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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income tax expense for the years ended December 31, 2023, 2022 and 2021 consisted of the following:


	2023		2022		2021
	(in thousands)
Current expense:
Federal	$	123,569	$	132,060	$	92,823
State	65,611		72,271		47,249
	189,180		204,331		140,072
Deferred (benefit) expense:
Federal	(8,035)		7,263		19,709
State	(1,324)		222		7,118
	(9,359)		7,485		26,827
Total income tax expense	$	179,821	$	211,816	$	166,899

Summary of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to the significant portions of the deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows:


	2023		2022
	(in thousands)
Deferred tax assets:
Allowance for credit losses	$	128,717	$	133,459


Employee benefits	41,190		39,917
Investment securities	42,361		48,598
Net operating loss carryforwards	11,037		13,904
Purchase accounting	53,980		66,487


FDIC Special Assessment	13,894		—
Other	24,362		12,995
Total deferred tax assets	315,541		315,360
Deferred tax liabilities:
Pension plans	37,194		30,474
Depreciation	20,963		16,625

Other investments	11,175		8,838

Core deposit intangibles	28,237		36,189
Other	22,319		27,235
Total deferred tax liabilities	119,888		119,361
Valuation Allowance	424		1,642
Net deferred tax asset (included in other assets)	$	195,229	$	194,357

Summary of Income Tax Reconciliation

Reconciliation between the reported income tax expense and the amount computed by multiplying consolidated income before taxes by the statutory federal income tax rate of 21 percent for the years ended December 31, 2023, 2022, and 2021 were as follows:


	2023				2022				2021
	Amount		Percent		Amount		Percent		Amount		Percent
	(in thousands)
U.S. federal statutory tax rate	$	142,450	21.0	%	$	163,940	21.0	%	$	134,556	21.0	%
Increase (decrease) due to:
State income tax expense, net of federal tax effect *	50,787		7.5	%	57,276		7.3	%	42,950		6.7	%
Tax credits	(23,008)		(3.4)	%	(12,872)		(1.6)	%	(9,942)		(1.6)	%
Nontaxable or non-deductible items	6,659		1.0	%	4,952		0.6	%	431		0.1	%
Other adjustments	2,933		0.4	%	(1,480)		(0.2)	%	(1,096)		(0.2)	%
Income tax expense	$	179,821	26.5	%	$	211,816	27.1	%	$	166,899	26.0	%

*State taxes in New York, New York City, and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.

Summary of Reconciliation of Gross Unrecognized Tax Benefits

A reconciliation of Valley’s gross unrecognized tax benefits for 2023, 2022 and 2021 is presented in the table below:


	2023		2022		2021
	(in thousands)
Beginning balance	$	30,359	$	30,359	$	31,918

Settlements with taxing authorities	—		—		(1,559)

Ending balance	$	30,359	$	30,359	$	30,359

Summary of Components of Taxes Paid

The following table presents income taxes paid for the years ended December 31, 2023, 2022 and 2021:


	2023		2022		2021
	(in thousands)
Federal taxes paid	$	162,502	$	121,000	$	100,000
State and city taxes paid:
New York	25,718		18,626		14,430
New Jersey	19,006		12,010		23,510
New York City	13,307		12,141		16,933
Other	15,970		8,325		8,497
Total state and city taxes paid	74,001		51,102		63,370
Total income taxes paid	$	236,503	$	172,102	$	163,370