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Investment Securities
 9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Equity Securities
Equity securities totaled $63.2 million and $48.7 million at September 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 September 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 $45 thousand and $673 thousand for the
three and nine months ended September 30, 2023, respectively. We recorded net trading gains of $290 thousand and net trading losses of $1.2 million for the three and nine months ended September 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 September 30, 2023 and December 31, 2022 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
 (in thousands)
September 30, 2023
U.S. Treasury securities$312,348 $— $(36,600)$275,748 
U.S. government agency securities26,002 19 (3,450)22,571 
Obligations of states and political subdivisions:
Obligations of states and state agencies49,810 — (1,006)48,804 
Municipal bonds170,002 — (47,334)122,668 
Total obligations of states and political subdivisions219,812 — (48,340)171,472 
Residential mortgage-backed securities665,150 8 (111,731)553,427 
Corporate and other debt securities192,181 — (28,875)163,306 
Total $1,415,493 $27 $(228,996)$1,186,524 
December 31, 2022
U.S. Treasury securities$308,137 $— $(28,639)$279,498 
U.S. government agency securities29,494 47 (2,577)26,964 
Obligations of states and political subdivisions:
Obligations of states and state agencies10,899 — (493)10,406 
Municipal bonds171,586 — (35,181)136,405 
Total obligations of states and political subdivisions182,485 — (35,674)146,811 
Residential mortgage-backed securities719,868 64 (90,114)629,818 
Corporate and other debt securities197,927 — (19,621)178,306 
Total$1,437,911 $111 $(176,625)$1,261,397 

Accrued interest on investments, which is excluded from the amortized cost of available for sale debt securities, totaled $5.2 million and $5.6 million at September 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.
The age of unrealized losses and fair value of the related available for sale debt securities at September 30, 2023 and December 31, 2022 were as follows: 
 Less than 12 MonthsMore than 12 MonthsTotal
 Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses
 (in thousands)
September 30, 2023
U.S. Treasury securities$— $— $275,748 $(36,600)$275,748 $(36,600)
U.S. government agency securities— — 21,216 (3,450)21,216 (3,450)
Obligations of states and political subdivisions:
Obligations of states and state agencies
— — 8,189 (1,006)8,189 (1,006)
Municipal bonds1,012 (17)121,656 (47,317)122,668 (47,334)
Total obligations of states and political subdivisions
1,012 (17)129,845 (48,323)130,857 (48,340)
Residential mortgage-backed securities1,985 (19)550,953 (111,712)552,938 (111,731)
Corporate and other debt securities11,863 (1,137)151,443 (27,738)163,306 (28,875)
Total$14,860 $(1,173)$1,129,205 $(227,823)$1,144,065 $(228,996)
December 31, 2022
U.S. Treasury securities$279,498 $(28,639)$— $— $279,498 $(28,639)
U.S. government agency securities22,831 (2,538)1,116 (39)23,947 (2,577)
Obligations of states and political subdivisions:
Obligations of states and state agencies
2,943 (54)7,462 (439)10,405 (493)
Municipal bonds112,029 (26,044)24,127 (9,137)136,156 (35,181)
Total obligations of states and political subdivisions
114,972 (26,098)31,589 (9,576)146,561 (35,674)
Residential mortgage-backed securities311,836 (27,152)314,834 (62,962)626,670 (90,114)
Corporate and other debt securities144,924 (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 720 and 730 at September 30, 2023 and December 31, 2022, respectively.
As of September 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 $803.0 million.
The contractual maturities of available for sale debt securities at September 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.
 September 30, 2023
 Amortized
Cost		Fair
Value
 (in thousands)
Due in one year$1,574 $1,557 
Due after one year through five years288,843 270,859 
Due after five years through ten years173,478 144,436 
Due after ten years286,448 216,245 
Residential mortgage-backed securities665,150 553,427 
Total $1,415,493 $1,186,524 
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 7.84 years at September 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 $5.0 million during the three months ended March 31, 2023. Valley also evaluated available for sale debt securities that are in an unrealized loss position as of September 30, 2023 included in the table above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors. There was no impairment recognized during the three months ended September 30, 2023 and 2022, and the nine months ended September 30, 2022.
The following table details the activity in the allowance for credit losses for the nine months ended September 30, 2023.
Nine Months Ended September 30, 2023
(in thousands)
Beginning balance$— 
Provision for credit losses5,000 
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 September 30, 2023 and there was no allowance for credit losses for available for sale debt securities at September 30, 2023, December 31, 2022 and September 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 September 30, 2023 and December 31, 2022 were as follows: 
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair ValueAllowance for Credit LossesNet Carrying Value
 (in thousands)
September 30, 2023
U.S. Treasury securities$66,408 $— $(753)$65,655 $— $66,408 
U.S. government agency securities306,339 — (62,428)243,911 — 306,339 
Obligations of states and political subdivisions:
Obligations of states and state agencies86,968 5 (7,810)79,163 415 86,553 
Municipal bonds350,673 5 (39,287)311,391 57 350,616 
Total obligations of states and political subdivisions437,641 10 (47,097)390,554 472 437,169 
Residential mortgage-backed securities2,875,630 28 (523,042)2,352,616 — 2,875,630 
Trust preferred securities37,057 — (6,976)30,081 552 36,505 
Corporate and other debt securities75,634 — (7,371)68,263 297 75,337 
Total $3,798,709 $38 $(647,667)$3,151,080 $1,321 $3,797,388 
December 31, 2022
U.S. Treasury securities$66,911 $— $(1,022)$65,889 $— $66,911 
U.S. government agency securities260,392 — (47,680)212,712 — 260,392 
Obligations of states and political subdivisions:
Obligations of states and state agencies99,238 305 (3,869)95,674 252 98,986 
Municipal bonds381,060 76 (23,615)357,521 41 381,019 
Total obligations of states and political subdivisions480,298 381 (27,484)453,195 293 480,005 
Residential mortgage-backed securities2,909,106 1,723 (415,032)2,495,797 — 2,909,106 
Trust preferred securities37,043 1 (5,938)31,106 888 36,155 
Corporate and other debt securities75,234 — (4,463)70,771 465 74,769 
Total $3,828,984 $2,105 $(501,619)$3,329,470 $1,646 $3,827,338 
Accrued interest on investments, which is excluded from the amortized cost of held to maturity debt securities, totaled $13.0 million and $13.5 million at September 30, 2023 and December 31, 2022, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition. Held to maturity debt securities are carried net of an allowance for credit losses.
The age of unrealized losses and fair value of related debt securities held to maturity at September 30, 2023 and December 31, 2022 were as follows: 
 Less than 12 MonthsMore than 12 MonthsTotal
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
 (in thousands)
September 30, 2023
U.S. Treasury securities$— $— $65,655 $(753)$65,655 $(753)
U.S. government agency securities44,630 (104)198,137 (62,324)242,767 (62,428)
Obligations of states and political subdivisions:
Obligations of states and state agencies
28,861 (1,449)47,812 (6,361)76,673 (7,810)
Municipal bonds52,881 (1,260)200,811 (38,027)253,692 (39,287)
Total obligations of states and political subdivisions
81,742 (2,709)248,623 (44,388)330,365 (47,097)
Residential mortgage-backed securities
258,643 (6,081)2,065,357 (516,961)2,324,000 (523,042)
Trust preferred securities— — 29,081 (6,976)29,081 (6,976)
Corporate and other debt securities12,333 (917)55,930 (6,454)68,263 (7,371)
Total$397,348 $(9,811)$2,662,783 $(637,856)$3,060,131 $(647,667)
December 31, 2022
U.S. Treasury securities$65,889 $(1,022)$— $— $65,889 $(1,022)
U.S. government agency securities209,863 (47,508)1,673 (172)211,536 (47,680)
Obligations of states and political subdivisions:
Obligations of states and state agencies62,443 (2,020)18,231 (1,849)80,674 (3,869)
Municipal bonds251,970 (20,457)15,534 (3,158)267,504 (23,615)
Total obligations of states and political 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 842 and 802 at September 30, 2023 and December 31, 2022, respectively.
As of September 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 September 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.
 September 30, 2023
 Amortized
Cost		Fair
Value
 (in thousands)
Due in one year$72,211 $71,920 
Due after one year through five years114,349 109,797 
Due after five years through ten years116,099 105,165 
Due after ten years620,420 511,582 
Residential mortgage-backed securities2,875,630 2,352,616 
Total$3,798,709 $3,151,080 
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 9.84 years at September 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 September 30, 2023 and December 31, 2022.
AAA/AA/A RatedBBB ratedNon-investment grade ratedNon-ratedTotal
 (in thousands)
September 30, 2023
U.S. Treasury securities$66,408 $— $— $— $66,408 
U.S. government agency securities306,339 — — — 306,339 
Obligations of states and political subdivisions:
Obligations of states and state agencies64,595 — 5,351 17,022 86,968 
Municipal bonds301,098 — — 49,575 350,673 
Total obligations of states and political subdivisions
365,693 — 5,351 66,597 437,641 
Residential mortgage-backed securities2,875,630 — — — 2,875,630 
Trust preferred securities— — — 37,057 37,057 
Corporate and other debt securities— 6,000 — 69,634 75,634 
Total $3,614,070 $6,000 $5,351 $173,288 $3,798,709 
December 31, 2022
U.S. Treasury securities$66,911 $— $— $— $66,911 
U.S. government agency securities260,392 — — — 260,392 
Obligations of states and political subdivisions:
Obligations of states and state agencies74,943 — 5,497 18,798 99,238 
Municipal bonds333,488 — — 47,572 381,060 
Total obligations of states and political subdivisions
408,431 — 5,497 66,370 480,298 
Residential mortgage-backed securities2,909,106 — — — 2,909,106 
Trust preferred securities— — — 37,043 37,043 
Corporate and other debt securities2,000 6,000 — 67,234 75,234 
Total$3,646,840 $6,000 $5,497 $170,647 $3,828,984 
Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At September 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 Current Expected Credit Losses (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 nine months ended September 30, 2023 and 2022: 
Three months ended September 30,Nine months ended September 30,
2023202220232022
(in thousands)
Beginning balance$1,351 $1,508 $1,646 $1,165 
(Credit) provision for credit losses(30)188 (325)531 
Ending balance$1,321 $1,696 $1,321 $1,696