, rule or regulation, including any applicable rule of The Nasdaq Stock Market LLC, or (ii) such amendment seeks to modify Section 3.4 hereof; provided further, that no amendment may materially impair the rights of a holder of an outstanding Award without the consent of such holder.

3.3.Non-Transferability. No Award shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such Award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes or a charitable organization designated by the holder, in each case, without consideration. Except to the extent permitted by the foregoing sentence or the Agreement relating to an Award, each Award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no Award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any Award, such Award and all rights thereunder shall immediately become null and void.

3.4.Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any Shares or the payment of any cash pursuant to an Award made hereunder, payment by the holder of such Award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such Award. An Agreement may provide that (i) the Company shall withhold whole Shares which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined

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as of the date the obligation to withhold or pay taxes arises in connection with an Award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole Shares having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole Shares which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of an option, a cash payment by a broker-dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the Award.

3.5.Restrictions on Shares. Each Award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the Shares subject to such Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing Shares delivered pursuant to any Award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder and may impose a similar restriction on book entry shares.

3.6.Adjustment. In the event of any equity restructuring that causes the per share value of Shares to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary cash dividend, the number and class of securities available under the Plan, the terms of each outstanding option and SAR (including the number and class of securities subject to each outstanding option or SAR and the purchase price or base price per share), the terms of each outstanding Restricted Stock Award and Restricted Stock Unit Award (including the number and class of securities subject thereto) and the terms of each outstanding Performance Award (including the number and class of securities subject thereto), shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs without an increase in the aggregate purchase price or base price and in accordance with Section 409A of the Code. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such adjustment shall be final, binding and conclusive.

3.7.Change in Control

(a)Subject to the terms of the applicable Award Agreement, in the event of a Change in Control, the Board (as constituted prior to such Change in Control) may, in its discretion:

(i)provide that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (B) the Restriction Period applicable to some

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or all outstanding Restricted Stock Awards and Restricted Stock Unit Awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the Performance Period applicable to some or all outstanding Awards shall lapse in full or in part, and (D) the Performance Measures applicable to some or all outstanding Awards shall be deemed to be satisfied at the target or any other level;

(ii)require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the Shares subject to an outstanding Award, with an appropriate and equitable adjustment to such Award as shall be determined by the Board in accordance with Section 7.6; and/or

(iii)require outstanding Awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of an option or an SAR, the aggregate number of Shares then subject to the portion of such option or SAR surrendered multiplied by the excess, if any, of the Fair Market Value of a Share as of the date of the Change in Control, over the purchase price or base price per Share subject to such option or SAR, (2) in the case of a Stock Award or a Performance Award denominated in Shares, the aggregate number of Shares then subject to the portion of such Award surrendered to the extent the Performance Measures applicable to such Award have been satisfied or are deemed satisfied pursuant to Section 7.7(a)(i), multiplied by the Fair Market Value of a Share as of the date of the Change in Control, and (3) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such Award surrendered to the extent the Performance Measures applicable to such Award have been satisfied or are deemed satisfied pursuant to Section 7.7(a)(i); (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.

(b)For purposes of the Plan, a “Change in Control” means, unless otherwise provided in an Award Agreement, the occurrence of any one of the following events:

(i)when any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than an affiliate of the Company or a Subsidiary or an employee benefit plan established or maintained by the Company, a Subsidiary or any of their respective affiliates, is or becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act) directly or indirectly, of securities of the Company representing more than twenty-five percent (25%) of the combined voting power of the Company’s then outstanding securities (a “Control Person”);

(ii) the consummation of (A) a transaction, other than a Non‑Control Transaction, pursuant to which the Company is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation, (B) a sale or disposition of all or substantially all of the Company’s assets or (C) a plan of liquidation or dissolution of the Company; or

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(iii)if during any period of two (2) consecutive years, individuals (the “Continuing Directors”) who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof or, following a Non‑Control Transaction, a majority of the board of directors of the Surviving Corporation; provided that any individual whose election or nomination for election as a member of the Board (or, following a Non‑Control Transaction, the board of directors of the Surviving Corporation) was approved by a vote of at least two‑thirds of the Continuing Directors then in office shall be considered a Continuing Director.

For purposes of this paragraph: (I) the Company will be deemed to have become a subsidiary of another corporation if any other corporation (which term shall include, in addition to a corporation, a limited liability company, partnership, trust, or other organization) owns, directly or indirectly, 50 percent or more of the total combined outstanding voting power of all classes of stock of the Company or any successor to the Company; (II) “Non‑Control Transaction” means a transaction in which the Company is merged with or into, or is consolidated with, or becomes the subsidiary of another corporation pursuant to a definitive agreement providing that at least a majority of the directors of the Surviving Corporation immediately after the transaction are persons who were directors of the Company on the day before the first public announcement relating to the transaction; (III) “Surviving Corporation” means (A) in a transaction in which the Company becomes the subsidiary of another corporation, the ultimate parent entity of the Company or the Company’s successor, and (B) in any other transaction pursuant to which the Company is merged with or into another corporation, the surviving or resulting corporation in the merger or consolidation.

3.8.Deferrals. The Committee may determine that the delivery of Shares or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any Award (other than Awards of Incentive Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of Awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.

3.9.No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement, no person shall have any right to participate in the Plan. Neither the Plan nor any Award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment or service of any person at any time without liability hereunder.

3.10.No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

3.11.Designation of Beneficiary. To the extent permitted by the Company, a holder of an Award may file with the Company a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity. To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Company. Each beneficiary designation shall become effective only when filed in writing with the

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Company during the holder’s lifetime on a form prescribed by the Company. The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary designations. If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding Award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative or similar person.

3.12.Governing Law. This Plan, each Award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of New Jersey and construed in accordance therewith without giving effect to principles of conflicts of laws.

3.13.Foreign Employees. Without amending the Plan, the Committee may grant Awards to eligible persons who are foreign nationals and/or reside outside the U.S. on such terms and conditions different from those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of the Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has employees.

3.14.Awards Subject to Clawback. The Awards granted under the Plan and any cash payment or Shares delivered pursuant to an Award are subject to forfeiture, recovery by the Company or other action pursuant to the applicable Award Agreement or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company has adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Ira Robbins, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Valley National Bancorp;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2023

/s/ Ira Robbins

Ira Robbins

Chairman of the Board and
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, Michael D. Hagedorn, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Valley National Bancorp;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 7, 2023

/s/ Michael D. Hagedorn

Michael D. Hagedorn

Senior Executive Vice President and
Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CEO AND CFO PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Valley National Bancorp (the “Company”) for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ira Robbins, as Chief Executive Officer of the Company, and Michael D. Hagedorn, as Chief Financial Officer of the Company, each hereby certify, pursuant to 18 U.S.C. (section) 1350, as adopted pursuant to (section) 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Ira Robbins

Ira Robbins

Chairman of the Board and
Chief Executive Officer

August 7, 2023

/s/ Michael D. Hagedorn

Michael D. Hagedorn

Senior Executive Vice President and
Chief Financial Officer

August 7, 2023

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 07, 2023
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-11277
Entity Registrant Name	Valley National Bancorp
Entity Incorporation, State or Country Code	NJ
Entity Tax Identification Number	22-2477875
Entity Address, Address Line One	One Penn Plaza
Entity Address, City or Town	New York,
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10119
City Area Code	973
Local Phone Number	305-8800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		507,634,731
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Period Period Focus	Q2
Entity Central Index Key	0000714310
Current Fiscal Year End Date	--12-31
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	VLY
Security Exchange Name	NASDAQ
Non-Cumulative Perpetual Preferred Stock, Series A
Entity Information [Line Items]
Title of 12(b) Security	Non-Cumulative Perpetual Preferred Stock, Series A, no par value
Trading Symbol	VLYPP
Security Exchange Name	NASDAQ
Non-Cumulative Perpetual Preferred Stock, Series B
Entity Information [Line Items]
Title of 12(b) Security	Non-Cumulative Perpetual Preferred Stock, Series B, no par value
Trading Symbol	VLYPO
Security Exchange Name	NASDAQ

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Cash and due from banks	$ 463,318	$ 444,325
Interest bearing deposits with banks	1,491,091	503,622
Investment securities:
Equity securities	61,010	48,731
Trading debt securities	3,409	13,438
Available for sale debt securities	1,236,946	1,261,397
Held to maturity debt securities (net of allowance for credit losses of $1,351 at June 30, 2023 and $1,646 at December 31, 2022)	3,765,487	3,827,338
Total investment securities	5,066,852	5,150,904
Loans held for sale, at fair value	33,044	18,118
Loans	49,877,248	46,917,200
Less: Allowance for loan losses	(436,432)	(458,655)
Net loans	49,440,816	46,458,545
Premises and equipment, net	386,584	358,556
Lease right of use assets	359,751	306,352
Bank owned life insurance	717,681	717,177
Accrued interest receivable	225,918	196,606
Goodwill	1,868,936	1,868,936
Other intangible assets, net	177,946	197,456
Other assets	1,471,756	1,242,152
Total Assets	61,703,693	57,462,749
Deposits:
Non-interest bearing	12,434,307	14,463,645
Interest bearing:
Savings, NOW and money market	22,277,326	23,616,812
Time	14,908,182	9,556,457
Total deposits	49,619,815	47,636,914
Short-term borrowings	1,088,899	138,729
Long-term borrowings	2,443,533	1,543,058
Junior subordinated debentures issued to capital trusts	56,934	56,760
Lease liabilities	420,972	358,884
Accrued expenses and other liabilities	1,498,356	1,327,602
Total Liabilities	55,128,509	51,061,947
Shareholders’ Equity
Common stock (no par value, authorized 650,000,000 shares; issued 507,896,910 shares at June 30, 2023 and December 31, 2022)	178,187	178,185
Surplus	4,974,507	4,980,231
Retained earnings	1,379,534	1,218,445
Accumulated other comprehensive loss	(164,747)	(164,002)
Treasury stock, at cost (277,480 common shares at June 30, 2023 and 1,522,432 common shares at December 31, 2022)	(1,988)	(21,748)
Total Shareholders’ Equity	6,575,184	6,400,802
Total Liabilities and Shareholders’ Equity	61,703,693	57,462,749
Series A
Shareholders’ Equity
Preferred stock, no par value; 50,000,000 authorized shares:	111,590	111,590
Series B
Shareholders’ Equity
Preferred stock, no par value; 50,000,000 authorized shares:	$ 98,101	$ 98,101

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Allowance for Credit Losses	$ 1,351	$ 1,646
Preferred stock, par value (usd per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, par value (usd per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	650,000,000	650,000,000
Common stock, shares issued (in shares)	507,896,910	507,896,910
Treasury stock, shares (in shares)	277,480	1,522,432
Series A
Preferred stock, shares issued (in shares)	4,600,000	4,600,000
Series B
Preferred stock, shares issued (in shares)	4,000,000	4,000,000

XML

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Interest Income
Interest and fees on loans	$ 715,172	$ 415,577	$ 1,370,398	$ 732,942
Interest and dividends on investment securities:
Taxable	31,919	27,534	64,208	45,973
Tax-exempt	5,575	5,191	10,900	7,708
Dividends	7,517	3,076	12,702	4,752
Interest on federal funds sold and other short-term investments	27,276	1,569	49,481	2,030
Total interest income	787,459	452,947	1,507,689	793,405
Interest on deposits:
Savings, NOW and money market	164,842	17,122	315,608	26,749
Time	125,764	3,269	206,062	6,100
Interest on short-term borrowings	50,208	4,083	84,156	4,889
Interest on long-term borrowings and junior subordinated debentures	26,880	10,313	46,078	19,838
Total interest expense	367,694	34,787	651,904	57,576
Net Interest Income	419,765	418,160	855,785	735,829
(Credit) provision for credit losses for available for sale and held to maturity securities	(282)	286	4,705	343
Provision for credit losses for loans	6,332	43,712	15,782	47,212
Net Interest Income After Provision for Credit Losses	413,715	374,162	835,298	688,274
Non-Interest Income
Insurance commissions	3,139	3,463	5,559	5,322
Capital markets	16,967	14,711	27,859	29,071
Gains (losses) on securities transactions, net	217	(309)	595	(1,381)
Fees from loan servicing	2,702	2,717	5,373	5,498
Gains on sales of loans, net	1,240	3,602	1,729	4,588
Bank owned life insurance	2,443	2,113	5,027	4,159
Other	11,649	12,592	26,451	19,559
Total non-interest income	60,075	58,533	114,374	97,803
Non-Interest Expense
Salary and employee benefits expense	149,594	154,798	294,580	262,531
Net occupancy expense	25,949	22,429	49,205	44,420
Technology, furniture and equipment expense	32,476	49,866	68,984	75,880
FDIC insurance assessment	10,426	5,351	19,581	9,509
Amortization of other intangible assets	9,812	11,400	20,331	15,837
Professional and legal fees	21,406	30,409	38,220	45,158
Amortization of tax credit investments	5,018	3,193	9,271	6,089
Other	28,290	22,284	54,965	37,646
Total non-interest expense	282,971	299,730	555,137	497,070
Income Before Income Taxes	190,819	132,965	394,535	289,007
Income tax expense	51,759	36,552	108,924	75,866
Net Income	139,060	96,413	285,611	213,141
Dividends on preferred stock	4,030	3,172	7,904	6,344
Net Income Available to Common Shareholders	$ 135,030	$ 93,241	$ 277,707	$ 206,797
Earnings Per Common Share:
Basic (usd per share)	$ 0.27	$ 0.18	$ 0.55	$ 0.45
Diluted (usd per share)	$ 0.27	$ 0.18	$ 0.55	$ 0.44
Wealth management and trust fees
Non-Interest Income
Revenue from contracts with customer	$ 11,176	$ 9,577	$ 20,763	$ 14,708
Service charges on deposit accounts
Non-Interest Income
Revenue from contracts with customer	$ 10,542	$ 10,067	$ 21,018	$ 16,279

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 139,060	$ 96,413	$ 285,611	$ 213,141
Unrealized gains and losses on available for sale securities
Net losses arising during the period	(18,051)	(52,269)	(881)	(91,161)
Less reclassification adjustment for net gains included in net income	0	0	0	(10)
Total	(18,051)	(52,269)	(881)	(91,171)
Unrealized gains and losses on derivatives (cash flow hedges)
Net (losses) gains on derivatives arising during the period	(3,573)	(23)	(775)	195
Less reclassification adjustment for net losses (gains) included in net income	516	(80)	895	306
Total	(3,057)	(103)	120	501
Defined benefit pension and postretirement benefit plans
Amortization of actuarial net loss	8	133	16	265
Other comprehensive (loss) income, net	(21,100)	(52,239)	(745)	(90,405)
Total comprehensive income	$ 117,960	$ 44,174	$ 284,866	$ 122,736

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjusted Balance	Preferred Series A	Preferred Series B	Common Stock	Preferred Stock	Preferred Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Common Stock	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Surplus	Surplus Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings Preferred Series A	Retained Earnings Preferred Series B	Retained Earnings Common Stock	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Cumulative Effect, Period of Adoption, Adjusted Balance	Treasury Stock	Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance
Beginning balance at Dec. 31, 2021	$ 5,084,066						$ 209,691		$ 148,482		$ 3,883,035		$ 883,645						$ (17,932)		$ (22,855)
Beginning balance (in shares) at Dec. 31, 2021									421,437
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	116,728												116,728
Other comprehensive income (loss), net of tax	(38,166)																		(38,166)
Cash dividends declared:
Cash dividends declared on preferred stock				$ (1,797)	$ (1,375)											$ (1,797)	$ (1,375)
Cash dividends declared on common stock						$ (46,803)												$ (46,803)
Effect of stock incentive plan, net (in shares)									972
Effect of stock incentive plan, net	(2,752)										(10,799)		(5,173)								13,220
Purchase of treasury stock (in shares)									(1,015)
Purchase of treasury stock	(13,517)																				(13,517)
Ending balance at Mar. 31, 2022	5,096,384						209,691		$ 148,482		3,872,236		945,225						(56,098)		(23,152)
Ending balance (in shares) at Mar. 31, 2022									421,394
Beginning balance at Dec. 31, 2021	5,084,066						209,691		$ 148,482		3,883,035		883,645						(17,932)		(22,855)
Beginning balance (in shares) at Dec. 31, 2021									421,437
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	213,141
Ending balance at Jun. 30, 2022	6,204,913						209,691		$ 178,185		4,965,488		982,146						(108,337)		(22,260)
Ending balance (in shares) at Jun. 30, 2022									506,329
Beginning balance at Dec. 31, 2021	5,084,066						209,691		$ 148,482		3,883,035		883,645						(17,932)		(22,855)
Beginning balance (in shares) at Dec. 31, 2021									421,437
Ending balance at Dec. 31, 2022	$ 6,400,802	$ 990	$ 6,401,792				209,691	$ 209,691	$ 178,185	$ 178,185	4,980,231	$ 4,980,231	1,218,445	$ 990	$ 1,219,435				(164,002)	$ (164,002)	(21,748)	$ (21,748)
Ending balance (in shares) at Dec. 31, 2022									506,374	506,374
Cash dividends declared:
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2022-02 [Member]
Beginning balance at Mar. 31, 2022	$ 5,096,384						209,691		$ 148,482		3,872,236		945,225						(56,098)		(23,152)
Beginning balance (in shares) at Mar. 31, 2022									421,394
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	96,413												96,413
Other comprehensive income (loss), net of tax	(52,239)																		(52,239)
Cash dividends declared:
Cash dividends declared on preferred stock				(1,797)	(1,375)											(1,797)	(1,375)
Cash dividends declared on common stock						(56,211)												(56,211)
Effect of stock incentive plan, net (in shares)									72
Effect of stock incentive plan, net	5,909								$ 1		5,125		(109)								892
Common stock issued (in shares)									84,863
Common stock issued	1,117,829								$ 29,702		1,088,127		0								0
Ending balance at Jun. 30, 2022	6,204,913						209,691		$ 178,185		4,965,488		982,146						(108,337)		(22,260)
Ending balance (in shares) at Jun. 30, 2022									506,329
Beginning balance at Dec. 31, 2022	6,400,802	990	6,401,792				209,691	209,691	$ 178,185	$ 178,185	4,980,231	4,980,231	1,218,445	990	1,219,435				(164,002)	(164,002)	(21,748)	(21,748)
Beginning balance (in shares) at Dec. 31, 2022									506,374	506,374
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	146,551												146,551
Other comprehensive income (loss), net of tax	20,355																		20,355
Cash dividends declared:
Cash dividends declared on preferred stock				(1,797)	(2,077)											(1,797)	(2,077)
Cash dividends declared on common stock						(56,488)												(56,488)
Effect of stock incentive plan, net (in shares)									1,061
Effect of stock incentive plan, net	(505)								$ 1		(12,569)		(3,994)								16,057
Common stock issued (in shares)									327
Common stock issued	3,750												(650)								4,400
Ending balance at Mar. 31, 2023	6,511,581						209,691		$ 178,186		4,967,662		1,300,980						(143,647)		(1,291)
Ending balance (in shares) at Mar. 31, 2023									507,762
Beginning balance at Dec. 31, 2022	6,400,802	$ 990	$ 6,401,792				209,691	$ 209,691	$ 178,185	$ 178,185	4,980,231	$ 4,980,231	1,218,445	$ 990	$ 1,219,435				(164,002)	$ (164,002)	(21,748)	$ (21,748)
Beginning balance (in shares) at Dec. 31, 2022									506,374	506,374
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	285,611
Ending balance at Jun. 30, 2023	6,575,184						209,691		$ 178,187		4,974,507		1,379,534						(164,747)		(1,988)
Ending balance (in shares) at Jun. 30, 2023									507,619
Beginning balance at Mar. 31, 2023	6,511,581						209,691		$ 178,186		4,967,662		1,300,980						(143,647)		(1,291)
Beginning balance (in shares) at Mar. 31, 2023									507,762
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	139,060												139,060
Other comprehensive income (loss), net of tax	(21,100)																		(21,100)
Cash dividends declared:
Cash dividends declared on preferred stock				$ (1,797)	$ (2,233)											$ (1,797)	$ (2,233)
Cash dividends declared on common stock						$ (56,474)												$ (56,474)
Effect of stock incentive plan, net (in shares)									157
Effect of stock incentive plan, net	8,239								$ 1		6,845		(2)								1,395
Purchase of treasury stock (in shares)									(300)
Purchase of treasury stock	(2,092)																				(2,092)
Ending balance at Jun. 30, 2023	$ 6,575,184						$ 209,691		$ 178,187		$ 4,974,507		$ 1,379,534						$ (164,747)		$ (1,988)
Ending balance (in shares) at Jun. 30, 2023									507,619

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022
Preferred Series A
Preferred stock, cash dividends declared (usd per share)	$ 0.39	$ 0.39	$ 0.39	$ 0.39
Preferred Series B
Preferred stock, cash dividends declared (usd per share)	0.56	0.52	0.34	0.34
Common Stock
Common stock, cash dividends declared (usd per share)	$ 0.11	$ 0.11	$ 0.11	$ 0.11

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 285,611	$ 213,141
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	21,425	18,297
Stock-based compensation	16,773	13,420
Provision for credit losses	20,487	47,555
Net amortization of premiums and accretion of discounts on securities and borrowings	(639)	9,680
Amortization of other intangible assets	20,331	15,837
Losses (gains) on available for sale and held to maturity debt securities, net	33	(69)
Proceeds from sales of loans held for sale	72,925	331,298
Gains on sales of loans, net	(1,729)	(4,588)
Originations of loans held for sale	(76,943)	(210,048)
(Gains) losses on sales of assets, net	(286)	265
Net change in:
Fair value of borrowings hedged by derivative transactions	(291)	(20,194)
Trading debt securities	10,029	39,580
Lease right of use assets	(53,412)	521
Cash surrender value of bank owned life insurance	(5,722)	(4,159)
Accrued interest receivable	(29,312)	(12,083)
Other assets	(230,017)	(191,597)
Accrued expenses and other liabilities	233,419	558,675
Net cash provided by operating activities	282,682	805,531
Cash flows from investing activities:
Net loan originations and purchases	(3,009,649)	(3,495,486)
Equity securities:
Purchases	(9,662)	(1,538)
Sales	771	1,110
Held to maturity debt securities:
Purchases	(114,544)	(545,934)
Maturities, calls and principal repayments	175,492	294,052
Available for sale debt securities:
Purchases	(41,470)	(38,000)
Sales	17,910	12,846
Maturities, calls and principal repayments	44,534	150,262
Death benefit proceeds from bank owned life insurance	5,218	3,089
Proceeds from sales of real estate property and equipment	490	7,265
Purchases of real estate property and equipment	(49,468)	(35,164)
Cash and cash equivalent acquired in acquisitions, net	0	321,540
Net cash used in investing activities	(2,980,378)	(3,325,958)
Cash flows from financing activities:
Net change in deposits	1,982,901	1,218,642
Net change in short-term borrowings	950,170	763,284
Proceeds from issuance of long-term borrowings, net	1,250,000	0
Repayments of long-term borrowings	(350,000)	0
Cash dividends paid to preferred shareholders	(7,904)	(6,344)
Cash dividends paid to common shareholders	(113,611)	(92,618)
Purchase of common shares to treasury	(11,133)	(23,886)
Common stock issued, net	3,750	106
Other, net	(15)	(365)
Net cash provided by financing activities	3,704,158	1,858,819
Net change in cash and cash equivalents	1,006,462	(661,608)
Cash and cash equivalents at beginning of year	947,947	2,049,920
Cash and cash equivalents at end of period	1,954,409	1,388,312
Supplemental disclosures of cash flow information:
Interest on deposits and borrowings	571,741	57,151
Federal and state income taxes	122,130	77,285
Supplemental schedule of non-cash investing activities:
Transfer of loans to other real estate owned	903	0
Transfer of loans to loans held for sale	10,000	0
Lease right of use assets obtained in exchange for operating lease liabilities	81,727	24,745
Non-cash assets acquired:
Equity securities	0	6,239
Investment securities available for sale	0	505,928
Investment securities held to maturity	0	806,627
Loans, net	0	5,844,070
Premises and equipment, net	0	38,827
Lease right of use assets	0	49,434
Bank owned life insurance	0	126,861
Accrued interest receivable	0	25,717
Goodwill	0	407,522
Other intangible assets, net	0	159,587
Other assets	0	158,352
Total non-cash assets acquired	0	8,129,164
Liabilities assumed:
Deposits	0	7,029,997
Short-term borrowings	0	103,794
Lease liabilities	0	79,844
Accrued expenses and other liabilities	0	119,240
Total liabilities assumed	0	7,332,875
Non-cash net assets acquired	0	796,289
Net cash and cash equivalents acquired in acquisition	0	321,540
Common stock issued in acquisition	$ 0	$ 1,117,829

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Basis of Presentation

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey Corporation (Valley) include the accounts of Valley National Bank (the Bank) and all other entities in which Valley has a controlling financial interest. All inter-company transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to U.S. generally accepted accounting principles (U.S. GAAP) and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. Certain prior period amounts have been reclassified to conform to the current presentation.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at June 30, 2023 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022.

Significant Estimates. In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Actual results may differ from those estimates. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date

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Business Combinations

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combinations

Business Combinations

Acquisitions

Bank Leumi Le-Israel Corporation. On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as "Bank Leumi USA". Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida. The common shareholders of Bank Leumi USA received 3.8025 shares of Valley common stock and $5.08 in cash for each Bank Leumi USA common share that they owned. As a result, Valley issued approximately 85 million shares of common stock and paid $113.4 million in cash in the transaction. Based on Valley’s closing stock price on March 31, 2022, the transaction was valued at $1.2 billion, inclusive of the value of options. As a result of the acquisition, Bank Leumi Le-Israel B.M. owned approximately 14 percent of Valley's common stock as of April 1, 2022.

Merger expenses, primarily consisting of salary and employee benefit expense, totaled $4.1 million for the six months ended June 30, 2023. There were no merger expenses for the three months ended June 30, 2023. Merger expenses totaled $54.5 million and $58.9 million for the three and six months ended June 30, 2022, respectively,

and largely consisted of salary and employee benefit expense, professional and legal fees and technology related costs within non-interest expense on the consolidated statements of income.

The following table sets forth assets acquired and liabilities assumed in the Bank Leumi USA acquisition, at their estimated fair values as of the closing date of the transaction:

	April 1, 2022
	(in thousands)
Assets acquired:
Cash and cash equivalents	$	443,588
Equity securities	6,239
Available for sale debt securities	505,928
Held to maturity debt securities	806,627
Loans	5,914,389
Allowance for loan losses	(70,319)
Loans, net	5,844,070
Premises and equipment	38,827
Lease right of use assets	49,273
Bank owned life insurance	126,861
Accrued interest receivable	25,717
Goodwill	400,582
Other intangible assets	153,380
Other assets	160,921
Total assets acquired	$	8,562,013
Liabilities assumed:
Deposits:
Non-interest bearing	$	4,511,537
Interest bearing:
Savings, NOW and money market	2,224,834
Time	293,626
Total deposits	7,029,997
Short-term borrowings	103,794
Lease liabilities	79,683
Accrued expense and other liabilities	117,269
Total liabilities assumed	$	7,330,743
Common stock issued in acquisition	1,117,829
Cash paid in acquisition	113,441

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except for share and per share data)
Net income available to common shareholders	$	135,030	$	93,241	$	277,707	$	206,797
Basic weighted average number of common shares outstanding	507,690,043		506,302,464		507,402,268		464,172,210
Plus: Common stock equivalents	952,982		2,176,742		1,674,035		2,148,473
Diluted weighted average number of common shares outstanding	508,643,025		508,479,206		509,076,303		466,320,683
Earnings per common share:
Basic	$	0.27	$	0.18	$	0.55	$	0.45
Diluted	0.27		0.18		0.55		0.44

Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting or exercise, if applicable, of restricted stock units and common stock options to purchase Valley’s common shares. Common stock options with exercise prices that exceed the average market price per share of Valley’s common stock during the periods presented may have an anti-dilutive effect on the diluted earnings per common share calculation and therefore are excluded from the diluted earnings per share calculation along with restricted stock units. Potential anti-dilutive weighted common shares totaled approximately 7.2 million and 2.2 million for the three months ended June 30, 2023 and 2022, respectively, and 3.0 million and 1.1 million for the six months ended June 30, 2023 and 2022, respectively.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2023:

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension and Postretirement Benefit Plans
	(in thousands)
Balance at March 31, 2023	$	(110,648)	$	5,410	$	(38,409)	$	(143,647)
Other comprehensive loss before reclassification	(18,051)		(3,573)		—		(21,624)
Amounts reclassified from other comprehensive loss	—		516		8		524
Other comprehensive (loss) income, net	(18,051)		(3,057)		8		(21,100)
Balance at June 30, 2023	$	(128,699)	$	2,353	$	(38,401)	$	(164,747)

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension and Postretirement Benefit Plans
	(in thousands)
Balance at December 31, 2022	$	(127,818)	$	2,233	$	(38,417)	$	(164,002)
Other comprehensive loss before reclassification	(881)		(775)		—		(1,656)
Amounts reclassified from other comprehensive loss	—		895		16		911
Other comprehensive (loss) income, net	(881)		120		16		(745)
Balance at June 30, 2023	$	(128,699)	$	2,353	$	(38,401)	$	(164,747)

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and six months ended June 30, 2023 and 2022:

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,				Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2023		2022		2023		2022		Income Statement Line Item
	(in thousands)
Unrealized gains on AFS securities before tax	$	—	$	—	$	—	$	14	Gains (losses) on securities transactions, net
Tax effect	—		—		—		(4)
Total net of tax	—		—		—		10
Unrealized gains (losses) on derivatives (cash flow hedges) before tax	(725)		116		(1,256)		(426)		Interest income, interest expense
Tax effect	209		(36)		361		120
Total net of tax	(516)		80		(895)		(306)
Defined benefit pension and postretirement benefit plans:
Amortization of actuarial net loss	(11)		(184)		(22)		(367)		*
Tax effect	3		51		6		102
Total net of tax	(8)		(133)		(16)		(265)
Total reclassifications, net of tax	$	(524)	$	(53)	$	(911)	$	(561)

* Amortization of actuarial net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

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New Authoritative Accounting Guidance

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

New Authoritative Accounting Guidance

New Accounting Guidance Adopted in 2023

Accounting Standards Update (ASU) No. 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging –Portfolio Layer Method” expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges. This method allows entities to designate multiple hedging relationships with a single closed portfolio, and therefore a larger portion of the interest rate risk associated with such a portfolio is eligible to be hedged. ASU No. 2022-01 also clarifies that no assets may be added to a closed portfolio once it is designated in a portfolio layer method hedge. Valley adopted ASU No. 2022-01 on January 1, 2023 and the guidance did not have a significant impact on Valley's consolidated financial statements.

ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” eliminates the troubled debt restructuring (TDR) accounting model for creditors, such as Valley, that

have adopted Topic 326, “Financial Instruments – Credit Losses.” ASU No. 2022-02 requires all loan modifications to be accounted for under the general loan modification guidance in Subtopic 310-20. On a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 vintage disclosure requirements are also required to prospectively disclose current-period gross write-off information by vintage. Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition method. Valley adopted ASU No. 2022-02 on January 1, 2023 and elected to apply the modified retrospective transition method. The adoption of ASU No. 2022-02 resulted in a $1.4 million decrease in the allowance for loan losses, and a $990 thousand increase to retained earnings, net of taxes. See Note 8 for required disclosures.

New Accounting Guidance Issued in 2023

ASU No. 2023-02, Investments –“Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” is intended to improve the accounting and disclosures for investments in certain tax credit structures. ASU No. 2023-02 allows the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. ASU No. 2023-02 will be effective on January 1, 2024 and it can be early adopted in any interim period. The new guidance can also be applied either on a modified retrospective or a retrospective basis, with any adjustments resulting from adoption recognized in earnings on the date of adoption. Valley is currently evaluating the impact of ASU No. 2023-02, but it is not expected to have a significant impact on Valley's consolidated financial statements.

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Fair Value Measurement of Assets and Liabilities

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

Fair Value Measurement of Assets and Liabilities

ASC Topic 820, “Fair Value Measurement” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

•Level 1    - Unadjusted exchange quoted prices in active markets for identical assets or liabilities, or identical liabilities traded as assets that the reporting entity has the ability to access at the measurement date.

•Level 2 - Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly (i.e., quoted prices on similar assets) for substantially the full term of the asset or liability.

•Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022. The assets presented under “non-recurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	June 30, 2023		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities	$	23,635	$	23,635	$	—	$	—
Equity securities at net asset value (NAV)	12,328		—		—		—
Trading debt securities	3,409		3,409		—		—
Available for sale debt securities:
U.S. Treasury securities	282,398		282,398		—		—
U.S. government agency securities	24,192		—		24,192		—
Obligations of states and political subdivisions	171,043		—		171,043		—
Residential mortgage-backed securities	594,636		—		594,636		—
Corporate and other debt securities	164,677		—		164,677		—
Total available for sale debt securities	1,236,946		282,398		954,548		—
Loans held for sale (1)	23,044		—		23,044		—
Other assets (2)	571,620		—		571,620		—
Total assets	$	1,870,982	$	309,442	$	1,549,212	$	—
Liabilities
Other liabilities (2)	$	599,226	$	—	$	599,226	$	—
Total liabilities	$	599,226	$	—	$	599,226	$	—
Non-recurring fair value measurements:
Non-performing loans held for sale	$	10,000	$	—	$	10,000	$	—
Collateral dependent loans	63,972		—		—		63,972
Foreclosed assets	2,132		—		—		2,132
Total	$	76,104	$	—	$	10,000	$	66,104

			Fair Value Measurements at Reporting Date Using:
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities	$	23,494	$	23,494	$	—	$	—
Equity securities at net asset value (NAV)	10,099		—		—		—
Trading debt securities	13,438		3,282		10,156		—
Available for sale debt securities:
U.S. Treasury securities	279,498		279,498		—		—
U.S. government agency securities	26,964		—		26,964		—
Obligations of states and political subdivisions	146,811		—		146,811		—
Residential mortgage-backed securities	629,818		—		629,818		—
Corporate and other debt securities	178,306		—		178,306		—
Total available for sale debt securities	1,261,397		279,498		981,899		—
Loans held for sale (1)	18,118		—		18,118		—
Other assets (2)	467,127		—		467,127		—
Total assets	$	1,793,673	$	306,274	$	1,477,300	$	—
Liabilities
Other liabilities (2)	$	607,237	$	—	$	607,237	$	—
Total liabilities	$	607,237	$	—	$	607,237	$	—
Non-recurring fair value measurements:
Collateral dependent loans	$	92,923	$	—	$	—	$	92,923
Foreclosed assets	1,937		—		—		1,937
Total	$	94,860	$	—	$	—	$	94,860

(1)Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $23.0 million and $17.9 million at June 30, 2023 and December 31, 2022, respectively.

(2)Derivative financial instruments are included in this category.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following valuation techniques were used for financial instruments measured at fair value on a recurring basis. All the valuation techniques described below apply to the unpaid principal balance, excluding any accrued interest or dividends at the measurement date. Interest income and expense are recorded within the consolidated statements of income depending on the nature of the instrument using the effective interest method based on acquired discount or premium.

Equity securities. The fair value of equity securities consists of a publicly traded mutual fund, a Community Reinvestment Act (CRA) investment fund and an investment related to the development of new financial technologies that are carried at quoted prices in active markets.

Equity securities at NAV. Valley also has privately held CRA funds at fair value measured at NAV using the most recently available financial information from the investee. Investments measured at NAV (or its equivalent) as a practical expedient are excluded from fair value hierarchy levels in the tables above.

Trading debt securities. The fair value of trading debt securities, consisting of U.S. Treasury securities are reported at fair value utilizing Level 1 inputs at June 30, 2023. At December 31, 2022, trading debt securities consisted of U.S. Treasury securities and municipal bonds reported at fair value utilizing Level 1 and Level 2 inputs, respectively. The prices for municipal bonds investments were derived from market quotations and matrix pricing obtained through an independent pricing service. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data.

Available for sale debt securities. U.S. Treasury securities are reported at fair value utilizing Level 1 inputs. The majority of other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom Valley has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the data and assumptions used in pricing the securities by its third-party provider to ensure the highest level of significant inputs are derived from market observable data. In addition, Valley reviews the volume and level of activity for all available for sale debt securities and attempts to identify transactions which may not be orderly or reflective of a significant level of activity and volume.

Loans held for sale. Residential mortgage loans originated for sale are reported at fair value using Level 2 inputs. The fair values were calculated utilizing quoted prices for similar assets in active markets. The market prices represent a delivery price, which reflects the underlying price each institution would pay Valley for an immediate sale of an aggregate pool of mortgages. Non-performance risk did not materially impact the fair value of mortgage loans held for sale at June 30, 2023 and December 31, 2022 based on the short duration these assets were held, and the credit quality of these loans.

Derivatives. Derivatives are reported at fair value utilizing Level 2 inputs. The fair values of Valley’s derivatives are determined using third-party prices that are based on discounted cash flow analysis using observed market inputs, such as the Overnight Index Swap and Secured Overnight Financing Rate (SOFR) curves. The fair value of mortgage banking derivatives, consisting of interest rate lock commitments to fund residential mortgage loans and forward commitments for the future delivery of such loans (including certain loans held for sale at June 30, 2023 and December 31, 2022), is determined based on the current market prices for similar instruments. The fair values of most of the derivatives incorporate credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its counterparties. The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at June 30, 2023 and December 31, 2022.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

The following valuation techniques were used for certain non-financial assets measured at fair value on a non-recurring basis, including collateral dependent loans reported at the fair value of the underlying collateral and foreclosed assets, which are reported at fair value upon initial recognition or subsequent impairment as described below.

Non-performing loans held for sale. Valley transferred one non-performing construction loan totaling $10.0 million, net of charge-offs, to loans held for sale at June 30, 2023. The transfer at the loan's fair value resulted in a $4.2 million charge-off to the allowance of loan losses for the three months ended June 30, 2023. The fair value of the loan was determined using Level 2 inputs, including bids from a third party broker engaged to solicit interest from potential purchasers. The broker coordinated loan level due diligence with interested parties and established a

formal bidding process in which each participant was required to provide an indicative non-binding bid. Fair value was determined based on a non-binding sale agreement selected by Valley during the bidding process that is expected to close during the third quarter 2023.

Collateral dependent loans. Collateral dependent loans are loans when foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all of the repayment is expected from the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral. Collateral values are estimated using Level 3 inputs, consisting of individual third-party appraisals that may be adjusted based on certain discounting criteria. Certain real estate appraisals may be discounted based on specific market data by location and property type. At June 30, 2023, collateral dependent loans were individually re-measured and reported at fair value through direct loan charge-offs to the allowance for loan losses based on the fair value of the underlying collateral. At June 30, 2023, collateral dependent loans with a total amortized cost of $125.0 million, including our taxi medallion loan portfolio, were reduced by specific allowance for loan losses allocations totaling $61.0 million to a reported total net carrying amount of $64.0 million.

Foreclosed assets. Certain foreclosed assets (consisting of other real estate owned and other repossessed assets included in other assets), upon initial recognition and transfer from loans, are re-measured and reported at fair value using Level 3 inputs, consisting of a third-party appraisal less estimated cost to sell. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value of the asset occur, an asset is re-measured and reported at fair value through a write-down recorded in non-interest expense. There were no adjustments to the appraisals of foreclosed assets at June 30, 2023 and December 31, 2022.

Other Fair Value Disclosures

ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The fair value estimates presented in the following table were based on pertinent market data and relevant information on the financial instruments available as of the valuation date. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire portfolio of financial instruments. Because no market exists for a portion of the financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For instance, Valley has certain fee-generating business lines (e.g., its mortgage servicing operations, trust and investment management departments) that were not considered in these estimates since these activities are not financial instruments. In addition, the tax implications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022 were as follows: 

	Fair Value Hierarchy	June 30, 2023				December 31, 2022
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	463,318	$	463,318	$	444,325	$	444,325
Interest bearing deposits with banks	Level 1	1,491,091		1,491,091		503,622		503,622
Equity securities (1)	Level 3	25,047		25,047		15,138		15,138
Held to maturity debt securities:
U.S. Treasury securities	Level 1	66,579		65,675		66,911		65,889
U.S. government agency securities	Level 2	261,197		215,039		260,392		212,712
Obligations of states and political subdivisions	Level 2	465,115		438,991		480,298		453,195
Residential mortgage-backed securities	Level 2	2,861,227		2,461,519		2,909,106		2,495,797
Trust preferred securities	Level 2	37,052		29,344		37,043		31,106
Corporate and other debt securities	Level 2	75,668		68,380		75,234		70,771
Total held to maturity debt securities (2)		3,766,838		3,278,948		3,828,984		3,329,470
Net loans	Level 3	49,440,816		47,472,065		46,458,545		44,910,049
Accrued interest receivable	Level 1	225,918		225,918		196,606		196,606
Federal Reserve Bank and Federal Home Loan Bank stock (3)	Level 2	326,959		326,959		238,056		238,056
Financial liabilities
Deposits without stated maturities	Level 1	34,711,633		34,711,633		38,080,457		38,080,457
Deposits with stated maturities	Level 2	14,908,182		14,783,271		9,556,457		9,443,253
Short-term borrowings	Level 1	1,088,899		1,066,450		138,729		138,729
Long-term borrowings	Level 2	2,443,533		2,340,324		1,543,058		1,395,991
Junior subordinated debentures issued to capital trusts	Level 2	56,934		48,117		56,760		50,923
Accrued interest payable (4)	Level 1	125,873		125,873		45,617		45,617

(1)Represents equity securities without a readily determinable fair value measured at cost less impairment, if any.

(2)The carrying amount is presented gross without the allowance for credit losses.

(3)Included in other assets.

(4)Included in accrued expenses and other liabilities.

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Investment Securities

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

Equity Securities

Equity securities totaled $61.0 million and $48.7 million at June 30, 2023 and December 31, 2022, respectively. See Note 6 for further details on equity securities.

Trading Debt Securities

The fair value of trading debt securities totaled $3.4 million and $13.4 million at June 30, 2023 and December 31, 2022, respectively. Net trading gains and losses were included in net gains and losses on securities transactions within non-interest income. We recorded net trading gains of $226 thousand and $628 thousand for the three and six months ended June 30, 2023, respectively. We recorded net trading losses of $387 thousand and $1.4 million for the three and six months ended June 30, 2022, 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, 2023 and December 31, 2022 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	310,936	$	—	$	(28,538)	$	282,398
U.S. government agency securities	26,799		19		(2,626)		24,192
Obligations of states and political subdivisions:
Obligations of states and state agencies	9,425		—		(776)		8,649
Municipal bonds	193,920		—		(31,526)		162,394
Total obligations of states and political subdivisions	203,345		—		(32,302)		171,043
Residential mortgage-backed securities	681,513		20		(86,897)		594,636
Corporate and other debt securities	192,087		—		(27,410)		164,677
Total	$	1,414,680	$	39	$	(177,773)	$	1,236,946
December 31, 2022
U.S. Treasury securities	$	308,137	$	—	$	(28,639)	$	279,498
U.S. government agency securities	29,494		47		(2,577)		26,964
Obligations of states and political subdivisions:
Obligations of states and state agencies	10,899		—		(493)		10,406
Municipal bonds	171,586		—		(35,181)		136,405
Total obligations of states and political subdivisions	182,485		—		(35,674)		146,811
Residential mortgage-backed securities	719,868		64		(90,114)		629,818
Corporate and other debt securities	197,927		—		(19,621)		178,306
Total	$	1,437,911	$	111	$	(176,625)	$	1,261,397

Accrued interest on investments, which is excluded from the amortized cost of available for sale debt securities, totaled $4.9 million and $5.6 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The age of unrealized losses and fair value of the related available for sale debt securities at June 30, 2023 and December 31, 2022 were as follows: 

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	—	$	—	$	282,398	$	(28,538)	$	282,398	$	(28,538)
U.S. government agency securities	—		—		22,818		(2,626)		22,818		(2,626)
Obligations of states and political subdivisions:
Obligations of states and state agencies	1,223		(20)		7,426		(756)		8,649		(776)
Municipal bonds	1,405		(20)		137,180		(31,506)		138,585		(31,526)
Total obligations of states and political subdivisions	2,628		(40)		144,606		(32,262)		147,234		(32,302)
Residential mortgage-backed securities	30,949		(1,919)		562,383		(84,978)		593,332		(86,897)
Corporate and other debt securities	44,404		(7,239)		120,273		(20,171)		164,677		(27,410)
Total	$	77,981	$	(9,198)	$	1,132,478	$	(168,575)	$	1,210,459	$	(177,773)
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 bonds	112,029		(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)

Within the available for sale debt securities portfolio, the total number of security positions in an unrealized loss position was 725 and 730 at June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, 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 $847.1 million.

The contractual maturities of available for sale debt securities at June 30, 2023 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, 2023
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	2,350	$	2,322
Due after one year through five years	282,534		265,870
Due after five years through ten years	175,056		148,811
Due after ten years	273,227		225,307
Residential mortgage-backed securities	681,513		594,636
Total	$	1,414,680	$	1,236,946

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 7.68 years at June 30, 2023.

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 changes in market interest rates, unpredictable nature of the U.S. economy 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. Based on a comparison of the present value of expected cash flows to the amortized cost, Valley recognized a credit related impairment of one corporate bond issued by Signature Bank resulting in a provision for credit losses and full charge-off of the bond totaling $5.0 million during the three months ended March 31, 2023. Valley also evaluated available for sale debt securities that are in an unrealized loss position as of June 30, 2023 included in the table 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. There was no impairment recognized during the three months ended June 30, 2023 and the three and six months ended June 30, 2022.

The following table details the activity in the allowance for credit losses for the six months ended June 30, 2023.

		Six Months Ended June 30, 2023
	(in thousands)
Beginning balance		$	—
Provision for credit losses		5,000
Charge-offs		(5,000)
Ending balance		$	—

Valley does not intend to sell any of its available for sale debt securities in an unrealized loss position prior to recovery of their amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery of their amortized cost basis. None of the available for sale debt securities were past due as of June 30, 2023 and there was no allowance for credit losses for available for sale debt securities at June 30, 2023, December 31, 2022 and June 30, 2022.

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, 2023 and December 31, 2022 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses		Net Carrying Value
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	66,579	$	—	$	(904)	$	65,675	$	—	$	66,579
U.S. government agency securities	261,197		—		(46,158)		215,039		—		261,197
Obligations of states and political subdivisions:
Obligations of states and state agencies	88,561		91		(5,112)		83,540		409		88,152
Municipal bonds	376,554		27		(21,130)		355,451		57		376,497
Total obligations of states and political subdivisions	465,115		118		(26,242)		438,991		466		464,649
Residential mortgage-backed securities	2,861,227		906		(400,614)		2,461,519		—		2,861,227
Trust preferred securities	37,052		1		(7,709)		29,344		559		36,493
Corporate and other debt securities	75,668		—		(7,288)		68,380		326		75,342
Total	$	3,766,838	$	1,025	$	(488,915)	$	3,278,948	$	1,351	$	3,765,487
December 31, 2022
U.S. Treasury securities	$	66,911	$	—	$	(1,022)	$	65,889	$	—	$	66,911
U.S. government agency securities	260,392		—		(47,680)		212,712		—		260,392
Obligations of states and political subdivisions:
Obligations of states and state agencies	99,238		305		(3,869)		95,674		252		98,986
Municipal bonds	381,060		76		(23,615)		357,521		41		381,019
Total obligations of states and political subdivisions	480,298		381		(27,484)		453,195		293		480,005
Residential mortgage-backed securities	2,909,106		1,723		(415,032)		2,495,797		—		2,909,106
Trust preferred securities	37,043		1		(5,938)		31,106		888		36,155
Corporate and other debt securities	75,234		—		(4,463)		70,771		465		74,769
Total	$	3,828,984	$	2,105	$	(501,619)	$	3,329,470	$	1,646	$	3,827,338

Accrued interest on investments, which is excluded from the amortized cost of held to maturity debt securities, totaled $13.6 million and $13.5 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition. Held to maturity debt securities are carried net of an allowance for credit losses.

The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2023 and December 31, 2022 were as follows: 

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	30,998	$	(598)	$	34,677	$	(306)	$	65,675	$	(904)
U.S. government agency securities	—		—		213,885		(46,158)		213,885		(46,158)
Obligations of states and political subdivisions:
Obligations of states and state agencies	25,298		(623)		44,869		(4,489)		70,167		(5,112)
Municipal bonds	84,224		(1,437)		200,924		(19,693)		285,148		(21,130)
Total obligations of states and political subdivisions	109,522		(2,060)		245,793		(24,182)		355,315		(26,242)
Residential mortgage-backed securities	182,290		(6,756)		2,107,464		(393,858)		2,289,754		(400,614)
Trust preferred securities	—		—		28,343		(7,709)		28,343		(7,709)
Corporate and other debt securities	18,056		(1,194)		50,324		(6,094)		68,380		(7,288)
Total	$	340,866	$	(10,608)	$	2,680,486	$	(478,307)	$	3,021,352	$	(488,915)
December 31, 2022
U.S. Treasury securities	$	65,889	$	(1,022)	$	—	$	—	$	65,889	$	(1,022)
U.S. government agency securities	209,863		(47,508)		1,673		(172)		211,536		(47,680)
Obligations of states and political subdivisions:
Obligations of states and state agencies	62,443		(2,020)		18,231		(1,849)		80,674		(3,869)
Municipal bonds	251,970		(20,457)		15,534		(3,158)		267,504		(23,615)
Total obligations of states and political subdivisions	314,413		(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 securities	57,245		(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)

Within the held to maturity portfolio, the total number of security positions in an unrealized loss position was 811 and 802 at June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023, 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 $2.4 billion.

The contractual maturities of investments in debt securities held to maturity at June 30, 2023 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, 2023
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	68,033	$	67,619
Due after one year through five years	126,908		123,033
Due after five years through ten years	95,472		87,948
Due after ten years	615,198		538,829
Residential mortgage-backed securities	2,861,227		2,461,519
Total	$	3,766,838	$	3,278,948

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 10.05 years at June 30, 2023.

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, 2023 and December 31, 2022.

	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	66,579	$	—	$	—	$	—	$	66,579
U.S. government agency securities	261,197		—		—		—		261,197
Obligations of states and political subdivisions:
Obligations of states and state agencies	65,768		—		5,416		17,377		88,561
Municipal bonds	321,860		—		—		54,694		376,554
Total obligations of states and political subdivisions	387,628		—		5,416		72,071		465,115
Residential mortgage-backed securities	2,861,227		—		—		—		2,861,227
Trust preferred securities	—		—		—		37,052		37,052
Corporate and other debt securities	—		6,000		—		69,668		75,668
Total	$	3,576,631	$	6,000	$	5,416	$	178,791	$	3,766,838
December 31, 2022
U.S. Treasury securities	$	66,911	$	—	$	—	$	—	$	66,911
U.S. government agency securities	260,392		—		—		—		260,392
Obligations of states and political subdivisions:
Obligations of states and state agencies	74,943		—		5,497		18,798		99,238
Municipal bonds	333,488		—		—		47,572		381,060
Total obligations of states and political subdivisions	408,431		—		5,497		66,370		480,298
Residential mortgage-backed securities	2,909,106		—		—		—		2,909,106
Trust preferred securities	—		—		—		37,043		37,043
Corporate and other debt securities	2,000		6,000		—		67,234		75,234
Total	$	3,646,840	$	6,000	$	5,497	$	170,647	$	3,828,984

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At June 30, 2023, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the "non-rated" category included tax exempt mortgage securities (TEMS) secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities, issued by bank holding companies. Corporate and other debt securities in the non-rated category mostly consist of high quality foreign issued bonds.

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 TEMS collateralized municipal bonds.

The following table details the activity in the allowance for credit losses for the three and six months ended June 30, 2023 and 2022: 

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(in thousands)
Beginning balance	$	1,633	$	1,222	$	1,646	$	1,165
(Credit) provision for credit losses	(282)		286		(295)		343
Ending balance	$	1,351	$	1,508	$	1,351	$	1,508

There were no sales of available for sale and held to maturity debt securities during the three and six months ended June 30, 2023 and 2022, respectively.

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Loans and Allowance for Credit Losses for Loans

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Loans and Allowance for Credit Losses for Loans

Loans and Allowance for Credit Losses for Loans

The detail of the loan portfolio as of June 30, 2023 and December 31, 2022 was as follows: 

	June 30, 2023		December 31, 2022
	(in thousands)
Loans:
Commercial and industrial	$	9,287,309	$	8,804,830
Commercial real estate:
Commercial real estate	27,793,072		25,732,033
Construction	3,815,761		3,700,835
Total commercial real estate loans	31,608,833		29,432,868
Residential mortgage	5,560,356		5,364,550
Consumer:
Home equity	535,493		503,884
Automobile	1,632,875		1,746,225
Other consumer	1,252,382		1,064,843
Total consumer loans	3,420,750		3,314,952
Total loans	$	49,877,248	$	46,917,200

Total loans include net unearned discounts and deferred loan fees of $119.1 million and $120.5 million at June 30, 2023 and December 31, 2022, respectively.

Accrued interest on loans, which is excluded from the amortized cost of loans held for investment, totaled $202.1 million and $175.9 million at June 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

During the three months ended June 30, 2023, Valley transferred a non-performing construction loan totaling $10.0 million, net of $4.2 million charge-offs from the held for investment loan portfolio to loans held for sale. See Note 6 for further details. There were no sales of loans from the held for investment portfolio during the three and six months ended June 30, 2023 and 2022.

Credit Risk Management

For all of its loan types, Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board of Directors annually. Credit authority relating to a

significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee. A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification, concentrations of credit, loan delinquencies, non-performing, and potential problem loans. Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances. Additionally, Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes. See Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for further details.

Credit Quality

The following table presents past due, current and non-accrual loans without an allowance for loan losses by loan portfolio class at June 30, 2023 and December 31, 2022:

	Past Due and Non-Accrual Loans
	30-59  Days  Past Due Loans		60-89  Days  Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Loan Losses
	(in thousands)
June 30, 2023
Commercial and industrial	$	6,229	$	7,468	$	6,599	$	84,449	$	104,745	$	9,182,564	$	9,287,309	$	8,221
Commercial real estate:
Commercial real estate	3,612		—		2,242		82,712		88,566		27,704,506		27,793,072		76,438
Construction	—		—		3,990		63,043		67,033		3,748,728		3,815,761		15,476
Total commercial real estate loans	3,612		—		6,232		145,755		155,599		31,453,234		31,608,833		91,914
Residential mortgage	15,565		1,348		1,165		20,819		38,897		5,521,459		5,560,356		16,151
Consumer loans:
Home equity	959		46		—		2,737		3,742		531,751		535,493		—
Automobile	5,963		568		332		248		7,111		1,625,764		1,632,875		—
Other consumer	1,509		3,512		674		83		5,778		1,246,604		1,252,382		—
Total consumer loans	8,431		4,126		1,006		3,068		16,631		3,404,119		3,420,750		—
Total	$	33,837	$	12,942	$	15,002	$	254,091	$	315,872	$	49,561,376	$	49,877,248	$	116,286

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89  Days Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Loan Losses
	(in thousands)
December 31, 2022
Commercial and industrial	$	11,664	$	12,705	$	18,392	$	98,881	$	141,642	$	8,663,188	$	8,804,830	$	5,659
Commercial real estate:
Commercial real estate	6,638		3,167		2,292		68,316		80,413		25,651,620		25,732,033		66,066
Construction	—		—		3,990		74,230		78,220		3,622,615		3,700,835		16,120
Total commercial real estate loans	6,638		3,167		6,282		142,546		158,633		29,274,235		29,432,868		82,186
Residential mortgage	16,146		3,315		1,866		25,160		46,487		5,318,063		5,364,550		14,224
Consumer loans:
Home equity	955		254		—		2,810		4,019		499,865		503,884		117
Automobile	5,974		630		1		271		6,876		1,739,349		1,746,225		—
Other consumer	2,158		695		46		93		2,992		1,061,851		1,064,843		—
Total consumer loans	9,087		1,579		47		3,174		13,887		3,301,065		3,314,952		117
Total	$	43,535	$	20,766	$	26,587	$	269,761	$	360,649	$	46,556,551	$	46,917,200	$	102,186

Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans within commercial and industrial, commercial real estate, and construction loan portfolio classes. Under Valley’s internal risk rating system, loan relationships could be classified as "Pass," "Special Mention," "Substandard," "Doubtful," and "Loss." Substandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable. Loans classified as Loss are those considered uncollectible with insignificant value and are charged-off immediately to the allowance for loan losses, and, therefore, not presented in the table below. Loans that do not currently pose a sufficient risk to warrant classification in one of the aforementioned categories but pose weaknesses that deserve management’s close attention are deemed Special Mention. Pass rated loans do not currently pose any identified risk and can range from the highest to average quality, depending on the degree of potential risk. Risk ratings are updated any time the situation warrants.

The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

	Term Loans
	Amortized Cost Basis by Origination Year
June 30, 2023	2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	978,383	$	1,233,039	$	987,984	$	490,159	$	267,719	$	565,910	$	4,420,712	$	306	$	8,944,212
Special Mention	16,582		43,260		3,257		19,948		4,125		7,005		131,677		1,488		227,342
Substandard	6,056		754		3,288		1,706		1,703		2,819		25,681		—		42,007
Doubtful	1,500		669		2,768		—		2,674		63,427		2,710		—		73,748
Total commercial and industrial	$	1,002,521	$	1,277,722	$	997,297	$	511,813	$	276,221	$	639,161	$	4,580,780	$	1,794	$	9,287,309
Commercial real estate
Risk Rating:
Pass	$	3,006,116	$	6,675,372	$	4,997,069	$	3,073,019	$	2,453,918	$	6,040,604	$	542,644	$	3,310	$	26,792,052
Special Mention	86,078		52,939		51,208		111,268		100,524		205,971		6,621		—		614,609
Substandard	10,972		30,664		35,577		27,280		36,320		237,578		7,830		—		386,221
Doubtful	—		—		—		190		—		—		—		—		190
Total commercial real estate	$	3,103,166	$	6,758,975	$	5,083,854	$	3,211,757	$	2,590,762	$	6,484,153	$	557,095	$	3,310	$	27,793,072
Construction
Risk Rating:
Pass	$	390,550	$	702,031	$	342,403	$	32,129	$	18,878	$	20,230	$	2,251,552	$	—	$	3,757,773
Substandard	8,538		12,969		7,427		—		955		17,668		3,501		—		51,058
Doubtful	—		6,930		—		—		—		—		—		—		6,930
Total construction	$	399,088	$	721,930	$	349,830	$	32,129	$	19,833	$	37,898	$	2,255,053	$	—	$	3,815,761
Gross loan charge-offs	$	—	$	7,288	$	24,658	$	6,479	$	908	$	2,524	$	26	$	—	$	41,883

	Term Loans
	Amortized Cost Basis by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	1,600,747	$	1,089,386	$	590,406	$	322,564	$	250,031	$	386,085	$	4,307,163	$	144	$	8,546,526
Special Mention	31,557		3,367		19,492		4,732		4,369		3,558		51,021		7		118,103
Substandard	288		1,734		4,121		1,412		4,256		4,879		31,698		—		48,388
Doubtful	886		20,844		—		2,692		—		64,158		3,233		—		91,813
Total commercial and industrial	$	1,633,478	$	1,115,331	$	614,019	$	331,400	$	258,656	$	458,680	$	4,393,115	$	151	$	8,804,830
Commercial real estate
Risk Rating:
Pass	$	6,815,115	$	5,168,127	$	3,246,885	$	2,672,223	$	1,536,327	$	5,027,128	$	452,461	$	3,504	$	24,921,770
Special Mention	93,286		48,007		60,169		45,447		62,111		125,414		8,188		—		442,622
Substandard	15,088		34,475		32,630		34,622		59,337		183,341		7,986		—		367,479
Doubtful	—		—		—		—		—		162		—		—		162
Total commercial real estate	$	6,923,489	$	5,250,609	$	3,339,684	$	2,752,292	$	1,657,775	$	5,336,045	$	468,635	$	3,504	$	25,732,033
Construction
Risk Rating:
Pass	$	942,380	$	512,046	$	61,131	$	22,845	$	8,676	$	20,599	$	2,040,866	$	—	$	3,608,543
Special Mention	—		—		—		—		—		—		14,268		—		14,268
Substandard	12,969		12,601		—		974		—		17,599		20,138		—		64,281
Doubtful	—		—		—		—		—		13,743		—		—		13,743
Total construction	$	955,349	$	524,647	$	61,131	$	23,819	$	8,676	$	51,941	$	2,075,272	$	—	$	3,700,835

For residential mortgages, automobile, home equity and other consumer loan portfolio classes, Valley also evaluates credit quality based on the aging status of the loan and by payment activity. The following table presents the amortized cost in those loan classes based on payment activity, by origination year as of June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

	Term Loans
	Amortized Cost Basis by Origination Year
June 30, 2023	2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	369,607	$	1,304,327	$	1,524,988	$	562,263	$	455,463	$	1,263,659	$	73,983	$	—	$	5,554,290
90 days or more past due	—		178		—		—		797		5,091		—		—		6,066
Total residential mortgage	$	369,607	$	1,304,505	$	1,524,988	$	562,263	$	456,260	$	1,268,750	$	73,983	$	—	$	5,560,356
Consumer loans
Home equity
Performing	$	19,442	$	45,601	$	11,873	$	4,326	$	4,660	$	17,396	$	392,898	$	38,391	$	534,587
90 days or more past due	—		—		—		—		—		—		263		643		906
Total home equity	19,442		45,601		11,873		4,326		4,660		17,396		393,161		39,034		535,493
Automobile
Performing	205,170		633,269		437,528		161,245		123,616		71,682		—		—		1,632,510
90 days or more past due	47		105		73		—		9		131		—		—		365
Total automobile	205,217		633,374		437,601		161,245		123,625		71,813		—		—		1,632,875
Other consumer
Performing	17,973		20,979		(1,549)		3,729		8,720		12,707		1,189,191		—		1,251,750
90 days or more past due	—		—		—		—		—		38		594		—		632
Total other consumer	17,973		20,979		(1,549)		3,729		8,720		12,745		1,189,785		—		1,252,382
Total consumer	$	242,632	$	699,954	$	447,925	$	169,300	$	137,005	$	101,954	$	1,582,946	$	39,034	$	3,420,750
Gross loan charge-offs	$	11	$	226	$	206	$	90	$	428	$	953	$	103	$	—	$	2,017

	Term Loans
	Amortized Cost Basis by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	1,302,279	$	1,502,622	$	571,390	$	500,197	$	338,062	$	1,073,995	$	66,706	$	—	$	5,355,251
90 days or more past due	—		197		217		1,835		2,876		4,174		—		—		9,299
Total residential mortgage	$	1,302,279	$	1,502,819	$	571,607	$	502,032	$	340,938	$	1,078,169	$	66,706	$	—	$	5,364,550
Consumer loans
Home equity
Performing	$	47,084	$	12,432	$	4,592	$	5,024	$	5,581	$	13,007	$	376,608	$	38,570	$	502,898
90 days or more past due	—		—		—		—		—		—		276		710		986
Total home equity	47,084		12,432		4,592		5,024		5,581		13,007		376,884		39,280		503,884
Automobile
Performing	724,557		525,017		204,578		166,103		80,012		45,415		—		—		1,745,682
90 days or more past due	38		116		36		180		101		72		—		—		543
Total automobile	724,595		525,133		204,614		166,283		80,113		45,487		—		—		1,746,225
Other consumer
Performing	24,140		10,144		8,206		7,435		7,406		15,736		991,737		—		1,064,804
90 days or more past due	—		—		—		—		—		38		1		—		39
Total other consumer	24,140		10,144		8,206		7,435		7,406		15,774		991,738		—		1,064,843
Total consumer	$	795,819	$	547,709	$	217,412	$	178,742	$	93,100	$	74,268	$	1,368,622	$	39,280	$	3,314,952

Loan modifications to borrowers experiencing financial difficulty. From time to time, Valley may extend, restructure, or otherwise modify the terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as well as assist other customers who may be experiencing financial difficulties. Prior to 2023, a loan was classified as a troubled debt restructuring (TDR) if the borrower was experiencing financial difficulties and a concession has been made at the time of such modification.

Effective January 1, 2023, Valley adopted ASU No. 2022-02 which eliminated the accounting guidance for TDR loans while enhancing disclosure requirements for certain loan modifications by creditors when a borrower is experiencing financial difficulty. Valley adopted ASU No. 2022-02 using the modified retrospective transition method. At the date of adoption, Valley was no longer required to utilize a loan-level discounted cash flow approach for determining the allowance for certain modified loans previously classified as TDR loans. As a result, Valley elected to utilize its collective reserve methodology for pools of loans that share common risk characteristic for determining the reserves for the modified loans formerly classified as TDR loans. This change resulted in the recognition of a cumulative-effect adjustment which decreased the allowance for loan losses with an offsetting entry to retained earnings, net of deferred taxes, at January 1, 2023.

The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at June 30, 2023 that were modified during the three and six months ended June 30, 2023, disaggregated by class of financing receivable and type of modification. Each of the types of modifications was less than one percent of their respective loan categories.

	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Term extension		Term extension and interest rate reduction		Total		Term extension		Term extension and interest rate reduction		Total
	($ in thousands)
Commercial and industrial	$	37,762	$	1,482	$	39,244	$	39,033	$	2,003	$	41,036
Commercial real estate	3,512		3,754		7,266		49,617		3,754		53,371
Residential mortgage	578		—		578		790		—		790
Consumer	—		—		—		53		—		53
Total	$	41,852	$	5,236	$	47,088	$	89,493	$	5,757	$	95,250

The following table describes the types of modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023:

	Types of Modifications
Commercial and industrial	12 month term extensions; and one 12 month term extension combined with a reduction in interest rate from 9.38 percent to 6.50 percent
Commercial real estate	6 to 36 month term extensions and one term extension combined with a reduction in interest rate from 8.75 percent to 6.00 percent
Residential mortgage	12 month term extensions
Consumer	60 month term extensions

Valley closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of modification efforts. All loans to borrowers experiencing financial difficulty that have been modified during the three and six months ended June 30, 2023 were current to their contractual payments as of June 30, 2023.

Valley did not extend any commitments to lend additional funds to borrowers experiencing financial difficulty whose loans had been modified during the three and six months ended June 30, 2023.

Troubled debt restructured loans. The following tables present the pre- and post-modification amortized cost of TDR loans by loan class during the three and six months ended June 30, 2022. Post-modification amounts are presented as of June 30, 2022 using the allowance methodology for TDRs prior to the adoption of ASU 2022-02.

	Three Months Ended June 30, 2022
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	49	$	82,120	$	78,051
Commercial real estate	1	8,811		8,735
Residential mortgage	7	4,970		4,969
Consumer	1	125		124
Total	58	$	96,026	$	91,879

		Six Months Ended June 30, 2022
Troubled Debt Restructurings		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial		60	$	91,804	$	87,685
Commercial real estate		3	14,072		13,986
Residential mortgage		8	5,090		5,087
Consumer		1	125		124
Total		72	$	111,091	$	106,882

The total TDRs presented in the above tables had allocated allowance for loan losses of $56.0 million at June 30, 2022. There were $1.5 million in charge-offs related to TDRs for the three and six months ended June 30, 2022. Valley did not extend any commitments to lend additional funds to borrowers whose loans have been modified as TDRs during the three and six months ended June 30, 2022.

Performing TDRs (not reported as non-accrual loans) and non-performing TDRs totaled $67.3 million and $154.4 million as of June 30, 2022.

Loans modified as TDRs within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and six months ended June 30, 2022 were as follows:

	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Construction	2	$	17,599	2	$	17,599
Total	2	$	17,599	2	$	17,599

Loans in process of foreclosure. Other real estate owned (OREO) totaled $824 thousand and $286 thousand at June 30, 2023 and December 31, 2022, respectively. There were no foreclosed residential real estate properties included in OREO at June 30, 2023 and December 31, 2022. Residential mortgage and consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $454 thousand and $2.6 million at June 30, 2023 and December 31, 2022, respectively.

Collateral dependent loans. Loans are collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. When Valley determines that foreclosure is probable, the collateral dependent loan balances are written down to the estimated current fair value (less estimated selling costs) resulting in an immediate charge-off to the allowance, excluding any consideration for personal guarantees that may be pursued in the Bank’s collection process.

The following table presents collateral dependent loans by class as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
Collateral dependent loans:
Commercial and industrial *	$	77,364	$	94,433
Commercial real estate	138,032		130,199
Residential mortgage	16,151		33,865
Home equity	—		195
Total	$	231,547	$	258,692

* Commercial and industrial loans presented in the table above are primarily collateralized by taxi medallions.

Allowance for Credit Losses for Loans

The allowance for credit losses (ACL) for loans consists of the allowance for loan losses and the allowance for unfunded credit commitments. The ACL for loans decreased $24.6 million at June 30, 2023 as compared to December 31, 2022.

The following table summarizes the ACL for loans at June 30, 2023 and December 31, 2022: 

	June 30, 2023		December 31, 2022
	(in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses	$	436,432	$	458,655
Allowance for unfunded credit commitments	22,244		24,600
Total allowance for credit losses for loans	$	458,676	$	483,255

The following table summarizes the provision for credit losses for loans for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	8,159	$	38,310	$	18,138	$	41,568
(Credit) provision for unfunded credit commitments	(1,827)		5,402		(2,356)		5,644
Total provision for credit losses for loans	$	6,332	$	43,712	$	15,782	$	47,212

The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and six months ended June 30, 2023 and 2022: 

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Three Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance	$	127,992	$	243,332	$	41,708	$	23,866	$	436,898
Loans charged-off	(3,865)		(6,273)		(149)		(1,040)		(11,327)
Charged-off loans recovered	2,173		4		135		390		2,702
Net charge-offs	(1,692)		(6,269)		(14)		(650)		(8,625)
Provision for loan losses	1,945		2,632		2,459		1,123		8,159
Ending balance	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Three Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	101,203	$	219,949	$	28,189	$	13,169	$	362,510
Allowance for purchased credit deteriorated (PCD) loans *	33,452		36,618		206		43		70,319
Loans charged-off	(4,540)		—		(1)		(726)		(5,267)
Charged-off loans recovered	1,952		224		74		697		2,947
Net (charge-offs) recoveries	(2,588)		224		73		(29)		(2,320)
Provision for loan losses	12,472		20,436		1,421		3,981		38,310
Ending balance	$	144,539	$	277,227	$	29,889	$	17,164	$	468,819

Six Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance	$	139,941	$	259,408	$	39,020	$	20,286	$	458,655
Impact of the adoption of ASU No. 2022-02	(739)		(589)		(12)		(28)		(1,368)
Beginning balance, adjusted	$	139,202	$	258,819	$	39,008	$	20,258	$	457,287
Loans charged-off	(29,912)		(11,971)		(149)		(1,868)		(43,900)
Charged-off loans recovered	3,572		28		156		1,151		4,907
Net (charge-offs) recoveries	(26,340)		(11,943)		7		(717)		(38,993)
Provision (credit) for loan losses	15,383		(7,181)		5,138		4,798		18,138
Ending balance	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Six Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	103,090	$	217,490	$	25,120	$	13,502	$	359,202
Allowance for PCD loans *	33,452		36,618		206		43		70,319
Loans charged-off	(6,111)		(173)		(27)		(1,551)		(7,862)
Charged-off loans recovered	2,776		331		531		1,954		5,592
Net (charge-offs) recoveries	(3,335)		158		504		403		(2,270)
Provision for loan losses	11,332		22,961		4,059		3,216		41,568
Ending balance	$	144,539	$	277,227	$	29,889	$	17,164	$	468,819

*    Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at June 30, 2023 and December 31, 2022.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2023
Allowance for loan losses:
Individually evaluated for credit losses	$	54,311	$	6,749	$	34	$	—	$	61,094
Collectively evaluated for credit losses	73,934		232,946		44,119		24,339		375,338
Total	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Loans:
Individually evaluated for credit losses	$	77,364	$	138,032	$	16,151	$	—	$	231,547
Collectively evaluated for credit losses	9,209,945		31,470,801		5,544,205		3,420,750		49,645,701
Total	$	9,287,309	$	31,608,833	$	5,560,356	$	3,420,750	$	49,877,248
December 31, 2022
Allowance for loan losses:
Individually evaluated for credit losses	$	68,745	$	13,174	$	337	$	4,338	$	86,594
Collectively evaluated for credit losses	71,196		246,234		38,683		15,948		372,061
Total	$	139,941	$	259,408	$	39,020	$	20,286	$	458,655
Loans:
Individually evaluated for credit losses	$	117,644	$	213,522	$	28,869	$	14,058	$	374,093
Collectively evaluated for credit losses	8,687,186		29,219,346		5,335,681		3,300,894		46,543,107
Total	$	8,804,830	$	29,432,868	$	5,364,550	$	3,314,952	$	46,917,200

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The carrying amounts of goodwill allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis at both June 30, 2023 and December 31, 2022 were as follows:

Business Segment / Reporting Unit *
Wealth Management		Consumer Banking		Commercial Banking		Total
(in thousands)
$	49,767	$	284,873	$	1,534,296	$	1,868,936

*    Valley’s Wealth Management and Insurance Division is comprised of trust, asset management, brokerage, insurance and tax credit advisory services. This reporting unit is included in the Consumer Banking segment for financial reporting purposes.

During the second quarter 2023, Valley performed the annual goodwill impairment test at its normal assessment date. The results of the 2023 annual impairment test resulted in no impairment of goodwill. During the six months ended June 30, 2023, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount. There was no impairment of goodwill recognized during the three and six months ended June 30, 2022.

The following table summarizes other intangible assets as of June 30, 2023 and December 31, 2022: 

	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
	(in thousands)
June 30, 2023
Loan servicing rights	$	120,764	$	(98,453)	$	22,311
Core deposits	215,620		(99,129)		116,491
Other	50,393		(11,249)		39,144
Total other intangible assets	$	386,777	$	(208,831)	$	177,946
December 31, 2022
Loan servicing rights	$	119,943	$	(96,136)	$	23,807
Core deposits	223,670		(92,486)		131,184
Other	51,299		(8,834)		42,465
Total other intangible assets	$	394,912	$	(197,456)	$	197,456

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. There was no net impairment recognized during the three and six months ended June 30, 2023 and 2022.

Core deposits are amortized using an accelerated method over a period of 10.0 years. The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 13.4 years.

Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and six months ended June 30, 2023 and 2022.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2023 through 2027: 

Year	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2023	$	1,579	$	14,054	$	3,201
2024	2,863		24,897		5,951
2025	2,506		21,048		5,380
2026	2,181		17,223		4,805
2027	1,890		13,544		4,205

Valley recognized amortization expense on other intangible assets totaling approximately $9.8 million and $11.4 million for the three months ended June 30, 2023 and 2022, respectively and $20.3 million and $15.8 million for the six months ended June 30, 2023 and 2022, respectively.

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Deposits

6 Months Ended

Jun. 30, 2023

Financial Services, Banking and Thrift [Abstract]

Deposits

Deposits

Included in time deposits are certificates of deposit over $250 thousand totaling $2.0 billion and $1.8 billion at June 30, 2023 and December 31, 2022, respectively. Interest expense on time deposits of $250 thousand or more totaled $5.1 million and $444 thousand for the three months ended June 30, 2023 and 2022, respectively and $7.5 million and $545 thousand for the six months ended June 30, 2023 and 2022, respectively.

The scheduled maturities of time deposits as of June 30, 2023 were as follows: 

Year	Amount
	(in thousands)
2023	8,020,778
2024	6,574,934
2025	70,994
2026	160,144
2027	41,691
Thereafter	39,641
Total time deposits	$	14,908,182

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Borrowed Funds

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Borrowed Funds

Borrowed Funds

Short-Term Borrowings

Short-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances	$	1,000,000	$	24,035
Securities sold under agreements to repurchase	88,899		114,694
Total short-term borrowings	$	1,088,899	$	138,729

The weighted average interest rate for short-term FHLB advances was 5.30 percent and 1.60 percent at June 30, 2023 and December 31, 2022, respectively.

Long-Term Borrowings

Long-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances, net (1)	$	1,688,311	$	788,419
Subordinated debt, net (2)	755,222		754,639
Total long-term borrowings	$	2,443,533	$	1,543,058

(1)	FHLB advances are presented net of unamortized premiums totaling $311 thousand and $419 thousand at June 30, 2023 and December 31, 2022, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $6.0 million and $6.9 million at June 30, 2023 and December 31, 2022, respectively.

FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 3.75 percent and 1.88 percent at June 30, 2023 and December 31, 2022, respectively. 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 June 30, 2023 are scheduled for contractual balance repayments as follows:

Year	Amount
	(in thousands)
2024	$	165,000
2025	273,000
2026	350,000
2027	675,000
Thereafter	225,000
Total long-term FHLB advances	$	1,688,000

There are no FHLB advances reported in the table above, which are callable for early redemption by the FHLB during the next 12 months.

Subordinated debt. There were no new issuances of the subordinated debt during the six months ended June 30, 2023. See Note 10 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for details on the outstanding subordinated debt.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock–Based Compensation

On April 25, 2023, Valley's shareholders approved the Valley National Bancorp 2023 Incentive Compensation Plan (the 2023 Plan). The purpose of the 2023 Plan is to provide additional long-term incentives to employees, directors and officers whose contributions are essential to the continued growth and success of Valley. Upon shareholder approval of the 2023 Plan, Valley ceased granting awards under the Valley National Bancorp 2021 Incentive Compensation Plan (the 2021 Plan). Under the 2023 Plan, Valley may issue awards to its officers, employees and non-employee directors in amounts up to 14.5 million shares of common stock, less one share for every share granted after December 31, 2022 under the 2021 Plan.

Restricted stock units are awarded as performance-based RSUs and time-based RSUs. The performance-based RSU awards are granted to certain officers and include RSUs with vesting conditions based upon certain levels of growth in Valley's tangible book value per share, plus dividends; and RSUs, with vesting conditions based upon Valley's total shareholder return as compared to its peer group.

The table below summarizes RSU awards granted and average grant date fair values for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except per share data)
Award shares granted:
Performance-based RSUs	—		52		723		619
Time-based RSUs	178		937		1,731		2,104
Average grant date fair value per share:
Performance-based RSUs	$	—	$	13.60	$	12.80	$	14.72
Time-based RSUs	$	8.35	$	12.85	$	11.55	$	13.51

Stock award fair values are expensed over the shorter of the vesting or required service period. Valley recorded total stock-based compensation expense of $8.7 million and $6.2 million for the three months ended June 30, 2023

and 2022, respectively and $16.8 million and $13.4 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, the unrecognized amortization expense for all stock-based employee compensation totaled approximately $49.4 million. This expense will be recognized over an average remaining vesting period of approximately 2.0 years. See Note 12 in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022 for details on the stock-based compensation awards.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Valley enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest and currency rates.

Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, Valley uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively.

During the second quarter 2023, Valley terminated six interest rate swaps with a total notional amount of $600 million. The terminated swaps, originally maturing between November 2024 to November 2026, were used to hedge the changes in cash flows associated with certain variable rate loans. The transaction resulted in a pre-tax gain totaling $3.6 million reported in accumulated other comprehensive loss within shareholders' equity that will be amortized to interest income over the life of the previously hedged loans.

Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of fixed-rate subordinated debt due to changes in interest rates. Valley uses interest rate swaps to manage its exposure to changes in fair value on fixed rate debt instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the receipt of variable rate payments from a counterparty in exchange for Valley making fixed rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives that are designated and qualify as fair value hedges, the gain or loss on the derivative as well as the loss or gain on the hedged item attributable to the hedged risk are recognized in earnings.

Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate movements or to provide a service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes. Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that Valley executes with a third party, such that Valley minimizes its net risk exposure resulting from such transactions. As these interest rate swaps do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.

Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the participation type. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not speculative and are not used to manage interest rate risk in assets or liabilities. Changes in the fair value in credit derivatives are recognized directly in earnings. At June 30, 2023, Valley had 36 credit swaps with an aggregate notional amount of $492.8 million related to risk participation agreements. 

At June 30, 2023, Valley had two “steepener” swaps, each with a current notional amount of $10.4 million where the receive rate on the swap mirrors the pay rate on the brokered deposits and the rates paid on these types of hybrid instruments are based on a formula derived from the spread between the long and short ends of the constant maturity swap (CMS) rate curve. Although these types of instruments do not meet the hedge accounting requirements, the change in fair value of both the bifurcated derivative and the stand alone swap tend to move in

opposite directions with changes in the three-month LIBOR rate (modified to the three-month Term SOFR rate effective July 1, 2023) and, therefore, provide an effective economic hedge.

Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary market and forward commitments for the future delivery of such loans. Valley enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rate on Valley's commitments to fund the loans as well as on its portfolio of mortgage loans held for sale.

Valley enters into foreign currency forward and option contracts, primarily to accommodate our customers, that are not designated as hedging instruments. Upon the origination of a certain foreign currency denominated transactions (including foreign currency holdings and non-U.S. dollar denominated loans) with a client, we enter into a respective hedging contract with a third party financial institution to mitigate the economic impact of foreign currency exchange rate fluctuation.

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows: 

	June 30, 2023						December 31, 2022
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps	$	—	$	—	$	—	$	3,971	$	4	$	600,000
Fair value hedge interest rate swaps	—		28,992		300,000		—		29,794		300,000
Total derivatives designated as hedging instruments	$	—	$	28,992	$	300,000	$	3,971	$	29,798	$	900,000
Derivatives not designated as hedging instruments:
Interest rate swaps and other contracts*	$	548,592	$	548,217	$	15,837,195	$	449,280	$	564,678	$	14,753,330
Foreign currency derivatives	22,635		21,710		1,331,575		13,709		12,604		1,273,735
Mortgage banking derivatives	393		307		105,948		167		157		31,299
Total derivatives not designated as hedging instruments	$	571,620	$	570,234	$	17,274,718	$	463,156	$	577,439	$	16,058,364

* Other derivative contracts include risk participation agreements.

During the second quarter 2023, certain cash flow hedges and other non-designated derivative hedging instruments previously cleared through the Chicago Mercantile Exchange and London Clearing House were no longer subject to the variation margin netting under the single-unit of account. At December 31, 2022, fair value of these non-designated derivative instruments were reported net of variation margin as settlements using a single-unit of account.

Gains (losses) included in the consolidated statements of income and other comprehensive loss, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Amount of (loss) gain reclassified from accumulated other comprehensive loss to interest income and expense	$	(725)	$	116	$	(1,256)	$	(426)
Amount of (loss) gain recognized in other comprehensive loss	(4,991)		121		(1,093)		441

The accumulated after-tax gains related to effective cash flow hedges included in accumulated other comprehensive loss were $2.4 million and $2.2 million at June 30, 2023 and December 31, 2022, respectively.

Amounts reported in accumulated other comprehensive loss related to cash flow interest rate derivatives are reclassified to interest income and expense as interest payments are received and paid on the hedged variable interest rate assets and liabilities. Valley estimates that $1.2 million and $238 thousand (before tax) will be reclassified as an increase to interest income and a decrease to interest expense, respectively, over the next 12 months.

(Losses) gains included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Derivative - interest rate swap:
Interest expense	$	(3,790)	$	76	$	902	$	606
Hedged item - subordinated debt
Interest expense	$	3,952	$	(147)	$	(820)	$	(477)

The changes in the fair value of the hedged item designated as a qualifying hedge are captured as an adjustment to the carrying amount of the hedged item (basis adjustment). The following table presents the hedged item related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged item at June 30, 2023 and December 31, 2022, respectively.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included	Net Carrying Amount of the Hedged Liability *		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
	(in thousands)
June 30, 2023
Long-term borrowings	$	268,300	$	(29,312)
December 31, 2022
Long-term borrowings	$	267,076	$	(30,132)

*    Net carrying amount includes unamortized debt issuance costs of $2.4 million and $2.8 million at June 30, 2023 and December 31, 2022, respectively.

The net (gains) losses included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$	(368)	$	1,143	$	(160)	$	(1,654)

Capital markets income reported in non-interest income included fee income related to non-designated hedge derivative interest rate swaps executed with commercial loan customers and foreign exchange contracts (not designated as hedging instruments) with a combined total of $14.1 million and $13.2 million for the three months ended June 30, 2023 and 2022, respectively and $24.0 million and $27.6 million for the six months ended June 30, 2023 and 2022, respectively.

Collateral Requirements and Credit Risk Related Contingent Features. By using derivatives, Valley is exposed to credit risk if counterparties to the derivative contracts do not perform as expected. Management attempts to minimize counterparty credit risk through credit approvals, limits, monitoring procedures and obtaining collateral where appropriate. Credit risk exposure associated with derivative contracts is managed at Valley in conjunction with Valley’s consolidated counterparty risk management process. Valley’s counterparties and the risk limits monitored by management are periodically reviewed and approved by the Board of Directors.

Valley has agreements with its derivative counterparties providing that if Valley defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be declared in default on its derivative counterparty agreements. Additionally, Valley has an agreement with several of its derivative counterparties that contains provisions that require Valley’s debt to maintain an investment grade credit rating from each of the major credit rating agencies from which it receives a credit rating. If Valley’s credit rating is reduced below investment grade, or such rating is withdrawn or suspended, then the counterparties could terminate the derivative positions and Valley would be required to settle its obligations under the agreements. As of June 30, 2023, Valley was in compliance with all of the provisions of its derivative counterparty agreements. The aggregate fair value of all derivative financial instruments with credit risk-related contingent features in a net liability position at June 30, 2023 was not material. Valley has derivative counterparty agreements that require minimum collateral posting thresholds for certain counterparties.

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Balance Sheet Offsetting

6 Months Ended

Jun. 30, 2023

Offsetting [Abstract]

Balance Sheet Offsetting

Balance Sheet Offsetting

Certain financial instruments, including certain over-the-counter (OTC) derivatives (mostly interest rate swaps) and repurchase agreements (accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition and/or subject to master netting arrangements or similar agreements. OTC derivatives include interest rate swaps executed and settled bilaterally with counterparties without the use of an organized exchange or central clearing house (presented in the table below). The credit risk associated with bilateral OTC derivatives is managed through obtaining collateral and enforceable master netting agreements.

Valley is party to master netting arrangements with its financial institution counterparties; however, Valley does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral, usually in the form of cash or marketable investment securities, is posted by the counterparty with net liability positions in accordance with contract thresholds. Master repurchase agreements which include “right of set-off” provisions generally have a legally enforceable right to offset recognized amounts. In such cases, the collateral would be used to settle the fair value of the swap or repurchase agreement should Valley be in default. The total amount of collateral held or pledged cannot exceed the net derivative fair values with the counterparty.

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of June 30, 2023 and December 31, 2022.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral *		Net Amount
	(in thousands)
June 30, 2023
Assets
Interest rate swaps	$	548,592	$	—	$	548,592	$	9,929	$	(468,200)	$	90,321
Liabilities
Interest rate swaps	$	577,209	$	—	$	577,209	$	(9,929)	$	—	$	567,280
December 31, 2022
Assets
Interest rate swaps	$	453,251	$	—	$	453,251	$	12,766	$	(342,480)	$	123,537
Liabilities
Interest rate swaps	$	594,476	$	—	$	594,476	$	(12,766)	$	(432)	$	581,278

*    Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contacts in an asset/liability position.

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Tax Credit Investments

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Tax Credit Investments

Tax Credit Investments

Valley’s tax credit investments are primarily related to investments promoting qualified affordable housing projects, and other investments related to community development and renewable energy sources. Some of these tax-advantaged investments support Valley’s regulatory compliance with the Community Reinvestment Act. Valley’s investments in these entities generate a return primarily through the realization of federal income tax credits, and other tax benefits, such as tax deductions from operating losses of the investments, over specified time periods. These tax credits and deductions are recognized as a reduction of income tax expense.

Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s unfunded capital and other commitments related to the tax credit investments are carried in accrued expenses and other liabilities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments, including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of accounting. After initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee, dividends received and impairments, if applicable.

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	21,427	$	24,198
Other tax credit investments, net	80,145		56,551
Total tax credit investments, net	$	101,572	$	80,749
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	1,327	$	1,338
Total unfunded tax credit commitments	$	1,327	$	1,338

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and six months ended June 30, 2023 and 2022: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,460	$	1,614	$	2,919	$	2,358
Other tax credit investment credits and tax benefits	3,430		2,539		6,651		5,090
Total reduction in income tax expense	$	4,890	$	4,153	$	9,570	$	7,448
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	938	$	653	$	1,875	$	1,068
Affordable housing tax credit investment impairment losses	448		363		896		625
Other tax credit investment losses	719		386		725		695
Other tax credit investment impairment losses	2,913		1,791		5,775		3,701
Total amortization of tax credit investments recorded in non-interest expense	$	5,018	$	3,193	$	9,271	$	6,089

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Operating Segments

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Operating Segments

Operating Segments

Valley manages its business operations under reportable segments consisting of Consumer Banking, Commercial Banking and Treasury and Corporate Other. Each operating segment is reviewed routinely for its asset growth, contribution to income before income taxes and return on average interest earning assets and impairment (if events or circumstances indicate a possible inability to realize the carrying amount). Valley regularly assesses its strategic plans, operations and reporting structures to identify its reportable segments and no changes to the reportable segments were determined necessary during the first half of 2023.

Consumer Banking is mainly comprised of residential mortgages and automobile loans, and to a lesser extent, secured personal lines of credit, home equity loans and other consumer loans. The duration of the residential mortgage loan portfolio is subject to movements in the market level of interest rates and forecasted prepayment speeds. The average weighted life of the automobile loans within the portfolio is relatively unaffected by movements in the market level of interest rates. However, the average life may be impacted by new loans as a result of the availability of credit within the automobile marketplace and consumer demand for purchasing new or used automobiles. Consumer Banking also includes the Wealth Management and Insurance Services Division, comprised of trust, asset management, brokerage, insurance and tax credit advisory services.

Commercial Banking is comprised of floating rate and adjustable rate commercial and industrial loans and construction loans, as well as fixed rate owner occupied and commercial real estate loans. Due to the portfolio’s interest rate characteristics, Commercial Banking is Valley’s operating segment that is most sensitive to movements in market interest rates.

Treasury and Corporate Other largely consists of the Treasury managed held to maturity debt securities and available for sale debt securities portfolios mainly utilized in the liquidity management needs of our lending segments and income and expense items resulting from support functions not directly attributable to a specific segment. Interest income is generated through investments in various types of securities (mainly comprised of fixed rate securities) and interest-bearing deposits with other banks (primarily the Federal Reserve Bank of New York). Expenses related to the branch network, all other components of retail banking, along with the back office departments of the Bank are allocated from Treasury and Corporate Other to the Consumer and Commercial Banking segments. Interest expense and internal transfer expense (for general corporate expenses) are allocated to each operating segment utilizing a transfer pricing methodology, which involves the allocation of operating and

funding costs based on each segment's respective mix of average interest earning assets and or liabilities outstanding for the period.

The accounting for each segment includes internal accounting policies designed to measure consistent and reasonable financial reporting and may result in income and expense measurements that differ from amounts under U.S. GAAP. The financial reporting for each segment contains allocations and reporting in line with Valley’s operations, which may not necessarily be comparable to any other financial institution. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

The following tables represent the financial data for Valley’s operating segments for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,904,483		$	40,553,454		$	7,893,871		$	57,351,808
Interest income	$	90,602		$	624,569		$	72,288		$	787,459
Interest expense	55,198			250,871			61,625			367,694
Net interest income	35,404			373,698			10,663			419,765
Provision (credit) for credit losses	3,492			2,840			(282)			6,050
Net interest income after provision for credit losses	31,912			370,858			10,945			413,715
Non-interest income	25,529			14,361			20,185			60,075
Non-interest expense	23,223			35,365			224,383			282,971
Internal transfer expense (income)	22,018			102,395			(124,413)			—
Income (loss) before income taxes	$	12,200		$	247,459		$	(68,840)		$	190,819
Return on average interest earning assets (pre-tax)	0.55		%	2.44		%	(3.49)		%	1.33		%

	Three Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,967,305		$	34,549,982		$	6,373,943		$	48,891,230
Interest income	$	63,137		$	352,440		$	37,370		$	452,947
Interest expense	4,723			19,735			10,329			34,787
Net interest income	58,414			332,705			27,041			418,160
Provision for credit losses	5,402			38,310			286			43,998
Net interest income after provision for credit losses	53,012			294,395			26,755			374,162
Non-interest income	17,086			14,425			27,022			58,533
Non-interest expense	18,791			24,448			256,491			299,730
Internal transfer expense (income)	37,629			157,365			(194,994)			—
Income (loss) before income taxes	$	13,678		$	127,007		$	(7,720)		$	132,965
Return on average interest earning assets (pre-tax)	0.69		%	1.47		%	(0.48)		%	1.09		%

	Six Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,836,859		$	39,826,630		$	7,699,305		$	56,362,794
Interest income	$	175,918		$	1,194,479		$	137,292		$	1,507,689
Interest expense	98,204			442,594			111,106			651,904
Net interest income	77,714			751,885			26,186			855,785
Provision for credit losses	9,936			5,846			4,705			20,487
Net interest income after provision for credit losses	67,778			746,039			21,481			835,298
Non-interest income	39,819			30,108			44,447			114,374
Non-interest expense	41,472			71,088			442,577			555,137
Internal transfer expense (income)	52,901			233,990			(286,891)			—
Income (loss) before income taxes	$	13,224		$	471,069		$	(89,758)		$	394,535
Return on average interest earning assets (pre-tax)	0.30		%	2.37		%	(2.33)		%	1.40		%

	Six Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,848,764		$	30,743,387		$	6,017,817		$	44,609,968
Interest income	$	122,596		$	610,346		$	60,463		$	793,405
Interest expense	7,930			31,062			18,584			57,576
Net interest income	114,666			579,284			41,879			735,829
Provision for credit losses	7,275			39,937			343			47,555
Net interest income after provision for credit losses	107,391			539,347			41,536			688,274
Non-interest income	30,903			31,305			35,595			97,803
Non-interest expense	35,359			49,533			412,178			497,070
Internal transfer expense (income)	66,276			257,281			(323,557)			—
Income (loss) before income taxes	$	36,659		$	263,838		$	(11,490)		$	289,007
Return on average interest earning assets (pre-tax)	0.93		%	1.72		%	(0.38)		%	1.30		%

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited consolidated financial statements of Valley National Bancorp, a New Jersey Corporation (Valley) include the accounts of Valley National Bank (the Bank) and all other entities in which Valley has a controlling financial interest. All inter-company transactions and balances have been eliminated. The accounting and reporting policies of Valley conform to U.S. generally accepted accounting principles (U.S. GAAP) and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. Certain prior period amounts have been reclassified to conform to the current presentation.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly Valley’s financial position, results of operations, changes in shareholders' equity and cash flows at June 30, 2023 and for all periods presented have been made. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year or any subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP and industry practice have been condensed or omitted pursuant to rules and regulations of the SEC. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Valley’s Annual Report on Form 10-K for the year ended December 31, 2022.

Significant Estimates

Significant Estimates. In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. Material estimates that require application of management’s most difficult, subjective or complex judgment and are particularly susceptible to change include: the allowance for credit losses, the evaluation of goodwill and other intangible assets for impairment and income taxes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed necessary. While management uses its best judgment, actual amounts or results could differ significantly from those estimates. The current economic environment has increased the degree of uncertainty inherent in these material estimates. Actual results may differ from those estimates. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date

New Accounting Guidance Adopted and Not Accounting Guidance Issued

New Accounting Guidance Adopted in 2023

Accounting Standards Update (ASU) No. 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging –Portfolio Layer Method” expands and clarifies the current guidance on accounting for fair value hedge basis adjustments under the portfolio layer method for both single-layer and multiple-layer hedges. This method allows entities to designate multiple hedging relationships with a single closed portfolio, and therefore a larger portion of the interest rate risk associated with such a portfolio is eligible to be hedged. ASU No. 2022-01 also clarifies that no assets may be added to a closed portfolio once it is designated in a portfolio layer method hedge. Valley adopted ASU No. 2022-01 on January 1, 2023 and the guidance did not have a significant impact on Valley's consolidated financial statements.

ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” eliminates the troubled debt restructuring (TDR) accounting model for creditors, such as Valley, that

have adopted Topic 326, “Financial Instruments – Credit Losses.” ASU No. 2022-02 requires all loan modifications to be accounted for under the general loan modification guidance in Subtopic 310-20. On a prospective basis, entities are subject to new disclosure requirements covering modifications of receivables to borrowers experiencing financial difficulty. Public business entities within the scope of the Topic 326 vintage disclosure requirements are also required to prospectively disclose current-period gross write-off information by vintage. Entities can elect to adopt the guidance on TDRs using either a prospective or modified retrospective transition method. Valley adopted ASU No. 2022-02 on January 1, 2023 and elected to apply the modified retrospective transition method. The adoption of ASU No. 2022-02 resulted in a $1.4 million decrease in the allowance for loan losses, and a $990 thousand increase to retained earnings, net of taxes. See Note 8 for required disclosures.

New Accounting Guidance Issued in 2023

ASU No. 2023-02, Investments –“Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method,” is intended to improve the accounting and disclosures for investments in certain tax credit structures. ASU No. 2023-02 allows the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met. ASU No. 2023-02 will be effective on January 1, 2024 and it can be early adopted in any interim period. The new guidance can also be applied either on a modified retrospective or a retrospective basis, with any adjustments resulting from adoption recognized in earnings on the date of adoption. Valley is currently evaluating the impact of ASU No. 2023-02, but it is not expected to have a significant impact on Valley's consolidated financial statements.

Allowance for Credit Losses for Held to Maturity Debt Securities

Allowance for Credit Losses for Held to Maturity Debt SecuritiesValley 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 TEMS collateralized municipal bonds.

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Assets Acquired and Liabilities Assumed in Acquisition

The following table sets forth assets acquired and liabilities assumed in the Bank Leumi USA acquisition, at their estimated fair values as of the closing date of the transaction:

	April 1, 2022
	(in thousands)
Assets acquired:
Cash and cash equivalents	$	443,588
Equity securities	6,239
Available for sale debt securities	505,928
Held to maturity debt securities	806,627
Loans	5,914,389
Allowance for loan losses	(70,319)
Loans, net	5,844,070
Premises and equipment	38,827
Lease right of use assets	49,273
Bank owned life insurance	126,861
Accrued interest receivable	25,717
Goodwill	400,582
Other intangible assets	153,380
Other assets	160,921
Total assets acquired	$	8,562,013
Liabilities assumed:
Deposits:
Non-interest bearing	$	4,511,537
Interest bearing:
Savings, NOW and money market	2,224,834
Time	293,626
Total deposits	7,029,997
Short-term borrowings	103,794
Lease liabilities	79,683
Accrued expense and other liabilities	117,269
Total liabilities assumed	$	7,330,743
Common stock issued in acquisition	1,117,829
Cash paid in acquisition	113,441

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table shows the calculation of both basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except for share and per share data)
Net income available to common shareholders	$	135,030	$	93,241	$	277,707	$	206,797
Basic weighted average number of common shares outstanding	507,690,043		506,302,464		507,402,268		464,172,210
Plus: Common stock equivalents	952,982		2,176,742		1,674,035		2,148,473
Diluted weighted average number of common shares outstanding	508,643,025		508,479,206		509,076,303		466,320,683
Earnings per common share:
Basic	$	0.27	$	0.18	$	0.55	$	0.45
Diluted	0.27		0.18		0.55		0.44

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Components of Accumulated Other Comprehensive Loss

The following tables present the after-tax changes in the balances of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2023:

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension and Postretirement Benefit Plans
	(in thousands)
Balance at March 31, 2023	$	(110,648)	$	5,410	$	(38,409)	$	(143,647)
Other comprehensive loss before reclassification	(18,051)		(3,573)		—		(21,624)
Amounts reclassified from other comprehensive loss	—		516		8		524
Other comprehensive (loss) income, net	(18,051)		(3,057)		8		(21,100)
Balance at June 30, 2023	$	(128,699)	$	2,353	$	(38,401)	$	(164,747)

	Components of Accumulated Other Comprehensive Loss						Total Accumulated Other Comprehensive Loss
	Unrealized Gains and Losses on Available for Sale (AFS) Securities		Unrealized Gains and Losses on Derivatives		Defined Benefit Pension and Postretirement Benefit Plans
	(in thousands)
Balance at December 31, 2022	$	(127,818)	$	2,233	$	(38,417)	$	(164,002)
Other comprehensive loss before reclassification	(881)		(775)		—		(1,656)
Amounts reclassified from other comprehensive loss	—		895		16		911
Other comprehensive (loss) income, net	(881)		120		16		(745)
Balance at June 30, 2023	$	(128,699)	$	2,353	$	(38,401)	$	(164,747)

Reclassification from Each Component of Accumulated Other Comprehensive Loss

The following table presents amounts reclassified from each component of accumulated other comprehensive loss on a gross and net of tax basis for the three and six months ended June 30, 2023 and 2022:

	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Three Months Ended June 30,				Six Months Ended June 30,
Components of Accumulated Other Comprehensive Loss	2023		2022		2023		2022		Income Statement Line Item
	(in thousands)
Unrealized gains on AFS securities before tax	$	—	$	—	$	—	$	14	Gains (losses) on securities transactions, net
Tax effect	—		—		—		(4)
Total net of tax	—		—		—		10
Unrealized gains (losses) on derivatives (cash flow hedges) before tax	(725)		116		(1,256)		(426)		Interest income, interest expense
Tax effect	209		(36)		361		120
Total net of tax	(516)		80		(895)		(306)
Defined benefit pension and postretirement benefit plans:
Amortization of actuarial net loss	(11)		(184)		(22)		(367)		*
Tax effect	3		51		6		102
Total net of tax	(8)		(133)		(16)		(265)
Total reclassifications, net of tax	$	(524)	$	(53)	$	(911)	$	(561)

* Amortization of actuarial net loss is included in the computation of net periodic pension cost recognized within other non-interest expense.

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Fair Value Measurement of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022. The assets presented under “non-recurring fair value measurements” in the tables below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized). 

	June 30, 2023		Fair Value Measurements at Reporting Date Using:
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities	$	23,635	$	23,635	$	—	$	—
Equity securities at net asset value (NAV)	12,328		—		—		—
Trading debt securities	3,409		3,409		—		—
Available for sale debt securities:
U.S. Treasury securities	282,398		282,398		—		—
U.S. government agency securities	24,192		—		24,192		—
Obligations of states and political subdivisions	171,043		—		171,043		—
Residential mortgage-backed securities	594,636		—		594,636		—
Corporate and other debt securities	164,677		—		164,677		—
Total available for sale debt securities	1,236,946		282,398		954,548		—
Loans held for sale (1)	23,044		—		23,044		—
Other assets (2)	571,620		—		571,620		—
Total assets	$	1,870,982	$	309,442	$	1,549,212	$	—
Liabilities
Other liabilities (2)	$	599,226	$	—	$	599,226	$	—
Total liabilities	$	599,226	$	—	$	599,226	$	—
Non-recurring fair value measurements:
Non-performing loans held for sale	$	10,000	$	—	$	10,000	$	—
Collateral dependent loans	63,972		—		—		63,972
Foreclosed assets	2,132		—		—		2,132
Total	$	76,104	$	—	$	10,000	$	66,104

			Fair Value Measurements at Reporting Date Using:
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities	$	23,494	$	23,494	$	—	$	—
Equity securities at net asset value (NAV)	10,099		—		—		—
Trading debt securities	13,438		3,282		10,156		—
Available for sale debt securities:
U.S. Treasury securities	279,498		279,498		—		—
U.S. government agency securities	26,964		—		26,964		—
Obligations of states and political subdivisions	146,811		—		146,811		—
Residential mortgage-backed securities	629,818		—		629,818		—
Corporate and other debt securities	178,306		—		178,306		—
Total available for sale debt securities	1,261,397		279,498		981,899		—
Loans held for sale (1)	18,118		—		18,118		—
Other assets (2)	467,127		—		467,127		—
Total assets	$	1,793,673	$	306,274	$	1,477,300	$	—
Liabilities
Other liabilities (2)	$	607,237	$	—	$	607,237	$	—
Total liabilities	$	607,237	$	—	$	607,237	$	—
Non-recurring fair value measurements:
Collateral dependent loans	$	92,923	$	—	$	—	$	92,923
Foreclosed assets	1,937		—		—		1,937
Total	$	94,860	$	—	$	—	$	94,860

(1)Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $23.0 million and $17.9 million at June 30, 2023 and December 31, 2022, respectively.

(2)Derivative financial instruments are included in this category.

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at June 30, 2023 and December 31, 2022 were as follows: 

	Fair Value Hierarchy	June 30, 2023				December 31, 2022
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	463,318	$	463,318	$	444,325	$	444,325
Interest bearing deposits with banks	Level 1	1,491,091		1,491,091		503,622		503,622
Equity securities (1)	Level 3	25,047		25,047		15,138		15,138
Held to maturity debt securities:
U.S. Treasury securities	Level 1	66,579		65,675		66,911		65,889
U.S. government agency securities	Level 2	261,197		215,039		260,392		212,712
Obligations of states and political subdivisions	Level 2	465,115		438,991		480,298		453,195
Residential mortgage-backed securities	Level 2	2,861,227		2,461,519		2,909,106		2,495,797
Trust preferred securities	Level 2	37,052		29,344		37,043		31,106
Corporate and other debt securities	Level 2	75,668		68,380		75,234		70,771
Total held to maturity debt securities (2)		3,766,838		3,278,948		3,828,984		3,329,470
Net loans	Level 3	49,440,816		47,472,065		46,458,545		44,910,049
Accrued interest receivable	Level 1	225,918		225,918		196,606		196,606
Federal Reserve Bank and Federal Home Loan Bank stock (3)	Level 2	326,959		326,959		238,056		238,056
Financial liabilities
Deposits without stated maturities	Level 1	34,711,633		34,711,633		38,080,457		38,080,457
Deposits with stated maturities	Level 2	14,908,182		14,783,271		9,556,457		9,443,253
Short-term borrowings	Level 1	1,088,899		1,066,450		138,729		138,729
Long-term borrowings	Level 2	2,443,533		2,340,324		1,543,058		1,395,991
Junior subordinated debentures issued to capital trusts	Level 2	56,934		48,117		56,760		50,923
Accrued interest payable (4)	Level 1	125,873		125,873		45,617		45,617

(1)Represents equity securities without a readily determinable fair value measured at cost less impairment, if any.

(2)The carrying amount is presented gross without the allowance for credit losses.

(3)Included in other assets.

(4)Included in accrued expenses and other liabilities.

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Available for Sale

The amortized cost, gross unrealized gains and losses and fair value of available for sale debt securities at June 30, 2023 and December 31, 2022 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	310,936	$	—	$	(28,538)	$	282,398
U.S. government agency securities	26,799		19		(2,626)		24,192
Obligations of states and political subdivisions:
Obligations of states and state agencies	9,425		—		(776)		8,649
Municipal bonds	193,920		—		(31,526)		162,394
Total obligations of states and political subdivisions	203,345		—		(32,302)		171,043
Residential mortgage-backed securities	681,513		20		(86,897)		594,636
Corporate and other debt securities	192,087		—		(27,410)		164,677
Total	$	1,414,680	$	39	$	(177,773)	$	1,236,946
December 31, 2022
U.S. Treasury securities	$	308,137	$	—	$	(28,639)	$	279,498
U.S. government agency securities	29,494		47		(2,577)		26,964
Obligations of states and political subdivisions:
Obligations of states and state agencies	10,899		—		(493)		10,406
Municipal bonds	171,586		—		(35,181)		136,405
Total obligations of states and political subdivisions	182,485		—		(35,674)		146,811
Residential mortgage-backed securities	719,868		64		(90,114)		629,818
Corporate and other debt securities	197,927		—		(19,621)		178,306
Total	$	1,437,911	$	111	$	(176,625)	$	1,261,397

Age of Unrealized Losses and Fair Value of Related Available for Sale Debt Securities

The age of unrealized losses and fair value of the related available for sale debt securities at June 30, 2023 and December 31, 2022 were as follows: 

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	—	$	—	$	282,398	$	(28,538)	$	282,398	$	(28,538)
U.S. government agency securities	—		—		22,818		(2,626)		22,818		(2,626)
Obligations of states and political subdivisions:
Obligations of states and state agencies	1,223		(20)		7,426		(756)		8,649		(776)
Municipal bonds	1,405		(20)		137,180		(31,506)		138,585		(31,526)
Total obligations of states and political subdivisions	2,628		(40)		144,606		(32,262)		147,234		(32,302)
Residential mortgage-backed securities	30,949		(1,919)		562,383		(84,978)		593,332		(86,897)
Corporate and other debt securities	44,404		(7,239)		120,273		(20,171)		164,677		(27,410)
Total	$	77,981	$	(9,198)	$	1,132,478	$	(168,575)	$	1,210,459	$	(177,773)
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 bonds	112,029		(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)

Contractual Maturities of Debt Securities Available for Sale

The contractual maturities of available for sale debt securities at June 30, 2023 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, 2023
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	2,350	$	2,322
Due after one year through five years	282,534		265,870
Due after five years through ten years	175,056		148,811
Due after ten years	273,227		225,307
Residential mortgage-backed securities	681,513		594,636
Total	$	1,414,680	$	1,236,946

Debt Securities, Available-for-Sale, Allowance for Credit Loss

The following table details the activity in the allowance for credit losses for the six months ended June 30, 2023.

		Six Months Ended June 30, 2023
	(in thousands)
Beginning balance		$	—
Provision for credit losses		5,000
Charge-offs		(5,000)
Ending balance		$	—

Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Held to Maturity

The amortized cost, gross unrealized gains and losses and fair value of debt securities held to maturity at June 30, 2023 and December 31, 2022 were as follows: 

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses		Net Carrying Value
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	66,579	$	—	$	(904)	$	65,675	$	—	$	66,579
U.S. government agency securities	261,197		—		(46,158)		215,039		—		261,197
Obligations of states and political subdivisions:
Obligations of states and state agencies	88,561		91		(5,112)		83,540		409		88,152
Municipal bonds	376,554		27		(21,130)		355,451		57		376,497
Total obligations of states and political subdivisions	465,115		118		(26,242)		438,991		466		464,649
Residential mortgage-backed securities	2,861,227		906		(400,614)		2,461,519		—		2,861,227
Trust preferred securities	37,052		1		(7,709)		29,344		559		36,493
Corporate and other debt securities	75,668		—		(7,288)		68,380		326		75,342
Total	$	3,766,838	$	1,025	$	(488,915)	$	3,278,948	$	1,351	$	3,765,487
December 31, 2022
U.S. Treasury securities	$	66,911	$	—	$	(1,022)	$	65,889	$	—	$	66,911
U.S. government agency securities	260,392		—		(47,680)		212,712		—		260,392
Obligations of states and political subdivisions:
Obligations of states and state agencies	99,238		305		(3,869)		95,674		252		98,986
Municipal bonds	381,060		76		(23,615)		357,521		41		381,019
Total obligations of states and political subdivisions	480,298		381		(27,484)		453,195		293		480,005
Residential mortgage-backed securities	2,909,106		1,723		(415,032)		2,495,797		—		2,909,106
Trust preferred securities	37,043		1		(5,938)		31,106		888		36,155
Corporate and other debt securities	75,234		—		(4,463)		70,771		465		74,769
Total	$	3,828,984	$	2,105	$	(501,619)	$	3,329,470	$	1,646	$	3,827,338

Age of Unrealized Losses and Fair Value of Related Debt Securities Held to Maturity

The age of unrealized losses and fair value of related debt securities held to maturity at June 30, 2023 and December 31, 2022 were as follows: 

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	30,998	$	(598)	$	34,677	$	(306)	$	65,675	$	(904)
U.S. government agency securities	—		—		213,885		(46,158)		213,885		(46,158)
Obligations of states and political subdivisions:
Obligations of states and state agencies	25,298		(623)		44,869		(4,489)		70,167		(5,112)
Municipal bonds	84,224		(1,437)		200,924		(19,693)		285,148		(21,130)
Total obligations of states and political subdivisions	109,522		(2,060)		245,793		(24,182)		355,315		(26,242)
Residential mortgage-backed securities	182,290		(6,756)		2,107,464		(393,858)		2,289,754		(400,614)
Trust preferred securities	—		—		28,343		(7,709)		28,343		(7,709)
Corporate and other debt securities	18,056		(1,194)		50,324		(6,094)		68,380		(7,288)
Total	$	340,866	$	(10,608)	$	2,680,486	$	(478,307)	$	3,021,352	$	(488,915)
December 31, 2022
U.S. Treasury securities	$	65,889	$	(1,022)	$	—	$	—	$	65,889	$	(1,022)
U.S. government agency securities	209,863		(47,508)		1,673		(172)		211,536		(47,680)
Obligations of states and political subdivisions:
Obligations of states and state agencies	62,443		(2,020)		18,231		(1,849)		80,674		(3,869)
Municipal bonds	251,970		(20,457)		15,534		(3,158)		267,504		(23,615)
Total obligations of states and political subdivisions	314,413		(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 securities	57,245		(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)

Contractual Maturities of Debt Securities Held to Maturity

The contractual maturities of investments in debt securities held to maturity at June 30, 2023 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, 2023
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	68,033	$	67,619
Due after one year through five years	126,908		123,033
Due after five years through ten years	95,472		87,948
Due after ten years	615,198		538,829
Residential mortgage-backed securities	2,861,227		2,461,519
Total	$	3,766,838	$	3,278,948

Amortized Cost of Debt Securities Held to Maturity by External Credit Rating

The following table summarizes the amortized cost of held to maturity debt securities by external credit rating at June 30, 2023 and December 31, 2022.

	AAA/AA/A Rated		BBB rated		Non-investment grade rated		Non-rated		Total
	(in thousands)
June 30, 2023
U.S. Treasury securities	$	66,579	$	—	$	—	$	—	$	66,579
U.S. government agency securities	261,197		—		—		—		261,197
Obligations of states and political subdivisions:
Obligations of states and state agencies	65,768		—		5,416		17,377		88,561
Municipal bonds	321,860		—		—		54,694		376,554
Total obligations of states and political subdivisions	387,628		—		5,416		72,071		465,115
Residential mortgage-backed securities	2,861,227		—		—		—		2,861,227
Trust preferred securities	—		—		—		37,052		37,052
Corporate and other debt securities	—		6,000		—		69,668		75,668
Total	$	3,576,631	$	6,000	$	5,416	$	178,791	$	3,766,838
December 31, 2022
U.S. Treasury securities	$	66,911	$	—	$	—	$	—	$	66,911
U.S. government agency securities	260,392		—		—		—		260,392
Obligations of states and political subdivisions:
Obligations of states and state agencies	74,943		—		5,497		18,798		99,238
Municipal bonds	333,488		—		—		47,572		381,060
Total obligations of states and political subdivisions	408,431		—		5,497		66,370		480,298
Residential mortgage-backed securities	2,909,106		—		—		—		2,909,106
Trust preferred securities	—		—		—		37,043		37,043
Corporate and other debt securities	2,000		6,000		—		67,234		75,234
Total	$	3,646,840	$	6,000	$	5,497	$	170,647	$	3,828,984

Debt Securities, Held-to-Maturity, Allowance for Credit Loss

The following table details the activity in the allowance for credit losses for the three and six months ended June 30, 2023 and 2022: 

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(in thousands)
Beginning balance	$	1,633	$	1,222	$	1,646	$	1,165
(Credit) provision for credit losses	(282)		286		(295)		343
Ending balance	$	1,351	$	1,508	$	1,351	$	1,508

XML

Loans and Allowance for Credit Losses for Loans (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of Loan Portfolio

The detail of the loan portfolio as of June 30, 2023 and December 31, 2022 was as follows: 

	June 30, 2023		December 31, 2022
	(in thousands)
Loans:
Commercial and industrial	$	9,287,309	$	8,804,830
Commercial real estate:
Commercial real estate	27,793,072		25,732,033
Construction	3,815,761		3,700,835
Total commercial real estate loans	31,608,833		29,432,868
Residential mortgage	5,560,356		5,364,550
Consumer:
Home equity	535,493		503,884
Automobile	1,632,875		1,746,225
Other consumer	1,252,382		1,064,843
Total consumer loans	3,420,750		3,314,952
Total loans	$	49,877,248	$	46,917,200

Past Due, Non-Accrual and Current Loans by Loan Portfolio Class

The following table presents past due, current and non-accrual loans without an allowance for loan losses by loan portfolio class at June 30, 2023 and December 31, 2022:

	Past Due and Non-Accrual Loans
	30-59  Days  Past Due Loans		60-89  Days  Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Loan Losses
	(in thousands)
June 30, 2023
Commercial and industrial	$	6,229	$	7,468	$	6,599	$	84,449	$	104,745	$	9,182,564	$	9,287,309	$	8,221
Commercial real estate:
Commercial real estate	3,612		—		2,242		82,712		88,566		27,704,506		27,793,072		76,438
Construction	—		—		3,990		63,043		67,033		3,748,728		3,815,761		15,476
Total commercial real estate loans	3,612		—		6,232		145,755		155,599		31,453,234		31,608,833		91,914
Residential mortgage	15,565		1,348		1,165		20,819		38,897		5,521,459		5,560,356		16,151
Consumer loans:
Home equity	959		46		—		2,737		3,742		531,751		535,493		—
Automobile	5,963		568		332		248		7,111		1,625,764		1,632,875		—
Other consumer	1,509		3,512		674		83		5,778		1,246,604		1,252,382		—
Total consumer loans	8,431		4,126		1,006		3,068		16,631		3,404,119		3,420,750		—
Total	$	33,837	$	12,942	$	15,002	$	254,091	$	315,872	$	49,561,376	$	49,877,248	$	116,286

	Past Due and Non-Accrual Loans
	30-59 Days Past Due Loans		60-89  Days Past Due Loans		90 Days or More Past Due Loans		Non-Accrual Loans		Total Past Due Loans		Current Loans		Total Loans		Non-Accrual Loans Without Allowance for Loan Losses
	(in thousands)
December 31, 2022
Commercial and industrial	$	11,664	$	12,705	$	18,392	$	98,881	$	141,642	$	8,663,188	$	8,804,830	$	5,659
Commercial real estate:
Commercial real estate	6,638		3,167		2,292		68,316		80,413		25,651,620		25,732,033		66,066
Construction	—		—		3,990		74,230		78,220		3,622,615		3,700,835		16,120
Total commercial real estate loans	6,638		3,167		6,282		142,546		158,633		29,274,235		29,432,868		82,186
Residential mortgage	16,146		3,315		1,866		25,160		46,487		5,318,063		5,364,550		14,224
Consumer loans:
Home equity	955		254		—		2,810		4,019		499,865		503,884		117
Automobile	5,974		630		1		271		6,876		1,739,349		1,746,225		—
Other consumer	2,158		695		46		93		2,992		1,061,851		1,064,843		—
Total consumer loans	9,087		1,579		47		3,174		13,887		3,301,065		3,314,952		117
Total	$	43,535	$	20,766	$	26,587	$	269,761	$	360,649	$	46,556,551	$	46,917,200	$	102,186

Risk Category of Loans

The following table presents the internal loan classification risk by loan portfolio class by origination year based on the most recent analysis performed at June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

	Term Loans
	Amortized Cost Basis by Origination Year
June 30, 2023	2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	978,383	$	1,233,039	$	987,984	$	490,159	$	267,719	$	565,910	$	4,420,712	$	306	$	8,944,212
Special Mention	16,582		43,260		3,257		19,948		4,125		7,005		131,677		1,488		227,342
Substandard	6,056		754		3,288		1,706		1,703		2,819		25,681		—		42,007
Doubtful	1,500		669		2,768		—		2,674		63,427		2,710		—		73,748
Total commercial and industrial	$	1,002,521	$	1,277,722	$	997,297	$	511,813	$	276,221	$	639,161	$	4,580,780	$	1,794	$	9,287,309
Commercial real estate
Risk Rating:
Pass	$	3,006,116	$	6,675,372	$	4,997,069	$	3,073,019	$	2,453,918	$	6,040,604	$	542,644	$	3,310	$	26,792,052
Special Mention	86,078		52,939		51,208		111,268		100,524		205,971		6,621		—		614,609
Substandard	10,972		30,664		35,577		27,280		36,320		237,578		7,830		—		386,221
Doubtful	—		—		—		190		—		—		—		—		190
Total commercial real estate	$	3,103,166	$	6,758,975	$	5,083,854	$	3,211,757	$	2,590,762	$	6,484,153	$	557,095	$	3,310	$	27,793,072
Construction
Risk Rating:
Pass	$	390,550	$	702,031	$	342,403	$	32,129	$	18,878	$	20,230	$	2,251,552	$	—	$	3,757,773
Substandard	8,538		12,969		7,427		—		955		17,668		3,501		—		51,058
Doubtful	—		6,930		—		—		—		—		—		—		6,930
Total construction	$	399,088	$	721,930	$	349,830	$	32,129	$	19,833	$	37,898	$	2,255,053	$	—	$	3,815,761
Gross loan charge-offs	$	—	$	7,288	$	24,658	$	6,479	$	908	$	2,524	$	26	$	—	$	41,883

	Term Loans
	Amortized Cost Basis by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Commercial and industrial
Risk Rating:
Pass	$	1,600,747	$	1,089,386	$	590,406	$	322,564	$	250,031	$	386,085	$	4,307,163	$	144	$	8,546,526
Special Mention	31,557		3,367		19,492		4,732		4,369		3,558		51,021		7		118,103
Substandard	288		1,734		4,121		1,412		4,256		4,879		31,698		—		48,388
Doubtful	886		20,844		—		2,692		—		64,158		3,233		—		91,813
Total commercial and industrial	$	1,633,478	$	1,115,331	$	614,019	$	331,400	$	258,656	$	458,680	$	4,393,115	$	151	$	8,804,830
Commercial real estate
Risk Rating:
Pass	$	6,815,115	$	5,168,127	$	3,246,885	$	2,672,223	$	1,536,327	$	5,027,128	$	452,461	$	3,504	$	24,921,770
Special Mention	93,286		48,007		60,169		45,447		62,111		125,414		8,188		—		442,622
Substandard	15,088		34,475		32,630		34,622		59,337		183,341		7,986		—		367,479
Doubtful	—		—		—		—		—		162		—		—		162
Total commercial real estate	$	6,923,489	$	5,250,609	$	3,339,684	$	2,752,292	$	1,657,775	$	5,336,045	$	468,635	$	3,504	$	25,732,033
Construction
Risk Rating:
Pass	$	942,380	$	512,046	$	61,131	$	22,845	$	8,676	$	20,599	$	2,040,866	$	—	$	3,608,543
Special Mention	—		—		—		—		—		—		14,268		—		14,268
Substandard	12,969		12,601		—		974		—		17,599		20,138		—		64,281
Doubtful	—		—		—		—		—		13,743		—		—		13,743
Total construction	$	955,349	$	524,647	$	61,131	$	23,819	$	8,676	$	51,941	$	2,075,272	$	—	$	3,700,835

The following table presents the amortized cost in those loan classes based on payment activity, by origination year as of June 30, 2023 and December 31, 2022, as well as the gross loan charge-offs by year of origination for the six months ended June 30, 2023:

	Term Loans
	Amortized Cost Basis by Origination Year
June 30, 2023	2023		2022		2021		2020		2019		Prior to 2019		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	369,607	$	1,304,327	$	1,524,988	$	562,263	$	455,463	$	1,263,659	$	73,983	$	—	$	5,554,290
90 days or more past due	—		178		—		—		797		5,091		—		—		6,066
Total residential mortgage	$	369,607	$	1,304,505	$	1,524,988	$	562,263	$	456,260	$	1,268,750	$	73,983	$	—	$	5,560,356
Consumer loans
Home equity
Performing	$	19,442	$	45,601	$	11,873	$	4,326	$	4,660	$	17,396	$	392,898	$	38,391	$	534,587
90 days or more past due	—		—		—		—		—		—		263		643		906
Total home equity	19,442		45,601		11,873		4,326		4,660		17,396		393,161		39,034		535,493
Automobile
Performing	205,170		633,269		437,528		161,245		123,616		71,682		—		—		1,632,510
90 days or more past due	47		105		73		—		9		131		—		—		365
Total automobile	205,217		633,374		437,601		161,245		123,625		71,813		—		—		1,632,875
Other consumer
Performing	17,973		20,979		(1,549)		3,729		8,720		12,707		1,189,191		—		1,251,750
90 days or more past due	—		—		—		—		—		38		594		—		632
Total other consumer	17,973		20,979		(1,549)		3,729		8,720		12,745		1,189,785		—		1,252,382
Total consumer	$	242,632	$	699,954	$	447,925	$	169,300	$	137,005	$	101,954	$	1,582,946	$	39,034	$	3,420,750
Gross loan charge-offs	$	11	$	226	$	206	$	90	$	428	$	953	$	103	$	—	$	2,017

	Term Loans
	Amortized Cost Basis by Origination Year
December 31, 2022	2022		2021		2020		2019		2018		Prior to 2018		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans		Total
	(in thousands)
Residential mortgage
Performing	$	1,302,279	$	1,502,622	$	571,390	$	500,197	$	338,062	$	1,073,995	$	66,706	$	—	$	5,355,251
90 days or more past due	—		197		217		1,835		2,876		4,174		—		—		9,299
Total residential mortgage	$	1,302,279	$	1,502,819	$	571,607	$	502,032	$	340,938	$	1,078,169	$	66,706	$	—	$	5,364,550
Consumer loans
Home equity
Performing	$	47,084	$	12,432	$	4,592	$	5,024	$	5,581	$	13,007	$	376,608	$	38,570	$	502,898
90 days or more past due	—		—		—		—		—		—		276		710		986
Total home equity	47,084		12,432		4,592		5,024		5,581		13,007		376,884		39,280		503,884
Automobile
Performing	724,557		525,017		204,578		166,103		80,012		45,415		—		—		1,745,682
90 days or more past due	38		116		36		180		101		72		—		—		543
Total automobile	724,595		525,133		204,614		166,283		80,113		45,487		—		—		1,746,225
Other consumer
Performing	24,140		10,144		8,206		7,435		7,406		15,736		991,737		—		1,064,804
90 days or more past due	—		—		—		—		—		38		1		—		39
Total other consumer	24,140		10,144		8,206		7,435		7,406		15,774		991,738		—		1,064,843
Total consumer	$	795,819	$	547,709	$	217,412	$	178,742	$	93,100	$	74,268	$	1,368,622	$	39,280	$	3,314,952

Financing Receivable, Troubled Debt Restructuring

The following table shows the amortized cost basis of loans to borrowers experiencing financial difficulty at June 30, 2023 that were modified during the three and six months ended June 30, 2023, disaggregated by class of financing receivable and type of modification. Each of the types of modifications was less than one percent of their respective loan categories.

	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Term extension		Term extension and interest rate reduction		Total		Term extension		Term extension and interest rate reduction		Total
	($ in thousands)
Commercial and industrial	$	37,762	$	1,482	$	39,244	$	39,033	$	2,003	$	41,036
Commercial real estate	3,512		3,754		7,266		49,617		3,754		53,371
Residential mortgage	578		—		578		790		—		790
Consumer	—		—		—		53		—		53
Total	$	41,852	$	5,236	$	47,088	$	89,493	$	5,757	$	95,250

The following table describes the types of modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023:

	Types of Modifications
Commercial and industrial	12 month term extensions; and one 12 month term extension combined with a reduction in interest rate from 9.38 percent to 6.50 percent
Commercial real estate	6 to 36 month term extensions and one term extension combined with a reduction in interest rate from 8.75 percent to 6.00 percent
Residential mortgage	12 month term extensions
Consumer	60 month term extensions

The following tables present the pre- and post-modification amortized cost of TDR loans by loan class during the three and six months ended June 30, 2022. Post-modification amounts are presented as of June 30, 2022 using the allowance methodology for TDRs prior to the adoption of ASU 2022-02.

	Three Months Ended June 30, 2022
Troubled Debt Restructurings	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial	49	$	82,120	$	78,051
Commercial real estate	1	8,811		8,735
Residential mortgage	7	4,970		4,969
Consumer	1	125		124
Total	58	$	96,026	$	91,879

		Six Months Ended June 30, 2022
Troubled Debt Restructurings		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Commercial and industrial		60	$	91,804	$	87,685
Commercial real estate		3	14,072		13,986
Residential mortgage		8	5,090		5,087
Consumer		1	125		124
Total		72	$	111,091	$	106,882

Loans modified as TDRs within the previous 12 months and for which there was a payment default (90 or more days past due) for the three and six months ended June 30, 2022 were as follows:

	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022
Troubled Debt Restructurings Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	($ in thousands)
Construction	2	$	17,599	2	$	17,599
Total	2	$	17,599	2	$	17,599

Summary of Collateral Dependent Loans

The following table presents collateral dependent loans by class as of June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
Collateral dependent loans:
Commercial and industrial *	$	77,364	$	94,433
Commercial real estate	138,032		130,199
Residential mortgage	16,151		33,865
Home equity	—		195
Total	$	231,547	$	258,692

* Commercial and industrial loans presented in the table above are primarily collateralized by taxi medallions.

Summary of Allowance for Credit Losses

The following table summarizes the ACL for loans at June 30, 2023 and December 31, 2022: 

	June 30, 2023		December 31, 2022
	(in thousands)
Components of allowance for credit losses for loans:
Allowance for loan losses	$	436,432	$	458,655
Allowance for unfunded credit commitments	22,244		24,600
Total allowance for credit losses for loans	$	458,676	$	483,255

Summary of Provision for Credit Losses

The following table summarizes the provision for credit losses for loans for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Components of provision for credit losses for loans:
Provision for loan losses	$	8,159	$	38,310	$	18,138	$	41,568
(Credit) provision for unfunded credit commitments	(1,827)		5,402		(2,356)		5,644
Total provision for credit losses for loans	$	6,332	$	43,712	$	15,782	$	47,212

Summary of Activity in Allowance for Loan Losses

The following table details the activity in the allowance for loan losses by loan portfolio segment for the three and six months ended June 30, 2023 and 2022: 

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
Three Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance	$	127,992	$	243,332	$	41,708	$	23,866	$	436,898
Loans charged-off	(3,865)		(6,273)		(149)		(1,040)		(11,327)
Charged-off loans recovered	2,173		4		135		390		2,702
Net charge-offs	(1,692)		(6,269)		(14)		(650)		(8,625)
Provision for loan losses	1,945		2,632		2,459		1,123		8,159
Ending balance	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Three Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	101,203	$	219,949	$	28,189	$	13,169	$	362,510
Allowance for purchased credit deteriorated (PCD) loans *	33,452		36,618		206		43		70,319
Loans charged-off	(4,540)		—		(1)		(726)		(5,267)
Charged-off loans recovered	1,952		224		74		697		2,947
Net (charge-offs) recoveries	(2,588)		224		73		(29)		(2,320)
Provision for loan losses	12,472		20,436		1,421		3,981		38,310
Ending balance	$	144,539	$	277,227	$	29,889	$	17,164	$	468,819

Six Months Ended June 30, 2023
Allowance for loan losses:
Beginning balance	$	139,941	$	259,408	$	39,020	$	20,286	$	458,655
Impact of the adoption of ASU No. 2022-02	(739)		(589)		(12)		(28)		(1,368)
Beginning balance, adjusted	$	139,202	$	258,819	$	39,008	$	20,258	$	457,287
Loans charged-off	(29,912)		(11,971)		(149)		(1,868)		(43,900)
Charged-off loans recovered	3,572		28		156		1,151		4,907
Net (charge-offs) recoveries	(26,340)		(11,943)		7		(717)		(38,993)
Provision (credit) for loan losses	15,383		(7,181)		5,138		4,798		18,138
Ending balance	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Six Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	103,090	$	217,490	$	25,120	$	13,502	$	359,202
Allowance for PCD loans *	33,452		36,618		206		43		70,319
Loans charged-off	(6,111)		(173)		(27)		(1,551)		(7,862)
Charged-off loans recovered	2,776		331		531		1,954		5,592
Net (charge-offs) recoveries	(3,335)		158		504		403		(2,270)
Provision for loan losses	11,332		22,961		4,059		3,216		41,568
Ending balance	$	144,539	$	277,227	$	29,889	$	17,164	$	468,819

*    Represents the allowance for acquired PCD loans, net of PCD loan charge-offs totaling $62.4 million in the second quarter 2022.

Allocation Of Allowance For Loan Losses Disaggregated Based On Impairment Methodology

The following table represents the allocation of the allowance for loan losses and the related loans by loan portfolio segment disaggregated based on the allowance measurement methodology at June 30, 2023 and December 31, 2022.

	Commercial and Industrial		Commercial Real Estate		Residential Mortgage		Consumer		Total
	(in thousands)
June 30, 2023
Allowance for loan losses:
Individually evaluated for credit losses	$	54,311	$	6,749	$	34	$	—	$	61,094
Collectively evaluated for credit losses	73,934		232,946		44,119		24,339		375,338
Total	$	128,245	$	239,695	$	44,153	$	24,339	$	436,432
Loans:
Individually evaluated for credit losses	$	77,364	$	138,032	$	16,151	$	—	$	231,547
Collectively evaluated for credit losses	9,209,945		31,470,801		5,544,205		3,420,750		49,645,701
Total	$	9,287,309	$	31,608,833	$	5,560,356	$	3,420,750	$	49,877,248
December 31, 2022
Allowance for loan losses:
Individually evaluated for credit losses	$	68,745	$	13,174	$	337	$	4,338	$	86,594
Collectively evaluated for credit losses	71,196		246,234		38,683		15,948		372,061
Total	$	139,941	$	259,408	$	39,020	$	20,286	$	458,655
Loans:
Individually evaluated for credit losses	$	117,644	$	213,522	$	28,869	$	14,058	$	374,093
Collectively evaluated for credit losses	8,687,186		29,219,346		5,335,681		3,300,894		46,543,107
Total	$	8,804,830	$	29,432,868	$	5,364,550	$	3,314,952	$	46,917,200

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The carrying amounts of goodwill allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis at both June 30, 2023 and December 31, 2022 were as follows:

Business Segment / Reporting Unit *
Wealth Management		Consumer Banking		Commercial Banking		Total
(in thousands)
$	49,767	$	284,873	$	1,534,296	$	1,868,936

*    Valley’s Wealth Management and Insurance Division is comprised of trust, asset management, brokerage, insurance and tax credit advisory services. This reporting unit is included in the Consumer Banking segment for financial reporting purposes.

Other Intangible Assets

The following table summarizes other intangible assets as of June 30, 2023 and December 31, 2022: 

	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
	(in thousands)
June 30, 2023
Loan servicing rights	$	120,764	$	(98,453)	$	22,311
Core deposits	215,620		(99,129)		116,491
Other	50,393		(11,249)		39,144
Total other intangible assets	$	386,777	$	(208,831)	$	177,946
December 31, 2022
Loan servicing rights	$	119,943	$	(96,136)	$	23,807
Core deposits	223,670		(92,486)		131,184
Other	51,299		(8,834)		42,465
Total other intangible assets	$	394,912	$	(197,456)	$	197,456

Estimated Future Amortization Expense

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2023 through 2027: 

Year	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2023	$	1,579	$	14,054	$	3,201
2024	2,863		24,897		5,951
2025	2,506		21,048		5,380
2026	2,181		17,223		4,805
2027	1,890		13,544		4,205

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Deposits (Tables)

6 Months Ended

Jun. 30, 2023

Financial Services, Banking and Thrift [Abstract]

Scheduled Maturities of Time Deposits

The scheduled maturities of time deposits as of June 30, 2023 were as follows: 

Year	Amount
	(in thousands)
2023	8,020,778
2024	6,574,934
2025	70,994
2026	160,144
2027	41,691
Thereafter	39,641
Total time deposits	$	14,908,182

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Borrowed Funds (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Short-Term Borrowings

Short-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances	$	1,000,000	$	24,035
Securities sold under agreements to repurchase	88,899		114,694
Total short-term borrowings	$	1,088,899	$	138,729

Schedule of Long-Term Borrowings

Long-term borrowings at June 30, 2023 and December 31, 2022 consisted of the following:

	June 30, 2023		December 31, 2022
	(in thousands)
FHLB advances, net (1)	$	1,688,311	$	788,419
Subordinated debt, net (2)	755,222		754,639
Total long-term borrowings	$	2,443,533	$	1,543,058

(1)	FHLB advances are presented net of unamortized premiums totaling $311 thousand and $419 thousand at June 30, 2023 and December 31, 2022, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $6.0 million and $6.9 million at June 30, 2023 and December 31, 2022, respectively.

Schedule of FHLB Repayment

The long-term FHLB advances at June 30, 2023 are scheduled for contractual balance repayments as follows:

Year	Amount
	(in thousands)
2024	$	165,000
2025	273,000
2026	350,000
2027	675,000
Thereafter	225,000
Total long-term FHLB advances	$	1,688,000

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Compensation Related Costs, Share Based Payments (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award

The table below summarizes RSU awards granted and average grant date fair values for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except per share data)
Award shares granted:
Performance-based RSUs	—		52		723		619
Time-based RSUs	178		937		1,731		2,104
Average grant date fair value per share:
Performance-based RSUs	$	—	$	13.60	$	12.80	$	14.72
Time-based RSUs	$	8.35	$	12.85	$	11.55	$	13.51

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Consolidated Statements of Financial Condition Related to Fair Value of Derivative Financial Instruments

Amounts included in the consolidated statements of financial condition related to the fair value of Valley’s derivative financial instruments were as follows: 

	June 30, 2023						December 31, 2022
	Fair Value						Fair Value
	Other Assets		Other Liabilities		Notional Amount		Other Assets		Other Liabilities		Notional Amount
	(in thousands)
Derivatives designated as hedging instruments:
Cash flow hedge interest rate swaps	$	—	$	—	$	—	$	3,971	$	4	$	600,000
Fair value hedge interest rate swaps	—		28,992		300,000		—		29,794		300,000
Total derivatives designated as hedging instruments	$	—	$	28,992	$	300,000	$	3,971	$	29,798	$	900,000
Derivatives not designated as hedging instruments:
Interest rate swaps and other contracts*	$	548,592	$	548,217	$	15,837,195	$	449,280	$	564,678	$	14,753,330
Foreign currency derivatives	22,635		21,710		1,331,575		13,709		12,604		1,273,735
Mortgage banking derivatives	393		307		105,948		167		157		31,299
Total derivatives not designated as hedging instruments	$	571,620	$	570,234	$	17,274,718	$	463,156	$	577,439	$	16,058,364

* Other derivative contracts include risk participation agreements.

Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Cash Flows

Gains (losses) included in the consolidated statements of income and other comprehensive loss, on a pre-tax basis, related to interest rate derivatives designated as hedges of cash flows were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Amount of (loss) gain reclassified from accumulated other comprehensive loss to interest income and expense	$	(725)	$	116	$	(1,256)	$	(426)
Amount of (loss) gain recognized in other comprehensive loss	(4,991)		121		(1,093)		441

Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Fair Value

(Losses) gains included in the consolidated statements of income related to interest rate derivatives designated as hedges of fair value were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Derivative - interest rate swap:
Interest expense	$	(3,790)	$	76	$	902	$	606
Hedged item - subordinated debt
Interest expense	$	3,952	$	(147)	$	(820)	$	(477)

Interest Rate Derivatives Designated as Hedges

The following table presents the hedged item related to interest rate derivatives designated as fair value hedges and the cumulative basis fair value adjustment included in the net carrying amount of the hedged item at June 30, 2023 and December 31, 2022, respectively.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included	Net Carrying Amount of the Hedged Liability *		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
	(in thousands)
June 30, 2023
Long-term borrowings	$	268,300	$	(29,312)
December 31, 2022
Long-term borrowings	$	267,076	$	(30,132)

*    Net carrying amount includes unamortized debt issuance costs of $2.4 million and $2.8 million at June 30, 2023 and December 31, 2022, respectively.

Net (Gains) Losses Related to Derivative Instruments Not Designated as Hedging Instruments

The net (gains) losses included in the consolidated statements of income related to derivative instruments not designated as hedging instruments were as follows: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$	(368)	$	1,143	$	(160)	$	(1,654)

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Balance Sheet Offsetting (Tables)

6 Months Ended

Jun. 30, 2023

Offsetting [Abstract]

Offsetting Assets

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of June 30, 2023 and December 31, 2022.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral *		Net Amount
	(in thousands)
June 30, 2023
Assets
Interest rate swaps	$	548,592	$	—	$	548,592	$	9,929	$	(468,200)	$	90,321
Liabilities
Interest rate swaps	$	577,209	$	—	$	577,209	$	(9,929)	$	—	$	567,280
December 31, 2022
Assets
Interest rate swaps	$	453,251	$	—	$	453,251	$	12,766	$	(342,480)	$	123,537
Liabilities
Interest rate swaps	$	594,476	$	—	$	594,476	$	(12,766)	$	(432)	$	581,278

*    Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contacts in an asset/liability position.

Offsetting Liabilities

The table below presents information about Valley’s financial instruments eligible for offset in the consolidated statements of financial condition as of June 30, 2023 and December 31, 2022.

							Gross Amounts Not Offset
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral *		Net Amount
	(in thousands)
June 30, 2023
Assets
Interest rate swaps	$	548,592	$	—	$	548,592	$	9,929	$	(468,200)	$	90,321
Liabilities
Interest rate swaps	$	577,209	$	—	$	577,209	$	(9,929)	$	—	$	567,280
December 31, 2022
Assets
Interest rate swaps	$	453,251	$	—	$	453,251	$	12,766	$	(342,480)	$	123,537
Liabilities
Interest rate swaps	$	594,476	$	—	$	594,476	$	(12,766)	$	(432)	$	581,278

*    Cash collateral received from or pledged to our counterparties in relation to market value exposures of OTC derivative contacts in an asset/liability position.

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Tax Credit Investments (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Affordable Housing Tax Credit Investments, Other Tax Credit Investments, and Related Unfunded Commitments

The following table presents the balances of Valley’s affordable housing tax credit investments, other tax credit investments, and related unfunded commitments at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
	(in thousands)
Other Assets:
Affordable housing tax credit investments, net	$	21,427	$	24,198
Other tax credit investments, net	80,145		56,551
Total tax credit investments, net	$	101,572	$	80,749
Other Liabilities:
Unfunded affordable housing tax credit commitments	$	1,327	$	1,338
Total unfunded tax credit commitments	$	1,327	$	1,338

Affordable Housing Tax Credit Investments and Other Tax Credit Investments

The following table presents other information relating to Valley’s affordable housing tax credit investments and other tax credit investments for the three and six months ended June 30, 2023 and 2022: 

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$	1,460	$	1,614	$	2,919	$	2,358
Other tax credit investment credits and tax benefits	3,430		2,539		6,651		5,090
Total reduction in income tax expense	$	4,890	$	4,153	$	9,570	$	7,448
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	$	938	$	653	$	1,875	$	1,068
Affordable housing tax credit investment impairment losses	448		363		896		625
Other tax credit investment losses	719		386		725		695
Other tax credit investment impairment losses	2,913		1,791		5,775		3,701
Total amortization of tax credit investments recorded in non-interest expense	$	5,018	$	3,193	$	9,271	$	6,089

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Operating Segments (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of Financial Data for Business Segments

The following tables represent the financial data for Valley’s operating segments for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,904,483		$	40,553,454		$	7,893,871		$	57,351,808
Interest income	$	90,602		$	624,569		$	72,288		$	787,459
Interest expense	55,198			250,871			61,625			367,694
Net interest income	35,404			373,698			10,663			419,765
Provision (credit) for credit losses	3,492			2,840			(282)			6,050
Net interest income after provision for credit losses	31,912			370,858			10,945			413,715
Non-interest income	25,529			14,361			20,185			60,075
Non-interest expense	23,223			35,365			224,383			282,971
Internal transfer expense (income)	22,018			102,395			(124,413)			—
Income (loss) before income taxes	$	12,200		$	247,459		$	(68,840)		$	190,819
Return on average interest earning assets (pre-tax)	0.55		%	2.44		%	(3.49)		%	1.33		%

	Three Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,967,305		$	34,549,982		$	6,373,943		$	48,891,230
Interest income	$	63,137		$	352,440		$	37,370		$	452,947
Interest expense	4,723			19,735			10,329			34,787
Net interest income	58,414			332,705			27,041			418,160
Provision for credit losses	5,402			38,310			286			43,998
Net interest income after provision for credit losses	53,012			294,395			26,755			374,162
Non-interest income	17,086			14,425			27,022			58,533
Non-interest expense	18,791			24,448			256,491			299,730
Internal transfer expense (income)	37,629			157,365			(194,994)			—
Income (loss) before income taxes	$	13,678		$	127,007		$	(7,720)		$	132,965
Return on average interest earning assets (pre-tax)	0.69		%	1.47		%	(0.48)		%	1.09		%

	Six Months Ended June 30, 2023
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	8,836,859		$	39,826,630		$	7,699,305		$	56,362,794
Interest income	$	175,918		$	1,194,479		$	137,292		$	1,507,689
Interest expense	98,204			442,594			111,106			651,904
Net interest income	77,714			751,885			26,186			855,785
Provision for credit losses	9,936			5,846			4,705			20,487
Net interest income after provision for credit losses	67,778			746,039			21,481			835,298
Non-interest income	39,819			30,108			44,447			114,374
Non-interest expense	41,472			71,088			442,577			555,137
Internal transfer expense (income)	52,901			233,990			(286,891)			—
Income (loss) before income taxes	$	13,224		$	471,069		$	(89,758)		$	394,535
Return on average interest earning assets (pre-tax)	0.30		%	2.37		%	(2.33)		%	1.40		%

	Six Months Ended June 30, 2022
	Consumer Banking			Commercial Banking			Treasury and Corporate Other			Total
	($ in thousands)
Average interest earning assets	$	7,848,764		$	30,743,387		$	6,017,817		$	44,609,968
Interest income	$	122,596		$	610,346		$	60,463		$	793,405
Interest expense	7,930			31,062			18,584			57,576
Net interest income	114,666			579,284			41,879			735,829
Provision for credit losses	7,275			39,937			343			47,555
Net interest income after provision for credit losses	107,391			539,347			41,536			688,274
Non-interest income	30,903			31,305			35,595			97,803
Non-interest expense	35,359			49,533			412,178			497,070
Internal transfer expense (income)	66,276			257,281			(323,557)			—
Income (loss) before income taxes	$	36,659		$	263,838		$	(11,490)		$	289,007
Return on average interest earning assets (pre-tax)	0.93		%	1.72		%	(0.38)		%	1.30		%

XML

Business Combinations (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		6 Months Ended
	Apr. 01, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Business Acquisition [Line Items]
Merger expenses		$ 0.0		$ 4.1
Bank Leumi Le-Israel Corporation
Business Acquisition [Line Items]
Number of shares issued for every share owned (in shares)	3.8025
Cash paid for every share owned (in dollars per share)	$ 5.08
Shares issued in connection with acquisition (in shares)	85,000,000
Cash paid in acquisition	$ 113.4
Consideration transferred	$ 1,200.0
Percentage of common stock transferred	14.00%
Acquisition related costs			$ 54.5		$ 58.9

XML

Business Combination - Assets Acquired and Liabilities Assumed in Acquisition (Details) - USD ($) $ in Thousands	Apr. 01, 2022	Jun. 30, 2023	Dec. 31, 2022
Assets acquired:
Goodwill		$ 1,868,936	$ 1,868,936
Bank Leumi USA
Assets acquired:
Cash and cash equivalents	$ 443,588
Equity securities	6,239
Available for sale debt securities	505,928
Held to maturity debt securities	806,627
Loans	5,914,389
Allowance for loan losses	(70,319)
Loans, net	5,844,070
Premises and equipment	38,827
Lease right of use assets	49,273
Bank owned life insurance	126,861
Accrued interest receivable	25,717
Goodwill	400,582
Other intangible assets	153,380
Other assets	160,921
Total assets acquired	8,562,013
Deposits:
Non-interest bearing	4,511,537
Interest bearing:
Savings, NOW and money market	2,224,834
Time	293,626
Total deposits	7,029,997
Short-term borrowings	103,794
Lease liabilities	79,683
Accrued expense and other liabilities	117,269
Total liabilities assumed	7,330,743
Common stock issued in acquisition	1,117,829
Cash paid in acquisition	$ 113,441

XML

Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share Reconciliation
Net income available to common shareholders	$ 135,030	$ 93,241	$ 277,707	$ 206,797
Basic weighted average number of common shares outstanding (in shares)	507,690,043	506,302,464	507,402,268	464,172,210
Plus: Common stock equivalents (in shares)	952,982	2,176,742	1,674,035	2,148,473
Diluted weighted average number of common shares outstanding (in shares)	508,643,025	508,479,206	509,076,303	466,320,683
Earnings Per Common Share:
Basic (usd per share)	$ 0.27	$ 0.18	$ 0.55	$ 0.45
Diluted (usd per share)	$ 0.27	$ 0.18	$ 0.55	$ 0.44
Anti-dilutive common stock options and warrants (in shares)	7,200,000	2,200,000	3,000,000	1,100,000

XML

Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Accumulated Other Comprehensive Income (Loss)
Beginning balance	$ 6,511,581	$ 5,096,384	$ 6,400,802	$ 5,084,066
Other comprehensive loss before reclassification	(21,624)		(1,656)
Amounts reclassified from other comprehensive loss	524		911
Other comprehensive (loss) income, net	(21,100)	(52,239)	(745)	(90,405)
Ending balance	6,575,184	6,204,913	6,575,184	6,204,913
Total Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(143,647)	(56,098)	(164,002)	(17,932)
Ending balance	(164,747)	$ (108,337)	(164,747)	$ (108,337)
Unrealized Gains and Losses on Available for Sale (AFS) Securities
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(110,648)		(127,818)
Other comprehensive loss before reclassification	(18,051)		(881)
Amounts reclassified from other comprehensive loss	0		0
Other comprehensive (loss) income, net	(18,051)		(881)
Ending balance	(128,699)		(128,699)
Unrealized Gains and Losses on Derivatives
Accumulated Other Comprehensive Income (Loss)
Beginning balance	5,410		2,233
Other comprehensive loss before reclassification	(3,573)		(775)
Amounts reclassified from other comprehensive loss	516		895
Other comprehensive (loss) income, net	(3,057)		120
Ending balance	2,353		2,353
Defined Benefit Pension and Postretirement Benefit Plans
Accumulated Other Comprehensive Income (Loss)
Beginning balance	(38,409)		(38,417)
Other comprehensive loss before reclassification	0		0
Amounts reclassified from other comprehensive loss	8		16
Other comprehensive (loss) income, net	8		16
Ending balance	$ (38,401)		$ (38,401)

XML

Accumulated Other Comprehensive Loss - Reclassification from Each Component of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Reclassification Out Of Accumulated Other Comprehensive Loss
Gains (losses) on securities transactions, net	$ 217		$ (309)		$ 595	$ (1,381)
Tax effect	(51,759)		(36,552)		(108,924)	(75,866)
Net interest income	(419,765)		(418,160)		(855,785)	(735,829)
Net income	139,060	$ 146,551	96,413	$ 116,728	285,611	213,141
Amortization of actuarial net loss	28,290		22,284		54,965	37,646
Amounts Reclassified from Accumulated Other Comprehensive Loss
Reclassification Out Of Accumulated Other Comprehensive Loss
Net income	(524)		(53)		(911)	(561)
Amounts Reclassified from Accumulated Other Comprehensive Loss | Unrealized gains on AFS securities before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Gains (losses) on securities transactions, net	0		0		0	14
Tax effect	0		0		0	(4)
Net income	0		0		0	10
Amounts Reclassified from Accumulated Other Comprehensive Loss | Unrealized gains (losses) on derivatives (cash flow hedges) before tax
Reclassification Out Of Accumulated Other Comprehensive Loss
Tax effect	209		(36)		361	120
Net interest income	(725)		116		(1,256)	(426)
Net income	(516)		80		(895)	(306)
Amounts Reclassified from Accumulated Other Comprehensive Loss | Defined benefit pension plan
Reclassification Out Of Accumulated Other Comprehensive Loss
Tax effect	3		51		6	102
Net income	(8)		(133)		(16)	(265)
Amortization of actuarial net loss	$ (11)		$ (184)		$ (22)	$ (367)

XML

New Authoritative Accounting Guidance (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses decrease	$ 436,432	$ 436,898	$ 458,655	$ 468,819	$ 362,510	$ 359,202
Adjustment due to adoption of ASUs	6,575,184	6,511,581	6,400,802	6,204,913	5,096,384	5,084,066
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment due to adoption of ASUs	$ 1,379,534	$ 1,300,980	1,218,445	$ 982,146	945,225	$ 883,645
Revision of Prior Period, Accounting Standards Update, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses decrease			(1,400)
Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses decrease			(1,368)		$ 70,319
Adjustment due to adoption of ASUs			990
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment due to adoption of ASUs			$ 990

XML

Fair Value Measurement of Assets and Liabilities - Recurring and Non-Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Investment securities:
Equity securities	$ 61,010	$ 48,731
Trading debt securities	3,409	13,438
Available for sale debt securities:
Available for sale debt securities	1,236,946	1,261,397
Non-recurring fair value measurements:
Unpaid principal balances of loans held for sale	23,000	17,900
U.S. Treasury securities
Available for sale debt securities:
Available for sale debt securities	282,398	279,498
U.S. government agency securities
Available for sale debt securities:
Available for sale debt securities	24,192	26,964
Obligations of states and political subdivisions
Available for sale debt securities:
Available for sale debt securities	171,043	146,811
Residential mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities	594,636	629,818
Corporate and other debt securities
Available for sale debt securities:
Available for sale debt securities	164,677	178,306
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements
Investment securities:
Equity securities	23,635	23,494
Trading debt securities	3,409	3,282
Available for sale debt securities:
Available for sale debt securities	282,398	279,498
Loans held for sale	0	0
Other assets	0	0
Total assets	309,442	306,274
Liabilities
Other liabilities	0	0
Total liabilities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | U.S. Treasury securities
Available for sale debt securities:
Available for sale debt securities	282,398	279,498
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | U.S. government agency securities
Available for sale debt securities:
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale debt securities:
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring fair value measurements | Corporate and other debt securities
Available for sale debt securities:
Available for sale debt securities	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-recurring fair value measurements
Liabilities
Non-performing loans held for sale	0
Non-recurring fair value measurements:
Non-performing loans held for sale	0
Collateral dependent loans	0	0
Foreclosed assets	0	0
Total	0	0
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements
Investment securities:
Equity securities	0	0
Trading debt securities	0	10,156
Available for sale debt securities:
Available for sale debt securities	954,548	981,899
Loans held for sale	23,044	18,118
Other assets	571,620	467,127
Total assets	1,549,212	1,477,300
Liabilities
Other liabilities	599,226	607,237
Total liabilities	599,226	607,237
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | U.S. Treasury securities
Available for sale debt securities:
Available for sale debt securities	0	0
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | U.S. government agency securities
Available for sale debt securities:
Available for sale debt securities	24,192	26,964
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale debt securities:
Available for sale debt securities	171,043	146,811
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities	594,636	629,818
Significant Other Observable Inputs (Level 2) | Recurring fair value measurements | Corporate and other debt securities
Available for sale debt securities:
Available for sale debt securities	164,677	178,306
Significant Other Observable Inputs (Level 2) | Non-recurring fair value measurements
Liabilities
Non-performing loans held for sale	10,000
Non-recurring fair value measurements:
Non-performing loans held for sale	10,000
Collateral dependent loans	0	0
Foreclosed assets	0	0
Total	10,000	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements
Investment securities:
Equity securities	0	0
Trading debt securities	0	0
Available for sale debt securities:
Available for sale debt securities	0	0
Loans held for sale	0	0
Other assets	0	0
Total assets	0	0
Liabilities
Other liabilities	0	0
Total liabilities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | U.S. Treasury securities
Available for sale debt securities:
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | U.S. government agency securities
Available for sale debt securities:
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale debt securities:
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Recurring fair value measurements | Corporate and other debt securities
Available for sale debt securities:
Available for sale debt securities	0	0
Significant Unobservable Inputs (Level 3) | Non-recurring fair value measurements
Liabilities
Non-performing loans held for sale	0
Non-recurring fair value measurements:
Non-performing loans held for sale	0
Collateral dependent loans	63,972	92,923
Foreclosed assets	2,132	1,937
Total	66,104	94,860
Fair Value | Recurring fair value measurements
Investment securities:
Trading debt securities	3,409	13,438
Available for sale debt securities:
Available for sale debt securities	1,236,946	1,261,397
Loans held for sale	23,044	18,118
Other assets	571,620	467,127
Total assets	1,870,982	1,793,673
Liabilities
Other liabilities	599,226	607,237
Total liabilities	599,226	607,237
Fair Value | Recurring fair value measurements | U.S. Treasury securities
Available for sale debt securities:
Available for sale debt securities	282,398	279,498
Fair Value | Recurring fair value measurements | U.S. government agency securities
Available for sale debt securities:
Available for sale debt securities	24,192	26,964
Fair Value | Recurring fair value measurements | Obligations of states and political subdivisions
Available for sale debt securities:
Available for sale debt securities	171,043	146,811
Fair Value | Recurring fair value measurements | Residential mortgage-backed securities
Available for sale debt securities:
Available for sale debt securities	594,636	629,818
Fair Value | Recurring fair value measurements | Corporate and other debt securities
Available for sale debt securities:
Available for sale debt securities	164,677	178,306
Fair Value | Non-recurring fair value measurements
Liabilities
Non-performing loans held for sale	10,000
Non-recurring fair value measurements:
Non-performing loans held for sale	10,000
Collateral dependent loans	63,972	92,923
Foreclosed assets	2,132	1,937
Total	76,104	94,860
Fair Value | Fair Value, Inputs, Level 1, Level 2, and Level 3 | Recurring fair value measurements
Investment securities:
Equity securities	23,635	23,494
Fair Value | Significant Unobservable Inputs (Level 3)
Investment securities:
Equity securities	25,047	15,138
Fair Value | NAV | Recurring fair value measurements
Investment securities:
Equity securities	$ 12,328	$ 10,099

XML

Fair Value Measurement of Assets and Liabilities - Additional Information (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023 USD ($) position	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Transfer to held for sale | position	1
Transfer of loans to loans held for sale	$ 10,000	$ 10,000	$ 0
Allowance for credit loss, writeoff	4,200
Collateral dependent loans amortized cost	125,000	125,000
Specific valuation allowance allocations	$ 61,000	$ 61,000
Discount adjustment of the appraisals of foreclosed assets	0.00%	0.00%		0.00%
Fair Value | Non-recurring fair value measurements
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Reported net carrying amount of collateral dependent loans	$ 64,000	$ 64,000

XML

Fair Value Measurement of Assets and Liabilities - Carrying Amounts and Estimated Fair Values (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Interest bearing deposits with banks	$ 1,491,091	$ 503,622
Equity securities	61,010	48,731
Total held to maturity debt securities	3,278,948	3,329,470
Accrued interest receivable	225,918	196,606
Liabilities
Deposits with stated maturities	14,908,182	9,556,457
U.S. Treasury securities
Assets
Total held to maturity debt securities	65,675	65,889
U.S. government agency securities
Assets
Total held to maturity debt securities	215,039	212,712
Obligations of states and political subdivisions
Assets
Total held to maturity debt securities	438,991	453,195
Residential mortgage-backed securities
Assets
Total held to maturity debt securities	2,461,519	2,495,797
Trust preferred securities
Assets
Total held to maturity debt securities	29,344	31,106
Corporate and other debt securities
Assets
Total held to maturity debt securities	68,380	70,771
Carrying Amount
Assets
Total held to maturity debt securities	3,766,838	3,828,984
Carrying Amount | Level 1
Assets
Cash and due from banks	463,318	444,325
Interest bearing deposits with banks	1,491,091	503,622
Accrued interest receivable	225,918	196,606
Liabilities
Deposits without stated maturities	34,711,633	38,080,457
Short-term borrowings	1,088,899	138,729
Accrued interest payable	125,873	45,617
Carrying Amount | Level 1 | U.S. Treasury securities
Assets
Total held to maturity debt securities	66,579	66,911
Carrying Amount | Level 2
Assets
Federal reserve bank and federal home loan bank stock	326,959	238,056
Liabilities
Deposits with stated maturities	14,908,182	9,556,457
Long-term borrowings	2,443,533	1,543,058
Junior subordinated debentures issued to capital trusts	56,934	56,760
Carrying Amount | Level 2 | U.S. government agency securities
Assets
Total held to maturity debt securities	261,197	260,392
Carrying Amount | Level 2 | Obligations of states and political subdivisions
Assets
Total held to maturity debt securities	465,115	480,298
Carrying Amount | Level 2 | Residential mortgage-backed securities
Assets
Total held to maturity debt securities	2,861,227	2,909,106
Carrying Amount | Level 2 | Trust preferred securities
Assets
Total held to maturity debt securities	37,052	37,043
Carrying Amount | Level 2 | Corporate and other debt securities
Assets
Total held to maturity debt securities	75,668	75,234
Carrying Amount | Level 3
Assets
Equity securities	25,047	15,138
Net loans	49,440,816	46,458,545
Fair Value
Assets
Total held to maturity debt securities	3,278,948	3,329,470
Fair Value | Level 1
Assets
Cash and due from banks	463,318	444,325
Interest bearing deposits with banks	1,491,091	503,622
Accrued interest receivable	225,918	196,606
Liabilities
Deposits without stated maturities	34,711,633	38,080,457
Short-term borrowings	1,066,450	138,729
Accrued interest payable	125,873	45,617
Fair Value | Level 1 | U.S. Treasury securities
Assets
Total held to maturity debt securities	65,675	65,889
Fair Value | Level 2
Assets
Federal reserve bank and federal home loan bank stock	326,959	238,056
Liabilities
Deposits with stated maturities	14,783,271	9,443,253
Long-term borrowings	2,340,324	1,395,991
Junior subordinated debentures issued to capital trusts	48,117	50,923
Fair Value | Level 2 | U.S. government agency securities
Assets
Total held to maturity debt securities	215,039	212,712
Fair Value | Level 2 | Obligations of states and political subdivisions
Assets
Total held to maturity debt securities	438,991	453,195
Fair Value | Level 2 | Residential mortgage-backed securities
Assets
Total held to maturity debt securities	2,461,519	2,495,797
Fair Value | Level 2 | Trust preferred securities
Assets
Total held to maturity debt securities	29,344	31,106
Fair Value | Level 2 | Corporate and other debt securities
Assets
Total held to maturity debt securities	68,380	70,771
Fair Value | Level 3
Assets
Equity securities	25,047	15,138
Net loans	$ 47,472,065	$ 44,910,049

XML

Investment Securities - Additional Information (Details)	3 Months Ended			6 Months Ended
	Jun. 30, 2023 USD ($) position	Mar. 31, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) position	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) position
Investments, Debt and Equity Securities [Abstract]
Equity securities	$ 61,010,000			$ 61,010,000		$ 48,731,000
Trading debt securities	3,409,000			3,409,000		$ 13,438,000
Debt securities, trading, realized gain	$ 226,000			$ 628,000
Debt securities, trading, realized loss			$ 387,000		$ 1,400,000
Number of security positions in the debt securities available for sale portfolio in an unrealized loss position | position	725			725		730
Fair value of debt securities available for sale pledged as collateral	$ 847,100,000			$ 847,100,000
Weighted-average remaining expected life of residential mortgage-backed securities available for sale, years				7 years 8 months 4 days
Provision for credit losses		$ 5,000,000		$ 5,000,000
Impairment loss			$ 0		$ 0
Accrued interest on investments available for sale	4,900,000			4,900,000		$ 5,600,000
Accrued interest on securities held to maturity	$ 13,600,000			$ 13,600,000		$ 13,500,000
Number of security positions in the securities held to maturity portfolio in an unrealized loss position | position	811			811		802
Fair value of investments held to maturity pledged as collateral	$ 2,400,000,000			$ 2,400,000,000
Weighted-average remaining expected life of residential mortgage-backed securities held to maturity, years				10 years 18 days

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Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Available for Sale (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,414,680	$ 1,437,911
Gross Unrealized Gains	39	111
Gross Unrealized Losses	(177,773)	(176,625)
Fair Value	1,236,946	1,261,397
U.S. Treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	310,936	308,137
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(28,538)	(28,639)
Fair Value	282,398	279,498
U.S. government agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	26,799	29,494
Gross Unrealized Gains	19	47
Gross Unrealized Losses	(2,626)	(2,577)
Fair Value	24,192	26,964
Obligations of states and state agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	9,425	10,899
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(776)	(493)
Fair Value	8,649	10,406
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	193,920	171,586
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(31,526)	(35,181)
Fair Value	162,394	136,405
Obligations of states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	203,345	182,485
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(32,302)	(35,674)
Fair Value	171,043	146,811
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	681,513	719,868
Gross Unrealized Gains	20	64
Gross Unrealized Losses	(86,897)	(90,114)
Fair Value	594,636	629,818
Corporate and other debt securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	192,087	197,927
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(27,410)	(19,621)
Fair Value	$ 164,677	$ 178,306

XML

Investment Securities - Age of Unrealized Losses and Fair Value of Related Available for Sale Debt Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value
Less than 12 Months	$ 77,981	$ 874,061
More than 12 Months	1,132,478	380,921
Total	1,210,459	1,254,982
Unrealized Losses
Less than 12 Months	(9,198)	(97,008)
More than 12 Months	(168,575)	(79,617)
Total	(177,773)	(176,625)
U.S. Treasury securities
Fair Value
Less than 12 Months	0	279,498
More than 12 Months	282,398	0
Total	282,398	279,498
Unrealized Losses
Less than 12 Months	0	(28,639)
More than 12 Months	(28,538)	0
Total	(28,538)	(28,639)
U.S. government agency securities
Fair Value
Less than 12 Months	0	22,831
More than 12 Months	22,818	1,116
Total	22,818	23,947
Unrealized Losses
Less than 12 Months	0	(2,538)
More than 12 Months	(2,626)	(39)
Total	(2,626)	(2,577)
Obligations of states and state agencies
Fair Value
Less than 12 Months	1,223	2,943
More than 12 Months	7,426	7,462
Total	8,649	10,405
Unrealized Losses
Less than 12 Months	(20)	(54)
More than 12 Months	(756)	(439)
Total	(776)	(493)
Municipal bonds
Fair Value
Less than 12 Months	1,405	112,029
More than 12 Months	137,180	24,127
Total	138,585	136,156
Unrealized Losses
Less than 12 Months	(20)	(26,044)
More than 12 Months	(31,506)	(9,137)
Total	(31,526)	(35,181)
Obligations of states and political subdivisions
Fair Value
Less than 12 Months	2,628	114,972
More than 12 Months	144,606	31,589
Total	147,234	146,561
Unrealized Losses
Less than 12 Months	(40)	(26,098)
More than 12 Months	(32,262)	(9,576)
Total	(32,302)	(35,674)
Residential mortgage-backed securities
Fair Value
Less than 12 Months	30,949	311,836
More than 12 Months	562,383	314,834
Total	593,332	626,670
Unrealized Losses
Less than 12 Months	(1,919)	(27,152)
More than 12 Months	(84,978)	(62,962)
Total	(86,897)	(90,114)
Corporate and other debt securities
Fair Value
Less than 12 Months	44,404	144,924
More than 12 Months	120,273	33,382
Total	164,677	178,306
Unrealized Losses
Less than 12 Months	(7,239)	(12,581)
More than 12 Months	(20,171)	(7,040)
Total	$ (27,410)	$ (19,621)

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Investment Securities - Contractual Maturities of Debt Securities Available for Sale (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Due in one year	$ 2,350
Due after one year through five years	282,534
Due after five years through ten years	175,056
Due after ten years	273,227
Residential mortgage-backed securities	681,513
Amortized Cost	1,414,680	$ 1,437,911
Fair Value
Due in one year	2,322
Due after one year through five years	265,870
Due after five years through ten years	148,811
Due after ten years	225,307
Residential mortgage-backed securities	594,636
Total	$ 1,236,946	$ 1,261,397

XML

Investment Securities -Debt Securities, Available-for-Sale, Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023
Debt Securities, Available-for-Sale, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 0	$ 0
Provision for credit losses	$ 5,000	5,000
Charge-offs		(5,000)
Ending balance		$ 0

XML

Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 3,766,838	$ 3,828,984
Gross Unrealized Gains	1,025	2,105
Gross Unrealized Losses	(488,915)	(501,619)
Fair Value	3,278,948	3,329,470
Allowance for Credit Losses	1,351	1,646	$ 1,508	$ 1,633	$ 1,165	$ 1,222
Net Carrying Value	3,765,487	3,827,338
U.S. Treasury securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	66,579	66,911
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(904)	(1,022)
Fair Value	65,675	65,889
Allowance for Credit Losses	0	0
Net Carrying Value	66,579	66,911
U.S. government agency securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	261,197	260,392
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(46,158)	(47,680)
Fair Value	215,039	212,712
Allowance for Credit Losses	0	0
Net Carrying Value	261,197	260,392
Obligations of states and state agencies
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	88,561	99,238
Gross Unrealized Gains	91	305
Gross Unrealized Losses	(5,112)	(3,869)
Fair Value	83,540	95,674
Allowance for Credit Losses	409	252
Net Carrying Value	88,152	98,986
Municipal bonds
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	376,554	381,060
Gross Unrealized Gains	27	76
Gross Unrealized Losses	(21,130)	(23,615)
Fair Value	355,451	357,521
Allowance for Credit Losses	57	41
Net Carrying Value	376,497	381,019
Obligations of states and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	465,115	480,298
Gross Unrealized Gains	118	381
Gross Unrealized Losses	(26,242)	(27,484)
Fair Value	438,991	453,195
Allowance for Credit Losses	466	293
Net Carrying Value	464,649	480,005
Residential mortgage-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	2,861,227	2,909,106
Gross Unrealized Gains	906	1,723
Gross Unrealized Losses	(400,614)	(415,032)
Fair Value	2,461,519	2,495,797
Allowance for Credit Losses	0	0
Net Carrying Value	2,861,227	2,909,106
Trust preferred securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	37,052	37,043
Gross Unrealized Gains	1	1
Gross Unrealized Losses	(7,709)	(5,938)
Fair Value	29,344	31,106
Allowance for Credit Losses	559	888
Net Carrying Value	36,493	36,155
Corporate and other debt securities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	75,668	75,234
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(7,288)	(4,463)
Fair Value	68,380	70,771
Allowance for Credit Losses	326	465
Net Carrying Value	$ 75,342	$ 74,769

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Investment Securities - Age of Unrealized Losses and Fair Value of Related Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value
Less than 12 Months	$ 340,866	$ 1,610,100
More than 12 Months	2,680,486	1,492,658
Total	3,021,352	3,102,758
Unrealized Losses
Less than 12 Months	(10,608)	(183,528)
More than 12 Months	(478,307)	(318,091)
Total	(488,915)	(501,619)
U.S. Treasury securities
Fair Value
Less than 12 Months	30,998	65,889
More than 12 Months	34,677	0
Total	65,675	65,889
Unrealized Losses
Less than 12 Months	(598)	(1,022)
More than 12 Months	(306)	0
Total	(904)	(1,022)
U.S. government agency securities
Fair Value
Less than 12 Months	0	209,863
More than 12 Months	213,885	1,673
Total	213,885	211,536
Unrealized Losses
Less than 12 Months	0	(47,508)
More than 12 Months	(46,158)	(172)
Total	(46,158)	(47,680)
Obligations of states and state agencies
Fair Value
Less than 12 Months	25,298	62,443
More than 12 Months	44,869	18,231
Total	70,167	80,674
Unrealized Losses
Less than 12 Months	(623)	(2,020)
More than 12 Months	(4,489)	(1,849)
Total	(5,112)	(3,869)
Municipal bonds
Fair Value
Less than 12 Months	84,224	251,970
More than 12 Months	200,924	15,534
Total	285,148	267,504
Unrealized Losses
Less than 12 Months	(1,437)	(20,457)
More than 12 Months	(19,693)	(3,158)
Total	(21,130)	(23,615)
Obligations of states and political subdivisions
Fair Value
Less than 12 Months	109,522	314,413
More than 12 Months	245,793	33,765
Total	355,315	348,178
Unrealized Losses
Less than 12 Months	(2,060)	(22,477)
More than 12 Months	(24,182)	(5,007)
Total	(26,242)	(27,484)
Residential mortgage-backed securities
Fair Value
Less than 12 Months	182,290	962,690
More than 12 Months	2,107,464	1,413,590
Total	2,289,754	2,376,280
Unrealized Losses
Less than 12 Months	(6,756)	(109,532)
More than 12 Months	(393,858)	(305,500)
Total	(400,614)	(415,032)
Trust preferred securities
Fair Value
Less than 12 Months	0	0
More than 12 Months	28,343	30,105
Total	28,343	30,105
Unrealized Losses
Less than 12 Months	0	0
More than 12 Months	(7,709)	(5,938)
Total	(7,709)	(5,938)
Corporate and other debt securities
Fair Value
Less than 12 Months	18,056	57,245
More than 12 Months	50,324	13,525
Total	68,380	70,770
Unrealized Losses
Less than 12 Months	(1,194)	(2,989)
More than 12 Months	(6,094)	(1,474)
Total	$ (7,288)	$ (4,463)

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Investment Securities - Contractual Maturities of Debt Securities Held to Maturity (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Due in one year	$ 68,033
Due after one year through five years	126,908
Due after five years through ten years	95,472
Due after ten years	615,198
Residential mortgage-backed securities	2,861,227
Amortized Cost	3,766,838	$ 3,828,984
Fair Value
Due in one year	67,619
Due after one year through five years	123,033
Due after five years through ten years	87,948
Due after ten years	538,829
Residential mortgage-backed securities	2,461,519
Total	$ 3,278,948	$ 3,329,470

XML

Investment Securities - Amortized Cost of Debt Securities Held to Maturity by External Credit Rating (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	$ 3,766,838	$ 3,828,984
U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	66,579	66,911
U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	261,197	260,392
Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	88,561	99,238
Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	376,554	381,060
Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	465,115	480,298
Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	2,861,227	2,909,106
Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	37,052	37,043
Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	75,668	75,234
AAA/AA/A Rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	3,576,631	3,646,840
AAA/AA/A Rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	66,579	66,911
AAA/AA/A Rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	261,197	260,392
AAA/AA/A Rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	65,768	74,943
AAA/AA/A Rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	321,860	333,488
AAA/AA/A Rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	387,628	408,431
AAA/AA/A Rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	2,861,227	2,909,106
AAA/AA/A Rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
AAA/AA/A Rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	2,000
BBB rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	6,000	6,000
BBB rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
BBB rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	6,000	6,000
Non-investment grade rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,416	5,497
Non-investment grade rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,416	5,497
Non-investment grade rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	5,416	5,497
Non-investment grade rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-investment grade rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	178,791	170,647
Non-rated | U.S. Treasury securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated | U.S. government agency securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated | Obligations of states and state agencies
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	17,377	18,798
Non-rated | Municipal bonds
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	54,694	47,572
Non-rated | Obligations of states and political subdivisions
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	72,071	66,370
Non-rated | Residential mortgage-backed securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	0	0
Non-rated | Trust preferred securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	37,052	37,043
Non-rated | Corporate and other debt securities
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Amortized cost of held to maturity debt securities	$ 69,668	$ 67,234

XML

Investment Securities - Debt Securities, Held-to-Maturity, Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Roll Forward]
Beginning balance		$ 1,633	$ 1,646	$ 1,165
(Credit) provision for credit losses	$ (282)	286	(295)	343
Ending balance	$ 1,351	$ 1,508	$ 1,351	$ 1,508

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Loans and Allowance for Credit Losses for Loans - Loan Portfolio (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 49,877,248	$ 46,917,200
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	9,287,309	8,804,830
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	31,608,833	29,432,868
Commercial real estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	27,793,072	25,732,033
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,815,761	3,700,835
Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	5,560,356	5,364,550
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,420,750	3,314,952
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	535,493	503,884
Consumer | Automobile
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,632,875	1,746,225
Consumer | Other consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 1,252,382	$ 1,064,843

XML

Loans and Allowance for Credit Losses for Loans - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non covered loans net of unearned discount and deferred loan fees	$ 119,100,000		$ 119,100,000		$ 120,500,000
Accrued interest	202,100,000		202,100,000		175,900,000
Sales of loans	0	$ 0	0	$ 0
Specific reserves for loan losses		56,000,000		56,000,000
Loan charge-offs related to loans modified as TDRs		1,500,000		1,500,000
TDRs not reported as non-accrual loans		67,300,000		67,300,000
Non-performing TDRs		$ 154,400,000		$ 154,400,000
Other real estate owned	824,000		824,000		286,000
Allowance for purchase credit deteriorated (PCD) loans			24,600,000
Residential real estate properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Other real estate owned	0		0		0
In formal foreclosure proceedings
Accounts, Notes, Loans and Financing Receivable [Line Items]
Residential mortgage and consumer loans secured by residential real estate properties	$ 454,000		$ 454,000		$ 2,600,000

XML

Loans and Allowance for Credit Losses for Loans - Past Due, Non-Accrual and Current Loans by Loan Portfolio Class (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Loans	$ 49,877,248	$ 46,917,200
Non-Accrual Loans	254,091	269,761
Non-Accrual Loans Without Allowance for Loan Losses	116,286	102,186
Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	315,872	360,649
30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	33,837	43,535
60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	12,942	20,766
90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	15,002	26,587
Current Loans
Financing Receivable, Past Due [Line Items]
Loans	49,561,376	46,556,551
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Loans	9,287,309	8,804,830
Non-Accrual Loans	84,449	98,881
Non-Accrual Loans Without Allowance for Loan Losses	8,221	5,659
Commercial and industrial | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	104,745	141,642
Commercial and industrial | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	6,229	11,664
Commercial and industrial | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	7,468	12,705
Commercial and industrial | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	6,599	18,392
Commercial and industrial | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	9,182,564	8,663,188
Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	31,608,833	29,432,868
Non-Accrual Loans	145,755	142,546
Non-Accrual Loans Without Allowance for Loan Losses	91,914	82,186
Commercial real estate | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	155,599	158,633
Commercial real estate | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	3,612	6,638
Commercial real estate | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	0	3,167
Commercial real estate | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	6,232	6,282
Commercial real estate | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	31,453,234	29,274,235
Commercial real estate | Commercial real estate
Financing Receivable, Past Due [Line Items]
Loans	27,793,072	25,732,033
Non-Accrual Loans	82,712	68,316
Non-Accrual Loans Without Allowance for Loan Losses	76,438	66,066
Commercial real estate | Commercial real estate | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	88,566	80,413
Commercial real estate | Commercial real estate | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	3,612	6,638
Commercial real estate | Commercial real estate | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	0	3,167
Commercial real estate | Commercial real estate | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	2,242	2,292
Commercial real estate | Commercial real estate | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	27,704,506	25,651,620
Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Loans	3,815,761	3,700,835
Non-Accrual Loans	63,043	74,230
Non-Accrual Loans Without Allowance for Loan Losses	15,476	16,120
Commercial real estate | Construction | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	67,033	78,220
Commercial real estate | Construction | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	0	0
Commercial real estate | Construction | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	0	0
Commercial real estate | Construction | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	3,990	3,990
Commercial real estate | Construction | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	3,748,728	3,622,615
Residential mortgage
Financing Receivable, Past Due [Line Items]
Loans	5,560,356	5,364,550
Non-Accrual Loans	20,819	25,160
Non-Accrual Loans Without Allowance for Loan Losses	16,151	14,224
Residential mortgage | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	38,897	46,487
Residential mortgage | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	15,565	16,146
Residential mortgage | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	1,348	3,315
Residential mortgage | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	1,165	1,866
Residential mortgage | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	5,521,459	5,318,063
Consumer
Financing Receivable, Past Due [Line Items]
Loans	3,420,750	3,314,952
Non-Accrual Loans	3,068	3,174
Non-Accrual Loans Without Allowance for Loan Losses	0	117
Consumer | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	16,631	13,887
Consumer | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	8,431	9,087
Consumer | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	4,126	1,579
Consumer | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	1,006	47
Consumer | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	3,404,119	3,301,065
Consumer | Home equity
Financing Receivable, Past Due [Line Items]
Loans	535,493	503,884
Non-Accrual Loans	2,737	2,810
Non-Accrual Loans Without Allowance for Loan Losses	0	117
Consumer | Home equity | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	3,742	4,019
Consumer | Home equity | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	959	955
Consumer | Home equity | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	46	254
Consumer | Home equity | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	0	0
Consumer | Home equity | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	531,751	499,865
Consumer | Automobile
Financing Receivable, Past Due [Line Items]
Loans	1,632,875	1,746,225
Non-Accrual Loans	248	271
Non-Accrual Loans Without Allowance for Loan Losses	0	0
Consumer | Automobile | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	7,111	6,876
Consumer | Automobile | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	5,963	5,974
Consumer | Automobile | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	568	630
Consumer | Automobile | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	332	1
Consumer | Automobile | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	1,625,764	1,739,349
Consumer | Other consumer
Financing Receivable, Past Due [Line Items]
Loans	1,252,382	1,064,843
Non-Accrual Loans	83	93
Non-Accrual Loans Without Allowance for Loan Losses	0	0
Consumer | Other consumer | Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Loans	5,778	2,992
Consumer | Other consumer | 30-59  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	1,509	2,158
Consumer | Other consumer | 60-89  Days  Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	3,512	695
Consumer | Other consumer | 90 Days or More Past Due Loans
Financing Receivable, Past Due [Line Items]
Loans	674	46
Consumer | Other consumer | Current Loans
Financing Receivable, Past Due [Line Items]
Loans	$ 1,246,604	$ 1,061,851

XML

Loans and Allowance for Credit Losses for Loans - Internal Loan Classification Risk by Loan Portfolio Class by Origination Year (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 49,877,248		$ 49,877,248		$ 46,917,200
Gross loan charge-offs
Total	11,327	$ 5,267	43,900	$ 7,862
Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	1,002,521		1,002,521		1,633,478
Year two, fiscal year before current fiscal year	1,277,722		1,277,722		1,115,331
Year three, two years before current fiscal year	997,297		997,297		614,019
Year four, three years before current fiscal year	511,813		511,813		331,400
Year five, four years before current fiscal year	276,221		276,221		258,656
More than five years before current fiscal year	639,161		639,161		458,680
Revolving Loans Amortized Cost Basis	4,580,780		4,580,780		4,393,115
Revolving Loans Converted to Term Loans	1,794		1,794		151
Total	9,287,309		9,287,309		8,804,830
Gross loan charge-offs
Total	3,865	4,540	29,912	6,111
Commercial and industrial | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	978,383		978,383		1,600,747
Year two, fiscal year before current fiscal year	1,233,039		1,233,039		1,089,386
Year three, two years before current fiscal year	987,984		987,984		590,406
Year four, three years before current fiscal year	490,159		490,159		322,564
Year five, four years before current fiscal year	267,719		267,719		250,031
More than five years before current fiscal year	565,910		565,910		386,085
Revolving Loans Amortized Cost Basis	4,420,712		4,420,712		4,307,163
Revolving Loans Converted to Term Loans	306		306		144
Total	8,944,212		8,944,212		8,546,526
Commercial and industrial | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	16,582		16,582		31,557
Year two, fiscal year before current fiscal year	43,260		43,260		3,367
Year three, two years before current fiscal year	3,257		3,257		19,492
Year four, three years before current fiscal year	19,948		19,948		4,732
Year five, four years before current fiscal year	4,125		4,125		4,369
More than five years before current fiscal year	7,005		7,005		3,558
Revolving Loans Amortized Cost Basis	131,677		131,677		51,021
Revolving Loans Converted to Term Loans	1,488		1,488		7
Total	227,342		227,342		118,103
Commercial and industrial | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	6,056		6,056		288
Year two, fiscal year before current fiscal year	754		754		1,734
Year three, two years before current fiscal year	3,288		3,288		4,121
Year four, three years before current fiscal year	1,706		1,706		1,412
Year five, four years before current fiscal year	1,703		1,703		4,256
More than five years before current fiscal year	2,819		2,819		4,879
Revolving Loans Amortized Cost Basis	25,681		25,681		31,698
Revolving Loans Converted to Term Loans	0		0		0
Total	42,007		42,007		48,388
Commercial and industrial | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	1,500		1,500		886
Year two, fiscal year before current fiscal year	669		669		20,844
Year three, two years before current fiscal year	2,768		2,768		0
Year four, three years before current fiscal year	0		0		2,692
Year five, four years before current fiscal year	2,674		2,674		0
More than five years before current fiscal year	63,427		63,427		64,158
Revolving Loans Amortized Cost Basis	2,710		2,710		3,233
Revolving Loans Converted to Term Loans	0		0		0
Total	73,748		73,748		91,813
Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total	31,608,833		31,608,833		29,432,868
Gross loan charge-offs
Total	6,273	$ 0	11,971	$ 173
Commercial real estate | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	3,103,166		3,103,166		6,923,489
Year two, fiscal year before current fiscal year	6,758,975		6,758,975		5,250,609
Year three, two years before current fiscal year	5,083,854		5,083,854		3,339,684
Year four, three years before current fiscal year	3,211,757		3,211,757		2,752,292
Year five, four years before current fiscal year	2,590,762		2,590,762		1,657,775
More than five years before current fiscal year	6,484,153		6,484,153		5,336,045
Revolving Loans Amortized Cost Basis	557,095		557,095		468,635
Revolving Loans Converted to Term Loans	3,310		3,310		3,504
Total	27,793,072		27,793,072		25,732,033
Commercial real estate | Commercial real estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	3,006,116		3,006,116		6,815,115
Year two, fiscal year before current fiscal year	6,675,372		6,675,372		5,168,127
Year three, two years before current fiscal year	4,997,069		4,997,069		3,246,885
Year four, three years before current fiscal year	3,073,019		3,073,019		2,672,223
Year five, four years before current fiscal year	2,453,918		2,453,918		1,536,327
More than five years before current fiscal year	6,040,604		6,040,604		5,027,128
Revolving Loans Amortized Cost Basis	542,644		542,644		452,461
Revolving Loans Converted to Term Loans	3,310		3,310		3,504
Total	26,792,052		26,792,052		24,921,770
Commercial real estate | Commercial real estate | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	86,078		86,078		93,286
Year two, fiscal year before current fiscal year	52,939		52,939		48,007
Year three, two years before current fiscal year	51,208		51,208		60,169
Year four, three years before current fiscal year	111,268		111,268		45,447
Year five, four years before current fiscal year	100,524		100,524		62,111
More than five years before current fiscal year	205,971		205,971		125,414
Revolving Loans Amortized Cost Basis	6,621		6,621		8,188
Revolving Loans Converted to Term Loans	0		0		0
Total	614,609		614,609		442,622
Commercial real estate | Commercial real estate | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	10,972		10,972		15,088
Year two, fiscal year before current fiscal year	30,664		30,664		34,475
Year three, two years before current fiscal year	35,577		35,577		32,630
Year four, three years before current fiscal year	27,280		27,280		34,622
Year five, four years before current fiscal year	36,320		36,320		59,337
More than five years before current fiscal year	237,578		237,578		183,341
Revolving Loans Amortized Cost Basis	7,830		7,830		7,986
Revolving Loans Converted to Term Loans	0		0		0
Total	386,221		386,221		367,479
Commercial real estate | Commercial real estate | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	0		0		0
Year two, fiscal year before current fiscal year	0		0		0
Year three, two years before current fiscal year	0		0		0
Year four, three years before current fiscal year	190		190		0
Year five, four years before current fiscal year	0		0		0
More than five years before current fiscal year	0		0		162
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term Loans	0		0		0
Total	190		190		162
Commercial real estate | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	399,088		399,088		955,349
Year two, fiscal year before current fiscal year	721,930		721,930		524,647
Year three, two years before current fiscal year	349,830		349,830		61,131
Year four, three years before current fiscal year	32,129		32,129		23,819
Year five, four years before current fiscal year	19,833		19,833		8,676
More than five years before current fiscal year	37,898		37,898		51,941
Revolving Loans Amortized Cost Basis	2,255,053		2,255,053		2,075,272
Revolving Loans Converted to Term Loans	0		0		0
Total	3,815,761		3,815,761		3,700,835
Commercial real estate | Construction | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	390,550		390,550		942,380
Year two, fiscal year before current fiscal year	702,031		702,031		512,046
Year three, two years before current fiscal year	342,403		342,403		61,131
Year four, three years before current fiscal year	32,129		32,129		22,845
Year five, four years before current fiscal year	18,878		18,878		8,676
More than five years before current fiscal year	20,230		20,230		20,599
Revolving Loans Amortized Cost Basis	2,251,552		2,251,552		2,040,866
Revolving Loans Converted to Term Loans	0		0		0
Total	3,757,773		3,757,773		3,608,543
Commercial real estate | Construction | Special Mention
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year					0
Year two, fiscal year before current fiscal year					0
Year three, two years before current fiscal year					0
Year four, three years before current fiscal year					0
Year five, four years before current fiscal year					0
More than five years before current fiscal year					0
Revolving Loans Amortized Cost Basis					14,268
Revolving Loans Converted to Term Loans					0
Total					14,268
Commercial real estate | Construction | Substandard
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	8,538		8,538		12,969
Year two, fiscal year before current fiscal year	12,969		12,969		12,601
Year three, two years before current fiscal year	7,427		7,427		0
Year four, three years before current fiscal year	0		0		974
Year five, four years before current fiscal year	955		955		0
More than five years before current fiscal year	17,668		17,668		17,599
Revolving Loans Amortized Cost Basis	3,501		3,501		20,138
Revolving Loans Converted to Term Loans	0		0		0
Total	51,058		51,058		64,281
Commercial real estate | Construction | Doubtful
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	0		0		0
Year two, fiscal year before current fiscal year	6,930		6,930		0
Year three, two years before current fiscal year	0		0		0
Year four, three years before current fiscal year	0		0		0
Year five, four years before current fiscal year	0		0		0
More than five years before current fiscal year	0		0		13,743
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term Loans	0		0		0
Total	$ 6,930		6,930		$ 13,743
Commercial and Industrial and Commercial Real Estate
Gross loan charge-offs
2023			0
2022			7,288
2021			24,658
2020			6,479
2019			908
Prior to 2019			2,524
Revolving Loans Amortized Cost Basis			26
Revolving Loans Converted to Term Loans			0
Total			$ 41,883

XML

Loans and Allowance for Credit Losses for Loans - Amortized Cost In Those Loan Classes Based on Payment Activity by Origination Year (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Total	$ 49,877,248		$ 49,877,248		$ 46,917,200
Gross loan charge-offs
Total	11,327	$ 5,267	43,900	$ 7,862
90 Days or More Past Due Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total	15,002		15,002		26,587
Residential mortgage
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	369,607		369,607		1,302,279
Year two, fiscal year before current fiscal year	1,304,505		1,304,505		1,502,819
Year three, two years before current fiscal year	1,524,988		1,524,988		571,607
Year four, three years before current fiscal year	562,263		562,263		502,032
Year five, four years before current fiscal year	456,260		456,260		340,938
More than five years before current fiscal year	1,268,750		1,268,750		1,078,169
Revolving Loans Amortized Cost Basis	73,983		73,983		66,706
Revolving Loans Converted to Term Loans	0		0		0
Total	5,560,356		5,560,356		5,364,550
Gross loan charge-offs
Total	149	1	149	27
Residential mortgage | 90 Days or More Past Due Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total	1,165		1,165		1,866
Residential mortgage | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	369,607		369,607		1,302,279
Year two, fiscal year before current fiscal year	1,304,327		1,304,327		1,502,622
Year three, two years before current fiscal year	1,524,988		1,524,988		571,390
Year four, three years before current fiscal year	562,263		562,263		500,197
Year five, four years before current fiscal year	455,463		455,463		338,062
More than five years before current fiscal year	1,263,659		1,263,659		1,073,995
Revolving Loans Amortized Cost Basis	73,983		73,983		66,706
Revolving Loans Converted to Term Loans	0		0		0
Total	5,554,290		5,554,290		5,355,251
Residential mortgage | Non-Performing Loans | 90 Days or More Past Due Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	0		0		0
Year two, fiscal year before current fiscal year	178		178		197
Year three, two years before current fiscal year	0		0		217
Year four, three years before current fiscal year	0		0		1,835
Year five, four years before current fiscal year	797		797		2,876
More than five years before current fiscal year	5,091		5,091		4,174
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term Loans	0		0		0
Total	6,066		6,066		9,299
Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	242,632		242,632		795,819
Year two, fiscal year before current fiscal year	699,954		699,954		547,709
Year three, two years before current fiscal year	447,925		447,925		217,412
Year four, three years before current fiscal year	169,300		169,300		178,742
Year five, four years before current fiscal year	137,005		137,005		93,100
More than five years before current fiscal year	101,954		101,954		74,268
Revolving Loans Amortized Cost Basis	1,582,946		1,582,946		1,368,622
Revolving Loans Converted to Term Loans	39,034		39,034		39,280
Total	3,420,750		3,420,750		3,314,952
Gross loan charge-offs
Total	1,040	$ 726	1,868	$ 1,551
Consumer | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	19,442		19,442		47,084
Year two, fiscal year before current fiscal year	45,601		45,601		12,432
Year three, two years before current fiscal year	11,873		11,873		4,592
Year four, three years before current fiscal year	4,326		4,326		5,024
Year five, four years before current fiscal year	4,660		4,660		5,581
More than five years before current fiscal year	17,396		17,396		13,007
Revolving Loans Amortized Cost Basis	393,161		393,161		376,884
Revolving Loans Converted to Term Loans	39,034		39,034		39,280
Total	535,493		535,493		503,884
Consumer | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	205,217		205,217		724,595
Year two, fiscal year before current fiscal year	633,374		633,374		525,133
Year three, two years before current fiscal year	437,601		437,601		204,614
Year four, three years before current fiscal year	161,245		161,245		166,283
Year five, four years before current fiscal year	123,625		123,625		80,113
More than five years before current fiscal year	71,813		71,813		45,487
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term Loans	0		0		0
Total	1,632,875		1,632,875		1,746,225
Consumer | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	17,973		17,973		24,140
Year two, fiscal year before current fiscal year	20,979		20,979		10,144
Year three, two years before current fiscal year	(1,549)		(1,549)		8,206
Year four, three years before current fiscal year	3,729		3,729		7,435
Year five, four years before current fiscal year	8,720		8,720		7,406
More than five years before current fiscal year	12,745		12,745		15,774
Revolving Loans Amortized Cost Basis	1,189,785		1,189,785		991,738
Revolving Loans Converted to Term Loans	0		0		0
Total	1,252,382		1,252,382		1,064,843
Consumer | 90 Days or More Past Due Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Total	1,006		1,006		47
Consumer | 90 Days or More Past Due Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Total	0		0		0
Consumer | 90 Days or More Past Due Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Total	332		332		1
Consumer | 90 Days or More Past Due Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total	674		674		46
Consumer | Performing | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	19,442		19,442		47,084
Year two, fiscal year before current fiscal year	45,601		45,601		12,432
Year three, two years before current fiscal year	11,873		11,873		4,592
Year four, three years before current fiscal year	4,326		4,326		5,024
Year five, four years before current fiscal year	4,660		4,660		5,581
More than five years before current fiscal year	17,396		17,396		13,007
Revolving Loans Amortized Cost Basis	392,898		392,898		376,608
Revolving Loans Converted to Term Loans	38,391		38,391		38,570
Total	534,587		534,587		502,898
Consumer | Performing | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	205,170		205,170		724,557
Year two, fiscal year before current fiscal year	633,269		633,269		525,017
Year three, two years before current fiscal year	437,528		437,528		204,578
Year four, three years before current fiscal year	161,245		161,245		166,103
Year five, four years before current fiscal year	123,616		123,616		80,012
More than five years before current fiscal year	71,682		71,682		45,415
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term Loans	0		0		0
Total	1,632,510		1,632,510		1,745,682
Consumer | Performing | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	17,973		17,973		24,140
Year two, fiscal year before current fiscal year	20,979		20,979		10,144
Year three, two years before current fiscal year	(1,549)		(1,549)		8,206
Year four, three years before current fiscal year	3,729		3,729		7,435
Year five, four years before current fiscal year	8,720		8,720		7,406
More than five years before current fiscal year	12,707		12,707		15,736
Revolving Loans Amortized Cost Basis	1,189,191		1,189,191		991,737
Revolving Loans Converted to Term Loans	0		0		0
Total	1,251,750		1,251,750		1,064,804
Consumer | Non-Performing Loans | 90 Days or More Past Due Loans | Home equity
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	0		0		0
Year two, fiscal year before current fiscal year	0		0		0
Year three, two years before current fiscal year	0		0		0
Year four, three years before current fiscal year	0		0		0
Year five, four years before current fiscal year	0		0		0
More than five years before current fiscal year	0		0		0
Revolving Loans Amortized Cost Basis	263		263		276
Revolving Loans Converted to Term Loans	643		643		710
Total	906		906		986
Consumer | Non-Performing Loans | 90 Days or More Past Due Loans | Automobile
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	47		47		38
Year two, fiscal year before current fiscal year	105		105		116
Year three, two years before current fiscal year	73		73		36
Year four, three years before current fiscal year	0		0		180
Year five, four years before current fiscal year	9		9		101
More than five years before current fiscal year	131		131		72
Revolving Loans Amortized Cost Basis	0		0		0
Revolving Loans Converted to Term Loans	0		0		0
Total	365		365		543
Consumer | Non-Performing Loans | 90 Days or More Past Due Loans | Other consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Year one, current fiscal year	0		0		0
Year two, fiscal year before current fiscal year	0		0		0
Year three, two years before current fiscal year	0		0		0
Year four, three years before current fiscal year	0		0		0
Year five, four years before current fiscal year	0		0		0
More than five years before current fiscal year	38		38		38
Revolving Loans Amortized Cost Basis	594		594		1
Revolving Loans Converted to Term Loans	0		0		0
Total	$ 632		632		$ 39
Residential Mortgage and Consumer
Gross loan charge-offs
2023			11
2022			226
2021			206
2020			90
2019			428
Prior to 2019			953
Revolving Loans Amortized Cost Basis			103
Revolving Loans Converted to Term Loans			0
Total			$ 2,017

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Loans and Allowance for Credit Losses for Loans - Financing Receivable, Modified (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023
Financing Receivable, Modified [Line Items]
Total	$ 47,088	$ 95,250
Term extension
Financing Receivable, Modified [Line Items]
Total	41,852	89,493
Term extension and interest rate reduction
Financing Receivable, Modified [Line Items]
Total	5,236	5,757
Commercial and industrial
Financing Receivable, Modified [Line Items]
Total	39,244	41,036
Commercial and industrial | Term extension
Financing Receivable, Modified [Line Items]
Total	37,762	39,033
Commercial and industrial | Term extension and interest rate reduction
Financing Receivable, Modified [Line Items]
Total	1,482	2,003
Commercial Real Estate
Financing Receivable, Modified [Line Items]
Total	7,266	53,371
Commercial Real Estate | Term extension
Financing Receivable, Modified [Line Items]
Total	3,512	49,617
Commercial Real Estate | Term extension and interest rate reduction
Financing Receivable, Modified [Line Items]
Total	3,754	3,754
Residential mortgage
Financing Receivable, Modified [Line Items]
Total	578	790
Residential mortgage | Term extension
Financing Receivable, Modified [Line Items]
Total	578	790
Residential mortgage | Term extension and interest rate reduction
Financing Receivable, Modified [Line Items]
Total	0	0
Consumer
Financing Receivable, Modified [Line Items]
Total	0	53
Consumer | Term extension
Financing Receivable, Modified [Line Items]
Total	0	53
Consumer | Term extension and interest rate reduction
Financing Receivable, Modified [Line Items]
Total	$ 0	$ 0

XML

Loans and Allowance for Credit Losses for Loans - Financing Effect of Loan Modification (Details)	6 Months Ended
	Jun. 30, 2023
Commercial and industrial | Term extension
Financing Receivable, Modified [Line Items]
Weighted average term increase from modification	12 months
Commercial and industrial | Term extension and interest rate reduction
Financing Receivable, Modified [Line Items]
Weighted average term increase from modification	12 months
Residential mortgage
Financing Receivable, Modified [Line Items]
Weighted average term increase from modification	12 months
Consumer
Financing Receivable, Modified [Line Items]
Weighted average term increase from modification	60 months
Maximum | Commercial and industrial
Financing Receivable, Modified [Line Items]
Weighted average contractual interest rate	9.38%
Maximum | Commercial Real Estate
Financing Receivable, Modified [Line Items]
Weighted average contractual interest rate	6.00%
Weighted average term increase from modification	36 months
Minimum | Commercial and industrial
Financing Receivable, Modified [Line Items]
Weighted average contractual interest rate	6.50%
Minimum | Commercial Real Estate
Financing Receivable, Modified [Line Items]
Weighted average contractual interest rate	8.75%
Weighted average term increase from modification	6 months

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Loans and Allowance for Credit Losses for Loans - Pre-Modification and Post-Modification (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022 USD ($) contract	Jun. 30, 2022 USD ($) contract
Financing Receivable, Modified [Line Items]
Number of contracts, troubled debt restructurings (in contract) | contract	58	72
Pre-Modification Outstanding Recorded Investment	$ 96,026	$ 111,091
Post-Modification Outstanding Recorded Investment	$ 91,879	$ 106,882
Days past due to place on non-accrual status		90 days
Number of Contracts | contract	2	2
Recorded Investment	$ 17,599	$ 17,599
Commercial and industrial
Financing Receivable, Modified [Line Items]
Number of contracts, troubled debt restructurings (in contract) | contract	49	60
Pre-Modification Outstanding Recorded Investment	$ 82,120	$ 91,804
Post-Modification Outstanding Recorded Investment	$ 78,051	$ 87,685
Commercial Real Estate | Commercial real estate
Financing Receivable, Modified [Line Items]
Number of contracts, troubled debt restructurings (in contract) | contract	1	3
Pre-Modification Outstanding Recorded Investment	$ 8,811	$ 14,072
Post-Modification Outstanding Recorded Investment	$ 8,735	$ 13,986
Commercial Real Estate | Construction
Financing Receivable, Modified [Line Items]
Number of Contracts | contract	2	2
Recorded Investment	$ 17,599	$ 17,599
Residential mortgage
Financing Receivable, Modified [Line Items]
Number of contracts, troubled debt restructurings (in contract) | contract	7	8
Pre-Modification Outstanding Recorded Investment	$ 4,970	$ 5,090
Post-Modification Outstanding Recorded Investment	$ 4,969	$ 5,087
Consumer
Financing Receivable, Modified [Line Items]
Number of contracts, troubled debt restructurings (in contract) | contract	1	1
Pre-Modification Outstanding Recorded Investment	$ 125	$ 125
Post-Modification Outstanding Recorded Investment	$ 124	$ 124

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Loans and Allowance for Credit Losses for Loans - Summary of Collateral Dependent Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 49,877,248	$ 46,917,200
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	9,287,309	8,804,830
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	31,608,833	29,432,868
Commercial real estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	27,793,072	25,732,033
Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	5,560,356	5,364,550
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,420,750	3,314,952
Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	535,493	503,884
Collateral Pledged
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	231,547	258,692
Collateral Pledged | Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	77,364	94,433
Collateral Pledged | Commercial real estate | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	138,032	130,199
Collateral Pledged | Residential mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	16,151	33,865
Collateral Pledged | Consumer | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 0	$ 195

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Loans and Allowance for Credit Losses for Loans - Summary of Allowance for Credit Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Receivables [Abstract]
Allowance for loan losses	$ 436,432	$ 436,898	$ 458,655	$ 468,819	$ 362,510	$ 359,202
Allowance for unfunded credit commitments	22,244		24,600
Total allowance for credit losses for loans	$ 458,676		$ 483,255

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Loans and Allowance for Credit Losses for Loans - Summary of Provision for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Receivables [Abstract]
Provision for loan losses	$ 8,159	$ 38,310	$ 18,138	$ 41,568
(Credit) provision for unfunded credit commitments	(1,827)	5,402	(2,356)	5,644
Total provision for credit losses for loans	$ 6,332	$ 43,712	$ 15,782	$ 47,212

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Loans and Allowance for Credit Losses for Loans - Summary of Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2021
Allowance for loan losses:
Beginning balance	$ 436,898	$ 362,510	$ 458,655	$ 359,202
Allowance for PCD loans					$ 70,319
Loans charged-off	(11,327)	(5,267)	(43,900)	(7,862)
Charged-off loans recovered	2,702	2,947	4,907	5,592
Net charge-offs	(8,625)	(2,320)	(38,993)	(2,270)
Provision for loan losses	8,159	38,310	18,138	41,568
Ending balance	436,432	468,819	436,432	468,819	359,202
Loans acquired with discounts related to credit quality
Allowance for loan losses:
Loans charged-off		(62,400)
Cumulative Effect, Period of Adoption, Adjustment
Allowance for loan losses:
Beginning balance		70,319	(1,368)
Cumulative Effect, Period of Adoption, Adjusted Balance
Allowance for loan losses:
Beginning balance			457,287
Commercial and industrial
Allowance for loan losses:
Beginning balance	127,992	101,203	139,941	103,090
Allowance for PCD loans					33,452
Loans charged-off	(3,865)	(4,540)	(29,912)	(6,111)
Charged-off loans recovered	2,173	1,952	3,572	2,776
Net charge-offs	(1,692)	(2,588)	(26,340)	(3,335)
Provision for loan losses	1,945	12,472	15,383	11,332
Ending balance	128,245	144,539	128,245	144,539	103,090
Commercial and industrial | Cumulative Effect, Period of Adoption, Adjustment
Allowance for loan losses:
Beginning balance		33,452	(739)
Commercial and industrial | Cumulative Effect, Period of Adoption, Adjusted Balance
Allowance for loan losses:
Beginning balance			139,202
Commercial Real Estate
Allowance for loan losses:
Beginning balance	243,332	219,949	259,408	217,490
Allowance for PCD loans					36,618
Loans charged-off	(6,273)	0	(11,971)	(173)
Charged-off loans recovered	4	224	28	331
Net charge-offs	(6,269)	224	(11,943)	158
Provision for loan losses	2,632	20,436	(7,181)	22,961
Ending balance	239,695	277,227	239,695	277,227	217,490
Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjustment
Allowance for loan losses:
Beginning balance		36,618	(589)
Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjusted Balance
Allowance for loan losses:
Beginning balance			258,819
Residential Mortgage
Allowance for loan losses:
Beginning balance	41,708	28,189	39,020	25,120
Allowance for PCD loans					206
Loans charged-off	(149)	(1)	(149)	(27)
Charged-off loans recovered	135	74	156	531
Net charge-offs	(14)	73	7	504
Provision for loan losses	2,459	1,421	5,138	4,059
Ending balance	44,153	29,889	44,153	29,889	25,120
Residential Mortgage | Cumulative Effect, Period of Adoption, Adjustment
Allowance for loan losses:
Beginning balance		206	(12)
Residential Mortgage | Cumulative Effect, Period of Adoption, Adjusted Balance
Allowance for loan losses:
Beginning balance			39,008
Consumer
Allowance for loan losses:
Beginning balance	23,866	13,169	20,286	13,502
Allowance for PCD loans					43
Loans charged-off	(1,040)	(726)	(1,868)	(1,551)
Charged-off loans recovered	390	697	1,151	1,954
Net charge-offs	(650)	(29)	(717)	403
Provision for loan losses	1,123	3,981	4,798	3,216
Ending balance	$ 24,339	17,164	24,339	$ 17,164	$ 13,502
Consumer | Cumulative Effect, Period of Adoption, Adjustment
Allowance for loan losses:
Beginning balance		$ 43	(28)
Consumer | Cumulative Effect, Period of Adoption, Adjusted Balance
Allowance for loan losses:
Beginning balance			$ 20,258

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Loans and Allowance for Credit Losses for Loans - Summary of Allocation of Allowance for Loan Losses and Related Loans by Loan Portfolio Segment Disaggregated Based on Allowance Measurement Methodology (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for credit losses	$ 61,094		$ 86,594
Collectively evaluated for credit losses	375,338		372,061
Total	436,432	$ 436,898	458,655	$ 468,819	$ 362,510	$ 359,202
Individually evaluated for credit losses	231,547		374,093
Collectively evaluated for credit losses	49,645,701		46,543,107
Total	49,877,248		46,917,200
Commercial and industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for credit losses	54,311		68,745
Collectively evaluated for credit losses	73,934		71,196
Total	128,245	127,992	139,941	144,539	101,203	103,090
Individually evaluated for credit losses	77,364		117,644
Collectively evaluated for credit losses	9,209,945		8,687,186
Total	9,287,309		8,804,830
Commercial Real Estate
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for credit losses	6,749		13,174
Collectively evaluated for credit losses	232,946		246,234
Total	239,695	243,332	259,408	277,227	219,949	217,490
Individually evaluated for credit losses	138,032		213,522
Collectively evaluated for credit losses	31,470,801		29,219,346
Total	31,608,833		29,432,868
Residential Mortgage
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for credit losses	34		337
Collectively evaluated for credit losses	44,119		38,683
Total	44,153	41,708	39,020	29,889	28,189	25,120
Individually evaluated for credit losses	16,151		28,869
Collectively evaluated for credit losses	5,544,205		5,335,681
Total	5,560,356		5,364,550
Consumer
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually evaluated for credit losses	0		4,338
Collectively evaluated for credit losses	24,339		15,948
Total	24,339	$ 23,866	20,286	$ 17,164	$ 13,169	$ 13,502
Individually evaluated for credit losses	0		14,058
Collectively evaluated for credit losses	3,420,750		3,300,894
Total	$ 3,420,750		$ 3,314,952

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Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Goodwill [Roll Forward]
Goodwill	$ 1,868,936	$ 1,868,936
Consumer Banking
Goodwill [Roll Forward]
Goodwill	284,873
Commercial Banking
Goodwill [Roll Forward]
Goodwill	1,534,296
Wealth Management | Consumer Banking
Goodwill [Roll Forward]
Goodwill	$ 49,767

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment			$ 0
Net impairment (net recovery)	$ 0	$ 0	0	$ 0
Amortization of other intangible assets	9,812,000	11,400,000	20,331,000	15,837,000
Core Deposits and Other
Finite-Lived Intangible Assets [Line Items]
Impairment of core deposits and other intangibles	$ 0	$ 0	$ 0	$ 0
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period, years			10 years
Other
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period, years			13 years 4 months 24 days

XML

Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	$ 386,777	$ 394,912
Accumulated Amortization	(208,831)	(197,456)
Net Intangible Assets	177,946	197,456
Loan servicing rights
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	120,764	119,943
Accumulated Amortization	(98,453)	(96,136)
Net Intangible Assets	22,311	23,807
Core deposits
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	215,620	223,670
Accumulated Amortization	(99,129)	(92,486)
Net Intangible Assets	116,491	131,184
Other
Finite-Lived Intangible Assets [Line Items]
Gross Intangible Assets	50,393	51,299
Accumulated Amortization	(11,249)	(8,834)
Net Intangible Assets	$ 39,144	$ 42,465

XML

Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Loan Servicing Rights
Finite-Lived Intangible Assets [Line Items]
2023	$ 1,579
2024	2,863
2025	2,506
2026	2,181
2027	1,890
Core Deposits
Finite-Lived Intangible Assets [Line Items]
2023	14,054
2024	24,897
2025	21,048
2026	17,223
2027	13,544
Other
Finite-Lived Intangible Assets [Line Items]
2023	3,201
2024	5,951
2025	5,380
2026	4,805
2027	$ 4,205

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Deposits - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Financial Services, Banking and Thrift [Abstract]
Time deposits, $250,000 or more	$ 2,000,000,000		$ 2,000,000,000		$ 1,800,000,000
Interest expense on time deposits of $250 thousand or more	$ 5,100,000	$ 444,000	$ 7,500,000	$ 545,000

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Deposits - Scheduled Maturities of Time Deposits (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Financial Services, Banking and Thrift [Abstract]
2023	$ 8,020,778,000
2024	6,574,934,000
2025	70,994,000
2026	160,144,000
2027	41,691,000
Thereafter	39,641,000
Total time deposits	$ 14,908,182,000	$ 9,556,457,000

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Borrowed Funds - Short-Term Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Total short-term borrowings	$ 1,088,899	$ 138,729
Short-term borrowings
Short-Term Debt [Line Items]
FHLB advances	1,000,000	24,035
Securities sold under agreements to repurchase	88,899	114,694
Total short-term borrowings	$ 1,088,899	$ 138,729

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Borrowed Funds - Additional Information (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Weighted average interest rate for short-term borrowings	5.30%	1.60%
FHLB advances, callable for early redemption		$ 0
Federal Home Loan Bank Advances
Debt Instrument [Line Items]
Weighted average interest rate for long-term borrowings	3.75%	1.88%

XML

Borrowed Funds - Schedule of Long-Term Borrowings (Details) - Long-term borrowings - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
FHLB advances, net	$ 1,688,311	$ 788,419
Subordinated debt, net	755,222	754,639
Total long-term borrowings	2,443,533	1,543,058
Unamortized prepayment penalties and other purchase accounting adjustments	311	419
Deferred issuance costs	$ 6,000	$ 6,900

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Borrowed Funds - Schedule of FHLB Repayment (Details) - Long-term borrowings $ in Thousands	Jun. 30, 2023 USD ($)
Debt Instrument [Line Items]
2024	$ 165,000
2025	273,000
2026	350,000
2027	675,000
Thereafter	225,000
Total long-term FHLB advances	$ 1,688,000

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Stock-Based Compensation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions	6 Months Ended
	Jun. 30, 2023	Apr. 25, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)		14.5
Stock-based compensation amortization expense unrecognized	$ 49.4
Average remaining vesting period (in years)	2 years

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Stock-Based Compensation - Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 8,700	$ 6,200	$ 16,800	$ 13,400
Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Average grant date fair value (usd per share)	$ 0	$ 13.60	$ 12.80	$ 14.72
Performance-Based Restricted Stock Units | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during the period (in shares)	0	52	723	619
Time-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during the period (in shares)	178	937	1,731	2,104
Average grant date fair value (usd per share)	$ 8.35	$ 12.85	$ 11.55	$ 13.51

XML

Derivative Instruments and Hedging Activities - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) swap	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) swap	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Derivatives not designated as hedging instruments:
Derivative [Line Items]
Notional amount	$ 17,274,718		$ 17,274,718		$ 16,058,364
Interest rate swaps
Derivative [Line Items]
Number of instruments held | swap	6		6
Notional amount	$ 600,000		$ 600,000
Income (loss) in other comprehensive income before tax			3,600
Accumulated net after-tax gains related to effective cash flow hedges	2,400		2,400		2,200
Interest rate swaps | Interest income
Derivative [Line Items]
Amounts reclassified to income statement	1,200		1,200
Interest rate swaps | Interest expense
Derivative [Line Items]
Amounts reclassified to income statement	238		238
Interest rate swaps | Fair value hedge interest rate swaps | Noninterest Income
Derivative [Line Items]
Fee income related to derivative interest rate swaps executed with commercial loan customers	14,100	$ 13,200	24,000	$ 27,600
Interest rate swaps | Fair value hedge interest rate swaps | Interest expense
Derivative [Line Items]
Fee income related to derivative interest rate swaps executed with commercial loan customers	$ (3,790)	$ 76	$ 902	$ 606
Interest rate swaps | Derivatives not designated as hedging instruments:
Derivative [Line Items]
Number of instruments held | swap	36		36
Notional amount	$ 15,837,195		$ 15,837,195		$ 14,753,330
Interest rate swaps | Derivatives not designated as hedging instruments: | Fair value hedge interest rate swaps
Derivative [Line Items]
Number of instruments held | swap	2		2
Notional amount	$ 10,400		$ 10,400
Interest rate swaps | Derivatives not designated as hedging instruments: | Risk Participation Agreement
Derivative [Line Items]
Notional amount	$ 492,800		$ 492,800

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Derivative Instruments and Hedging Activities - Balance Sheet Disclosures (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Interest rate swaps
Derivative [Line Items]
Other Assets	$ 0	$ 0
Other Liabilities	577,209	594,476
Interest rate swaps
Derivative [Line Items]
Notional Amount	600,000
Derivatives designated as hedging instruments:
Derivative [Line Items]
Notional Amount	300,000	900,000
Derivatives designated as hedging instruments: | Other Assets
Derivative [Line Items]
Other Assets	0	3,971
Derivatives designated as hedging instruments: | Other Liabilities
Derivative [Line Items]
Other Liabilities	28,992	29,798
Derivatives designated as hedging instruments: | Cash flow hedge interest rate swaps | Interest rate swaps
Derivative [Line Items]
Notional Amount	0	600,000
Derivatives designated as hedging instruments: | Cash flow hedge interest rate swaps | Interest rate swaps | Other Assets
Derivative [Line Items]
Other Assets	0	3,971
Derivatives designated as hedging instruments: | Cash flow hedge interest rate swaps | Interest rate swaps | Other Liabilities
Derivative [Line Items]
Other Liabilities	0	4
Derivatives designated as hedging instruments: | Fair value hedge interest rate swaps | Interest rate swaps
Derivative [Line Items]
Notional Amount	300,000	300,000
Derivatives designated as hedging instruments: | Fair value hedge interest rate swaps | Interest rate swaps | Other Assets
Derivative [Line Items]
Other Assets	0	0
Derivatives designated as hedging instruments: | Fair value hedge interest rate swaps | Interest rate swaps | Other Liabilities
Derivative [Line Items]
Other Liabilities	28,992	29,794
Derivatives not designated as hedging instruments:
Derivative [Line Items]
Notional Amount	17,274,718	16,058,364
Derivatives not designated as hedging instruments: | Other Assets
Derivative [Line Items]
Other Assets	571,620	463,156
Derivatives not designated as hedging instruments: | Other Liabilities
Derivative [Line Items]
Other Liabilities	570,234	577,439
Derivatives not designated as hedging instruments: | Interest rate swaps
Derivative [Line Items]
Notional Amount	15,837,195	14,753,330
Derivatives not designated as hedging instruments: | Interest rate swaps | Other Assets
Derivative [Line Items]
Other Assets	548,592	449,280
Derivatives not designated as hedging instruments: | Interest rate swaps | Other Liabilities
Derivative [Line Items]
Other Liabilities	548,217	564,678
Derivatives not designated as hedging instruments: | Foreign currency derivatives
Derivative [Line Items]
Notional Amount	1,331,575	1,273,735
Derivatives not designated as hedging instruments: | Foreign currency derivatives | Other Assets
Derivative [Line Items]
Other Assets	22,635	13,709
Derivatives not designated as hedging instruments: | Foreign currency derivatives | Other Liabilities
Derivative [Line Items]
Other Liabilities	21,710	12,604
Derivatives not designated as hedging instruments: | Mortgage banking derivatives
Derivative [Line Items]
Notional Amount	105,948	31,299
Derivatives not designated as hedging instruments: | Mortgage banking derivatives | Other Assets
Derivative [Line Items]
Other Assets	393	167
Derivatives not designated as hedging instruments: | Mortgage banking derivatives | Other Liabilities
Derivative [Line Items]
Other Liabilities	307	$ 157
Derivatives not designated as hedging instruments: | Fair value hedge interest rate swaps | Interest rate swaps
Derivative [Line Items]
Notional Amount	$ 10,400

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Derivative Instruments and Hedging Activities - Gains (Losses) Related to Interest Rate Derivatives Designated as Hedges of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items]
Amount of (loss) gain reclassified from accumulated other comprehensive loss to interest income and expense	$ (367,694)	$ (34,787)	$ (651,904)	$ (57,576)
Amount of (loss) gain recognized in other comprehensive loss	(4,991)	121	(1,093)	441
Amounts Reclassified from Accumulated Other Comprehensive Loss
Amounts Related To Interest Rate Derivatives Included In Income Designated As Hedges Of Cash Flows [Line Items]
Amount of (loss) gain reclassified from accumulated other comprehensive loss to interest income and expense	$ (725)	$ 116	$ (1,256)	$ (426)

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Derivative Instruments and Hedging Activities - Gains (Losses) on Interest Rate Derivatives Designated as Fair Value Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gain (loss) related to hedged loans			$ 291	$ 20,194
Fair value hedge interest rate swaps | Interest expense | Derivative - interest rate swap:
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gain (loss) related to derivative interest rate swaps	$ (3,790)	$ 76	902	606
Fair value hedge interest rate swaps | Interest expense | Hedged item - subordinated debt | Derivatives designated as hedging instruments
Gain Loss On Fair Value Hedges Recognized In Earnings [Line Items]
Gain (loss) related to hedged loans	$ 3,952	$ (147)	$ (820)	$ (477)

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Derivative Instruments and Hedging Activities - Interest Rate Derivatives Designated as Hedges (Details) - Derivative - interest rate swap: - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Derivative [Line Items]
Deferred issuance costs	$ 2,400	$ 2,800
Fair value hedge interest rate swaps | Derivatives designated as hedging instruments:
Derivative [Line Items]
Net Carrying Amount of the Hedged Liability *	268,300	267,076
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability	$ (29,312)	$ (30,132)

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Derivative Instruments and Hedging Activities - Net (Gains) Losses Related to Derivative Instruments Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Non-designated hedge interest rate swaps and credit derivatives
Other non-interest expense	$ (368)	$ 1,143	$ (160)	$ (1,654)

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Balance Sheet Offsetting (Details) - Interest rate swaps - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Offsetting Assets
Gross Amounts Recognized	$ 548,592	$ 453,251
Gross Amounts Offset	0	0
Net Amounts Presented	548,592	453,251
Financial Instruments	9,929	12,766
Cash Collateral	(468,200)	(342,480)
Net Amount	90,321	123,537
Offsetting Liabilities
Gross Amounts Recognized	577,209	594,476
Gross Amounts Offset	0	0
Net Amounts Presented	577,209	594,476
Financial Instruments	(9,929)	(12,766)
Cash Collateral	0	(432)
Net Amount	$ 567,280	$ 581,278

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Tax Credit Investments - Balance Sheet Disclosures (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Assets
Other Assets:
Affordable housing tax credit investments, net	$ 21,427	$ 24,198
Other tax credit investments, net	80,145	56,551
Total tax credit investments, net	101,572	80,749
Other Liabilities:
Other Liabilities:
Unfunded affordable housing tax credit commitments	1,327	1,338
Total unfunded tax credit commitments	$ 1,327	$ 1,338

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Tax Credit Investments - Income Statement Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Components of Income Tax Expense:
Affordable housing tax credits and other tax benefits	$ 1,460	$ 1,614	$ 2,919	$ 2,358
Other tax credit investment credits and tax benefits	3,430	2,539	6,651	5,090
Total reduction in income tax expense	4,890	4,153	9,570	7,448
Non-Interest Expenses
Amortization of Tax Credit Investments:
Affordable housing tax credit investment losses	938	653	1,875	1,068
Affordable housing tax credit investment impairment losses	448	363	896	625
Other tax credit investment losses	719	386	725	695
Other tax credit investment impairment losses	2,913	1,791	5,775	3,701
Total amortization of tax credit investments recorded in non-interest expense	$ 5,018	$ 3,193	$ 9,271	$ 6,089

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Operating Segments - Schedule of Financial Data for Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Average interest earning assets	$ 57,351,808	$ 48,891,230	$ 56,362,794	$ 44,609,968
Interest income	787,459	452,947	1,507,689	793,405
Interest expense	367,694	34,787	651,904	57,576
Net interest income	419,765	418,160	855,785	735,829
Provision (credit) for credit losses	6,050	43,998	20,487	47,555
Net Interest Income After Provision for Credit Losses	413,715	374,162	835,298	688,274
Non-interest income	60,075	58,533	114,374	97,803
Non-interest expense	282,971	299,730	555,137	497,070
Internal transfer expense (income)	0	0	0	0
Income Before Income Taxes	$ 190,819	$ 132,965	$ 394,535	$ 289,007
Return on average interest earning assets (pre-tax)	1.33%	1.09%	1.40%	1.30%
Consumer Banking | Operating Segments
Segment Reporting Information [Line Items]
Average interest earning assets	$ 8,904,483	$ 7,967,305	$ 8,836,859	$ 7,848,764
Interest income	90,602	63,137	175,918	122,596
Interest expense	55,198	4,723	98,204	7,930
Net interest income	35,404	58,414	77,714	114,666
Provision (credit) for credit losses	3,492	5,402	9,936	7,275
Net Interest Income After Provision for Credit Losses	31,912	53,012	67,778	107,391
Non-interest income	25,529	17,086	39,819	30,903
Non-interest expense	23,223	18,791	41,472	35,359
Internal transfer expense (income)	22,018	37,629	52,901	66,276
Income Before Income Taxes	$ 12,200	$ 13,678	$ 13,224	$ 36,659
Return on average interest earning assets (pre-tax)	0.55%	0.69%	0.30%	0.93%
Commercial Banking | Operating Segments
Segment Reporting Information [Line Items]
Average interest earning assets	$ 40,553,454	$ 34,549,982	$ 39,826,630	$ 30,743,387
Interest income	624,569	352,440	1,194,479	610,346
Interest expense	250,871	19,735	442,594	31,062
Net interest income	373,698	332,705	751,885	579,284
Provision (credit) for credit losses	2,840	38,310	5,846	39,937
Net Interest Income After Provision for Credit Losses	370,858	294,395	746,039	539,347
Non-interest income	14,361	14,425	30,108	31,305
Non-interest expense	35,365	24,448	71,088	49,533
Internal transfer expense (income)	102,395	157,365	233,990	257,281
Income Before Income Taxes	$ 247,459	$ 127,007	$ 471,069	$ 263,838
Return on average interest earning assets (pre-tax)	2.44%	1.47%	2.37%	1.72%
Treasury and Corporate Other | Treasury and Corporate Other
Segment Reporting Information [Line Items]
Average interest earning assets	$ 7,893,871	$ 6,373,943	$ 7,699,305	$ 6,017,817
Interest income	72,288	37,370	137,292	60,463
Interest expense	61,625	10,329	111,106	18,584
Net interest income	10,663	27,041	26,186	41,879
Provision (credit) for credit losses	(282)	286	4,705	343
Net Interest Income After Provision for Credit Losses	10,945	26,755	21,481	41,536
Non-interest income	20,185	27,022	44,447	35,595
Non-interest expense	224,383	256,491	442,577	412,178
Internal transfer expense (income)	(124,413)	(194,994)	(286,891)	(323,557)
Income Before Income Taxes	$ (68,840)	$ (7,720)	$ (89,758)	$ (11,490)
Return on average interest earning assets (pre-tax)	(3.49%)	(0.48%)	(2.33%)	(0.38%)