Borrowed Funds

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowed Funds

BORROWED FUNDS (Note 10)

Short-Term Borrowings

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

	2023		2022
FHLB advances	$	850,000	$	24,035
Securities sold under agreements to repurchase	67,834		114,694
Total short-term borrowings	$	917,834	$	138,729

The weighted average interest rate for short-term FHLB advances was 5.62 percent and 1.60 percent at December 31, 2023 and 2022, respectively.

Long-Term Borrowings

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

	2023		2022
FHLB advances, net (1)	$	1,690,013	$	788,419
Subordinated debt, net (2)	638,362		754,639
Total long-term borrowings	$	2,328,375	$	1,543,058

(1)	FHLB advances are presented net of unamortized premiums totaling $209 thousand and $419 thousand at December 31, 2023 and 2022, respectively.
(2)	Subordinated debt is presented net of unamortized debt issuance costs totaling $5.2 million and $6.9 million at December 31, 2023 and 2022, respectively.

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

Long-Term Borrowings

The long-term FHLB advances at December 31, 2023 are scheduled for contractual balance repayments as follows: 

Year	Amount
	(in thousands)
2024	$	165,000
2025	273,000
2026	351,804
2027	675,000
2028	225,000
Total long-term FHLB advances	$	1,689,804

None of the FHLB advances reported in the table above are callable for early redemption by the FHLB during the next 12 months.

Subordinated Debt. On September 27, 2023, Valley repaid $125 million of 5.125 percent matured subordinated notes issued in September 2013. There were no new issuances of the subordinated debt during the year ended December 31, 2023.

At December 31, 2023, Valley had the following subordinated debt outstanding by its maturity date:

•$100 million of 4.55 percent subordinated debentures (notes) issued in June 2015 and due June 30, 2025 with no call dates or prepayments allowed unless certain conditions exist. Interest on the subordinated notes is payable semi-annually in arrears on June 30 and December 30 of each year. The subordinated notes had a net carrying value of $99.9 million and $99.7 million at December 31, 2023 and 2022, respectively.

•$115 million of 5.25 percent Fixed-to-Floating Rate subordinated notes issued in June 2020 and due June 15, 2030 callable in whole or in part on or after June 15, 2025 or upon the occurrence of certain events. Interest on the subordinated notes during the initial five-year term through June 15, 2025 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on three-month Term SOFR plus 514 basis points and paid quarterly through maturity of the notes. The subordinated notes had a net carrying value of $113.8 million and $113.6 million at December 31, 2023 and 2022, respectively.

•$300 million of 3.00 percent Fixed-to-Floating Rate subordinated notes issued in May 2021 and due June 15, 2031. The subordinated notes are callable in whole or in part on or after June 15, 2026 or upon the occurrence of certain events. Interest on the subordinated notes during the initial five-year term through June 15, 2026 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on three-month Term SOFR plus 236 basis points and paid quarterly through maturity of the notes. The subordinated notes had a carrying value of $276.6 million and $267.1 million, net of unamortized debt issuance costs and fair value of hedging adjustment at December 31, 2023 and 2022, respectively. In June 2021, Valley executed an interest rate swap to hedge the change in the fair value of the $300 million in subordinated notes. See Note 15 for additional details.

•$150 million of 6.25 percent fixed-to-floating rate subordinated notes issued on September 20, 2022 and due September 30, 2032. Interest on the subordinated notes during the initial five year term through September 30, 2027, is payable semi-annually in arrears on March 30 and September 30, commencing on March 30, 2023. Thereafter, interest will be set based on three-month Term SOFR plus 278 basis points and paid quarterly through maturity of the notes. The subordinated notes had a net carrying value of $148.1 million at December 31, 2023.

Pledged Securities. The fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit, FHLB advances and for other purposes required by law approximated $3.5 billion and $1.1 billion for December 31, 2023 and 2022, respectively.