XML 23 R13.htm IDEA: XBRL DOCUMENT v3.25.1
Fair Value Measurement of Assets and Liabilities
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025 and December 31, 2024. 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). 
 March 31,
2025		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$23,545 $23,545 $— $— 
Equity securities at net asset value (NAV)
10,870 — — — 
Available for sale debt securities:
U.S. Treasury securities296,253 296,253 — — 
U.S. government agency securities22,400 — 22,400 — 
Obligations of states and political subdivisions187,381 — 187,381 — 
Residential mortgage-backed securities2,967,535 — 2,967,535 — 
Corporate and other debt securities185,135 — 185,135 — 
Total available for sale debt securities3,658,704 296,253 3,362,451 — 
Loans held for sale (1)
8,427 — 8,427 — 
Other assets (2)
326,722 — 326,722 — 
Total assets$4,028,268 $319,798 $3,697,600 $— 
Liabilities
Other liabilities (2)
$332,888 $— $332,888 $— 
Total liabilities$332,888 $— $332,888 $— 
Non-recurring fair value measurements:
Non-performing loans held for sale (3)
$18,950 $— $18,950 $— 
Collateral dependent loans 81,473 — — 81,473 
Foreclosed assets (3)
9,768 — — 9,768 
Total$110,191 $— $18,950 $91,241 
  Fair Value Measurements at Reporting Date Using:
 December 31,
2024		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 $23,642 $23,642 $— $— 
Equity securities at net asset value (NAV)
11,000 — — — 
Available for sale debt securities:
U.S. Treasury securities291,549 291,549 — — 
U.S. government agency securities22,543 — 22,543 — 
Obligations of states and political subdivisions192,509 — 192,509 — 
Residential mortgage-backed securities2,681,076 — 2,681,076 — 
Corporate and other debt securities182,047 — 182,047 — 
Total available for sale debt securities3,369,724 291,549 3,078,175 — 
Loans held for sale (1)
16,931 — 16,931 — 
Other assets (2)
444,263 — 444,263 — 
Total assets$3,865,560 $315,191 $3,539,369 $— 
Liabilities
Other liabilities (2)
$454,200 $— $454,200 $— 
Total liabilities$454,200 $— $454,200 $— 
Non-recurring fair value measurements:
Non-performing loan held for sale (3)
$8,750 $— $8,750 $— 
Collateral dependent loans 139,424 — — 139,424 
Foreclosed assets (3)
13,852 — — 13,852 
Total$162,026 $— $8,750 $153,276 
(1)Represents residential mortgage originated for sale that are carried at fair value and had contractual unpaid principal balances totaling $8.3 million and $16.8 million at March 31, 2025 and December 31, 2024, respectively.
(2)Derivative financial instruments are included in this category.
(3)Reported at lower of cost or fair value.

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 equity securities consisted of two publicly traded mutual funds, CRA investments and a publicly traded financial technology company. These investments are reported at fair value utilizing Level 1 inputs.
Equity securities at NAV. Valley also has privately held CRA funds and investments in limited liability companies and partnerships at fair value measured at NAV using the most recently available financial information from the investee. Certain equity investments without readily determinable fair values, excluded from fair value hierarchy levels in the table above, are measured at NAV per share (or its equivalent) as a practical expedient.
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 AFS 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 March 31, 2025 and December 31, 2024 based on the short duration these assets were held and their credit quality.
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 SOFR curve, at March 31, 2025 and December 31, 2024. 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 March 31, 2025 and December 31, 2024), is determined based on the current market prices for similar instruments. The fair value of a credit default swap related to a portion of Valley's automobile loan portfolio is based on estimated discounted cash flows that incorporate market data for auto credit loss forecasts and anticipated cash outflows for the instrument's premium payments. The fair value 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 March 31, 2025 and December 31, 2024. See Note 12 for additional details on Valley's derivatives.
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 commercial real estate loans held for sale. During 2023, Valley transferred a non-performing construction loan totaling $10.0 million, net of $4.2 million charge-offs, to the allowance for loan losses, to loans held for sale. 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 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 in the bidding process. During 2024, an additional $1.2 million write-down was recorded to earnings to reflect the loan's current estimated fair value of $8.8 million at December 31, 2024 and March 31, 2025.
During the three months ended March 31, 2025, Valley transferred a non-performing construction loan totaling $10.2 million, net of $638 thousand charge-offs to the allowance for loan losses, to loans held for sale. The fair value of the loan was determined using Level 2 inputs, including bids to purchase from multiple third-parties. Fair value was determined based on a non-binding sale agreement selected by Valley in the bidding process.
Collateral dependent loans. Collateral dependent loans are loans where foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and substantially all the repayment is expected from the sale of collateral. Collateral dependent loans are reported at the fair value of the underlying collateral when the fair value is lower than the recorded investment in the loan. 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 March 31, 2025, 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. Collateral dependent loans with a total amortized cost of $142.9 million, (including taxi medallion loans totaling $49.2 million), were reduced by specific allowance for loan losses allocations totaling $61.4 million to a reported total net carrying amount of $81.5 million at March 31, 2025.
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 an asset occur, the 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 March 31, 2025 and December 31, 2024.
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 or Wealth Management reporting unit) 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 March 31, 2025 and December 31, 2024 were as follows: 
 Fair Value
Hierarchy		March 31, 2025December 31, 2024
 Carrying
Amount		Fair ValueCarrying
Amount		Fair Value
 (in thousands)
Financial assets
Cash and due from banksLevel 1$508,887 $508,887 $411,412 $411,412 
Interest bearing deposits with banksLevel 1714,810 714,810 1,478,713 1,478,713 
Equity securities (1)
Level 340,010 40,010 36,871 36,871 
Held to maturity debt securities:
U.S. Treasury securitiesLevel 125,290 25,269 25,480 25,461 
U.S. government agency securitiesLevel 2300,865 259,872 301,315 252,302 
Obligations of states and political subdivisionsLevel 2358,186 329,121 372,489 346,361 
Residential mortgage-backed securitiesLevel 22,742,355 2,373,276 2,710,642 2,292,148 
Trust preferred securitiesLevel 236,086 29,480 36,081 29,145 
Corporate and other debt securitiesLevel 283,179 80,616 86,213 82,867 
Total held to maturity debt securities (2)
3,545,961 3,097,634 3,532,220 3,028,284 
Net loans 
Level 348,078,928 46,833,553 48,240,861 46,634,654 
Accrued interest receivableLevel 1238,326 238,326 239,941 239,941 
FRB and FHLB stock (3)
Level 2329,602 329,602 328,497 328,497 
Financial liabilities
Deposits without stated maturitiesLevel 138,041,836 38,041,836 37,733,313 37,733,313 
Deposits with stated maturitiesLevel 211,924,008 11,953,730 12,342,544 12,363,365 
Short-term borrowingsLevel 259,026 56,112 72,718 68,032 
Long-term borrowingsLevel 22,904,567 2,863,577 3,174,155 3,109,622 
Junior subordinated debentures issued to capital trusts
Level 257,542 55,163 57,455 54,957 
Accrued interest payable (4)
Level 1111,934 111,934 150,564 150,564 
(1)Represents equity securities without a readily determinable fair value, which are measured based on the price at which the investment was acquired plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. Total changes in the valuation of equity securities for the three months ended March 31, 2025 and for the year ended December 31, 2024, respectively, were immaterial.
(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.