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 September 30, 2025 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 juris ...

Financial Performance - Net income for Q3 2025 was $163.4 million, or $0.28 per diluted share, up from $133.2 million, or $0.22 per diluted share in Q2 2025, and $97.9 million, or $0.18 per diluted share in Q3 2024[1]. - Net income available to common shareholders for Q3 2025 was $155.711 million, a 23.4% increase from $126.219 million in Q2 2025 and a 69.9% increase from $91.739 million in Q3 2024[28]. - Net income for the three months ended September 30, 2025, was $163,355 thousand, up from $133,167 thousand in the previous quarter, representing a growth of 22.63%[45]. - Adjusted net income available to common shareholders for the three months ended September 30, 2025, was $156,444,000, compared to $127,467,000 for the same period in 2024, representing a 22.5% increase[40]. Revenue and Income Sources - Net interest income increased to $447.5 million in Q3 2025, up $13.8 million from Q2 2025 and $35.7 million from Q3 2024, with a net interest margin of 3.05%, up 4 basis points from Q2 2025[3][6]. - Non-interest income increased to $64.9 million, up $2.3 million from Q2 2025, mainly due to higher service charges and wealth management fees[4]. - Non-interest income totaled $64,887 thousand for the three months ended September 30, 2025, compared to $62,604 thousand in the previous quarter, reflecting a 3.64% increase[45]. - Net interest income for the nine months ended September 30, 2025, was $1,298,737,000, up from $1,205,731,000 in the same period of 2024, representing a 7.7% increase[43]. Asset and Loan Management - Total loans decreased by $118.6 million, or 1.0% annualized, to $49.3 billion, driven by declines in commercial real estate and commercial and industrial loans[4][10]. - Total loans as of September 30, 2025, were $49.272823 billion, a slight decrease from $49.391420 billion in Q2 2025 but an increase from $48.657128 billion in Q3 2024[30]. - The total loan portfolio amounted to $49.3 billion as of September 30, 2025[18]. - Loans totaled $49.27 billion, with an average interest rate of 5.95%, an increase from 5.88% in the previous quarter[46]. Credit Quality and Losses - The allowance for credit losses for loans was $598.6 million, representing 1.21% of total loans, with a provision for credit losses of $19.2 million in Q3 2025[4]. - Non-accrual loans increased to $421.5 million, or 0.86% of total loans, primarily due to new non-performing loans in the commercial real estate sector[13]. - The provision for credit losses for loans was $19.171 thousand for the three months ended September 30, 2025, down from $37,795 thousand in the previous quarter, indicating a reduction of 49.3%[32]. - Total non-accrual loans increased to $421,489 thousand as of September 30, 2025, up from $354,359 thousand in the previous quarter, representing a rise of 18.9%[34]. Efficiency and Profitability Ratios - Efficiency ratio improved to 53.37% in Q3 2025, down from 55.20% in Q2 2025 and 56.13% in Q3 2024[8]. - Annualized return on average assets (ROA) was 1.04%, and return on equity (ROE) was 8.58% for Q3 2025, indicating steady improvement in profitability ratios[8]. - The annualized return on average tangible shareholders' equity, as adjusted, improved to 11.64% in Q3 2025 from 9.71% in Q3 2024[40]. - The annualized return on average assets, as adjusted, rose to 1.04% in Q3 2025 from 0.87% in Q2 2025, indicating improved asset utilization[43]. Shareholder Returns and Equity - The company repurchased 1.3 million shares of common stock at an average price of $9.38 during the third quarter 2025[20]. - Total shareholders' equity increased to $7,695,374 thousand as of September 30, 2025, from $7,435,127 thousand at December 31, 2024, reflecting a growth of 3.49%[44]. - Book value per common share increased to $13.09 as of September 30, 2025, compared to $12.89 in Q2 2025 and $12.76 in Q1 2025[30]. - Dividends on preferred stock increased to $7,644 thousand for the three months ended September 30, 2025, compared to $6,948 thousand in the previous quarter, marking an increase of 10.0%[38]. Capital and Asset Growth - Total risk-based capital ratio was 13.83% at September 30, 2025, compared to 13.67% at June 30, 2025[20]. - Total assets increased to $63,018,614 thousand as of September 30, 2025, compared to $62,491,691 thousand at December 31, 2024, reflecting a growth of 0.84%[44]. - Average assets for the three months ended September 30, 2025, were $63,046,215,000, up from $62,106,945,000 in Q2 2025, indicating a growth of 1.5%[43]. - Total deposits rose to $51,175,758 thousand, a 2.20% increase from $50,075,857 thousand[44].

Financial Performance - The net income for the second quarter of 2025 was $133.2 million, or $0.22 per diluted common share, compared to $70.4 million, or $0.13 per diluted common share, for the same quarter in 2024, reflecting a $62.7 million increase[170]. - Net interest income increased by $30.7 million, primarily due to lower interest rates on deposit products in Q2 2025[173]. - Non-interest income rose by $11.4 million, driven by higher service charges, capital markets income, and bank-owned life insurance income[173]. - Adjusted net income for Q2 2025 was $134.415 million, up from $71.643 million in Q2 2024, representing an increase of 88%[187]. - The effective tax rate for the second quarter of 2025 was 23.1%, a decrease from 24.5% in the second quarter of 2024, primarily due to a higher level of investment in tax credits[223]. Asset and Loan Metrics - As of June 30, 2025, the company reported total assets of approximately $62.7 billion, total net loans of $48.8 billion, total deposits of $50.7 billion, and total shareholders' equity of $7.6 billion[167]. - Total commercial real estate loans amounted to $28.8 billion, representing 58.4% of total loans, down from 59.8% in the previous quarter, with a goal to maintain the ratio below 350% through December 31, 2025[169]. - Total loans charged-off amounted to $42.071 million for the second quarter of 2025, with commercial and industrial loans contributing $25.189 million and commercial real estate loans contributing $14.623 million[315]. - The allowance for loan losses was $579.500 million, representing 1.17% of total loans as of June 30, 2025[318]. - The total loans increased by $734.3 million, or 6.0%, to $49.4 billion from March 31, 2025, primarily due to organic growth in commercial and industrial loans[287]. Deposit and Funding - Total deposit balances increased by $759.4 million to $50.7 billion, driven by increases in both direct and indirect customer time deposits[169]. - Average non-interest-bearing deposits increased by $113.8 million to $11.3 billion in Q2 2025[178]. - Total estimated uninsured deposits were approximately $13.1 billion, or 26 percent of total deposits, as of June 30, 2025[180]. - The loans to deposits ratio is 97.4%, and wholesale funding to total funding ratio is 18.0%[267]. - Average core deposits totaled approximately $41.5 billion for the six months ended June 30, 2025, representing 72.6% of average interest-earning assets[271]. Credit Quality and Loss Provisions - The allowance for credit losses for loans was $594.0 million, or 1.20% of total loans, with expectations to remain between 1.20% and 1.25% through December 31, 2025[169]. - Non-accrual loans totaled $354.4 million, or 0.72% of total loans, with total accruing past due loans increasing to $199.2 million, or 0.40% of total loans[169]. - The provision for credit losses for loans was $37.795 million in the second quarter of 2025, down from $62.675 million in the first quarter of 2025 and $82.111 million in the second quarter of 2024[318]. - The allowance for loan losses as a percentage of non-accrual loans was 163.53% at June 30, 2025[306]. - Non-performing assets (NPAs) increased by $4.6 million to $360.8 million at June 30, 2025, with NPAs as a percentage of total loans remaining at 0.73%[296]. Capital and Ratios - The company's total risk-based capital ratio was 13.67% at June 30, 2025, down from 13.91% in the previous quarter, influenced by the early redemption of subordinated notes[170]. - Shareholders' equity increased to approximately $7.6 billion as of June 30, 2025, representing 12.1% of total assets, up from 11.9% at December 31, 2024[319]. - The common equity Tier 1 capital to risk-weighted assets ratio was maintained at 4.5% as of June 30, 2025, exceeding regulatory requirements[322]. - Valley's total risk-based capital was $6,713,872, with a ratio of 13.58% as of June 30, 2025[323]. - The retention ratio for Valley was approximately 45.0% for the six months ended June 30, 2025, compared to 36.2% for the full year ended December 31, 2024, reflecting an increase in net income available to common shareholders[324]. Economic Environment - The U.S. real GDP increased at an estimated annual rate of 3.0% in the second quarter of 2025, compared to a decrease of 0.5% in the first quarter, with inflation rising to 2.7%[172]. - Moody's Baseline forecast at June 30, 2025 included a GDP expansion of 0.6 percent in Q3 2025 and an unemployment rate of 4.3 percent[313]. - The inflation rate is projected to grow from 2.7 percent in June 30, 2025, declining to near 2.0 percent in early 2027[313].

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section provides an overview of Valley National Bancorp's second quarter 2025 financial performance, including key financial highlights and CEO commentary [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Valley National Bancorp reported a significant increase in net income for Q2 2025 compared to both Q1 2025 and Q2 2024, with adjusted net income also showing positive growth | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income (millions) | $133.2 | $106.1 | $70.4 | | Diluted EPS | $0.22 | $0.18 | $0.13 | | Adjusted Net Income (millions) | $134.4 | $106.1 | $71.6 | | Adjusted Diluted EPS | $0.23 | $0.18 | $0.13 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Ira Robbins expressed satisfaction with continued balance sheet strength, commercial loan growth, and improving profitability metrics. The company remains focused on growing low-cost deposits and noted significant improvements in credit results with a comfortable allowance coverage ratio - CEO pleased with continued **balance sheet strength** and **commercial loan growth** during Q2 2025[2](index=2&type=chunk) - **Profitability metrics** are trending positively, consistent with expectations for improvement throughout the year[2](index=2&type=chunk) - Company remains focused on growing **low-cost deposits** to support aspirations in 2025 and beyond[2](index=2&type=chunk) - Quarterly **credit results improved significantly**, with a reduction in provision for loan losses both quarter-over-quarter and year-over-year[2](index=2&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) The company experienced growth in net interest income and margin, total loans (driven by C&I and auto), and deposits. Provision for credit losses decreased significantly, while non-interest income and expense both saw increases [Net Interest Income and Margin Overview](index=1&type=section&id=Net%20Interest%20Income%20and%20Margin%20Overview) The company saw an increase in net interest margin and net interest income quarter-over-quarter and year-over-year - Net interest margin (tax equivalent) increased by **5 basis points to 3.01%** in Q2 2025 from 2.96% in Q1 2025[3](index=3&type=chunk) - Net interest income (tax equivalent) of **$433.7 million** for Q2 2025 increased **$12.3 million QoQ** and **$30.7 million YoY**[3](index=3&type=chunk) [Loan Portfolio Overview](index=1&type=section&id=Loan%20Portfolio%20Overview) Total loans grew, primarily driven by commercial and industrial and automobile loans, while commercial real estate loans decreased - Total loans increased **$734.3 million**, or **6.0% on an annualized basis**, to **$49.4 billion** at June 30, 2025[3](index=3&type=chunk) - Commercial and industrial (C&I) loans increased **$719.8 million**, and automobile loans increased **$137.6 million**[3](index=3&type=chunk) - Total commercial real estate (CRE) loans decreased **$288.6 million**, leading to a decline in the CRE loan concentration ratio to approximately **349%** from 353%[3](index=3&type=chunk)[4](index=4&type=chunk) [Allowance and Provision for Credit Losses Overview](index=2&type=section&id=Allowance%20and%20Provision%20for%20Credit%20Losses%20Overview) The allowance for credit losses remained stable, while the provision for credit losses significantly decreased quarter-over-quarter and year-over-year - Allowance for credit losses for loans totaled **$594.0 million** at June 30, 2025, representing **1.20% of total loans**[4](index=4&type=chunk) - Provision for credit losses for loans was **$37.8 million** in Q2 2025, a decrease from **$62.7 million** in Q1 2025 and **$82.1 million** in Q2 2024[4](index=4&type=chunk) [Credit Quality Overview](index=2&type=section&id=Credit%20Quality%20Overview) Net loan charge-offs remained stable, non-accrual loans slightly increased, and total accruing past due loans saw a significant rise, primarily due to specific CRE loans - Net loan charge-offs totaled **$37.8 million** for Q2 2025, compared to **$41.9 million** in Q1 2025 and **$36.8 million** in Q2 2024[4](index=4&type=chunk) - Non-accrual loans increased slightly to **$354.4 million** (**0.72% of total loans**) at June 30, 2025[4](index=4&type=chunk) - Total accruing past due loans increased significantly to **$199.2 million** (**0.40% of total loans**), primarily due to three CRE loans, two of which were no longer past due in July 2025[4](index=4&type=chunk) [Deposits Overview](index=2&type=section&id=Deposits%20Overview) Total deposit balances increased, driven by growth in non-interest bearing and time deposits, partially offset by a decrease in savings, NOW, and money market accounts - Total deposit balances increased **$759.4 million** to **$50.7 billion** at June 30, 2025[4](index=4&type=chunk) - Non-interest bearing deposits increased **$118.2 million** to **$11.7 billion**[4](index=4&type=chunk) [Subordinated Debt Redemptions](index=2&type=section&id=Subordinated%20Debt%20Redemptions) The company redeemed and repaid subordinated notes, resulting in a pre-tax loss on one redemption - Redeemed **$115 million** of 5.25% fixed-to-floating rate subordinated notes, resulting in a **$922 thousand pre-tax loss**[4](index=4&type=chunk) - Repaid **$100 million** of 4.55% fixed rate subordinated notes that matured[4](index=4&type=chunk) [Non-Interest Income Overview](index=2&type=section&id=Non-Interest%20Income%20Overview) Non-interest income increased, primarily driven by higher capital markets income and service charges on deposit accounts - Non-interest income increased **$4.3 million** to **$62.6 million** for Q2 2025, driven by capital markets income (**$2.8 million increase**) and service charges on deposit accounts (**$2.0 million increase**)[4](index=4&type=chunk) [Non-Interest Expense Overview](index=2&type=section&id=Non-Interest%20Expense%20Overview) Non-interest expense increased due to higher professional and legal fees and increased salary and employee benefits - Non-interest expense increased **$7.5 million** to **$284.1 million** for Q2 2025, primarily due to higher professional and legal fees (**$4.3 million**) and salary and employee benefits expense (**$2.8 million**)[4](index=4&type=chunk)[5](index=5&type=chunk) [Efficiency and Performance Ratios Overview](index=3&type=section&id=Efficiency%20and%20Performance%20Ratios%20Overview) The company's efficiency ratio improved, and all annualized return metrics (ROA, ROE, Tangible ROE) showed positive trends | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Efficiency Ratio | 55.20% | 55.87% | 59.62% | | Annualized Return on Average Assets (ROA) | 0.86% | 0.69% | 0.46% | | Annualized Return on Average Shareholders' Equity (ROE) | 7.08% | 5.69% | 4.17% | | Annualized Return on Average Tangible Shareholders' Equity (Tangible ROE) | 9.62% | 7.76% | 5.95% | [Detailed Financial Review](index=3&type=section&id=Detailed%20Financial%20Review) This section offers an in-depth analysis of the company's net interest income, loan and deposit trends, credit quality, and capital adequacy for the quarter [Net Interest Income and Margin](index=3&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income and margin both improved in Q2 2025, driven by higher yields on new loan originations and increased average loan balances, despite a rise in interest expense due to higher deposit costs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Interest Income (FTE) | $433.7M | $421.4M | $403.0M | | Net Interest Margin (FTE) | 3.01% | 2.96% | 2.84% | | Interest Income (FTE) | $806.3M | $786.0M | $834.8M | | Interest Expense | $372.6M | $364.6M | $431.8M | | Cost of Total Average Deposits | 2.67% | 2.65% | 3.18% | - Increase in interest income was mostly driven by higher yields on new loan originations, increased average loan balances (C&I), additional interest income from taxable investment purchases, and one additional day in the quarter[6](index=6&type=chunk) - Increase in interest expense was largely due to a **$548.7 million** increase in average time deposit balances, increased cost of certain non-maturity deposits, and the increased day count[6](index=6&type=chunk) [Loans, Deposits and Other Borrowings](index=4&type=section&id=Loans,%20Deposits%20and%20Other%20Borrowings) The company experienced overall loan and deposit growth in Q2 2025, with significant increases in C&I and automobile loans, and time and non-interest bearing deposits. Subordinated debt redemptions were largely offset by new FHLB advances [Loans](index=4&type=section&id=Loans) Total loans increased, primarily driven by strong growth in commercial and industrial and automobile loans, while commercial real estate loans saw a decline | Loan Category | June 30, 2025 (in millions) | March 31, 2025 (in millions) | Change (QoQ) | | :-------------------------------- | :-------------------------- | :--------------------------- | :----------- | | Total Loans | $49,391.4 | $48,657.1 | +$734.3M | | Commercial and Industrial (C&I) | $10,870.0 | $10,150.2 | +$719.8M | | Automobile | $2,178.8 | $2,041.2 | +$137.6M | | Residential Mortgage | $5,709.9 | $5,636.4 | +$73.6M | | Total Commercial Real Estate (CRE) | $28,825.9 | $29,114.5 | -$288.6M | | Construction | $2,854.8 | $3,026.9 | -$172.1M | - C&I loans grew by **28.4% on an annualized basis** due to continued strategic focus on organic growth[9](index=9&type=chunk) - Automobile loans increased by **27.0% on an annualized basis** due to high quality consumer demand and low prepayment activity[9](index=9&type=chunk) - CRE loans decreased largely due to runoff from repayment activity and efforts to focus new originations on more profitable holistic banking clients[9](index=9&type=chunk) [Deposits](index=4&type=section&id=Deposits) Total deposits increased, with notable growth in time and non-interest bearing deposits, while savings, NOW, and money market accounts decreased | Deposit Category | June 30, 2025 (in millions) | March 31, 2025 (in millions) | Change (QoQ) | | :-------------------------------- | :-------------------------- | :--------------------------- | :----------- | | Total Deposits | $50,725.3 | $49,965.8 | +$759.4M | | Non-interest Bearing | $11,746.8 | $11,628.6 | +$118.2M | | Time Deposits | $12,886.9 | $11,924.0 | +$962.9M | | Savings, NOW, Money Market | $26,091.6 | $26,413.2 | -$321.6M | - Increase in time deposit balances mainly driven by new promotional retail CD offerings and additional fully-insured indirect customer CDs[10](index=10&type=chunk) - Non-interest bearing deposit balances increased mostly due to higher commercial customer deposit inflows[10](index=10&type=chunk) - Indirect customer deposits totaled **$6.5 billion** at June 30, 2025, up from **$6.3 billion** at March 31, 2025[10](index=10&type=chunk) [Other Borrowings](index=4&type=section&id=Other%20Borrowings) Short-term borrowings increased due to FHLB advances, while long-term borrowings remained stable despite subordinated note redemptions, offset by new FHLB advances - Short-term borrowings increased **$103.2 million** to **$162.2 million**, largely due to an increase in FHLB advances[11](index=11&type=chunk) - Long-term borrowings remained relatively unchanged at **$2.9 billion**, as **$215 million** of subordinated notes redemptions were mostly offset by new long-term FHLB advances[11](index=11&type=chunk) [Credit Quality](index=5&type=section&id=Credit%20Quality) Credit quality showed mixed trends, with a slight increase in non-performing assets and a notable rise in accruing past due loans, though some of the past due loans were resolved post-quarter. The provision for credit losses decreased significantly [Non-Performing Assets (NPAs)](index=5&type=section&id=Non-Performing%20Assets%20(NPAs)) Total non-performing assets and non-accrual loans increased slightly, primarily due to a rise in non-performing CRE loans, while other real estate owned decreased | Metric | June 30, 2025 (in millions) | March 31, 2025 (in millions) | Change (QoQ) | | :-------------------------------- | :-------------------------- | :--------------------------- | :----------- | | Total NPAs | $360.8 | $356.2 | +$4.6M | | Non-accrual Loans | $354.4 | $346.5 | +$7.9M | | Non-accrual Loans as % of Total Loans | 0.72% | 0.71% | +0.01% | | Other Real Estate Owned (OREO) | $4.8 | $7.7 | -$2.9M | - Increase in non-accrual loans mainly due to a net increase in non-performing CRE loans, partially offset by a decline in non-performing C&I loans due to **$17.4 million** in full charge-offs[12](index=12&type=chunk) - OREO decreased due to a fair valuation write-down related to one CRE property[12](index=12&type=chunk) [Accruing Past Due Loans](index=5&type=section&id=Accruing%20Past%20Due%20Loans) Total accruing past due loans increased significantly quarter-over-quarter, primarily driven by specific CRE and construction loans, some of which were resolved in July 2025 - Total accruing past due loans increased **$147.5 million** to **$199.2 million** (**0.40% of total loans**) at June 30, 2025, from **$51.7 million** (**0.11%**) at March 31, 2025[13](index=13&type=chunk) [30 to 59 Days Past Due](index=5&type=section&id=30%20to%2059%20Days%20Past%20Due) Loans 30 to 59 days past due increased significantly, primarily due to specific CRE and construction loans that were subsequently resolved - Loans 30 to 59 days past due increased **$89.5 million** to **$123.0 million**, largely due to one **$39.2 million** CRE loan and one **$35.0 million** construction loan, both subsequently paid in full or resolved in July 2025[14](index=14&type=chunk) [60 to 89 Days Past Due](index=5&type=section&id=60%20to%2089%20Days%20Past%20Due) Loans 60 to 89 days past due increased significantly, mainly due to a large CRE loan that was subsequently modified and brought current - Loans 60 to 89 days past due increased **$62.8 million** to **$73.3 million**, mainly due to a **$60.6 million** CRE loan that was subsequently modified and brought current in July 2025[14](index=14&type=chunk) [90 or More Days Past Due](index=5&type=section&id=90%20or%20More%20Days%20Past%20Due) Loans 90 days or more past due decreased, primarily due to a reduction in residential mortgage loan delinquencies - Loans 90 days or more past due decreased **$4.8 million** to **$2.9 million**, mainly due to a decrease in residential mortgage loan delinquencies[14](index=14&type=chunk) [Allowance for Credit Losses for Loans and Unfunded Commitments](index=6&type=section&id=Allowance%20for%20Credit%20Losses%20for%20Loans%20and%20Unfunded%20Commitments) The allowance for credit losses for loans remained stable, while the provision for credit losses decreased, reflecting loan growth and charge-offs offset by reserve adjustments | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Allowance for Credit Losses for Loans | $594.0M | $594.1M | $532.5M | | ACL for Loans as % of Total Loans | 1.20% | 1.22% | 1.06% | | Provision for Credit Losses for Loans | $37.8M | $62.7M | $82.1M | | Net Loan Charge-offs | $37.8M | $41.9M | $36.8M | - The Q2 2025 provision reflects the impact of loan growth (mainly C&I) and loan charge-offs, partially offset by a decline in quantitative reserves and lower specific reserves[16](index=16&type=chunk) - Gross loan charge-offs totaled **$42.1 million** for Q2 2025, including **$23.1 million** related to five non-performing C&I loan relationships[15](index=15&type=chunk) [Capital Adequacy](index=7&type=section&id=Capital%20Adequacy) Valley's capital ratios remained strong at June 30, 2025, with a slight reduction in the total risk-based capital ratio due to the early redemption of subordinated notes | Capital Ratio | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :------------ | :------------- | | Total Risk-Based Capital | 13.67% | 13.91% | | Tier 1 Capital | 11.57% | 11.53% | | Common Equity Tier 1 Capital | 10.85% | 10.80% | | Tier 1 Leverage Capital | 9.49% | 9.41% | - The reduction in the total risk-based capital ratio reflects the early redemption of **$115 million** of 5.25% fixed-to-floating rate subordinated notes[17](index=17&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) This section provides essential company details, including investor call information, a brief company overview, forward-looking statements, and shareholder relations contacts [Investor Conference Call](index=7&type=section&id=Investor%20Conference%20Call) Valley's CEO, Ira Robbins, will host a conference call on July 24, 2025, to discuss the second quarter 2025 earnings, with preregistration and webcast options available - Conference call with investors and financial community scheduled for **July 24, 2025, at 11:00 AM (ET)**[18](index=18&type=chunk) - Preregistration is required to receive dial-in number and personal PIN; webcast also available[18](index=18&type=chunk) [About Valley National Bancorp](index=7&type=section&id=About%20Valley%20National%20Bancorp) Valley National Bank, the principal subsidiary of Valley National Bancorp, is a regional bank with approximately $63 billion in assets, operating across multiple states and focused on customer service and community growth - Valley National Bank is a regional bank with approximately **$63 billion in assets**[19](index=19&type=chunk) - Operates branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California, and Illinois[19](index=19&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) The document includes a standard disclaimer regarding forward-looking statements, highlighting various risks and uncertainties that could cause actual results to differ materially from expectations, including macroeconomic conditions, financial market instability, regulatory changes, and cybersecurity threats - Statements are not historical facts and include expressions about management's confidence and expectations[20](index=20&type=chunk) - Actual results may differ materially due to factors such as market interest rates, macroeconomic downturns, instability in the U.S. financial sector, negative public opinion, and changes in regulations[20](index=20&type=chunk)[21](index=21&type=chunk) - Other risks include loss of lower-cost funding, litigation, declines in commercial real estate values, technology costs, increased competition, and cyberattacks[21](index=21&type=chunk)[23](index=23&type=chunk) [Shareholder Relations](index=19&type=section&id=Shareholder%20Relations) Contact information for shareholder inquiries and reports is provided for Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist - Shareholder inquiries should be directed to Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist[46](index=46&type=chunk) [Consolidated Financial Highlights (Tables)](index=10&type=section&id=Consolidated%20Financial%20Highlights%20(Tables)) This section presents comprehensive financial tables, including selected financial data, balance sheet items, loan categories, capital ratios, allowance for credit losses, asset quality, and non-GAAP reconciliations [Selected Financial Data](index=10&type=section&id=Selected%20Financial%20Data) This section provides a summary of key financial data, including net interest income, non-interest income, total revenue, expenses, net income, EPS, and various financial ratios for the three and six months ended June 30, 2025, and comparable periods | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net interest income - FTE (thousands) | $433,675 | $421,378 | $402,984 | $855,052 | $797,831 | | Non-interest income (thousands) | $62,604 | $58,294 | $51,213 | $120,898 | $112,628 | | Total revenue (thousands) | $495,012 | $478,399 | $452,898 | $973,411 | $907,861 | | Net income (thousands) | $133,167 | $106,058 | $70,424 | $239,225 | $166,704 | | Diluted earnings per common share | $0.22 | $0.18 | $0.13 | $0.40 | $0.31 | | Net interest margin - FTE | 3.01% | 2.96% | 2.84% | 2.99% | 2.81% | | Efficiency ratio | 55.20% | 55.87% | 59.62% | 55.53% | 59.36% | [Balance Sheet Items](index=11&type=section&id=Balance%20Sheet%20Items) This table presents key balance sheet figures, including total assets, loans, deposits, and shareholders' equity, at various quarter-end dates | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | September 30, 2024 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------------- | :-------------------------------- | :--------------------------- | | Assets | $62,705,358 | $61,865,655 | $62,491,691 | $62,092,332 | $62,058,974 | | Total loans | $49,391,420 | $48,657,128 | $48,799,711 | $49,355,319 | $50,311,702 | | Deposits | $50,725,284 | $49,965,844 | $50,075,857 | $50,395,966 | $50,112,177 | | Shareholders' equity | $7,575,421 | $7,499,897 | $7,435,127 | $6,972,380 | $6,737,737 | [Loans by Category](index=11&type=section&id=Loans%20by%20Category) This table details the composition of the loan portfolio across various categories, showing trends over the past five quarters | Loan Category | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | September 30, 2024 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------------- | :-------------------------------- | :--------------------------- | | Commercial and industrial | $10,870,036 | $10,150,205 | $9,931,400 | $9,799,287 | $9,479,147 | | Total commercial real estate | $28,825,920 | $29,114,556 | $29,644,958 | $30,402,196 | $31,768,846 | | Residential mortgage | $5,709,971 | $5,636,407 | $5,632,516 | $5,684,079 | $5,627,113 | | Total consumer loans | $3,985,493 | $3,755,960 | $3,590,837 | $3,469,757 | $3,436,596 | | Total loans | $49,391,420 | $48,657,128 | $48,799,711 | $49,355,319 | $50,311,702 | [Capital Ratios](index=11&type=section&id=Capital%20Ratios) This table presents the company's regulatory capital ratios and book values per common share over the past five quarters | Capital Ratio | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Book value per common share | $12.89 | $12.76 | $12.67 | $13.00 | $12.82 | | Tangible book value per common share | $9.35 | $9.21 | $9.10 | $9.06 | $8.87 | | Tangible common equity to tangible assets | 8.63% | 8.61% | 8.40% | 7.68% | 7.52% | | Tier 1 leverage capital | 9.49% | 9.41% | 9.16% | 8.40% | 8.19% | | Common equity tier 1 capital | 10.85% | 10.80% | 10.82% | 9.57% | 9.55% | | Tier 1 risk-based capital | 11.57% | 11.53% | 11.55% | 10.29% | 9.98% | | Total risk-based capital | 13.67% | 13.91% | 13.87% | 12.56% | 12.17% | [Allowance for Credit Losses](index=12&type=section&id=Allowance%20for%20Credit%20Losses) This table provides a detailed breakdown of the allowance for credit losses, including charge-offs, recoveries, and provision for credit losses, for the three and six months ended June 30, 2025, and comparable periods | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Beginning balance - Allowance for credit losses for loans (thousands) | $594,054 | $573,328 | $487,269 | $573,328 | $465,550 | | Total net charge-offs (thousands) | $(37,829) | $(41,949) | $(36,839) | $(79,778) | $(60,394) | | Provision for credit losses for loans (thousands) | $37,795 | $62,675 | $82,111 | $100,470 | $127,385 | | Ending balance (thousands) | $594,020 | $594,054 | $532,541 | $594,020 | $532,541 | | Allowance for credit losses for loans as a % of total loans | 1.20% | 1.22% | 1.06% | 1.20% | 1.06% | [Asset Quality](index=13&type=section&id=Asset%20Quality) This table presents detailed asset quality metrics, including accruing past due loans by delinquency stage and non-accrual loans by category, over the past five quarters | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | September 30, 2024 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------------- | :-------------------------------- | :--------------------------- | | Total accruing past due loans | $199,202 | $51,697 | $99,194 | $174,696 | $72,395 | | Total non-accrual loans | $354,359 | $346,451 | $359,498 | $296,319 | $303,279 | | Total non-performing assets | $360,784 | $356,219 | $373,329 | $305,102 | $312,945 | | Total non-accrual loans as a % of loans | 0.72% | 0.71% | 0.74% | 0.60% | 0.60% | | Allowance for losses on loans as a % of non-accrual loans | 163.53% | 166.89% | 155.45% | 185.05% | 171.23% | [Notes to Selected Financial Data](index=14&type=section&id=Notes%20to%20Selected%20Financial%20Data) This section clarifies the presentation of net interest income and margin on a tax equivalent basis and provides an explanation of the non-GAAP financial measures used in the report - Net interest income and net interest margin are presented on a tax equivalent basis using a **21 percent federal tax rate** for comparability[33](index=33&type=chunk) - Non-GAAP financial measures are used by management and investors to understand underlying operational performance and trends, and should not be considered in isolation from GAAP measures[34](index=34&type=chunk) [Non-GAAP Reconciliations](index=14&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of non-GAAP financial measures, such as adjusted net income, adjusted EPS, and various adjusted return ratios, to their most directly comparable GAAP measures | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net income, as reported (GAAP) (thousands) | $133,167 | $106,058 | $70,424 | $239,225 | $166,704 | | Net income, as adjusted (non-GAAP) (thousands) | $134,415 | $106,066 | $71,643 | $240,481 | $171,091 | | Diluted earnings, as adjusted (non-GAAP) | $0.23 | $0.18 | $0.13 | $0.40 | $0.32 | | Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) | 9.71% | 7.76% | 6.05% | 8.74% | 7.25% | | Efficiency ratio (non-GAAP) | 55.20% | 55.87% | 59.62% | 55.53% | 59.36% | [Consolidated Statements of Financial Condition](index=16&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This table presents the consolidated balance sheets for Valley National Bancorp as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and shareholders' equity | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :------------------------------- | | Total Assets | $62,705,358 | $62,491,691 | | Total Loans (net of allowance) | $48,811,920 | $48,240,861 | | Total Deposits | $50,725,284 | $50,075,857 | | Total Liabilities | $55,129,937 | $55,056,564 | | Total Shareholders' Equity | $7,575,421 | $7,435,127 | [Consolidated Statements of Income](index=17&type=section&id=Consolidated%20Statements%20of%20Income) This table provides the consolidated income statements for the three and six months ended June 30, 2025, and comparable periods, detailing interest income, interest expense, non-interest income, non-interest expense, and net income | Item | Q2 2025 (in thousands) | Q1 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :--------------------- | :---------------------- | :---------------------- | | Total interest income | $805,012 | $784,752 | $833,466 | $1,589,764 | $1,662,122 | | Total interest expense | $372,604 | $364,647 | $431,781 | $737,251 | $866,889 | | Net Interest Income | $432,408 | $420,105 | $401,685 | $852,513 | $795,233 | | Provision for credit losses for loans | $37,795 | $62,675 | $82,111 | $100,470 | $127,385 | | Total non-interest income | $62,604 | $58,294 | $51,213 | $120,898 | $112,628 | | Total non-interest expense | $284,122 | $276,618 | $277,497 | $560,740 | $557,807 | | Net Income | $133,167 | $106,058 | $70,424 | $239,225 | $166,704 | [Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and Net Interest Income on a Tax Equivalent Basis](index=19&type=section&id=Quarterly%20Analysis%20of%20Average%20Assets,%20Liabilities%20and%20Shareholders'%20Equity%20and%20Net%20Interest%20Income%20on%20a%20Tax%20Equivalent%20Basis) This table provides a detailed quarterly analysis of average balances, interest income/expense, and rates for interest-earning assets and interest-bearing liabilities, along with net interest income and margin on a tax equivalent basis | Item | Q2 2025 Average Balance (in thousands) | Q2 2025 Average Rate | Q1 2025 Average Balance (in thousands) | Q1 2025 Average Rate | Q2 2024 Average Balance (in thousands) | Q2 2024 Average Rate | | :-------------------------------- | :----------------------------------- | :------------------- | :----------------------------------- | :------------------- | :----------------------------------- | :------------------- | | Total interest earning assets | $57,553,624 | 5.60% | $56,891,691 | 5.53% | $56,772,950 | 5.88% | | Total interest bearing liabilities | $41,913,735 | 3.56% | $41,230,709 | 3.54% | $41,576,344 | 4.15% | | Net interest income/interest rate spread | | 2.04% | | 1.99% | | 1.73% | | Net interest margin on a fully tax equivalent basis | | 3.01% | | 2.96% | | 2.84% |

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) [TABLE OF CONTENTS](index=2&type=section&id=TABLE%20OF%20CONTENTS) [Glossary of Defined Terms](index=3&type=section&id=Glossary%20of%20Defined%20Terms) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Valley National Bancorp's unaudited consolidated financial statements, including financial condition, income, comprehensive income, equity changes, and cash flows, for the quarter ended March 31, 2025 [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total Assets | $61,865,655 | $62,491,691 | $(626,036) | | Total Liabilities | $54,365,758 | $55,056,564 | $(690,806) | | Total Shareholders' Equity | $7,499,897 | $7,435,127 | $64,770 | | Total Deposits | $49,965,844 | $50,075,857 | $(110,013) | | Net Loans | $48,078,928 | $48,240,861 | $(161,933) | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net Income | $106,058 | $96,280 | $9,778 | | Net Interest Income | $420,105 | $393,548 | $26,557 | | Provision for Credit Losses for Loans | $62,675 | $45,274 | $17,401 | | Total Non-Interest Income | $58,294 | $61,415 | $(3,121) | | Total Non-Interest Expense | $276,618 | $280,310 | $(3,692) | | Basic Earnings Per Common Share | $0.18 | $0.18 | $0.00 | | Diluted Earnings Per Common Share | $0.18 | $0.18 | $0.00 | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net income | $106,058 | $96,280 | $9,778 | | Unrealized gains and losses on AFS securities (Net gains (losses) arising during the period) | $27,212 | $(10,205) | $37,417 | | Total other comprehensive income (loss) | $27,082 | $(10,392) | $37,474 | | Total comprehensive income | $133,140 | $85,888 | $47,252 | [Consolidated Statements of Changes in Shareholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) | Item | Three Months Ended March 31, 2025 (in thousands) | | :------------------------------------ | :----------------------------------------------- | | Balance - December 31, 2024 | $7,435,127 | | Net income | $106,058 | | Other comprehensive income, net of tax | $27,082 | | Cash dividends declared: Preferred stock | $(6,956) | | Cash dividends declared: Common stock | $(62,460) | | Effect of stock incentive plan, net | $3,208 | | Purchase of treasury stock | $(2,162) | | Balance - March 31, 2025 | $7,499,897 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net cash (used in) provided by operating activities | $(17,122) | $99,511 | $(116,633) | | Net cash (used in) provided by investing activities | $(175,310) | $91,985 | $(267,295) | | Net cash used in financing activities | $(473,996) | $(141,888) | $(332,108) | | Net change in cash and cash equivalents | $(666,428) | $49,608 | $(716,036) | | Cash and cash equivalents at end of period | $1,223,697 | $940,833 | $282,864 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for consolidated financial statements, covering accounting policies, estimates, fair value, investments, loans, credit losses, and operating segments [Note 1. Basis of Presentation](index=12&type=section&id=Note%201.%20Basis%20of%20Presentation) - The unaudited consolidated financial statements conform to GAAP and include Valley National Bank and all other entities in which Valley has a controlling financial interest[25](index=25&type=chunk) - Management's material estimates, such as the allowance for credit losses, goodwill, and income taxes, are subject to significant judgment and potential change, with actual results possibly differing from estimates[28](index=28&type=chunk) [Note 2. Earnings Per Common Share](index=12&type=section&id=Note%202.%20Earnings%20Per%20Common%20Share) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income available to common shareholders | $99,103 thousand | $92,161 thousand | | Basic weighted average number of common shares outstanding | 559,613,272 | 508,340,719 | | Diluted weighted average number of common shares outstanding | 563,305,525 | 510,633,945 | | Basic Earnings Per Common Share | $0.18 | $0.18 | | Diluted Earnings Per Common Share | $0.18 | $0.18 | [Note 3. Accumulated Other Comprehensive Loss](index=13&type=section&id=Note%203.%20Accumulated%20Other%20Comprehensive%20Loss) | Component | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | Change (in thousands) | | :------------------------------------------ | :------------------------------- | :---------------------------- | :-------------------- | | Unrealized Gains and Losses on AFS Securities | $(133,898) | $(106,686) | $27,212 | | Unrealized Gains and Losses on Derivatives | $1,245 | $1,027 | $(218) | | Defined Benefit Pension and Postretirement Benefit Plans | $(22,681) | $(22,593) | $88 | | Total Accumulated Other Comprehensive Loss | $(155,334) | $(128,252) | $27,082 | - Net other comprehensive income (loss) for the three months ended March 31, 2025, was **$27,082 thousand**, a significant improvement compared to a loss of **$(10,392) thousand** for the same period in 2024[31](index=31&type=chunk) [Note 4. New Authoritative Accounting Guidance](index=14&type=section&id=Note%204.%20New%20Authoritative%20Accounting%20Guidance) - ASU No. 2024-03 requires disaggregation of certain income statement expenses in footnotes, with an amended effective date for public business entities for annual periods beginning after December 15, 2026[32](index=32&type=chunk) - Valley is currently evaluating the impact of ASU No. 2024-03 on its consolidated financial statements[32](index=32&type=chunk) [Note 5. Fair Value Measurement of Assets and Liabilities](index=14&type=section&id=Note%205.%20Fair%20Value%20Measurement%20of%20Assets%20and%20Liabilities) This note details the fair value hierarchy (Level 1, 2, 3) for assets and liabilities, distinguishing recurring and non-recurring measurements and valuation techniques [Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis](index=14&type=section&id=Assets%20and%20Liabilities%20Measured%20at%20Fair%20Value%20on%20a%20Recurring%20and%20Non-Recurring%20Basis) | Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total recurring fair value assets | $4,028,268 | $3,865,560 | | Total recurring fair value liabilities | $332,888 | $454,200 | | Total non-recurring fair value measurements | $110,191 | $162,026 | [Assets and Liabilities Measured at Fair Value on a Recurring Basis](index=16&type=section&id=Assets%20and%20Liabilities%20Measured%20at%20Fair%20Value%20on%20a%20Recurring%20Basis) - Equity securities and U.S. Treasury securities are reported at fair value utilizing Level 1 inputs (unadjusted exchange quoted prices in active markets)[40](index=40&type=chunk)[42](index=42&type=chunk) - The majority of other available for sale debt securities, residential mortgage loans held for sale, and derivatives are reported at fair value utilizing Level 2 inputs (quoted prices in inactive markets or observable inputs)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Assets and Liabilities Measured at Fair Value on a Non-recurring Basis](index=17&type=section&id=Assets%20and%20Liabilities%20Measured%20at%20Fair%20Value%20on%20a%20Non-recurring%20Basis) - Non-performing commercial real estate loans held for sale are valued using Level 2 inputs, based on bids from third-party brokers[46](index=46&type=chunk)[47](index=47&type=chunk) - Collateral dependent loans are reported at the fair value of the underlying collateral, estimated using Level 3 inputs (individual third-party appraisals, potentially adjusted)[48](index=48&type=chunk) - Foreclosed assets are re-measured and reported at fair value using Level 3 inputs, consisting of a third-party appraisal less estimated cost to sell[49](index=49&type=chunk) [Other Fair Value Disclosures](index=18&type=section&id=Other%20Fair%20Value%20Disclosures) - Fair value estimates are based on pertinent market data and relevant information, but do not reflect any premium or discount from selling the entire portfolio or the value of non-financial instruments[51](index=51&type=chunk)[52](index=52&type=chunk) | Financial Instrument | March 31, 2025 Carrying Amount (in thousands) | March 31, 2025 Fair Value (in thousands) | | :--------------------------------- | :------------------------------------------ | :--------------------------------------- | | Net loans | $48,078,928 | $46,833,553 | [Note 6. Investment Securities](index=19&type=section&id=Note%206.%20Investment%20Securities) This note details the composition, fair value, unrealized gains/losses, and credit quality of Valley's equity, AFS, and HTM debt securities portfolios [Equity Securities](index=19&type=section&id=Equity%20Securities) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------- | :------------------------------ | :------------------------------- | | Equity securities | $74,425 | $71,513 | [Available for Sale Debt Securities](index=20&type=section&id=Available%20for%20Sale%20Debt%20Securities) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Fair Value | $3,658,704 | $3,369,724 | | Gross Unrealized Gains | $16,574 | $4,063 | | Gross Unrealized Losses | $(162,030) | $(186,612) | - The declines in fair value for AFS debt securities are mainly attributable to interest rates, credit spreads, market volatility, and liquidity conditions, not credit quality[64](index=64&type=chunk) - No impairment was recognized for AFS debt securities in Q1 2025 or Q1 2024, as Valley does not intend to sell them prior to recovery of their amortized cost basis[64](index=64&type=chunk)[65](index=65&type=chunk) [Held to Maturity Debt Securities](index=23&type=section&id=Held%20to%20Maturity%20Debt%20Securities) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Net Carrying Value | $3,545,328 | $3,531,573 | | Gross Unrealized Gains | $5,057 | $2,107 | | Gross Unrealized Losses | $(453,384) | $(506,043) | | Allowance for Credit Losses | $633 | $647 | - The majority of obligations of states and political subdivisions were rated investment grade, and residential mortgage-backed securities were AAA/AA/A rated at March 31, 2025[74](index=74&type=chunk)[264](index=264&type=chunk) - Valley has a zero-loss expectation for certain HTM securities, including U.S. Treasury, U.S. government agency, and Ginnie Mae/Fannie Mae/Freddie Mac residential mortgage-backed securities[75](index=75&type=chunk) [Note 7. Loans and Allowance for Credit Losses for Loans](index=27&type=section&id=Note%207.%20Loans%20and%20Allowance%20for%20Credit%20Losses%20for%20Loans) This note details the loan portfolio breakdown, credit quality, loan modifications, and allowance for credit losses (ACL) methodology and activity [Loan Portfolio Details](index=27&type=section&id=Loan%20Portfolio%20Details) | Loan Category | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------- | | Commercial and industrial | $10,150,205 | $9,931,400 | | Commercial real estate | $29,114,556 | $29,644,958 | | Residential mortgage | $5,636,407 | $5,632,516 | | Consumer loans | $3,755,960 | $3,590,837 | | Total loans | $48,657,128 | $48,799,711 | - Commercial real estate loans (including construction) constituted **59.8% of total loans** at March 31, 2025[77](index=77&type=chunk) [Loans Portfolio Sales and Transfers to Loans Held for Sale](index=27&type=section&id=Loans%20Portfolio%20Sales%20and%20Transfers%20to%20Loans%20Held%20for%20Sale) - During Q1 2025, Valley transferred a non-performing construction loan totaling **$10.2 million** (net of $638 thousand charge-offs) from the held for investment portfolio to loans held for sale[80](index=80&type=chunk) - In Q1 2024, Valley sold its commercial premium finance lending business for **$96.8 million**, generating a **$3.6 million net gain**[81](index=81&type=chunk) [Credit Risk Management](index=28&type=section&id=Credit%20Risk%20Management) - Valley's credit policy aims to minimize credit risk through centralized authority, regular Board review, and loan portfolio diversification across business sectors[82](index=82&type=chunk) - Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes[82](index=82&type=chunk) [Credit Quality](index=28&type=section&id=Credit%20Quality) | Loan Status | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Past Due Loans (30+ days) | $51,697 | $99,194 | | Non-Accrual Loans | $346,451 | $359,498 | | Total Past Due and Non-Accrual Loans | $398,148 | $458,692 | - Valley utilizes an internal loan classification system (Pass, Special Mention, Substandard, Doubtful, Loss) to report problem loans within commercial and industrial, commercial real estate, and construction categories[84](index=84&type=chunk) [Loan Modifications to Borrowers Experiencing Financial Difficulty](index=34&type=section&id=Loan%20Modifications%20to%20Borrowers%20Experiencing%20Financial%20Difficulty) | Loan Class | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Commercial and industrial | $7,805 | $34,414 | | Commercial real estate | $28,617 | $16,284 | | Home equity | — | $91 | | Total | $36,422 | $50,789 | - One commercial real estate loan received **$17.5 million** in principal forgiveness in Q1 2025, following a partial charge-off in Q4 2024[95](index=95&type=chunk) - The amortized cost basis of loans modified within the previous 12 months that were current at March 31, 2025, totaled **$359,413 thousand**[97](index=97&type=chunk) [Allowance for Credit Losses for Loans](index=36&type=section&id=Allowance%20for%20Credit%20Losses%20for%20Loans) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------ | :------------------------------ | :------------------------------- | | Allowance for loan losses | $578,200 | $558,850 | | Allowance for unfunded credit commitments | $15,854 | $14,478 | | Total allowance for credit losses for loans | $594,054 | $573,328 | | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Provision for loan losses | $61,299 | $46,723 | | Provision (credit) for unfunded credit commitments | $1,376 | $(1,449) | | Total provision for credit losses for loans | $62,675 | $45,274 | - Net charge-offs for Q1 2025 were **$(41,949) thousand**, compared to **$(23,555) thousand** in Q1 2024[104](index=104&type=chunk) [Note 8. Goodwill and Other Intangible Assets](index=38&type=section&id=Note%208.%20Goodwill%20and%20Other%20Intangible%20Assets) | Asset | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :------------------------------ | :------------------------------- | | Goodwill | $1,868,936 | $1,868,936 | | Net Other Intangible Assets | $121,340 | $128,661 | - No impairment of goodwill or other intangible assets was recognized during the three months ended March 31, 2025, or 2024[108](index=108&type=chunk)[111](index=111&type=chunk) - Amortization expense on other intangible assets totaled **$8.0 million** for Q1 2025, down from **$9.4 million** for Q1 2024, mainly due to a decline in amortization related to core deposits and loan servicing rights[111](index=111&type=chunk)[215](index=215&type=chunk) [Note 9. Deposits](index=40&type=section&id=Note%209.%20Deposits) | Deposit Type | March 31, 2025 (in thousands) | | :------------------------------------ | :------------------------------ | | Total time deposits | $11,924,008 | | Certificates of deposit over $250 thousand | $2,400,000 | | Scheduled maturities of time deposits in 2025 | $7,611,465 | [Note 10. Borrowed Funds](index=40&type=section&id=Note%2010.%20Borrowed%20Funds) | Borrowing Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Short-term borrowings | $59,026 | $72,718 | | Long-term borrowings | $2,904,567 | $3,174,155 | | Junior subordinated debentures | $57,542 | $57,455 | - Long-term borrowings decreased by **$269.6 million** from December 31, 2024, primarily due to the repayment of FHLB advances in January 2025[183](index=183&type=chunk) - Long-term FHLB advances had a weighted average interest rate of **4.47 percent** at March 31, 2025[115](index=115&type=chunk) [Note 11. Stock–Based Compensation](index=41&type=section&id=Note%2011.%20Stock%E2%80%93Based%20Compensation) | RSU Type | Award Shares Granted Q1 2025 (in thousands) | Award Shares Granted Q1 2024 (in thousands) | | :-------------------- | :---------------------------------------- | :---------------------------------------- | | Performance-based RSUs | 649 | 958 | | Time-based RSUs | 2,506 | 2,794 | - Total stock-based compensation expense was approximately **$6.8 million** for Q1 2025, down from **$8.1 million** for Q1 2024[120](index=120&type=chunk) - As of March 31, 2025, unrecognized amortization expense for all stock-based compensation totaled approximately **$51.7 million**, to be recognized over an average remaining vesting period of **2.4 years**[120](index=120&type=chunk) [Note 12. Derivative Instruments and Hedging Activities](index=42&type=section&id=Note%2012.%20Derivative%20Instruments%20and%20Hedging%20Activities) - Valley uses interest rate derivatives for cash flow hedges (to stabilize interest expense) and fair value hedges (to manage exposure to interest rate changes in fixed-rate assets/liabilities)[122](index=122&type=chunk)[123](index=123&type=chunk) - A credit default swap related to approximately **$1.5 billion** in automobile loans was entered into in June 2024 to enhance the risk profile for regulatory capital purposes, incurring **$2.0 million** in premium amortization expense in Q1 2025[131](index=131&type=chunk) | Derivative Type | March 31, 2025 Notional Amount (in thousands) | December 31, 2024 Notional Amount (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :----------------------------------------------- | | Derivatives designated as hedging instruments | $780,322 | $780,322 | | Derivatives not designated as hedging instruments | $19,111,754 | $19,085,615 | | Total derivative financial instruments | $19,892,076 | $19,865,937 | [Note 13. Balance Sheet Offsetting](index=45&type=section&id=Note%2013.%20Balance%20Sheet%20Offsetting) - Valley is party to master netting arrangements with financial institution counterparties for OTC derivatives and repurchase agreements, but does not offset assets and liabilities under these arrangements for financial statement presentation[140](index=140&type=chunk)[141](index=141&type=chunk) | Item | March 31, 2025 Gross Amounts Recognized (in thousands) | March 31, 2025 Net Amounts Presented (in thousands) | March 31, 2025 Cash Collateral (in thousands) | | :------------------------------------ | :--------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Interest rate swaps and other contracts (Assets) | $311,399 | $311,399 | $(248,322) | | Interest rate swaps and other contracts (Liabilities) | $317,725 | $317,725 | — | [Note 14. Tax Credit Investments](index=46&type=section&id=Note%2014.%20Tax%20Credit%20Investments) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total tax credit investments, net | $351,677 | $301,210 | | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Total reduction in income tax expense | $12,114 | $7,741 | | Total amortization of tax credit investments | $9,320 | $5,562 | - The increase in amortization of tax credit investments is mainly due to large purchases of tax-advantaged investments over the last twelve months[216](index=216&type=chunk) [Note 15. Operating Segments](index=47&type=section&id=Note%2015.%20Operating%20Segments) This note describes Valley's Consumer Banking, Commercial Banking, and Treasury and Corporate Other segments, detailing their financial performance and asset composition [Consumer Banking Segment](index=47&type=section&id=Consumer%20Banking%20Segment) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Average interest earning assets | $10,210,226 | $9,796,681 | | Income before income taxes | $37,307 | $11,574 | | Net interest margin | 2.24% | 1.57% | - Income before income taxes for Consumer Banking increased **$25.7 million** in Q1 2025 compared to Q1 2024, driven by increased net interest income and a lower provision for loan losses[225](index=225&type=chunk) - The net interest margin for this segment increased **67 basis points to 2.24%** in Q1 2025, primarily due to a 16 basis point increase in loan yield and a 51 basis point decrease in funding costs[227](index=227&type=chunk) [Commercial Banking Segment](index=47&type=section&id=Commercial%20Banking%20Segment) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Average interest earning assets | $38,444,695 | $40,449,910 | | Income before income taxes | $104,226 | $149,369 | | Net interest margin | 3.47% | 3.43% | - Income before income taxes for Commercial Banking decreased **$45.1 million** in Q1 2025 compared to Q1 2024, mainly due to lower net interest income and a higher provision for credit losses[230](index=230&type=chunk) - The net interest margin for this segment increased **4 basis points to 3.47%** in Q1 2025, driven by a 51 basis point decrease in funding costs, largely offset by a 47 basis point decrease in loan yield[231](index=231&type=chunk) [Treasury and Corporate Other](index=47&type=section&id=Treasury%20and%20Corporate%20Other) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Average interest earning assets | $8,236,770 | $6,372,206 | | Income (loss) before income taxes | $(2,413) | $(31,490) | | Net interest margin | 1.44% | 0.51% | - Loss before income taxes improved by **$29.1 million** to **$(2.4) million** in Q1 2025 compared to Q1 2024, mainly due to a **$21.5 million** increase in net interest income and a **$7.9 million** decrease in non-interest expense (FDIC assessment)[235](index=235&type=chunk) - The net interest margin increased **93 basis points to 1.44%** in Q1 2025, due to a 42 basis point increase in investment yields and a 51 basis point decrease in funding costs[236](index=236&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Valley's financial condition, operations, liquidity, key components, risk management, and capital adequacy [Cautionary Statement Concerning Forward-Looking Statements](index=49&type=section&id=Cautionary%20Statement%20Concerning%20Forward-Looking%20Statements) - The report contains forward-looking statements subject to various risks and uncertainties, including market interest rates, macroeconomic conditions, financial sector instability, regulatory changes, and cybersecurity threats[158](index=158&type=chunk)[159](index=159&type=chunk) - Valley undertakes no duty to update any forward-looking statement, and actual results may differ materially from expectations[161](index=161&type=chunk) [Critical Accounting Estimates](index=51&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting policies include the allowance for credit losses, goodwill and other intangible assets, and income taxes, which involve subjective and complex judgments[162](index=162&type=chunk) - There have been no material changes in critical accounting policies and estimates since Valley's Annual Report on Form 10-K for the year ended December 31, 2024[162](index=162&type=chunk) [New Authoritative Accounting Guidance](index=51&type=section&id=New%20Authoritative%20Accounting%20Guidance) - Refers to Note 4 for details on new authoritative accounting guidance, specifically ASU No. 2024-03 regarding disaggregation of income statement expenses[163](index=163&type=chunk) [Executive Summary](index=51&type=section&id=Executive%20Summary) This section provides a high-level overview of Valley's financial position, balance sheet initiatives, quarterly performance, and U.S. economic conditions [Company Overview](index=51&type=section&id=Company%20Overview) | Metric | March 31, 2025 (approximate) | | :-------------------- | :--------------------------- | | Total assets | $61.9 billion | | Total net loans | $48.1 billion | | Total deposits | $50.0 billion | | Total shareholders' equity | $7.5 billion | - Valley operates **229 branch offices**, with **55% in New Jersey**, **18% in New York**, **18% in Florida**, and **9% combined in Alabama, California, and Illinois**[164](index=164&type=chunk) [Financial Condition Highlights](index=52&type=section&id=Financial%20Condition%20Highlights) - Commercial Real Estate Loan Concentration: Declined to approximately **353%** at March 31, 2025, from **362%** at December 31, 2024, with a goal to reduce it below **350%** by December 31, 2025[166](index=166&type=chunk) - Regulatory Capital: Common Equity Tier 1 capital ratio was **10.80%** at March 31, 2025, with an expectation to gradually increase to approximately **11%** by December 31, 2025[166](index=166&type=chunk) - Allowance for Credit Losses for Loans: Increased to **$594.1 million** (**1.22% of total loans**) at March 31, 2025, from **$573.3 million** (**1.17% of total loans**) at December 31, 2024, and is anticipated to migrate towards approximately **1.25% of total loans** by December 31, 2025[166](index=166&type=chunk) [Quarterly Results](index=54&type=section&id=Quarterly%20Results) - Net income for Q1 2025 was **$106.1 million**, or **$0.18 per diluted common share**, an increase of **$9.8 million** compared to **$96.3 million** (**$0.18 diluted EPS**) for Q1 2024[167](index=167&type=chunk) - The increase in net income was mainly due to a **$26.6 million** increase in net interest income and a **$3.7 million** decrease in non-interest expense, partially offset by a **$17.5 million** increase in the provision for credit losses[173](index=173&type=chunk) [U.S. Economic Conditions](index=54&type=section&id=U.S.%20Economic%20Conditions) - Real gross GDP decreased at an estimated annual rate of **0.3%** in Q1 2025, a contraction from a **2.5%** increase in Q4 2024, primarily due to increased imports and reduced government spending[169](index=169&type=chunk) - The Federal Reserve lowered the target range for the federal funds rate from **5.25–5.50% to 4.25–4.50%** over the last four months of 2024, with two rate cuts projected for 2025[170](index=170&type=chunk) - Market analysts have increased the likelihood of a recession due to new tariff policies, strict immigration enforcement, government spending cuts, a potentially weakening job market, and continued elevated market interest rates[175](index=175&type=chunk) [Deposits and Other Borrowings](index=55&type=section&id=Deposits%20and%20Other%20Borrowings) - The cumulative deposit beta in the current interest rate decrease cycle (June 30, 2024, to March 31, 2025) was **53%**, up from **34%** in the prior quarter, driven by reduced costs of interest-bearing deposits and a reduction of higher-cost indirect customer CDs[176](index=176&type=chunk) - Total average deposits decreased by **$1.6 billion** to **$49.1 billion** for Q1 2025 compared to Q4 2024, mainly due to a **$2.0 billion** decrease in average time deposits[177](index=177&type=chunk) - Actual ending deposit balances decreased **$110.0 million** to **$50.0 billion** at March 31, 2025, primarily due to a **$661 million** decline in indirect customer CDs, partially offset by increases in non-interest bearing and savings/money market deposits[178](index=178&type=chunk) - Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits, totaled approximately **$13.0 billion**, or **26% of total deposits**, at March 31, 2025, up from **$12.6 billion**, or **25%**, at December 31, 2024[179](index=179&type=chunk) - Long-term borrowings decreased **$269.6 million** to **$2.9 billion** at March 31, 2025, compared to December 31, 2024, due to the repayment of FHLB advances in January 2025[183](index=183&type=chunk) [Non-GAAP Financial Measures](index=58&type=section&id=Non-GAAP%20Financial%20Measures) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Net income, as adjusted (non-GAAP) | $106,066 | $99,448 | | Annualized ROATE (non-GAAP) | 7.76% | 8.19% | | Annualized ROATE, as adjusted (non-GAAP) | 7.76% | 8.46% | | Efficiency ratio, as adjusted (non-GAAP) | 55.87% | 59.10% | | Metric | March 31, 2025 | December 31, 2024 | | :------------------------------------ | :------------- | :---------------- | | Tangible book value per common share (non-GAAP) | $9.21 | $9.10 | [Net Interest Income](index=61&type=section&id=Net%20Interest%20Income) - Net interest income on a tax equivalent basis increased **$26.5 million** to **$421.4 million** for Q1 2025 compared to Q1 2024, but decreased **$2.9 million** compared to Q4 2024[191](index=191&type=chunk)[204](index=204&type=chunk) - Average interest earning assets decreased by **$1.3 billion** during Q1 2025 compared to Q4 2024, mainly due to decreases in average loans and overnight interest-bearing cash balances, partially offset by an increase in average taxable investments[192](index=192&type=chunk) - Net interest margin on a tax equivalent basis increased **4 basis points to 2.96%** for Q1 2025 compared to Q4 2024, and increased **17 basis points** compared to Q1 2024[194](index=194&type=chunk) - The cost of total average deposits decreased to **2.65%** for Q1 2025, compared to **2.94%** for Q4 2024 and **3.16%** for Q1 2024[195](index=195&type=chunk) - Net interest income growth for 2025 is now expected to be at the low-end of the **9-12% range**, largely due to lower anticipated loan growth and continued lending spread compression[196](index=196&type=chunk) [Non-Interest Income](index=65&type=section&id=Non-Interest%20Income) | Non-Interest Income Component | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Total non-interest income | $58,294 | $61,415 | $(3,121) | | Wealth management and trust fees | $15,031 | $17,930 | $(2,899) | | Capital markets | $6,940 | $5,670 | $1,270 | | Service charges on deposit accounts | $12,726 | $11,249 | $1,477 | | Gains on sales of assets, net | $43 | $3,694 | $(3,651) | | Bank owned life insurance | $4,777 | $3,235 | $1,542 | | Other | $9,917 | $12,531 | $(2,614) | - The decrease in wealth management and trust fees was mainly due to a **$3.0 million** decrease in tax credit advisory service fees[208](index=208&type=chunk) - The decrease in net gains on sales of assets was primarily a result of a **$3.6 million** net gain realized on the sale of the commercial premium finance lending business during Q1 2024[210](index=210&type=chunk) [Non-Interest Expense](index=66&type=section&id=Non-Interest%20Expense) | Non-Interest Expense Component | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Total non-interest expense | $276,618 | $280,310 | $(3,692) | | Technology, furniture and equipment expense | $29,896 | $35,462 | $(5,566) | | FDIC insurance assessment | $12,867 | $18,236 | $(5,369) | | Amortization of tax credit investments | $9,320 | $5,562 | $3,758 | | Other | $32,340 | $29,019 | $3,321 | - FDIC insurance assessment expense decreased **$5.4 million** primarily due to **$7.4 million** in special assessment expenses recorded in Q1 2024[215](index=215&type=chunk) - Other non-interest expense increased **$3.3 million**, largely due to a **$2.9 million** loss from the sale of a commercial real estate OREO property and **$2.0 million** in costs related to a credit default swap[217](index=217&type=chunk) [Income Taxes](index=67&type=section&id=Income%20Taxes) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------- | :----------------------------------------------- | :----------------------------------------------- | | Income tax expense | $33,062 | $33,173 | | Effective tax rate | 23.8% | 25.6% | - The decrease in the effective tax rate from Q1 2024 was primarily due to a higher level of investment in tax credits[218](index=218&type=chunk) - Valley anticipates its effective tax rate will be approximately within the **23% to 25% range** for the remainder of 2025[219](index=219&type=chunk) [Operating Segments](index=68&type=section&id=Operating%20Segments) This section provides detailed financial breakdown and performance analysis for Valley's Consumer, Commercial, and Treasury segments [Consumer Banking Segment](index=69&type=section&id=Consumer%20Banking%20Segment_MD%26A) - Income before income taxes for the Consumer Banking segment increased **$25.7 million** to **$37.3 million** for Q1 2025 compared to Q1 2024, driven by increased net interest income and a lower provision for loan losses[225](index=225&type=chunk) - Net interest margin for this segment increased **67 basis points to 2.24%** for Q1 2025 compared to Q1 2024, due to a 16 basis point increase in loan yield and a 51 basis point decrease in funding costs[227](index=227&type=chunk) [Commercial Banking Segment](index=70&type=section&id=Commercial%20Banking%20Segment_MD%26A) - Income before income taxes for the Commercial Banking segment decreased **$45.1 million** to **$104.2 million** for Q1 2025 compared to Q1 2024, mainly due to lower net interest income and a higher provision for credit losses[230](index=230&type=chunk) - The net interest margin for this segment increased **4 basis points to 3.47%** for Q1 2025 compared to Q1 2024, due to a 51 basis point decrease in funding costs, largely offset by a 47 basis point decrease in loan yield[231](index=231&type=chunk) [Treasury and Corporate Other](index=70&type=section&id=Treasury%20and%20Corporate%20Other_MD%26A) - Loss before income taxes for Treasury and Corporate Other improved by **$29.1 million** to **$(2.4) million** for Q1 2025 compared to Q1 2024, driven by increased net interest income from higher average taxable investments and lower FDIC assessment[235](index=235&type=chunk) - The net interest margin increased **93 basis points to 1.44%** for Q1 2025 compared to Q1 2024, due to a 42 basis point increase in investment yields and a 51 basis point decrease in funding costs[236](index=236&type=chunk) [ASSET/LIABILITY MANAGEMENT](index=71&type=section&id=ASSET%2FLIABILITY%20MANAGEMENT) This section discusses Valley's strategies for managing interest rate risk, including simulation modeling for net interest income sensitivity [Interest Rate Risk](index=71&type=section&id=Interest%20Rate%20Risk) - Valley uses a simulation model to analyze net interest income sensitivity to movements in interest rates over a 12-month period, based on actual maturity and re-pricing characteristics of assets and liabilities[238](index=238&type=chunk) | Changes in Interest Rates (in basis points) | Estimated Change in Future Net Interest Income (in thousands) | Percentage Change | | :---------------------------------------- | :---------------------------------------------------------- | :---------------- | | +300 | $129,311 | 7.23% | | +200 | $87,591 | 4.90% | | +100 | $43,924 | 2.46% | | –100 | $(45,444) | (2.54)% | | –200 | $(93,092) | (5.21)% | | –300 | $(135,960) | (7.60)% | - Management believes the interest rate sensitivity of the balance sheet remains within an expected tolerance range at March 31, 2025, but future changes in balance sheet strategies and the slope of the yield curve could impact it[243](index=243&type=chunk) [Liquidity and Cash Requirements](index=73&type=section&id=Liquidity%20and%20Cash%20Requirements) This section outlines Valley's liquidity management objectives, fund sources, and compliance, distinguishing bank-level and corporation-level liquidity [Bank Liquidity](index=73&type=section&id=Bank%20Liquidity) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Loans to deposits | 97.4% | 97.5% | | Wholesale funding to total funding | 17.7% | 18.7% | | Liquid Asset Source | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total liquid assets | $5,136,553 | $5,505,586 | | Unused FHLB borrowing capacity | $5,861,000 | $5,853,596 | | Unused FRB discount window | $10,224,000 | $11,509,000 | | Unencumbered investment securities | $4,727,166 | $3,415,834 | | Total unused available non-deposit borrowing capacities | $22,422,166 | $22,918,430 | [Corporation Liquidity](index=74&type=section&id=Corporation%20Liquidity) - Valley's recurring cash requirements, primarily dividends and interest expense on subordinated debt, are routinely satisfied by dividends collected from the Bank[254](index=254&type=chunk) - Valley has the right to defer interest payments on junior subordinated debentures for consecutive quarterly periods of up to five years, subject to certain conditions[254](index=254&type=chunk) [Investment Securities Portfolio](index=75&type=section&id=Investment%20Securities%20Portfolio) This section describes Valley's AFS and HTM investment securities portfolios, their role in earnings, liquidity, interest rate risk, and credit loss assessment [Allowance for Credit Losses and Impairment Analysis](index=75&type=section&id=Allowance%20for%20Credit%20Losses%20and%20Impairment%20Analysis) - AFS debt securities in unrealized loss positions are evaluated quarterly for impairment related to credit losses; no impairment was recognized in Q1 2025 or Q1 2024, as declines were mainly due to interest rates, not credit quality[258](index=258&type=chunk)[259](index=259&type=chunk) - HTM debt securities were carried net of an allowance for credit losses totaling **$633 thousand** at March 31, 2025, with no net charge-offs during Q1 2025 or Q1 2024[261](index=261&type=chunk) - Unrealized losses in both AFS and HTM portfolios are largely related to residential mortgage-backed securities and continue to be driven by the higher market interest rate environment[264](index=264&type=chunk)[265](index=265&type=chunk) [Loan Portfolio](index=77&type=section&id=Loan%20Portfolio) - Total loans decreased **$142.6 million**, or **1.2% on an annualized basis**, to **$48.7 billion** at March 31, 2025, primarily due to normal repayment activity and selective originations within the commercial real estate loan portfolio[267](index=267&type=chunk) - Commercial and industrial loans grew by **$218.8 million**, or **8.8% on an annualized basis**, to **$10.2 billion** at March 31, 2025, reflecting a continued strategic focus on growth in this category[269](index=269&type=chunk) - The commercial real estate (CRE) loan concentration ratio declined to approximately **353%** at March 31, 2025, from **362%** at December 31, 2024, as Valley proactively diversifies its portfolio by reducing new originations of certain CRE lending types[270](index=270&type=chunk)[275](index=275&type=chunk) - Total loan growth for 2025 is now expected to be at the low-end of the **3-5% range**, due to competition for high-quality commercial loans, an expected decline in business investment, and other factors[276](index=276&type=chunk) [Non-performing Assets](index=79&type=section&id=Non-performing%20Assets) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total non-performing assets (NPAs) | $356,219 | $373,329 | | Total non-accrual loans | $346,451 | $359,498 | | Other real estate owned (OREO) | $7,714 | $12,150 | | NPAs as a % of loans and NPAs | 0.73% | 0.76% | - Non-accrual loans decreased **$13.0 million** to **$346.5 million**, largely driven by partial charge-offs of two non-performing commercial and industrial loan relationships[283](index=283&type=chunk) - Non-performing taxi medallion loans included in non-accrual commercial and industrial loans totaled **$49.2 million** at March 31, 2025, with related reserves of **$25.6 million**[284](index=284&type=chunk) [Allowance for Credit Losses for Loans](index=81&type=section&id=Allowance%20for%20Credit%20Losses%20for%20Loans_MD%26A) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------ | :------------------------------- | | Total allowance for credit losses for loans | $594,054 | $573,328 | | Allowance for credit losses for loans as a % of total loans | 1.22% | 1.17% | | Provision charged for credit losses | $62,675 | $106,965 | | Total net loan charge-offs | $(41,949) | $(98,308) | - Valley estimates the collective ACL using a current expected credit losses (CECL) methodology based on historical experience, current conditions, and reasonable and supportable forecasts, utilizing a transition matrix model[288](index=288&type=chunk) - The Moody's Baseline forecast for March 31, 2025, included GDP expansion by **1.7%** in Q2 2025, unemployment of **4.0%** in Q2 2025, and two possible **25 basis point** federal funds rate cuts in 2025[294](index=294&type=chunk) [Capital Adequacy](index=85&type=section&id=Capital%20Adequacy) - Shareholders' equity increased by approximately **$64.8 million** to **$7.5 billion** at March 31, 2025, representing **12.1% of total assets**[299](index=299&type=chunk) - Valley and Valley National Bank exceeded all Basel III regulatory capital requirements at March 31, 2025[302](index=302&type=chunk) | Capital Ratio | Valley March 31, 2025 | Valley December 31, 2024 | | :-------------------------- | :-------------------- | :----------------------- | | Total Risk-based Capital | 13.91% | 13.87% | | Common Equity Tier 1 Capital | 10.80% | 10.82% | | Tier 1 Risk-based Capital | 11.53% | 11.55% | | Tier 1 Leverage Capital | 9.41% | 9.16% | - The full CECL deferral amount was recognized as a reduction to regulatory capital at March 31, 2025, decreasing risk-based capital ratios by approximately **11 basis points**[303](index=303&type=chunk)[304](index=304&type=chunk) [Off-Balance Sheet Arrangements, Contractual Obligations and Other Matters](index=87&type=section&id=Off-Balance%20Sheet%20Arrangements,%20Contractual%20Obligations%20and%20Other%20Matters) - For a discussion of Valley's off-balance sheet arrangements and contractual obligations, refer to Valley's Annual Report in the MD&A section 'Liquidity and Cash Requirements' and Notes 12 and 13 to the consolidated financial statements[307](index=307&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section identifies Valley's primary market risk as interest rate risk, with detailed discussion referenced to page 65 - Valley's market risk is primarily composed of interest rate risk[308](index=308&type=chunk) [Item 4. Controls and Procedures](index=87&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of Valley's disclosure controls and internal control over financial reporting, concluding their effectiveness - Valley's CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[310](index=310&type=chunk) - There have not been any material changes in Valley's internal control over financial reporting in the quarter ended March 31, 2025[311](index=311&type=chunk) - Management acknowledges that internal control systems provide reasonable, not absolute, assurance against errors and fraud due to inherent limitations[312](index=312&type=chunk) [PART II - OTHER INFORMATION](index=88&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=88&type=section&id=Item%201.%20Legal%20Proceedings) This section states Valley is involved in legal actions, but management believes their resolution will not materially adversely affect financial condition - Management believes the ultimate resolution of current claims and legal actions will not have a material adverse effect on Valley's financial condition, results of operations, or liquidity[314](index=314&type=chunk) [Item 1A. Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) This section states no material changes to risk factors previously disclosed in Valley's Annual Report on Form 10-K - There have been no material changes in the risk factors previously disclosed in Valley's Annual Report on Form 10-K for the year ended December 31, 2024[315](index=315&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=88&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section reports no unregistered equity sales and details the issuer's common stock repurchase activities during Q1 2025 - No equity securities not registered under the Securities Act of 1933 were sold during the three months ended March 31, 2025[316](index=316&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :-------------------------------- | :------------------------------- | :--------------------------- | | January 1, 2025 to March 31, 2025 | 939,266 | $9.79 | - 250,000 shares were purchased as part of a publicly announced stock repurchase program, leaving **24,750,000 shares** that may yet be purchased under the plan[316](index=316&type=chunk)[318](index=318&type=chunk) [Item 5. Other Information](index=89&type=section&id=Item%205.%20Other%20Information) This section states no other information is reported under this item - No other information is reported under this item[319](index=319&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications, articles of incorporation, and interactive data files - Exhibits include certifications from the CEO and CFO pursuant to Securities Exchange Rule 13a-14(a) and 18 U.S.C. Section 1350[321](index=321&type=chunk) - The filing includes an Interactive Data File (XBRL Instance Document) and Cover Page Interactive Data File[321](index=321&type=chunk) [SIGNATURES](index=90&type=section&id=SIGNATURES) [Signatures](index=90&type=section&id=Signatures) This section contains the official signatures of Valley National Bancorp's Chairman/CEO and Senior EVP/CFO, certifying the report - The report was signed by Ira Robbins, Chairman of the Board and Chief Executive Officer, and Travis Lan, Senior Executive Vice President and Chief Financial Officer, on May 8, 2025[324](index=324&type=chunk)

[First Quarter 2025 Earnings Overview](index=1&type=section&id=1_First_Quarter_2025_Earnings_Overview) This section provides an executive summary of Valley National Bancorp's Q1 2025 financial performance, including key highlights and CEO commentary [Executive Summary and CEO Commentary](index=1&type=section&id=1.1_Executive_Summary_and_CEO_Commentary) Valley National Bancorp reported Q1 2025 net income of **$106.1 million**, with CEO Ira Robbins highlighting improved funding, core deposit growth, and reduced loan loss provision | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------------- | :------ | :------ | :------ | | Net Income (GAAP, $ millions) | $106.1 | $115.7 | $96.3 | | Diluted EPS (GAAP) | $0.18 | $0.20 | $0.18 | | Adjusted Net Income (Non-GAAP, $ millions) | $106.1 | $75.7 | $99.4 | | Adjusted Diluted EPS (Non-GAAP) | $0.18 | $0.13 | $0.19 | - CEO noted continued improvement in **funding base**, **core deposit growth**, and **reduced reliance on indirect deposits**, benefiting **revenue** and **net interest margin**[2](index=2&type=chunk) - Provision for loan losses for Q1 2025 was at its **lowest point in the last four quarters**, and **non-accrual loans** and **early stage delinquencies** improved sequentially[2](index=2&type=chunk) [Key Financial Highlights](index=1&type=section&id=1.2_Key_Financial_Highlights) This section provides a concise overview of key financial performance indicators for Q1 2025, including net interest income, loan portfolio, credit quality, deposits, and non-interest items - Net interest margin on a tax equivalent basis increased by **4 basis points** to **2.96 percent** in the first quarter 2025 as compared to **2.92 percent** for the fourth quarter 2024[3](index=3&type=chunk) - Total loans decreased **$142.6 million**, or **1.2 percent** on an annualized basis, to **$48.7 billion** at March 31, 2025, mostly due to normal repayment activity and selective originations within the commercial real estate (CRE) portfolio[3](index=3&type=chunk)[4](index=4&type=chunk) - Provision for credit losses for loans was **$62.7 million** for the first quarter 2025, compared to **$107.0 million** for the fourth quarter 2024[4](index=4&type=chunk) | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------------- | :------ | :------ | :------ | | Efficiency Ratio | 55.87% | 57.21% | 59.10% | | Annualized Return on Average Assets (ROA) | 0.69% | 0.74% | 0.63% | | Annualized Return on Average Shareholders' Equity (ROE) | 5.69% | 6.38% | 5.73% | [Net Interest Income and Margin](index=1&type=section&id=1.2.1_Net_Interest_Income_and_Margin_Highlight) Net interest income saw a moderate decrease quarter-over-quarter, while net interest margin improved due to lower funding costs | Metric | Q1 2025 | Q4 2024 | Q1 2024 | Change QoQ | Change YoY | | :-------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Net Interest Income (FTE, $ millions) | $421.4 | $424.3 | $394.8 | -$2.9 | +$26.6 | | Net Interest Margin (FTE) | 2.96% | 2.92% | 2.79% | +4 bps | +17 bps | - The moderate decrease in net interest income from the fourth quarter 2024 was due to the impact of **two less days** during the first quarter 2025[3](index=3&type=chunk) [Loan Portfolio](index=1&type=section&id=1.2.2_Loan_Portfolio_Highlight) Total loans decreased slightly, driven by CRE repayments, while C&I and automobile loans experienced growth | Loan Category | Change (QoQ, $ millions) | Annualized Change | | :-------------------------- | :----------------------- | :---------------- | | Total Loans | -$142.6 | -1.2% | | CRE Loans | -$530.4 | N/A | | C&I Loans | +$218.8 | +8.8% | | Automobile Loans | +$140.2 | +29.5% | - The CRE loan concentration ratio declined to approximately **353 percent** at March 31, 2025, from **362 percent** at December 31, 2024[4](index=4&type=chunk) [Allowance and Provision for Credit Losses](index=2&type=section&id=1.2.3_Allowance_and_Provision_for_Credit_Losses_Highlight) Allowance for credit losses increased, while the provision for credit losses significantly decreased quarter-over-quarter | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------------- | :------ | :------ | :------ | | Allowance for Credit Losses for Loans ($ millions) | $594.1 | $573.3 | N/A | | Allowance as % of Total Loans | 1.22% | 1.17% | N/A | | Provision for Credit Losses for Loans ($ millions) | $62.7 | $107.0 | $45.3 | [Credit Quality](index=2&type=section&id=1.2.4_Credit_Quality_Highlight) Accruing past due loans and non-accrual loans both improved sequentially, indicating better credit quality | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :------------------ | | Accruing Past Due Loans ($ millions) | $51.7 | $99.2 | | Accruing Past Due Loans (% of total loans) | 0.11% | 0.20% | | Non-Accrual Loans ($ millions) | $346.5 | $359.5 | | Non-Accrual Loans (% of total loans) | 0.71% | 0.74% | | Net Loan Charge-offs ($ millions) | $41.9 | $98.3 | [Deposits](index=2&type=section&id=1.2.5_Deposits_Highlight) Total deposits slightly decreased, with growth in non-interest bearing and savings deposits offset by a decline in indirect customer deposits | Deposit Category | Change (QoQ, $ millions) | | :-------------------------- | :----------------------- | | Total Deposits | -$110.0 | | Non-Interest Bearing Deposits | +$199.9 | | Savings, NOW, Money Market Deposits | +$108.6 | | Indirect Customer Deposits | -$726.5 | - The increases in direct customer deposits were offset by a **$726.5 million** decrease in indirect customer deposits (consisting largely of brokered CDs) during the first quarter 2025[4](index=4&type=chunk) [Non-Interest Income](index=2&type=section&id=1.2.6_Non-Interest_Income_Highlight) Non-interest income increased quarter-over-quarter, primarily driven by net gains on sales of loans | Metric | Q1 2025 ($ millions) | Q4 2024 ($ millions) | | :-------------------------- | :------------------- | :------------------- | | Total Non-Interest Income | $58.3 | $51.2 | | Net Gains on Sales of Loans | $2.2 | -$4.7 | - The increase in non-interest income reflected net gains on sales of loans of **$2.2 million** for the first quarter 2025 as compared to net losses of **$4.7 million** for the fourth quarter 2024, which included **$7.9 million** of losses related to the sale of performing CRE loans[4](index=4&type=chunk) [Non-Interest Expense](index=2&type=section&id=1.2.7_Non-Interest_Expense_Highlight) Total non-interest expense decreased due to lower professional, legal, and technology-related costs | Metric | Q1 2025 ($ millions) | Q4 2024 ($ millions) | | :-------------------------- | :------------------- | :------------------- | | Total Non-Interest Expense | $276.6 | $278.6 | | Professional and Legal Expenses (decrease) | -$6.1 | N/A | | Technology, Furniture and Equipment Expense (decrease) | -$5.6 | N/A | - The decreases in professional and technology-related expenses were mostly due to **elevated fourth quarter 2024 expenses** resulting from transformation and enhancement efforts in bank operations[5](index=5&type=chunk) [Income Tax Expense](index=3&type=section&id=1.2.8_Income_Tax_Expense_Highlight) Income tax expense shifted from a benefit in Q4 2024 to an expense in Q1 2025, with a corresponding change in effective tax rate | Metric | Q1 2025 ($ millions) | Q4 2024 ($ millions) | | :-------------------------- | :------------------- | :------------------- | | Income Tax Expense (Benefit) | $33.1 | -$26.7 | | Effective Tax Rate | 23.8% | -29.9% | - The fourth quarter 2024 income tax benefit reflected a **$46.4 million** total reduction in uncertain tax liability positions and related accrued interest due to statute of limitation expirations[8](index=8&type=chunk) [Efficiency Ratio](index=3&type=section&id=1.2.9_Efficiency_Ratio_Highlight) The efficiency ratio improved sequentially and year-over-year, reflecting better operational cost management | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------- | :------ | :------ | :------ | | Efficiency Ratio | 55.87% | 57.21% | 59.10% | [Performance Ratios](index=3&type=section&id=1.2.10_Performance_Ratios_Highlight) Annualized return on average assets and equity saw slight quarter-over-quarter decreases but remained stable year-over-year | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------------- | :------ | :------ | :------ | | Annualized Return on Average Assets (ROA) | 0.69% | 0.74% | 0.63% | | Annualized Return on Average Shareholders' Equity (ROE) | 5.69% | 6.38% | 5.73% | | Annualized Return on Average Tangible ROE | 7.76% | 8.81% | 8.19% | [Detailed Financial Analysis](index=3&type=section&id=2_Detailed_Financial_Analysis) This section provides an in-depth analysis of Valley National Bancorp's financial performance, covering net interest income, loan and deposit trends, and credit quality metrics [Net Interest Income and Margin](index=3&type=section&id=2.1_Net_Interest_Income_and_Margin_Analysis) Net interest income on a tax equivalent basis decreased slightly quarter-over-quarter but increased year-over-year. The net interest margin improved due to a significant decline in the cost of total average deposits, despite a lower yield on average interest-earning assets | Metric | Q1 2025 ($ millions) | Q4 2024 ($ millions) | Q1 2024 ($ millions) | | :-------------------------------- | :------------------- | :------------------- | :------------------- | | Net Interest Income (FTE) | $421.4 | $424.3 | $394.8 | | Interest Income (FTE) | $786.0 | $836.1 | $829.9 | | Interest Expense | $364.6 | $411.8 | $435.1 | | Net Interest Margin (FTE) | 2.96% | 2.92% | 2.79% | | Yield on Average Interest Earning Assets | 5.53% | 5.75% | 5.86% | | Cost of Average Interest Bearing Liabilities | 3.54% | 3.85% | 4.19% | | Cost of Total Average Deposits | 2.65% | 2.94% | 3.16% | - The decrease in interest income was mostly driven by **two less days** in Q1 2025, the **bulk sale of certain performing CRE loans** during Q4 2024, and **downward repricing on adjustable rate loans**[6](index=6&type=chunk) - The decrease in interest expense was mainly due to the **reduction in day count**, a **$2.0 billion decrease** in average time deposit balances (primarily related to the maturity and repayment of **higher cost indirect customer CDs**), and **lower interest rates** on many interest bearing deposit products[6](index=6&type=chunk) [Loans, Deposits and Other Borrowings](index=4&type=section&id=2.2_Loans_Deposits_and_Other_Borrowings) This section details the composition and changes in the bank's loan portfolio, deposit base, and other borrowings, highlighting shifts in loan categories and funding sources, with a strategic focus on C&I and auto loan growth while managing CRE exposure [Loans](index=4&type=section&id=2.2.1_Loans_Detailed) Total loans decreased due to CRE repayments, while C&I and automobile loans showed significant annualized growth | Loan Category | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | Annualized Change | | :-------------------------- | :-------------------------- | :--------------------------- | :------------------ | :---------------- | | Total Loans | $48,657.1 | $48,799.7 | -$142.6 | -1.2% | | Total CRE Loans | $29,114.6 | $29,645.0 | -$530.4 | N/A | | Construction Loans | $3,026.9 | $3,114.7 | -$87.8 | N/A | | Multifamily Loans | $8,420.4 | $8,299.3 | +$121.1 | N/A | | C&I Loans | $10,150.2 | $9,931.4 | +$218.8 | +8.8% | | Automobile Loans | $2,041.2 | $1,901.1 | +$140.2 | +29.5% | - The decrease in total CRE loans was largely driven by **repayment activity** and continued **selective origination activity** within the CRE portfolio[9](index=9&type=chunk) - C&I loans grew by **$218.8 million**, or **8.8 percent** on an annualized basis, largely due to a continued strategic focus on growth within this category[9](index=9&type=chunk) [Deposits](index=4&type=section&id=2.2.2_Deposits_Detailed) Total deposits slightly decreased, with indirect customer CDs declining while non-interest bearing and savings deposits increased | Deposit Category | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | % of Total Deposits (Mar 31, 2025) | % of Total Deposits (Dec 31, 2024) | | :-------------------------- | :-------------------------- | :--------------------------- | :------------------ | :--------------------------------- | :--------------------------------- | | Total Deposits | $49,965.8 | $50,075.9 | -$110.0 | N/A | N/A | | Non-Interest Bearing | $11,628.6 | $11,428.7 | +$199.9 | 23% | 23% | | Savings, NOW, Money Market | $26,413.3 | $26,304.6 | +$108.6 | 53% | 52% | | Time Deposits | $11,924.0 | $12,342.5 | -$418.5 | 24% | 25% | | Total Indirect Customer Deposits | $6,300.0 | $7,000.0 | -$700.0 | N/A | N/A | - The decrease in time deposit balances was mainly driven by a decline of approximately **$661 million** in **indirect (i.e., brokered) customer CDs**, partially offset by deposit inflows from new retail CD offerings[10](index=10&type=chunk) - Non-interest bearing deposits increased mostly due to **higher commercial customer deposit inflows** late in the first quarter 2025[10](index=10&type=chunk) [Other Borrowings](index=4&type=section&id=2.2.3_Other_Borrowings_Detailed) Long-term borrowings decreased due to the maturity and repayment of certain FHLB advances | Borrowing Type | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :--------------------------- | :------------------ | | Short-term borrowings | $59.0 | $72.7 | -$13.7 | | Long-term borrowings | $2,904.6 | $3,174.2 | -$269.6 | - Long-term borrowings decreased **$269.6 million** as compared to December 31, 2024, due to the **maturity and repayment of certain FHLB advances**[11](index=11&type=chunk) [Credit Quality](index=4&type=section&id=2.3_Credit_Quality_Analysis) This section provides a detailed breakdown of the bank's credit quality, including trends in non-performing assets, various categories of past due loans, and the allowance for credit losses, highlighting improvements in overall asset quality and coverage [Non-Performing Assets (NPAs)](index=4&type=section&id=2.3.1_Non-Performing_Assets_NPAs) Total non-performing assets and non-accrual loans decreased, reflecting improved asset quality, despite a slight increase in non-performing CRE loans | Metric | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | :------------------ | | Total NPAs | $356.2 | $373.3 | -$17.1 | | Non-Accrual Loans | $346.5 | $359.5 | -$13.0 | | Non-Accrual Loans (% of total loans) | 0.71% | 0.74% | -0.03% | | OREO | $7.7 | $12.2 | -$4.4 | - Non-accrual loans decreased largely driven by **partial charge-offs of two non-performing C&I loan relationships** during the first quarter 2025, partially offset by a **moderate increase in non-performing CRE loans**[12](index=12&type=chunk)[13](index=13&type=chunk) - OREO decreased due to the sale of one CRE property, which resulted in a **$2.9 million loss** for the first quarter 2025[13](index=13&type=chunk) [Accruing Past Due Loans](index=5&type=section&id=2.3.2_Accruing_Past_Due_Loans) Total accruing past due loans significantly decreased, driven by improvements in 30-59 and 60-89 day delinquencies | Category | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :-------------------------- | :-------------------------- | :--------------------------- | :------------------ | | Total Accruing Past Due Loans | $51.7 | $99.2 | -$47.5 | | 30 to 59 days past due | $33.4 | $57.1 | -$23.7 | | 60 to 89 days past due | $10.5 | $36.2 | -$25.6 | | 90 or more days past due | $7.8 | $5.9 | +$1.9 | - Loans 30 to 59 days past due decreased largely due to a **previously reported delinquent CRE loan becoming current** and a **general improvement in residential mortgage loan delinquencies**[15](index=15&type=chunk) - Loans 90 days or more past due and still accruing interest increased, mainly due to an **increase in residential mortgage loan delinquencies**, though all such loans are **well-secured and in the process of collection**[15](index=15&type=chunk) [Allowance for Credit Losses for Loans and Unfunded Commitments](index=6&type=section&id=2.3.3_Allowance_for_Credit_Losses_for_Loans_and_Unfunded_Commitments) The allowance for credit losses for loans increased, while the provision for credit losses decreased, reflecting a balance of charge-offs and reserve adjustments | Metric | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | March 31, 2024 ($ millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | :-------------------------- | | Total Allowance for Credit Losses for Loans | $594.1 | $573.3 | $487.3 | | Allowance for Loan Losses | $578.2 | $558.9 | $469.2 | | Allowance for Unfunded Credit Commitments | $15.9 | $14.5 | $18.0 | | Allowance for Credit Losses for Loans as % of Total Loans | 1.22% | 1.17% | 0.98% | | Provision for Credit Losses for Loans | $62.7 | $107.0 | $45.3 | | Net Loan Charge-offs | $41.9 | $98.3 | $23.6 | - The first quarter 2025 provision reflects, among other factors, the impact of **loan charge-offs**, **increased quantitative reserves** and **continued growth in the C&I loan portfolio**, partially offset by a **decrease in specific reserves** associated with collateral dependent loans[18](index=18&type=chunk) - Gross loan charge-offs totaled **$44.0 million** for the first quarter 2025 and included **$24.1 million** of partial and full charge-offs related to **two non-performing C&I loan relationships**[17](index=17&type=chunk) [Capital Adequacy](index=7&type=section&id=3_Capital_Adequacy) This section reviews Valley National Bancorp's capital position, including key regulatory capital ratios, demonstrating continued financial strength and stability [Capital Ratios](index=7&type=section&id=3.1_Capital_Ratios) Valley National Bancorp maintained strong capital ratios in Q1 2025, with slight changes across its total risk-based, Tier 1, common equity Tier 1, and Tier 1 leverage capital ratios compared to the previous quarter, indicating continued financial stability | Capital Ratio | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :------------------ | | Total Risk-Based Capital | 13.91% | 13.87% | | Tier 1 Capital | 11.53% | 11.55% | | Common Equity Tier 1 Capital | 10.80% | 10.82% | | Tier 1 Leverage Capital | 9.41% | 9.16% | [Corporate Information and Outlook](index=7&type=section&id=4_Corporate_Information_and_Outlook) This section provides details on the investor conference call, an overview of Valley National Bancorp, and important forward-looking statements and risk factors [Investor Conference Call](index=7&type=section&id=4.1_Investor_Conference_Call) Valley National Bancorp announced details for its Q1 2025 earnings conference call, hosted by CEO Ira Robbins, providing instructions for investor participation and access to webcast and presentation materials - Valley's CEO, Ira Robbins, will host a conference call with investors and the financial community at **11:00 AM (ET) on April 24, 2025**, to discuss Valley's first quarter 2025 earnings[20](index=20&type=chunk) - Interested parties should **preregister** to receive the dial-in number and a personal PIN, and the teleconference will also be **webcast live and archived** on Valley's website[20](index=20&type=chunk) [About Valley National Bancorp](index=7&type=section&id=4.2_About_Valley_National_Bancorp) Valley National Bancorp is a regional bank with approximately **$62 billion** in assets, committed to empowering people and businesses across multiple states with convenient service, innovation, and a knowledgeable team - Valley National Bank is a regional bank with approximately **$62 billion in assets**, operating many convenient branch locations and commercial banking offices across **New Jersey, New York, Florida, Alabama, California, and Illinois**[21](index=21&type=chunk) - Valley is committed to giving people and businesses the power to succeed by providing the **most convenient service, the latest innovations, and an experienced and knowledgeable team** dedicated to meeting customer needs[21](index=21&type=chunk) [Forward-Looking Statements and Risk Factors](index=7&type=section&id=4.3_Forward-Looking_Statements_and_Risk_Factors) This section outlines the forward-looking nature of certain statements in the release and details various factors that could cause actual results to differ materially from expectations, encompassing market, economic, regulatory, operational, and competitive risks - The release contains forward-looking statements about management's confidence, strategies, and expectations, identifiable by terms such as **'intend,' 'should,' 'expect,' 'believe,' and 'anticipate.'**[22](index=22&type=chunk) - Actual results may differ materially due to factors including **market interest rates, macroeconomic conditions, instability in the U.S. financial sector, negative public opinion, changes in regulations, loss of lower-cost funding, litigation, and a prolonged downturn in the economy affecting commercial real estate values**[22](index=22&type=chunk)[23](index=23&type=chunk) - Additional risks include **higher or lower income tax expense, inability to grow customer deposits, material changes in allowance for credit losses, need to supplement capital, goodwill impairment, technology-related costs, increased competitive challenges, cybersecurity incidents, regulatory examinations, and unexpected significant declines in the loan portfolio**[23](index=23&type=chunk)[25](index=25&type=chunk) [Consolidated Financial Statements and Supplemental Data](index=10&type=section&id=5_Consolidated_Financial_Statements_and_Supplemental_Data) This section provides comprehensive financial tables, including selected financial data, balance sheet, loan portfolio details, capital ratios, allowance for credit losses, asset quality, and non-GAAP reconciliations [Selected Financial Data](index=10&type=section&id=5.1_Selected_Financial_Data) This table provides a snapshot of key financial performance metrics for Valley National Bancorp over the past three quarters, including net interest income, total revenue, net income, EPS, and core financial ratios | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Net interest income - FTE | $421,378 | $424,277 | $394,847 | | Non-interest income | $58,294 | $51,202 | $61,415 | | Total revenue | $478,399 | $474,179 | $454,963 | | Non-interest expense | $276,618 | $278,582 | $280,310 | | Net income | $106,058 | $115,711 | $96,280 | | Diluted earnings per share | $0.18 | $0.20 | $0.18 | | Net interest margin - FTE | 2.96% | 2.92% | 2.79% | | Annualized return on average assets | 0.69% | 0.74% | 0.63% | | Annualized return on avg. shareholders' equity | 5.69% | 6.38% | 5.73% | | Efficiency ratio | 55.87% | 57.21% | 59.10% | [Balance Sheet and Loan Portfolio Details](index=11&type=section&id=5.2_Balance_Sheet_and_Loan_Portfolio_Details) This section presents key balance sheet items and a detailed breakdown of the loan portfolio by category, showing trends over the past five quarters | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :----------------- | :------------ | :------------- | | Assets | $61,865,655 | $62,491,691 | $62,092,332 | $62,058,974 | $61,000,188 | | Total loans | $48,657,128 | $48,799,711 | $49,355,319 | $50,311,702 | $49,922,042 | | Deposits | $49,965,844 | $50,075,857 | $50,395,966 | $50,112,177 | $49,077,946 | | Shareholders' equity | $7,499,897 | $7,435,127 | $6,972,380 | $6,737,737 | $6,727,139 | | Loan Category ($ in thousands) | March 31, 2025 | December 31, 2024 | September 30, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :----------------- | :------------- | | Commercial and industrial | $10,150,205 | $9,931,400 | $9,799,287 | $9,104,193 | | Total commercial real estate | $29,114,556 | $29,644,958 | $30,402,196 | $31,705,464 | | Residential mortgage | $5,636,407 | $5,632,516 | $5,684,079 | $5,618,355 | | Total consumer loans | $3,755,960 | $3,590,837 | $3,469,757 | $3,494,030 | [Capital Ratios](index=11&type=section&id=5.3_Capital_Ratios_Detailed) This table provides a comprehensive overview of Valley National Bancorp's capital adequacy ratios, including book value, tangible book value, and various regulatory capital ratios, across multiple quarters | Capital Ratio | March 31, 2025 | December 31, 2024 | September 30, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :----------------- | :------------- | | Book value per common share | $12.76 | $12.67 | $13.00 | $12.81 | | Tangible book value per common share | $9.21 | $9.10 | $9.06 | $8.84 | | Tangible common equity to tangible assets | 8.61% | 8.40% | 7.68% | 7.62% | | Tier 1 leverage capital | 9.41% | 9.16% | 8.40% | 8.20% | | Common equity tier 1 capital | 10.80% | 10.82% | 9.57% | 9.34% | | Tier 1 risk-based capital | 11.53% | 11.55% | 10.29% | 9.78% | | Total risk-based capital | 13.91% | 13.87% | 12.56% | 11.88% | [Allowance for Credit Losses](index=12&type=section&id=5.4_Allowance_for_Credit_Losses_Table) This table details the allowance for credit losses for loans, including beginning and ending balances, total net charge-offs, and the provision for credit losses, providing a comprehensive view of credit loss trends | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Beginning balance - Allowance for credit losses for loans | $573,328 | $564,671 | $465,550 | | Total net charge-offs | $(41,949) | $(98,308) | $(23,555) | | Provision for credit losses for loans | $62,675 | $106,965 | $45,274 | | Ending balance - Allowance for credit losses for loans | $594,054 | $573,328 | $487,269 | | Allowance for credit losses for loans as a % of total loans | 1.22% | 1.17% | 0.98% | | Loan Category ($ in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Commercial and industrial | $(28,456) | $(31,784) | $(14,293) | | Commercial real estate | $(12,260) | $(69,218) | $(1,204) | | Construction | $(1,163) | $0 | $(7,594) | | Total loans charged-off | $(44,019) | $(103,652) | $(24,900) | [Asset Quality](index=13&type=section&id=5.5_Asset_Quality_Table) This section provides detailed tables on asset quality, including accruing past due loans by delinquency stage and non-accrual loans by category, offering insights into the bank's loan performance and risk profile | Category ($ in thousands) | March 31, 2025 | December 31, 2024 | September 30, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :----------------- | :------------- | | Total 30 to 59 days past due | $33,413 | $57,138 | $115,128 | $46,844 | | Total 60 to 89 days past due | $10,528 | $36,167 | $54,788 | $14,189 | | Total 90 or more days past due | $7,756 | $5,889 | $4,780 | $13,355 | | Total accruing past due loans | $51,697 | $99,194 | $174,696 | $74,388 | | Category ($ in thousands) | March 31, 2025 | December 31, 2024 | September 30, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :----------------- | :------------- | | Commercial and industrial | $110,146 | $136,675 | $120,575 | $102,399 | | Commercial real estate | $172,011 | $157,231 | $113,752 | $100,052 | | Construction | $24,275 | $24,591 | $24,657 | $51,842 | | Total non-accrual loans | $346,451 | $359,498 | $296,319 | $287,292 | | Total non-performing assets | $356,219 | $373,329 | $305,102 | $288,773 | | Total non-accrual loans as a % of loans | 0.71% | 0.74% | 0.60% | 0.58% | [Non-GAAP Reconciliations to GAAP Financial Measures](index=14&type=section&id=5.6_Non-GAAP_Reconciliations_to_GAAP_Financial_Measures) This section provides detailed reconciliations of various non-GAAP financial measures, such as adjusted net income, EPS, and efficiency ratio, to their most directly comparable GAAP counterparts, along with explanations for the adjustments | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Net income, as reported (GAAP) | $106,058 | $115,711 | $96,280 | | Total non-GAAP adjustments to net income | $11 | $(37,477) | $4,392 | | Income tax adjustments related to non-GAAP adjustments | $(3) | $(2,520) | $(1,224) | | Net income, as adjusted (non-GAAP) | $106,066 | $75,714 | $99,448 | | Net income available to common shareholders, as adjusted (non-GAAP) | $99,111 | $68,689 | $95,329 | | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Basic earnings, as adjusted (non-GAAP) | $0.18 | $0.13 | $0.19 | | Diluted earnings, as adjusted (non-GAAP) | $0.18 | $0.13 | $0.19 | | Annualized return on average tangible shareholders' equity, as adjusted (non-GAAP) | 7.76% | 5.76% | 8.46% | - Non-GAAP financial measures provide **useful supplemental information** to both management and investors in understanding Valley's **underlying operational performance, business and performance trends**, and may **facilitate comparisons** with others in the financial services industry[42](index=42&type=chunk) [Consolidated Statements of Financial Condition (Balance Sheet)](index=16&type=section&id=5.7_Consolidated_Statements_of_Financial_Condition_Balance_Sheet) This table presents the consolidated balance sheet of Valley National Bancorp, detailing assets, liabilities, and shareholders' equity as of March 31, 2025, and December 31, 2024 | Asset ($ in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $61,865,655 | $62,491,691 | | Net Loans | $48,078,928 | $48,240,861 | | Total Investment Securities | $7,278,457 | $6,972,810 | | Goodwill | $1,868,936 | $1,868,936 | | Total Liabilities | $54,365,758 | $55,056,564 | | Total Deposits | $49,965,844 | $50,075,857 | | Total Shareholders' Equity | $7,499,897 | $7,435,127 | [Consolidated Statements of Income](index=17&type=section&id=5.8_Consolidated_Statements_of_Income) This table provides the consolidated statements of income for Valley National Bancorp for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, detailing interest income and expense, net interest income, non-interest income and expense, and net income | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Total Interest Income | $784,752 | $834,826 | $828,656 | | Total Interest Expense | $364,647 | $411,849 | $435,108 | | Net Interest Income | $420,105 | $422,977 | $393,548 | | Provision for credit losses for loans | $62,675 | $106,965 | $45,274 | | Total Non-Interest Income | $58,294 | $51,202 | $61,415 | | Total Non-Interest Expense | $276,618 | $278,582 | $280,310 | | Income Before Income Taxes | $139,120 | $89,061 | $129,453 | | Income Tax Expense (Benefit) | $33,062 | $(26,650) | $33,173 | | Net Income | $106,058 | $115,711 | $96,280 | | Net Income Available to Common Shareholders | $99,103 | $108,686 | $92,161 | [Quarterly Analysis of Average Assets, Liabilities and Shareholders' Equity and Net Interest Income](index=18&type=section&id=5.9_Quarterly_Analysis_of_Average_Assets%2C_Liabilities_and_Shareholders%27_Equity_and_Net_Interest_Income) This table provides a detailed quarterly analysis of average balances for assets, liabilities, and shareholders' equity, along with corresponding interest income, expense, and rates, presented on a tax-equivalent basis | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------------------- | :------------- | :---------------- | :------------- | | Average Interest Earning Assets | $56,891,691 | $58,214,783 | $56,618,797 | | Average Loans | $48,654,921 | $49,730,130 | $50,246,591 | | Average Interest Bearing Liabilities | $41,230,709 | $42,765,949 | $41,556,588 | | Average Deposits | $49,139,303 | $50,726,080 | $48,575,974 | | Average Shareholders' Equity | $7,458,177 | $7,255,159 | $6,725,695 | | Net Interest Income (FTE) | $421,378 | $424,277 | $394,847 | | Net Interest Margin (FTE) | 2.96% | 2.92% | 2.79% | | Yield on Average Interest Earning Assets | 5.53% | 5.75% | 5.86% | | Cost of Average Interest Bearing Liabilities | 3.54% | 3.85% | 4.19% | [Shareholders Relations](index=18&type=section&id=6_Shareholders_Relations) This section provides contact information for shareholders seeking reports or other inquiries, directing them to the Shareholder Relations Specialist [Shareholders Contact Information](index=18&type=section&id=6.1_Shareholders_Contact_Information) This section provides contact details for shareholders seeking reports or other inquiries, directing them to the Shareholder Relations Specialist - Requests for copies of reports and/or other inquiries should be directed to **Tina Zarkadas, Assistant Vice President, Shareholder Relations Specialist**, at Valley National Bancorp[51](index=51&type=chunk) - Contact information includes telephone at **(973) 305-3380**, fax at **(973) 305-1364**, or e-mail at **tzarkadas@valley.com**[51](index=51&type=chunk)

FORM 10-K General Information [Registrant Information](index=1&type=section&id=Registrant%20Information) Valley National Bancorp is a New Jersey company with total assets of **$62.5 billion**, total net loans of **$48.2 billion**, total deposits of **$50.1 billion**, and total shareholders' equity of **$7.4 billion** as of December 31, 2024 | Metric | Amount (USD) | | :--- | :--- | | Total Assets as of December 31, 2024 | $62.5 billion | | Total Net Loans as of December 31, 2024 | $48.2 billion | | Total Deposits as of December 31, 2024 | $50.1 billion | | Total Shareholders' Equity as of December 31, 2024 | $7.4 billion | | Security Class | Trading Symbol | Registered Exchange | | :--- | :--- | :--- | | Common Stock, No Par Value | VLY | Nasdaq Stock Market LLC | | Non-Cumulative Perpetual Preferred Stock, Series A, No Par Value | VLYPP | Nasdaq Stock Market LLC | | Non-Cumulative Perpetual Preferred Stock, Series B, No Par Value | VLYPO | Nasdaq Stock Market LLC | | Non-Cumulative Perpetual Preferred Stock, Series C, No Par Value | VLYPN | Nasdaq Stock Market LLC | - The company is a **well-known seasoned issuer** and a **large accelerated filer**[6](index=6&type=chunk) - As of June 30, 2024, the aggregate market value of voting stock held by non-affiliates was approximately **$3.5 billion**[6](index=6&type=chunk) - As of February 26, 2025, **560,275,784 shares of common stock** were outstanding[7](index=7&type=chunk) [Documents Incorporated by Reference](index=1&type=section&id=Documents%20Incorporated%20by%20Reference) Certain portions of the company's definitive proxy statement for the 2025 Annual Meeting of Shareholders will be incorporated by reference into Part III, to be filed within 120 days after December 31, 2024 - Certain portions of the 2025 Proxy Statement will be incorporated by reference into Part III, expected to be filed within **120 days** after December 31, 2024[9](index=9&type=chunk) [FORM 10-K TABLE OF CONTENTS](index=2&type=section&id=FORM%2010-K%20TABLE%20OF%20CONTENTS) [Glossary of Defined Terms](index=3&type=section&id=Glossary%20of%20Defined%20Terms) This report defines common terms to ensure readers clearly understand the specialized financial and regulatory terminology used, such as ACL (Allowance for Credit Losses), AFS (Available-for-Sale), CECL (Current Expected Credit Loss model), and Basel III | Term | Definition | | :--- | :--- | | ACL | Allowance for Credit Losses | | AFS | Available-for-Sale | | Basel III | Capital rules under the global regulatory framework developed by the Basel Committee on Banking Supervision | | BHC Act | Bank Holding Company Act of 1956, as amended | | CECL | Current Expected Credit Loss model | | CET1 | Common Equity Tier 1 Capital | | CRA | Community Reinvestment Act | | FDIC | Federal Deposit Insurance Corporation | | HTM | Held-to-Maturity | | SEC | U.S. Securities and Exchange Commission | | Valley | Refers to Valley National Bancorp or its consolidated subsidiaries | PART I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Valley National Bancorp, a New Jersey-based bank holding company, offers comprehensive commercial, private, retail banking, insurance, and wealth management financial services through its main subsidiary, Valley National Bank | Metric | Amount (USD) | | :--- | :--- | | Total Assets as of December 31, 2024 | $62.5 billion | | Total Net Loans as of December 31, 2024 | $48.2 billion | | Total Deposits as of December 31, 2024 | $50.1 billion | | Total Shareholders' Equity as of December 31, 2024 | $7.4 billion | - Valley National Bancorp provides comprehensive commercial, private, retail banking, insurance, and wealth management financial services, including traditional deposits and loans, commercial real estate financing, asset-based lending, small business loans, equipment financing, residential mortgages, home equity loans, and auto financing; it also offers niche financial services such as homeowners' association, cannabis-related business banking, and venture capital banking services[18](index=18&type=chunk) - As of June 30, 2024, Valley ranked **10th** among **150 FDIC-insured financial institutions** in the New York, Northern New Jersey, and Long Island deposit market, and ranked **6th** in New Jersey, **29th** in New York, **18th** in Florida, **17th** in Alabama, and **70th** in California[23](index=23&type=chunk) [General](index=5&type=section&id=General) Valley National Bancorp, a New Jersey bank holding company established in 1983, provides extensive financial services through its primary subsidiary, Valley National Bank, operating over 200 branches across multiple states - Valley National Bancorp is a New Jersey corporation, incorporated in **1983**, registered as a bank holding company and a financial holding company[17](index=17&type=chunk) - As of December 31, 2024, the company's consolidated total assets were **$62.5 billion**, net loans **$48.2 billion**, deposits **$50.1 billion**, and shareholders' equity **$7.4 billion**[17](index=17&type=chunk) - The company offers comprehensive banking solutions through Valley National Bank and its subsidiaries, including traditional deposits and loans, commercial real estate financing, asset-based lending, small business loans, equipment financing, insurance and wealth management, residential mortgages, home equity loans, and auto financing[18](index=18&type=chunk) - The company also provides niche financial services such as homeowners' association, cannabis-related business banking, and venture capital banking services[18](index=18&type=chunk) - The company operates **over 200 branches** across New Jersey, New York, Florida, Alabama, California, and Illinois[19](index=19&type=chunk) [Recent Acquisition](index=5&type=section&id=Recent%20Acquisition) Valley completed the acquisition of Bank Leumi Le-Israel Corporation (parent of Bank Leumi USA) on April 1, 2022, involving the issuance of approximately 85 million common shares and a cash payment of **$113.4 million** - On April 1, 2022, Valley completed the acquisition of Bank Leumi Le-Israel Corporation (Bank Leumi USA)[21](index=21&type=chunk) - The acquisition resulted in Valley issuing approximately **85 million shares of common stock** and paying **$113.4 million in cash**[21](index=21&type=chunk) - As of April 1, 2022, Bank Leumi Le-Israel B.M. held approximately **14% of Valley's common stock**[21](index=21&type=chunk) [Competition for Deposits, Lending and Other Financial Services](index=5&type=section&id=Competition%20for%20Deposits%2C%20Lending%20and%20Other%20Financial%20Services) Valley National Bank, a leading commercial bank in New Jersey, faces intense competition from various financial and non-financial entities, maintaining its edge through superior customer service, innovative products, and strategic acquisitions - Valley National Bank is the **largest commercial bank in New Jersey**, with primary markets in northern and central New Jersey, the New York metropolitan area, Florida, and Alabama[23](index=23&type=chunk) - As of June 30, 2024, Valley ranked **10th** among **150 FDIC-insured financial institutions** in the New York, Northern New Jersey, and Long Island deposit market[23](index=23&type=chunk) - The company faces intense competition from commercial banks, savings banks, credit unions, money market and mutual funds, mortgage companies, fintech companies, and other diverse competitors[25](index=25&type=chunk) - The company maintains competitiveness by offering superior relationship banking services and advice, strong innovative financial products and solutions, and continuously enhancing online and mobile banking products through internal resources and external technology partners[25](index=25&type=chunk) [Operating Segments](index=6&type=section&id=Operating%20Segments) Valley's operations are structured into Consumer Banking and Commercial Banking segments, with Treasury and Corporate Other managing unallocated activities, and Wealth Management and Insurance Services reported within Consumer Banking - Valley's business operations are divided into two main segments: **Consumer Banking** and **Commercial Banking**[28](index=28&type=chunk) - Activities not allocated to operating segments are grouped under **Treasury and Corporate Other**[28](index=28&type=chunk) - The Wealth Management and Insurance Services division is a reporting unit within the Consumer Banking segment, offering asset management advisory, brokerage, trust, personal and property insurance, tax credit advisory services, and international and domestic private banking[28](index=28&type=chunk)[38](index=38&type=chunk) [Commercial Banking](index=6&type=section&id=Commercial%20Banking) The Commercial Banking segment primarily provides commercial and industrial loans, along with commercial real estate and construction loans, actively adjusting its portfolio to reduce non-owner-occupied and multi-family residential loans | Loan Type | Balance as of December 31, 2024 (thousand USD) | Percentage of Total Loans (%) | | :--- | :--- | :--- | | Commercial and Industrial Loans | 9,931,400 | 20.4 | | Commercial Real Estate Loans | 26,530,225 | 54.3 | | Construction Loans | 3,114,733 | 6.4 | | **Total Commercial Loans** | **29,644,958** | **60.7** | - The company's strategic goal is to reduce its **Commercial Real Estate (CRE) loan concentration ratio** from **362%** as of December 31, 2024, to **below 350%** by December 31, 2025[33](index=33&type=chunk) - In 2024, the company actively diversified its loan portfolio by reducing new originations of certain commercial real estate loans, such as non-owner-occupied and multi-family residential loans, and by selling **$1.2 billion** of performing commercial real estate and construction loans[33](index=33&type=chunk) - As of December 31, 2024, commercial real estate loans secured by office buildings totaled approximately **$3.1 billion**, with a weighted average loan-to-value ratio of **62%** and a debt service coverage ratio of **1.76**[34](index=34&type=chunk) [Consumer Banking](index=8&type=section&id=Consumer%20Banking) The Consumer Banking segment focuses on residential mortgage and other consumer loans, including auto, life insurance cash value, and home equity loans, with wealth management and insurance services also integrated | Loan Type | Balance as of December 31, 2024 (thousand USD) | Percentage of Total Loans (%) | | :--- | :--- | :--- | | Residential Mortgage Loans | 5,632,516 | 11.5 | | Other Consumer Loans | 3,590,837 | 7.4 | | Of which: Auto Loans | 1,901,065 | - | | Of which: Home Equity Loans | 604,433 | - | - Residential mortgage loans are primarily concentrated in New Jersey, New York, and Florida, with originations adhering to Fannie Mae and Freddie Mac standards[37](index=37&type=chunk) - Other consumer loans primarily include direct and indirect auto loans, life insurance cash value collateralized loans, home equity loans, and lines of credit[37](index=37&type=chunk) - The Wealth Management and Insurance Services division offers asset management advisory, brokerage, trust, commercial, personal, and title insurance, tax credit advisory services, and international and domestic private banking services[38](index=38&type=chunk) [Treasury and Corporate Other](index=9&type=section&id=Treasury%20and%20Corporate%20Other) The Treasury and Corporate Other segment manages held-to-maturity (HTM) and available-for-sale (AFS) debt securities portfolios for liquidity, handling unallocated revenues and expenses, with total investment securities of **$7.0 billion** and interest-bearing bank deposits of **$1.5 billion** as of December 31, 2024 - The Treasury and Corporate Other segment primarily manages HTM and AFS debt securities portfolios for liquidity management[40](index=40&type=chunk) | Metric | Amount as of December 31, 2024 (USD) | | :--- | :--- | | Total Investment Securities | $7.0 billion | | Interest-Bearing Bank Deposits | $1.5 billion | [Changes in Loan Portfolio Composition](index=9&type=section&id=Changes%20in%20Loan%20Portfolio%20Composition) As of December 31, 2024, Valley's total loans were **$48.8 billion**, with approximately **73%** in commercial real estate (including construction), residential mortgages, and home equity loans, as the company continued to diversify its portfolio - As of December 31, 2024, Valley's total loans were **$48.8 billion**, with approximately **73%** comprised of commercial real estate (including construction loans), residential mortgages, and home equity loans[41](index=41&type=chunk) - In 2024, the company continued its strategy to reduce investor commercial real estate (i.e., multi-family and non-owner-occupied) and construction loans, focusing more on the growth of commercial and industrial loans and owner-occupied commercial real estate loan portfolios[41](index=41&type=chunk) | State | Commercial & Industrial (%) | Commercial Real Estate (%) | Residential (%) | Consumer (%) | Total Loans (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | New York | 29 | 29 | 29 | 29 | 29 | | Florida | 27 | 27 | 27 | 27 | 27 | | New Jersey | 22 | 22 | 22 | 22 | 22 | | California | 4 | 4 | 4 | 4 | 4 | | Illinois | 2 | 2 | 2 | 2 | 2 | | Alabama | 1 | 1 | 1 | 1 | 1 | | Other | 15 | 15 | 15 | 15 | 15 | | **Total** | **100** | **100** | **100** | **100** | **100** | [Risk Management](index=9&type=section&id=Risk%20Management) Valley's board, through its Risk Committee, oversees an enterprise-wide risk management framework to address credit, asset/liability (including interest rate and liquidity), and operational risks, regularly conducting stress tests and refining policies - The company's primary risks include **credit risk**, **asset/liability management risk** (interest rate and liquidity risk), and **operational risk** (information security and cybersecurity risk)[44](index=44&type=chunk) - The Board of Directors, through its Risk Committee, performs risk oversight functions, responsible for overseeing the enterprise-wide risk management framework and risk culture[45](index=45&type=chunk) - The company regularly conducts capital position stress tests, including climate-related scenarios, and maintains an overall risk management plan based on the test results[47](index=47&type=chunk) [Credit Risk Management and Underwriting Approach](index=10&type=section&id=Credit%20Risk%20Management%20and%20Underwriting%20Approach) Valley manages credit risk through stringent policies and underwriting standards, aiming to maximize revenue while minimizing risk, prohibiting negative amortization and subprime loans, and requiring thorough due diligence - The company follows credit policies designed to minimize credit risk and maximize revenue, centrally controlled by the Credit Risk Management Department and the Management Credit Committee[49](index=49&type=chunk) - The company prohibits payment option adjustable-rate residential mortgage loans that allow for negative amortization and subprime loans[50](index=50&type=chunk) - Loan underwriting standards require obtaining and verifying sufficient financial information to determine the creditworthiness, capital support, repayment ability, collateral support, and character of the borrower or guarantor[51](index=51&type=chunk) - Commercial loan renewals, refinancings, and other transactions involving new funds or extended amortization periods typically require new or updated appraisals[55](index=55&type=chunk) [Loan Renewals and Modifications](index=11&type=section&id=Loan%20Renewals%20and%20Modifications) The company renews existing loans under standard underwriting conditions and may extend, restructure, or modify terms on a case-by-case basis to maintain competitiveness, retain customers, or assist financially distressed clients - The company renews loans at maturity as long as the new loan meets standard underwriting conditions[58](index=58&type=chunk) - The company may extend, restructure, or modify existing loan terms to remain competitive, retain profitable customers or help customers facing financial difficulties[58](index=58&type=chunk) - Modified loans rarely result in principal or accrued interest forgiveness and typically receive additional collateral or guarantee support[58](index=58&type=chunk) [Extension of Credit to Past Due Borrowers](index=11&type=section&id=Extension%20of%20Credit%20to%20Past%20Due%20Borrowers) Loans are typically placed on non-accrual status when 90 days past due and full, timely recovery of principal and interest becomes uncertain, with additional funding generally prohibited unless under specific loss mitigation restructuring plans - Loans are typically placed on non-accrual status when **90 days past due** and the full and timely recovery of principal and interest becomes uncertain[59](index=59&type=chunk) - The company prohibits providing additional funds to non-accrual loans, except under specific restructuring plans designed to mitigate losses[59](index=59&type=chunk) [Allowance for Credit Losses](index=11&type=section&id=Allowance%20for%20Credit%20Losses) The company maintains an Allowance for Credit Losses (ACL) for financial assets under the CECL methodology, encompassing loan loss allowances, unfunded loan commitments, and held-to-maturity (HTM) securities, estimated based on historical events, current conditions, and future forecasts - The company maintains an Allowance for Credit Losses (ACL) for financial assets under the **CECL methodology**, including allowances for loan losses and unfunded loan commitments, as well as credit losses on HTM securities[60](index=60&type=chunk) - ACL estimates are based on historical events, current conditions, and reasonable and supportable future forecasts to assess the collectibility of reported amounts[61](index=61&type=chunk) - The CECL methodology includes a collective allowance component for pools of loans with shared risk characteristics and an individual allowance component for loans not sharing risk characteristics, such as collateral-dependent loans[61](index=61&type=chunk) [Loans Originated by Third Parties](index=12&type=section&id=Loans%20Originated%20by%20Third%20Parties) The company purchases certain commercial loans, loan participations, and residential mortgages originated by other financial institutions to manage liquidity, meet CRA requirements, and execute asset/liability management strategies - The company purchases commercial loans, loan participations, and residential mortgage loans originated by other financial institutions[63](index=63&type=chunk) - Decisions to purchase loans are based on current loan origination volumes, market interest rates, excess liquidity, meeting CRA credit needs, and asset/liability management strategies[63](index=63&type=chunk) | Loan Type | Amount as of December 31, 2024 (thousand USD) | Percentage of Total Commercial/Residential Mortgage Loans (%) | | :--- | :--- | :--- | | Purchased Commercial Loans | 2,200,000 | 5.3 | | Purchased Residential Mortgage Loans | 516,700 | 9.2 | - As of December 31, 2024, less than **1.0%** of third-party originated commercial loans were **30 days or more past due**, while **3.4%** of residential mortgage loans were **30 days or more past due**[65](index=65&type=chunk) [Human Capital](index=12&type=section&id=Human%20Capital) Valley fosters an inclusive, high-performance culture, attracting and retaining talent through competitive compensation, comprehensive benefits, work-life balance support, and continuous career development opportunities - As of December 31, 2024, Valley had **3,732 full-time and part-time employees**, with a voluntary turnover rate of **13.5%** and an average tenure of **7.1 years**[66](index=66&type=chunk) - The company offers a competitive total rewards program, including base salary, performance bonuses, equity awards, 401(k) plans, health benefits, paid time off, remote work arrangements, and parental leave[68](index=68&type=chunk)[70](index=70&type=chunk) - The company promotes internal mobility and career development through programs such as Business Resource Groups (BRG Program), leadership development, certifications, and mentorship initiatives[67](index=67&type=chunk)[71](index=71&type=chunk) [Corporate Social and Environmental Responsibility](index=13&type=section&id=Corporate%20Social%20and%20Environmental%20Responsibility) Recognizing its societal and environmental impact, Valley established an ESG Committee in 2020 to guide its social responsibility efforts while pursuing long-term strategic goals, with further details to be disclosed in the 2025 Proxy Statement - Valley established an **ESG Committee in 2020** to guide how environmental, social, and governance issues impact its ability to achieve long-term strategies and fulfill social responsibilities[72](index=72&type=chunk) - Further information regarding the company's human capital management and corporate social and environmental responsibility will be disclosed in the **2025 Proxy Statement**[73](index=73&type=chunk) [Information about our Executive Officers](index=14&type=section&id=Information%20about%20our%20Executive%20Officers) This section lists Valley National Bancorp's executive officers, their ages, tenure, positions, and primary occupations over the past five years as of December 31, 2024 | Name | Age as of December 31, 2024 | Tenure | Position | Principal Occupations for the Past Five Years (Excluding Valley) | | :--- | :--- | :--- | :--- | :--- | | Ira Robbins | 50 | 2009 | Chairman and Chief Executive Officer | - | | Thomas A. Iadanza | 66 | 2015 | President | - | | Russell Barrett | 49 | 2024 | Senior Executive Vice President, Chief Operating Officer | 2013-2020 Managing Director, BNP Paribas | | Joseph V. Chillura | 58 | 2020 | Senior Executive Vice President, President of Commercial Banking | - | | John P. Regan | 61 | 2024 | Senior Executive Vice President, Chief Risk Officer | 2016-2022 Chief Audit Executive, Investors Bancorp, July 2022-March 2024 Chief Audit Executive, Industrial and Commercial Bank of China | | Travis Lan | 40 | 2023 | Executive Vice President, Interim Chief Financial Officer | 2016-2020 Director, Investment Banking, Keefe, Bruyette & Woods, Inc. | | Yvonne M. Surowiec | 64 | 2017 | Senior Executive Vice President, Chief Human Resources Officer | - | | Mitchell L. Crandell | 54 | 2007 | Executive Vice President, Chief Accounting Officer | - | | Mark Saeger | 60 | 2018 | Executive Vice President, Chief Credit Officer | - | [Available Information](index=14&type=section&id=Available%20Information) The company provides annual, quarterly, and current reports, along with amendments, codes of conduct, committee charters, and corporate governance guidelines, via the SEC and its own website, which also serves for disclosing material non-public information - The company provides Form 10-K, 10-Q, 8-K reports and amendments on **www.sec.gov** and **www.valley.com**[76](index=76&type=chunk) - The company's website also provides its Code of Conduct, Audit Committee Charter, Compensation and Human Capital Management Committee Charter, Nominating, Governance and Corporate Sustainability Committee Charter, and Corporate Governance Guidelines[76](index=76&type=chunk) - The company uses its website to disseminate corporate information, including as a means of disclosing material non-public information and for complying with Regulation FD[78](index=78&type=chunk) [SUPERVISION AND REGULATION](index=14&type=section&id=SUPERVISION%20AND%20REGULATION) The banking industry is heavily regulated by federal and state authorities, requiring Valley National Bancorp and its subsidiaries to comply with numerous laws and regulations, including the BHC Act, Basel III, Dodd-Frank, BSA/AML, OFAC, and CFPB, with increasing compliance costs and potential penalties for non-compliance - The banking industry is heavily regulated by federal and state regulatory agencies, primarily to protect FDIC-insured deposits, consumers, the stability of the U.S. banking and financial system, and the health of the national economy[79](index=79&type=chunk) - Regulation and supervision increase the operating costs of bank holding companies and limit management's options for deploying assets and maximizing income[80](index=80&type=chunk) - Violations of laws and regulations or deficiencies in risk management practices can lead to downgraded regulatory ratings, which may restrict the company's acquisition or expansion activities and increase regulatory scrutiny[80](index=80&type=chunk) [Bank Holding Company Regulation](index=15&type=section&id=Bank%20Holding%20Company%20Regulation) Valley, as a bank and financial holding company, is supervised by the Federal Reserve Board and subject to the BHC Act, allowing non-banking activities of a financial nature but requiring good capital and management, and CRA compliance - Valley is a bank holding company and a financial holding company as defined by the **Bank Holding Company Act (BHC Act)**, supervised by the Federal Reserve Board[83](index=83&type=chunk) - The BHC Act restricts bank holding companies from acquiring voting shares of non-banking companies and engaging in non-banking activities, but financial holding companies can engage in a broader range of financial activities[84](index=84&type=chunk)[85](index=85&type=chunk) - To maintain financial holding company status, Valley and its bank must remain **well-capitalized** and **well-managed**, and comply with CRA obligations[85](index=85&type=chunk) - Valley is legally required to serve as a source of managerial and financial strength for its bank subsidiaries[87](index=87&type=chunk) [Regulation of Bank Subsidiary](index=16&type=section&id=Regulation%20of%20Bank%20Subsidiary) Valley National Bank is supervised by the OCC and adheres to various laws and regulations, including capital requirements, reserve maintenance, lending and investment limits, and consumer protection, with Federal Reserve Act sections 23A and 23B restricting funding to affiliates - Valley National Bank is supervised by the **Office of the Comptroller of the Currency (OCC)** and is subject to periodic examinations[88](index=88&type=chunk) - Laws and regulations applicable to Valley and the Bank impose restrictions and requirements in various areas, including capital requirements, reserve maintenance, establishment of new offices, lending and investments, consumer protection, employment practices, bank acquisitions, and entry into new business types[88](index=88&type=chunk) - Sections 23A and 23B of the Federal Reserve Act limit the extent to which the Bank can provide funds to Valley or its non-bank subsidiaries[88](index=88&type=chunk) [Capital Requirements](index=16&type=section&id=Capital%20Requirements) Valley and its bank must comply with Basel III capital requirements, including minimum ratios for Common Equity Tier 1 (CET1), Tier 1, and Total Capital to risk-weighted assets, plus a 2.5% capital conservation buffer, with all ratios exceeding "well-capitalized" minimums as of December 31, 2024 - Valley and its bank must comply with **Basel III rules**, including minimum capital ratios for CET1, Tier 1, and Total Capital to risk-weighted assets, as well as a leverage ratio of Tier 1 Capital to average consolidated assets[89](index=89&type=chunk)[91](index=91&type=chunk) - The company must also maintain a **2.5% 'capital conservation buffer'**, resulting in effective minimum ratios of **7.0%** for CET1, **8.5%** for Tier 1, and **10.5%** for Total Capital to risk-weighted assets[89](index=89&type=chunk) | Capital Ratio | Minimum Requirement (%) | | :--- | :--- | | Common Equity Tier 1 (CET1) to Risk-Weighted Assets | 4.5 | | Tier 1 Capital to Risk-Weighted Assets | 6.0 | | Total Capital to Risk-Weighted Assets | 8.0 | | Tier 1 Capital to Average Consolidated Assets (Leverage Ratio) | 4.0 | - As of December 31, 2024, Valley and its bank's capital ratios exceeded the minimum requirements for 'well-capitalized' financial institutions[96](index=96&type=chunk) - Under the CECL Day 1 impact deferral provisions, approximately **$35.5 million** of deferred amounts were recognized as a reduction in regulatory capital as of December 31, 2024, decreasing risk-weighted capital ratios by approximately **9 basis points**[94](index=94&type=chunk) [Prompt Corrective Action](index=17&type=section&id=Prompt%20Corrective%20Action) The FDICIA mandates federal bank regulators to implement "prompt corrective actions" for FDIC-insured institutions failing capital adequacy standards, including restrictions on capital distributions or asset growth, with Valley National Bank classified as "well-capitalized" in 2024 and 2023 - FDICIA requires federal bank regulators to take **'prompt corrective actions'** against FDIC-insured depository institutions that fail to meet capital adequacy standards[95](index=95&type=chunk) - Failure to meet 'well-capitalized' or minimum capital requirements can lead to mandatory and discretionary regulatory actions, including restrictions on dividend payments or capital distributions[90](index=90&type=chunk)[93](index=93&type=chunk) - As of December 31, 2024, and 2023, Valley National Bank's capital ratios exceeded the minimum levels required to be considered a **'well-capitalized'** financial institution[96](index=96&type=chunk) [Resolution Planning](index=17&type=section&id=Resolution%20Planning) The FDIC requires insured depository institutions with over **$50 billion** in total assets to submit periodic resolution plans, with Valley National Bank, under revised 2024 rules, needing to submit an information filing every three years, with its first due by October 1, 2025 - The FDIC requires insured depository institutions with total assets exceeding **$50 billion** to submit periodic resolution plans[97](index=97&type=chunk) - Under rules revised in June 2024, institutions with total assets between **$50 billion and $100 billion** (including Valley National Bank) must submit an information filing every three years, with supplemental filings updating key information in non-filing years[97](index=97&type=chunk) - The final rule became effective on October 1, 2024, and Valley National Bank's first information submission is due by **October 1, 2025**[97](index=97&type=chunk) [The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act)](index=17&type=section&id=The%20Dodd-Frank%20Wall%20Street%20Reform%20and%20Consumer%20Protection%20Act%20of%202010%20%28the%20Dodd-Frank%20Act%29) The Dodd-Frank Act significantly reshaped banking regulation, impacting financial institutions' lending, deposits, investments, and operations, with the Durbin Amendment imposing debit card transaction fee limits and the Federal Reserve proposing further reductions - The **Dodd-Frank Act** significantly changed the banking regulatory landscape, affecting financial institutions' lending, deposits, investments, trading, and operational activities[98](index=98&type=chunk) - Under the **Durbin Amendment**, banks with assets exceeding **$10 billion** are subject to maximum interchange fees for debit card transactions, and the Federal Reserve Board has proposed further reducing this fee[99](index=99&type=chunk)[100](index=100&type=chunk) - Although the company is no longer subject to the stress testing requirements of the **Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA)**, it still conducts internal stress tests based on safety and soundness principles[101](index=101&type=chunk) [Volcker Rule](index=18&type=section&id=Volcker%20Rule) The Volcker Rule prohibits insured depository institutions and their affiliates from engaging in certain short-term "proprietary trading" and restricts investments in or sponsorship of "covered funds," with exemptions for market-making, hedging, and underwriting - The **Volcker Rule** prohibits insured depository institutions and their affiliates from engaging in certain short-term **'proprietary trading'** activities and restricts investments in or sponsorship of certain types of **'covered funds'**[102](index=102&type=chunk) - The rule includes exemptions for market-making, hedging, underwriting, and trading in U.S. government and agency debt, and permits retaining ownership interests in certain covered funds under specific conditions[102](index=102&type=chunk) [Incentive Compensation](index=18&type=section&id=Incentive%20Compensation) Federal banking agencies have issued joint guidance on incentive compensation to prevent imprudent risk-taking, and while final Dodd-Frank rules are pending, the company ensures its incentive compensation plans do not encourage undue risk - Federal banking agencies have issued joint guidance on incentive compensation, aiming to ensure that banking institutions' incentive compensation policies do not encourage imprudent risk-taking[103](index=103&type=chunk) - The Dodd-Frank Act required federal banking agencies to issue incentive compensation rules, but final rules have not been issued as of the date of this report[104](index=104&type=chunk) - The company has strived to ensure its incentive compensation plans do not encourage undue risk, in line with the aforementioned principles[104](index=104&type=chunk) [Dividend Limitations](index=18&type=section&id=Dividend%20Limitations) Valley's income primarily derives from its bank subsidiaries' dividends, which are subject to regulatory restrictions, including limits on total annual dividends based on net profits and retained earnings, with regulators empowered to prohibit unsafe or unsound payments - Valley's income primarily comes from dividends from its bank subsidiaries, and bank dividend payments are subject to regulatory restrictions[105](index=105&type=chunk) - Under the National Bank Act, without consent, the total dividends declared by a national bank in any year cannot exceed the sum of its net profits for that year and its retained net profits for the preceding two years[105](index=105&type=chunk) - Bank regulators have the authority to prohibit the payment of dividends that are unsafe or unsound[105](index=105&type=chunk) [Transactions by the Bank with Related Parties](index=18&type=section&id=Transactions%20by%20the%20Bank%20with%20Related%20Parties) Valley National Bank extends credit to its directors, executive officers, and 10% shareholders (insiders) and their controlled entities, governed by the National Bank Act, Sarbanes-Oxley Act of 2002, and Federal Reserve Board Regulation O, requiring terms substantially similar to non-affiliated transactions - Valley National Bank extends credit to its directors, executive officers, and **10% shareholders (insiders)** and entities they control, subject to the National Bank Act, the Sarbanes-Oxley Act of 2002, and Federal Reserve Board Regulation O[106](index=106&type=chunk) - Credit extended to insiders must be on substantially the same terms as non-affiliated transactions and not involve a higher than normal risk of repayment[106](index=106&type=chunk) [Community Reinvestment](index=18&type=section&id=Community%20Reinvestment) The Community Reinvestment Act (CRA) obligates national banks to meet the credit needs of their entire communities, including low- and moderate-income areas, consistent with safe and sound operations, with Valley National Bank receiving an "Outstanding" CRA rating in its 2021 review - Under the **CRA**, national banks have a continuing and affirmative obligation to meet the credit needs of their entire communities, including low- and moderate-income communities, consistent with safe and sound operations[107](index=107&type=chunk) - Valley National Bank in its most recent 2021 review received an **'Outstanding' CRA rating**[108](index=108&type=chunk) - Federal banking agencies finalized rules in October 2023 to revise CRA implementing regulations, establishing tailored assessment frameworks based on bank size and business model, and implementing separate evaluations for retail lending, retail services and products, community development financing, and community development services for banks with total assets exceeding **$10 billion**[109](index=109&type=chunk) [Bank Secrecy Act (BSA)/USA PATRIOT Act](index=19&type=section&id=Bank%20Secrecy%20Act%20%28BSA%29%2FUSA%20PATRIOT%20Act) Valley National Bank is subject to BSA reporting and record-keeping requirements, necessitating an Anti-Money Laundering (AML) program, with the AML Act of 2020 further expanding regulatory demands, and federal agencies proposing revised AML/CFT program requirements in July 2024 - Valley National Bank is subject to the reporting and record-keeping requirements of the **Bank Secrecy Act (BSA)** and its implementing regulations, requiring an Anti-Money Laundering (AML) program[110](index=110&type=chunk) - The **AML Act of 2020** amended the BSA, requiring FinCEN to update and expand regulatory requirements, which may impact banks' compliance obligations[110](index=110&type=chunk) - Regulators strictly enforce AML and suspicious activity reporting requirements, and non-compliance can lead to penalties and business restrictions[112](index=112&type=chunk) - Federal banking agencies proposed revisions to AML/CFT program requirements in July 2024, and FinCEN extended AML obligations to registered investment advisers in August 2024[113](index=113&type=chunk) [OFAC Regulation](index=19&type=section&id=OFAC%20Regulation) The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions against targeted foreign countries and regimes, requiring the company and its bank to freeze accounts, prohibit unauthorized transactions, and report frozen activities - OFAC administers and enforces economic and trade sanctions against targeted foreign countries and regimes[114](index=114&type=chunk) - The company and its bank are responsible for freezing accounts and transactions of such targets and countries, prohibiting unauthorized trade and financial transactions, and reporting frozen transactions[115](index=115&type=chunk) - Failure to comply with these sanctions can lead to severe legal and reputational consequences, including regulators not approving or prohibiting merger and acquisition transactions[115](index=115&type=chunk) [Consumer Financial Protection Bureau Supervision](index=20&type=section&id=Consumer%20Financial%20Protection%20Bureau%20Supervision) Valley National Bank is extensively regulated by the CFPB across various consumer financial products and services, with the CFPB empowered to examine and enforce consumer financial laws, prevent unfair practices, and potentially use disparate impact analysis for anti-discrimination laws - Valley National Bank is subject to extensive regulation by the **Consumer Financial Protection Bureau (CFPB)**, covering deposit products, credit cards, mortgages, auto, student, and other consumer loans, and other consumer financial products and services[116](index=116&type=chunk) - The CFPB has the authority to examine and enforce consumer financial laws and prevent unfair, deceptive, or abusive acts or practices[116](index=116&type=chunk) - The CFPB may use disparate impact analysis to enforce anti-discrimination lending laws, where even unintentional actions can have adverse effects[117](index=117&type=chunk) - In December 2024, the CFPB issued a final rule revising Regulation Z, requiring overdraft credit offered by financial institutions with assets exceeding **$10 billion** to comply with certain consumer protection provisions, effective **October 1, 2025**[118](index=118&type=chunk) [Insurance of Deposit Accounts](index=21&type=section&id=Insurance%20of%20Deposit%20Accounts) Valley National Bank's deposits are FDIC-insured up to **$250,000** per account ownership type, with FDIC implementing risk-based premiums and a special assessment in November 2023 totaling **$59.1 million** for Valley National Bank to cover 2023 bank failures - Valley National Bank's deposits are insured by the **FDIC**, typically up to **$250,000** per account ownership type[121](index=121&type=chunk) - The FDIC implements a risk-based deposit premium assessment system, determining assessment rates based on supervisory ratings, regulatory capital levels, and other factors[121](index=121&type=chunk) - To cover losses from 2023 bank failures, the FDIC implemented a special assessment in November 2023; Valley National Bank's total special assessment was **$59.1 million**, resulting in pre-tax charges of **$50.3 million**, **$7.4 million**, and **$1.4 million** in the fourth quarter of 2023, first quarter of 2024, and second quarter of 2024, respectively[123](index=123&type=chunk) [Federal Securities Laws](index=21&type=section&id=Federal%20Securities%20Laws) Valley's common stock is registered with the SEC under the Securities Exchange Act, subjecting the company to disclosure, proxy solicitation, insider trading, and other requirements and restrictions - Valley's common stock is registered with the **SEC** under the Securities Exchange Act[124](index=124&type=chunk) - The company must comply with disclosure, proxy solicitation, insider trading, and other requirements and restrictions under the Securities Exchange Act[124](index=124&type=chunk) [Broker-Dealer and Securities Regulation](index=21&type=section&id=Broker-Dealer%20and%20Securities%20Regulation) Valley's broker-dealer subsidiary, VFM, is regulated by federal and state securities laws and self-regulatory organizations like FINRA, covering sales practices, client funds, net capital, record-keeping, and privacy, also adhering to Regulation Best Interest for retail clients - Valley's broker-dealer subsidiary, **VFM**, is regulated by federal securities laws, state securities commissions, and self-regulatory organizations such as **FINRA**[125](index=125&type=chunk) - VFM must comply with **Regulation Best Interest**, requiring broker-dealers and investment advisers to act in the **'best interest'** of retail customers when providing recommendations[126](index=126&type=chunk) - The SEC and FINRA have active enforcement functions and can impose fines, restrict activities, or disqualify individuals for violations[127](index=127&type=chunk) [Investment Advisers Act](index=21&type=section&id=Investment%20Advisers%20Act) VFM and Valley Wealth Managers, Inc., as registered investment advisers, are subject to the Investment Advisers Act and SEC rules, covering record-keeping, operational and marketing requirements, disclosure obligations, fiduciary duties, and prohibitions against fraudulent activities - **VFM** and **Valley Wealth Managers, Inc.** are registered investment advisers, subject to the Investment Advisers Act and SEC rules and regulations[128](index=128&type=chunk)[129](index=129&type=chunk) - Regulatory scope includes record-keeping, operational and marketing requirements, disclosure obligations, fiduciary duties, and prohibitions against fraudulent activities[129](index=129&type=chunk) - Non-compliance with the Investment Advisers Act or other federal and state securities laws and regulations can lead to investigations, sanctions, fines, and reputational damage[129](index=129&type=chunk) [Insurance regulation](index=22&type=section&id=Insurance%20regulation) Valley's insurance agency subsidiaries, Valley Insurance Services, Inc. and VFM, are subject to state-level insurance regulation, requiring compliance with multi-state regulatory and licensing requirements, managed through internal monitoring and third-party vendors - Valley's insurance agency subsidiaries, **Valley Insurance Services, Inc.** and **VFM**, are subject to state-level insurance regulation, requiring compliance with multi-state regulatory and licensing requirements[130](index=130&type=chunk) - The company ensures compliance through internal monitoring and third-party vendors, focusing on relevant requirements and emerging regulatory issues[130](index=130&type=chunk) [Prohibitions Against Tying Arrangements](index=22&type=section&id=Prohibitions%20Against%20Tying%20Arrangements) Banks are prohibited by 12 U.S.C. Section 1972 from certain tying arrangements, meaning a depository institution cannot offer credit or other services conditional on a customer obtaining additional services from it or its affiliates, or not obtaining services from a competitor - Depository institutions are prohibited from offering credit or any other service conditional on a customer obtaining additional services from that institution or its affiliates, or not obtaining services from a competitor[131](index=131&type=chunk) [Data Privacy and Cybersecurity Regulation](index=22&type=section&id=Data%20Privacy%20and%20Cybersecurity%20Regulation) The company collects, uses, stores, and discloses personal information, subjecting it to federal, state, and local data privacy and cybersecurity laws, including GLBA and CCPA, with federal regulators requiring reporting of significant cybersecurity incidents within 36 hours - The company is subject to federal, state, and local laws and regulations, including the **Gramm-Leach-Bliley Act (GLBA)** and the **California Consumer Privacy Act (CCPA)**, concerning data privacy and cybersecurity[132](index=132&type=chunk)[133](index=133&type=chunk) - Federal banking regulators require banking organizations to notify their primary federal regulator within **36 hours** of a cybersecurity incident that could materially disrupt or degrade service capabilities, jeopardize critical operations, or affect financial stability[132](index=132&type=chunk) - The New York State Department of Financial Services (NYDFS) issued **'Cybersecurity Requirements for Financial Services Companies'**, requiring regulated entities to establish and maintain cybersecurity programs[134](index=134&type=chunk) - The CFPB issued a final rule in October 2024, requiring data providers to make certain transaction, account, and payment information available to consumers and authorized third parties to facilitate **'open banking'**, with depository institutions having assets between **$10 billion and $250 billion** required to comply by **April 1, 2027**[135](index=135&type=chunk)[136](index=136&type=chunk) - The SEC finalized amendments to **Regulation S-P** in May 2024, requiring broker-dealers, investment companies, and registered investment advisers to develop incident response plans and notify affected individuals within **30 days**[137](index=137&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks, including economic shifts (interest rates, inflation, bank failures), business model challenges (CRE concentration, deposit attrition, cannabis business, goodwill impairment, competition), industry-specific issues (AML compliance, credit losses, NPAs, dividend limits), and operational, financial, and regulatory complexities (liquidity, CECL volatility, internal control failures, natural disasters, acquisition risks, compliance costs, consumer protection, accounting changes, litigation) - Changes in the economic environment, including interest rate fluctuations, financial market instability, inflationary pressures, and geopolitical conflicts, can significantly impact the company's loan production, net interest income, securities portfolio value, and allowance for credit losses[140](index=140&type=chunk) - A significant portion of the company's loan portfolio is secured by commercial real estate, and adverse events in the real estate market could affect asset quality and profitability[147](index=147&type=chunk) - The company faces intense competition from large financial service providers, digital fintech startups, and other competitors with advanced technological capabilities[155](index=155&type=chunk)[156](index=156&type=chunk) - The company is subject to extensive federal and state regulation, incurring high compliance costs, and regulatory changes could adversely affect its business, financial condition, and results of operations[192](index=192&type=chunk) - Cybersecurity incidents and information system disruptions could expose the company to liability, losses, and escalating operational costs[199](index=199&type=chunk) - The company's use of artificial intelligence (AI) tools and third-party vendors' adoption of AI may increase the risk of errors, omissions, unfair treatment, or fraudulent activities[208](index=208&type=chunk) [Risks Related to the Operating Environment](index=23&type=section&id=Risks%20Related%20to%20the%20Operating%20Environment) The company's financial performance is vulnerable to economic shifts like interest rate changes, inflation, and geopolitical instability, as well as the repercussions of bank failures, potentially leading to increased credit losses, reduced interest income, and reputational damage - Changes in the economic environment, including interest rate fluctuations, financial market volatility, geopolitical instability, or conflicts, could adversely affect the company's financial performance and condition[140](index=140&type=chunk) - Inflationary pressures and rising market interest rates could lead to a decrease in the value of investment securities and increase business operating costs[141](index=141&type=chunk) - The 2023 bank failures led to significant capital market volatility, decreased bank security valuations, and may continue to impact customer confidence in the banking system[143](index=143&type=chunk) - The FDIC's special assessment to address recent bank failures resulted in pre-tax charges of **$8.8 million** and **$50.3 million** for the company in 2024 and 2023, respectively[145](index=145&type=chunk) [Risks Associated with Our Business Model](index=24&type=section&id=Risks%20Associated%20with%20Our%20Business%20Model) The company's business model faces risks from high commercial real estate loan concentration, reduced low-cost deposits, legal and regulatory challenges in cannabis banking, potential goodwill impairment, inability to compete with fintech, and failure to execute growth strategies - As of December 31, 2024, commercial real estate loans (including construction loans) constituted **60.7%** of the company's loan portfolio, and adverse events in the real estate market could impact asset quality and profitability[147](index=147&type=chunk) - The loss or reduction of low-cost deposit sources, or the inability to achieve deposit retention goals, could adversely affect the company's net interest income and net income[150](index=150&type=chunk)[151](index=151&type=chunk) - The company provides deposit services to the state-licensed cannabis industry, which may expose it to risks of federal prosecution or other regulatory sanctions[152](index=152&type=chunk)[153](index=153&type=chunk) - The company may incur goodwill impairment in the future; as of December 31, 2024, total goodwill was **$1.9 billion**[154](index=154&type=chunk) - The company faces intense competition from large and diversified financial service providers, digital fintech startups, and other competitors with advanced technological capabilities[155](index=155&type=chunk)[156](index=156&type=chunk) - The company's ability to attract, develop, and retain key talent is crucial for its success, and a competitive labor market could lead to talent loss and increased costs[166](index=166&type=chunk)[167](index=167&type=chunk) - ESG matters could adversely affect the company's reputation, business, financial condition, and results of operations, as well as its stock price[168](index=168&type=chunk)[169](index=169&type=chunk) - Climate change and severe weather could adversely affect the company's operations, business, and customers, especially given its primary markets are in coastal regions[170](index=170&type=chunk)[171](index=171&type=chunk) [Risks Related to Our Industry](index=29&type=section&id=Risks%20Related%20to%20Our%20Industry) The banking industry faces risks from interest rate changes impacting net interest income, AML non-compliance leading to penalties, increased credit losses requiring higher allowances, rising non-performing assets reducing income, and regulatory restrictions on dividend payments - Interest rate changes could reduce the company's net interest income and profitability, as net interest income is the difference between interest earned and interest paid, influenced by economic conditions, competition, and Federal Reserve Board policies[173](index=173&type=chunk) - Failure to adequately or timely detect money laundering and other illegal or improper activities could expose the company to additional liabilities and significantly adversely affect it[174](index=174&type=chunk)[175](index=175&type=chunk) - Higher charge-offs and weak credit conditions may require the company to further increase its allowance for credit losses through expense provisions[176](index=176&type=chunk)[177](index=177&type=chunk) - An increase in non-performing assets could reduce the company's interest income and increase net loan charge-offs, loan loss allowances, and operating expenses[178](index=178&type=chunk) - The company may need to negotiate with the Federal Reserve Board to declare common stock cash dividends, which could ultimately delay, reduce, or cancel such dividends and adversely affect the market price of common stock[179](index=179&type=chunk)[180](index=180&type=chunk) [General Commercial, Operational, Financial and Regulatory Risks](index=30&type=section&id=General%20Commercial%2C%20Operational%2C%20Financial%20and%20Regulatory%20Risks) The company faces risks including inadequate liquidity management, CECL model volatility, internal control failures, natural disasters, limited acquisition opportunities, rising regulatory costs, accounting policy changes, consumer protection compliance, and litigation claims - The company may be unable to adequately manage liquidity risk, which could affect its ability to meet obligations on time, seize growth opportunities, pay regular common stock dividends, and generate sufficient profitability[181](index=181&type=chunk)[184](index=184&type=chunk) - The CECL model used to determine the allowance for credit losses may increase the volatility of credit loss allowances and profitability[185](index=185&type=chunk) - The company's controls and procedures may fail or be circumvented, which could have a significant adverse effect on its business, results of operations, and financial condition[186](index=186&type=chunk)[187](index=187&type=chunk) - Natural disasters, pandemics, acts of terrorism, and other catastrophic events could adversely affect the company's operations, business, and customers[189](index=189&type=chunk)[190](index=190&type=chunk) - The company's ability to pursue opportunistic acquisitions is limited by significant risks, including the risk that regulators may not provide required approvals[191](index=191&type=chunk) - Extensive regulation and supervision negatively impact the company's ability to compete cost-effectively and may expose it to significant compliance costs and penalties[192](index=192&type=chunk) - The company is subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and failure to comply with these laws could result in various sanctions[195](index=195&type=chunk) - Changes in accounting policies or accounting standards could cause the company to report its financial performance and condition in an unfavorable manner and may subject it to additional costs and expenses[196](index=196&type=chunk)[197](index=197&type=chunk) - Claims and litigation could result in significant expenses, losses, and reputational damage[198](index=198&type=chunk) [Technology Risks](index=33&type=section&id=Technology%20Risks) The company faces cybersecurity incidents and information system disruptions, leading to potential liabilities and rising operational costs, exacerbated by increasingly sophisticated threats and the proliferation of AI, alongside evolving data privacy regulations and AI tool adoption risks - Cybersecurity incidents and information system disruptions could expose the company to liability, losses, and escalating operational costs[199](index=199&type=chunk) - Cybersecurity risks are increasing in complexity due to the proliferation of new technologies (including AI) and the activities of threat actors (such as criminal organizations, hacktivists, and nation-states)[199](index=199&type=chunk) - The company faces complex and evolving data privacy and cybersecurity laws, regulations, rules, standards, and contractual obligations, which could increase operating costs, compliance risks, and potential liabilities[203](index=203&type=chunk) - The company's adoption of artificial intelligence (AI) tools and third-party vendors' adoption of AI may increase the risk of errors, omissions, unfair treatment, or fraudulent activities[208](index=208&type=chunk) - The company may need to invest significant resources to comply with the evolving AI legal and regulatory environment and may need to alter products or business practices or limit the use of AI[210](index=210&type=chunk) [Risks Related to an Investment in Our Securities](index=36&type=section&id=Risks%20Related%20to%20an%20Investment%20in%20Our%20Securities) Investing in the company's securities carries risks, including potential reductions or cancellations of common stock cash dividends, subsidiaries' inability to pay dividends affecting the company's distributions, dilution from future acquisitions, and adverse impacts on stock price from future equity or debt issuances - The company may reduce or cancel common stock cash dividends, which could adversely affect the market price of common stock[211](index=211&type=chunk) - If subsidiaries are unable to pay dividends or make distributions to the company, the company may be unable to pay dividends to preferred and common shareholders or interest on long-term borrowings and subordinated debt issued to capital trusts[212](index=212&type=chunk) - Future acquisitions could dilute shareholder value, particularly tangible book value per share[213](index=213&type=chunk) - Future issuances of common stock, preferred stock, debt, or other securities could adversely affect the market price of the company's stock and dilute existing shareholders' holdings[214](index=214&type=chunk) [Item 1B. Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments in this report - No unresolved staff comments[215](index=215&type=chunk) [Item 1C. Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) The company implements an enterprise-wide information security program, guided by the NIST framework and overseen by the Board's Risk Committee, to identify, assess, and manage significant cyber and information security risks through threat identification, technical safeguards, third-party risk management, employee training, and incident response - The company implements an enterprise-wide information security program designed to identify, assess, and manage significant cyber and information security risks and threats, utilizing the **National Institute of Standards and Technology (NIST) framework**[216](index=216&type=chunk) - The Board of Directors, through its Risk Committee, has primary oversight responsibility for cyber and information security risks and has established a dedicated Cyber and Technology Risk Subcommittee[217](index=217&type=chunk)[220](index=220&type=chunk) - The company's cyber and information security risk management framework and strategy focus on identifying, protecting, and detecting threats, deploying technical safeguards, managing third-party risks, conducting employee education and awareness training, and developing incident response and recovery plans[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[228](index=228&type=chunk) - The company regularly engages external consultants to assess the effectiveness of its cybersecurity measures and reports assessment results to the Risk Committee and the Board of Directors[229](index=229&type=chunk) - To date, cybersecurity threats have not had a material impact on the company, but there is no guarantee that future incidents will not occur that could have a significant adverse effect[230](index=230&type=chunk) [Item 2. Properties](index=38&type=section&id=Item%202.%20Properties) The company operates 229 retail banking centers across multiple states, with 96 owned and the remainder leased, primarily concentrated in New Jersey, New York, and Florida, and its headquarters relocated to a leased location in Morristown, New Jersey, in Q3 2023 - The company operates **229 retail banking centers** in northern and central New Jersey, Manhattan, Brooklyn, and Queens in New York City, Long Island, Westchester County, New York, Florida, Alabama, California, and Illinois[231](index=231&type=chunk) - The company owns **96 banking center facilities** and several non-branch operating facilities, with the remaining properties leased[231](index=231&type=chunk) | State | Number of Leased Banking Centers | Number of Owned Banking Centers | Total Number of Banking Centers | Percentage of Total (%) | | :--- | :--- | :--- | :--- | :--- | | New Jersey | 68 | 59 | 127 | 55.5 | | New York | 31 | 10 | 41 | 17.9 | | Florida | 26 | 15 | 41 | 17.9 | | Alabama | 4 | 12 | 16 | 7.0 | | California | 3 | — | 3 | 1.3 | | Illinois | 1 | — | 1 | 0.4 | | **Total** | **133** | **96** | **229** | **100.0** | - The company's headquarters relocated to a leased location in Morristown, New Jersey, in the **third quarter of 2023**[233](index=233&type=chunk) [Item 3. Legal Proceedings](index=39&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings and claims in the ordinary course of business, which management believes will not materially impact its financial condition, results of operations, or liquidity - The company is involved in various pending legal proceedings and claims in the ordinary course of business[236](index=236&type=chunk) - Management believes that the outcome of these proceedings and claims will not have a material adverse effect on the company's financial condition, results of operations, or liquidity[236](index=236&type=chunk) [Item 4. Mine and Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20and%20Safety%20Disclosures) This item is not applicable - Not applicable[237](index=237&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq Global Select Market, with **6,537** registered shareholders as of December 31, 2024, paying a **$0.11** quarterly cash dividend in 2024, and a new stock repurchase plan authorizing up to **25 million** common shares until April 26, 2026 - The company's common stock trades on the **Nasdaq Global Select Market** under the symbol **'VLY'**[239](index=239&type=chunk) - As of December 31, 2024, there were **6,537 registered shareholders**[239](index=239&type=chunk) - A **$0.11 cash dividend** was paid quarterly in 2024[240](index=240&type=chunk) - The company announced a new stock repurchase plan on February 21, 2024, authorizing the repurchase of up to **25 million shares of common stock**, effective until April 26, 2026[245](index=245&type=chunk) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | Total Shares Purchased as Part of Publicly Announced Plan | Maximum Number of Shares Remaining to be Purchased Under Plan | | :--- | :--- | :--- | :--- | :--- | | October 1 to October 31, 2024 | 27,552 | 8.93 | — | 25,000,000 | | November 1 to November 30, 2024 | 7,567 | 9.47 | — | 25,000,000 | | December 1 to December 31, 2024 | 6,844 | 10.64 | — | 25,000,000 | | **Total** | **41,963** | **9.31** | **—** | **-** | [Item 6. [Reserved]](index=42&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Item 7. Management's Discussion and Analysis (MD&A) of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20%28MD%26A%29%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Valley National Bancorp's financial condition and operating results for the two years ended December 31, 2024

Financial Performance - Net income for Q4 2024 was $115.7 million, or $0.20 per diluted share, compared to $97.9 million, or $0.18 per diluted share in Q3 2024, and $71.6 million, or $0.13 per diluted share in Q4 2023[2] - Net interest income for Q4 2024 was $424,277,000, an increase of 3.5% from $411,812,000 in Q3 2024 and up 6.4% from $398,581,000 in Q4 2023[29] - Total revenue for Q4 2024 reached $474,179,000, slightly up from $471,169,000 in Q3 2024 and an increase of 5.3% compared to $449,966,000 in Q4 2023[29] - Reported net income for Q4 2024 was $115,711,000, an increase from $97,856,000 in Q3 2024 and $71,554,000 in Q4 2023[37] - Net income available to common shareholders increased to $358.90 million in 2024 from $482.38 million in 2023, a decline of 25.66%[48] Loan and Deposit Activity - Total loans decreased by $555.6 million, or 4.5% annualized, to $48.8 billion at December 31, 2024, primarily due to normal repayment activity in commercial real estate loans[10] - Total deposits decreased by $320.1 million to $50.1 billion at December 31, 2024, mainly due to a $1.8 billion decrease in time deposits[11] - Total loans decreased to $49,730,130,000 in Q4 2024 from $50,126,963,000 in Q3 2024, but increased from $50,039,429,000 in Q4 2023[29] - Deposits increased to $50,726,080,000 in Q4 2024 from $50,409,234,000 in Q3 2024 and $49,460,571,000 in Q4 2023[29] Credit Quality - The allowance for credit losses for loans totaled $573.3 million, representing 1.17% of total loans, with a provision for credit losses of $107.0 million in Q4 2024[5] - Total Non-Performing Assets (NPAs) increased by $68.2 million to $373.3 million at December 31, 2024, compared to $305.1 million at September 30, 2024[14] - Non-accrual loans rose by $63.2 million to $359.5 million at December 31, 2024, representing 0.74% of total loans, up from 0.60% at September 30, 2024[14] - The provision for credit losses for loans totaled $107.0 million in Q4 2024, compared to $75.0 million in Q3 2024 and $20.7 million in Q4 2023[18] - The total provision for credit losses for loans was $309,388 thousand for the year ended December 31, 2024, significantly higher than $45,625 thousand for the year ended December 31, 2023, indicating a substantial increase of 577.5%[33] Expenses and Efficiency - Non-interest income decreased by $9.5 million to $51.2 million in Q4 2024, primarily due to lower income from litigation settlements[7] - Non-interest expense increased by $9.1 million to $278.6 million in Q4 2024, driven by higher professional and technology-related expenses[7] - The efficiency ratio improved to 57.21% in Q4 2024, compared to 56.13% in Q3 2024 and 60.70% in Q4 2023[7] - Total non-interest expense for the year ended December 31, 2024, was $1.11 billion, down from $1.16 billion in 2023, a decrease of 4.91%[48] Capital and Shareholder Returns - Valley's total risk-based capital ratio increased to 13.87% at December 31, 2024, up from 12.56% at September 30, 2024, due to the issuance of approximately 49.2 million shares of common stock[20] - Basic earnings per share for Q4 2024 were $0.20, up from $0.18 in Q3 2024 and $0.13 in Q4 2023[29] - Dividends on preferred stock increased to $7,025,000 in Q4 2024 from $6,117,000 in Q3 2024 and $4,104,000 in Q4 2023[37] - The company maintained a strong capital position with total shareholders' equity increasing to $7.44 billion in 2024 from $6.70 billion in 2023, an increase of 11.06%[47] Market Position and Strategy - Valley National Bank operates with over $62 billion in assets and is committed to providing innovative services across multiple states[22] - The company continues to focus on expanding its market presence and enhancing its product offerings to drive future growth[49]

Financial Performance - The company's net income for the third quarter 2024 was $97.9 million, or $0.18 per diluted common share, a decrease of $43.5 million compared to $141.3 million, or $0.27 per diluted common share, for the same quarter in 2023[183]. - Net income for Q3 2024 was reported at $97,856 thousand, a decrease of 30.7% compared to $141,346 thousand in Q3 2023[201]. - Adjusted net income for Q3 2024 was $96,754 thousand, down from $136,363 thousand in Q3 2023, reflecting a decline of 29%[202]. - Return on average assets for Q3 2024 was 0.63%, down from 0.92% in Q3 2023[201]. - Return on average shareholders' equity for Q3 2024 was 5.70%, compared to 8.56% in Q3 2023[201]. - Efficiency ratio for Q3 2024 was 56.13%, slightly improved from 56.72% in Q3 2023[205]. Asset and Loan Portfolio - As of September 30, 2024, the company reported total assets of approximately $62.1 billion, total net loans of $48.8 billion, total deposits of $50.4 billion, and total shareholders' equity of $7.0 billion[176]. - Total commercial real estate loans amounted to $30.4 billion, representing 61.6% of total loans, down from 63.2% at June 30, 2024, with a strategic goal to reduce the CRE loan concentration ratio to approximately 400% by December 31, 2024[181]. - As of September 30, 2024, total loans decreased by $956.4 million, or 7.6%, to $49.4 billion from June 30, 2024, primarily due to the transfer of $823.1 million of commercial real estate loans to loans held for sale[304]. - Commercial and industrial loans increased by $320.1 million to $9.8 billion at September 30, 2024, driven by a strategic initiative to expand new loan production[305]. - Residential mortgage loans totaled $5.7 billion at September 30, 2024, with new and refinanced originations of $179.3 million for the third quarter 2024[308]. Credit Quality and Allowance for Loan Losses - The company's allowance for loan losses included an $8.0 million qualitative reserve for estimated losses due to Hurricane Helene, with potential increases expected from Hurricane Milton[178]. - Allowance for Credit Losses (ACL) for loans increased to $564.7 million, representing 1.14% of total loans as of September 30, 2024, with projections to rise to approximately 1.20% and 1.25% by December 31, 2024, and 2025, respectively[184]. - The allowance for credit losses for loans increased to $564.7 million as of September 30, 2024, up from $532.5 million at June 30, 2024, and $462.3 million at September 30, 2023[332]. - The total provision for credit losses remained elevated due to higher reserves allocated to commercial real estate loans and an $8.0 million qualitative reserve related to Hurricane Helene[336]. Deposits and Funding - Total deposits rose by $283.8 million to $50.4 billion at September 30, 2024, driven by higher commercial customer deposits[184]. - Average deposits increased by $1.0 billion to $50.4 billion for the third quarter 2024 compared to the second quarter 2024[193]. - Cumulative deposit beta remained stable at 60% as of September 30, 2024, reflecting a modestly higher cost of interest-bearing deposits[192]. - Average interest bearing liabilities rose by $1.8 billion to $42.7 billion for Q3 2024 compared to Q3 2023, primarily due to a $1.4 billion increase in average interest bearing deposits[209]. Interest Income and Expense - Net interest income for Q3 2024 was $411.8 million, an increase of $8.8 million from Q2 2024, but a decrease of $1.8 million from Q3 2023[206]. - Total interest expense for Q3 2024 increased to $450.1 million, up $18.3 million from Q2 2024, primarily due to higher average time deposit balances[207]. - The net interest margin on a tax equivalent basis for Q3 2024 was 2.86%, a 2 basis point increase from Q2 2024 but a 5 basis point decrease from Q3 2023[210]. - The yield on average interest earning assets increased by 10 basis points to 5.98% for Q3 2024, attributed to higher yielding investment purchases and new loan originations[210]. Capital and Shareholder Equity - Total shareholders' equity increased by $234.6 million to $7.0 billion at September 30, 2024, largely due to net proceeds from the issuance of Series C preferred stock and net income for the third quarter[182]. - The company's regulatory capital ratios were 12.56% for total risk-based capital and 9.57% for common equity Tier 1 capital as of September 30, 2024, compared to 12.17% and 9.55% respectively at June 30, 2024[182]. - Valley is required to maintain a common equity Tier 1 capital to risk-weighted assets ratio of 4.5%, and as of September 30, 2024, it exceeded all capital adequacy requirements[340]. - Total risk-based capital for Valley was $6,194.8 million with a ratio of 12.56% as of September 30, 2024, compared to $5,855.6 million and 11.76% as of December 31, 2023[343]. Economic Outlook - The Moody's Baseline forecast predicts GDP expansion of approximately 2.0% in Q4 2024 and unemployment of 4.1% in Q3 2024[331]. - The Federal Reserve lowered the federal funds rate by 50 basis points to a range of 4.75 - 5.00% with potential for an additional cut during Q4 2024[331].

Financial Performance - Net income for Q3 2024 was $97.9 million, or $0.18 per diluted share, compared to $70.4 million, or $0.13 per diluted share in Q2 2024, and $141.3 million, or $0.27 per diluted share in Q3 2023[2] - Adjusted net income for Q3 2024 was $96.8 million, or $0.18 per diluted share, compared to $71.6 million, or $0.13 per diluted share in Q2 2024, and $136.4 million, or $0.26 per diluted share in Q3 2023[2] - Total revenue for Q3 2024 was $471,169,000, compared to $452,898,000 in Q2 2024 and $471,082,000 in Q3 2023, indicating stable performance year-over-year[32] - Net income available to common shareholders for Q3 2024 was $91,739,000, up from $66,316,000 in Q2 2024, but down from $137,219,000 in Q3 2023[32] - Adjusted net income available to common shareholders (non-GAAP) for Q3 2024 was $90,637,000, compared to $67,535,000 in Q3 2023, representing a 34.1% increase[43] - Net income, as reported (GAAP) for the nine months ended September 30, 2024, was $264,560,000, down from $426,957,000 in the same period of 2023, a decrease of 38.0%[43] Loan and Credit Quality - Total loans decreased by $956.4 million, or 7.6% annualized, to $49.4 billion as of September 30, 2024, primarily due to the transfer of $823.1 million in commercial real estate loans to loans held for sale[5] - The allowance for credit losses for loans was $564.7 million, representing 1.14% of total loans as of September 30, 2024, with a provision for credit losses of $75.0 million recorded in Q3 2024[5] - Net loan charge-offs totaled $42.9 million for Q3 2024, compared to $36.8 million in Q2 2024 and $5.5 million in Q3 2023[19] - The provision for credit losses for loans was $75.0 million in Q3 2024, down from $82.1 million in Q2 2024 but significantly higher than $9.1 million in Q3 2023[20] - Total accruing past due loans increased by $102.3 million to $174.7 million, representing 0.35% of total loans as of September 30, 2024, compared to 0.14% at June 30, 2024[17] - Total non-performing assets decreased to $305.1 million as of September 30, 2024, down $7.8 million from June 30, 2024[16] Deposits and Funding - Deposits increased by $283.8 million to $50.4 billion as of September 30, 2024, driven by higher commercial customer money market and non-interest bearing deposits[12] - Total deposits rose to $50,395,966,000 in Q3 2024 from $49,242,829,000 in Q4 2023, indicating a growth of 2.34%[49] Efficiency and Ratios - The efficiency ratio improved to 56.13% in Q3 2024, compared to 59.62% in Q2 2024[9] - Annualized return on average assets (ROA) was 0.63%, and return on equity (ROE) was 5.70% for Q3 2024[9] - The net interest margin for Q3 2024 was 2.85%, slightly up from 2.83% in Q2 2024, but down from 2.90% in Q3 2023[32] - The allowance for credit losses for loans as a percentage of total loans was 1.14% at September 30, 2024, up from 1.06% at June 30, 2024, and 0.92% at September 30, 2023[20] Non-Interest Income and Expenses - Non-interest income rose to $60.7 million in Q3 2024, an increase of $9.5 million from Q2 2024, mainly due to higher wealth management fees and service charges[6] - Total non-interest expense for Q3 2024 was $269,471,000, a slight decrease from $267,133,000 in Q3 2023[50] Capital and Shareholder Value - Valley's total risk-based capital ratio increased to 12.56% at September 30, 2024, compared to 12.18% at June 30, 2024, primarily due to the issuance of 6.0 million shares of preferred stock[23] - Book value per common share increased to $13.00 as of September 30, 2024, from $12.82 in Q2 2024, reflecting growth in shareholders' equity[34] - Tangible common equity to tangible assets ratio was 7.68% as of September 30, 2024, up from 7.52% in Q2 2024, indicating improved capital strength[34]