VALLEY NATIONAL BANCORP
2025 Proxy Statement
2024 Annual Report
Letter to our Shareholders:
To our Shareholders, Associates,
Clients, and Community Partners:
Not all relationships are built on trust—but Valley’s are.
It is of great importance then, to recognize that what we do at Valley Bank
happens only because of the trust our clients, associates, clients and
communities have in us to preserve, protect, and promote their livelihood
through all of life’s stages. You earn and sustain someone’s trust through
repeated demonstrations of attention and thoughtfulness; through showing up
when it matters most and maintaining a level of resilience during times of
change.
This mindset is the cornerstone of our identity as a Relationship Bank—an
institution that bucks the traditional expectations of banking in favor of true
partnership, putting our clients’ needs first even amid a year marked by
economic shifts, political division, and global conflicts. We are acutely aware of
what our clients do, what their goals are, and how we can help them make a
difference. That kind of client relationship doesn’t exist by happenstance. It
comes by providing an unmatched level of client service that’s built on
partnership, attention to detail, and great care for their wellbeing. To put it
plainly, it comes from trust.
This is what has allowed us to service our clients and communities for nearly 100
years and withstand even the harshest of industry changes. It’s also what will
carry us forward on our path to become one of the premier regional banks in the
country.
Strategic initiatives position us for better performance
In early 2024, we laid out specific balance sheet targets, which reflected
increased loan diversity, an improved funding base, and stronger capital ratios. I
am proud to report that as a result of organic discipline and the execution of
certain balance sheet actions, we significantly exceeded our original balance
sheet and capital goals at year-end. We believe that each balance sheet action
was thoughtful, prudent, and shareholder friendly. These efforts enhanced our
financial flexibility and enabled us to enter 2025 from a position of strength.
Despite the narrative of concern around the commercial real estate market, the
large majority of our borrowers continue to perform well during 2024. The
strength of our underwriting was also highlighted by our ability to sell
$920 million of commercial real estate loans in December 2024 at a modest one
percent discount. This transaction helped to diversify our loan portfolio and
provided incremental capacity to reinvest in our relationship-focused clients.
We also raised $150 million through our preferred stock offering and
$450 million through our common stock offering during the year. The issuances
generated nearly 125 basis points of incremental Tier 1 capital invested in the
Bank. These significant capital resources position us well to work in support of
our growth initiatives in 2025 and beyond.
IRA ROBBINS
Chairman and CEO
i
LETTER TO OUR SHAREHOLDERS
During the year, our allowance for credit losses to loans ratio
increased to 1.17 percent at December 31, 2024 from
0.93 percent at December 31, 2023. We are optimistic that
both net charge-offs and our loan loss provision may decline
meaningfully in 2025 as the migration of criticized assets has
slowed significantly.
We continued to successfully gather deposits and improve our
funding base through organic growth and strategic initiatives.
At the end of 2024, we reported total deposits of $50.1 billion,
a 2 percent increase from $49.2 billion at year end 2023. This
growth is net of a $500 million reduction in indirect deposits.
Through our successful deposit gathering efforts and diligent
liquidity management, we reported a loan to deposit ratio of
97.5 percent at December 31, 2024, versus 102 percent a year
ago.
Despite interest rate volatility throughout the year, 2024 was
generally stable from a revenue perspective. Net interest
income and non-interest income were $1.6 billion and
$225 million, respectively. While net interest margin
compressed modestly in 2024 as a result of the prolonged
inverted yield curve, we did see a steady quarter over quarter
increase in net interest income and margin starting in the
second quarter 2024. We expect this positive momentum
continued in 2025.
Through efficient expense management and a reduction in
non-core charges, we were able to reduce our non-interest
expense by 5 percent year over year. As a result, pre-tax
pre-provision revenue for 2024 increased nearly 3 percent as
compared to 2023.
Stepping back, we are proud of our ability to navigate
continued volatility in the economic, interest rate, and
operating landscape. Tangible book value per share increased
nearly 4 percent year over year and continued an extended
period of consistent growth. Since 2017, and inclusive of the
dividends we have paid to shareholders, our tangible book
value has increased 100 percent. During the same period, we
more than doubled our commercial customer base, a clear
indication that our target clients recognize the value of the
products and services that we provide. We have also
significantly diversified our loan portfolios and funding base by
both geography and business line. These positive
developments speak to the franchise value that we have
created despite the continuous disruption within the banking
environment.
In 2025, we expect to continue the strategic journey that
began seven years ago. We plan to further leverage the
investments that we have made in talent and technology to
drive diverse and profitable growth. Our efforts in 2024
meaningfully strengthened the balance sheet, and we believe
we are well-positioned to support our clients and communities
as they work to achieve their financial goals. I am incredibly
proud of the resilience that our organization has exhibited and
am eager to further prove our success as the operating
environment continues to evolve.
Our people are our best asset
Valley associates are built different, and the evidence is in our
client portfolio.
Having client relationships that last decades might not be the
norm elsewhere – but it is at Valley. And that’s because our
associates bring a level of care, attention, and personalization
to their work that is unmatched. They take the time to
understand what their clients strive for, what they’re
challenged by, and where Valley can make a difference. They
go above and beyond the traditional route of client service
and because of that they truly embody what it means to be a
relationship banker.
We strive to apply that same level of care to our associates by
providing a culture rooted in collaboration, empowerment,
inclusion, accountability, and performance. These pillars drive
what we do at Valley, fostering a work environment where
every associate is given the opportunity to share their
perspectives and grow as people and professionals.
Just as our associates power our clients’ success, we power
theirs – offering an array of developmental programs and
resources to help grow their careers, support their holistic
wellbeing, and encourage personal pursuit of charitable efforts
that give back to our communities.
This culture of inclusivity and belonging directly correlates to
our strength as an organization. When we widen our lens, the
opportunities are boundless: new ideas, new insights, new
innovations all come to the table – and improve our ability to
support one another and serve our clients.
The strength of our communities is the measure
of our success
We bring that same level of care and commitment to our
communities. Why? Because we aren’t just their bank—we’re
their neighbors. Our associates live and work in the areas we
serve, and we’ve taken great care to foster genuine
connections with the people and organizations that make up
the Valley footprint.
Moreover, we consider it our responsibility to invest in the
communities we serve by supporting partners who promote
sustainable, equitable, and meaningful change.
Just as our identity as relationship bankers guides our client
relationships, it underscores our work with our community
partners, as well. Under the direction of our Corporate Social
Responsibility-Community Reinvestment Act (CSR-CRA) team,
we have had the privilege of partnering with a series of
community and nonprofit organizations the missions of which
align with the core pillars of our Corporate Social
ii
LETTER TO OUR SHAREHOLDERS
Responsibility platform: economic inclusion, workforce and
community development, environmental stewardship, and a
commitment to supporting local, small businesses.
Increasing access to financial literacy among marginalized and
underserved populations was a primary focus over the past
year. Together with community partners across the Valley
footprint, our associates volunteered their time and expertise
to provide financial education – including an introduction to
basic banking products and money management practices –
to individuals and communities in need. This work is
particularly significant because a strong foundation of
financial literacy can yield a healthy and full livelihood.
These partnerships demonstrate just how deep our
relationship with these organizations goes. Our community
partners welcome us into the fold because they know we
understand their mission – and more importantly – we believe
in it. We’re grateful to support them in this critical work and to
play our part in building communities where everyone has the
opportunity to thrive.
Embracing a growth mindset
One thing we know about change is that it is inevitable.
We also know that Valley is uniquely poised to embrace
change. A few years ago, we were a transactionally focused,
regional organization with $20 billion in assets. Today, we
stand taller, backed by a growth mindset, a culture rooted in
relationships – with talented people, prosperous clients, and
thriving communities – all enabling us to grow to more than
$60 billion in assets.
We’ve expanded our footprint, giving us a coast-to-coast
presence; grown our business lines; our tangible book value;
inclusive of dividends; has now doubled in the last seven years;
and our greater growth continues to outpace peers. Where we
are now is a drastically different place than where we were
when I took over as CEO – and this evolution is all for the
better.
We didn’t get here by being stagnant, or by being a bystander,
letting the pressures of inflation, recessionary fears, and
political division wash over us. Rather, we got here because we
were smart, strategic, and swift. We honed in on our identity
as relationship bankers and used that to make us stronger.
As we plan for the future, we remain focused on customer
acquisition in both the commercial and consumer areas and
are committed to optimizing our customer network and
balance sheet to become a better bank for our associates,
communities, clients, and stakeholders.
This growth mindset will carry us forward, as we continue to
implement new technologies, diversify our client base,
leverage our talents, and foster a culture of excellence that
will take Valley to newer, greater heights.
On behalf of our Board of Directors, our executive leadership
team, and all our associates, thank you for your continued
trust and confidence in us.
Ira Robbins
Chairman of the Board and Chief Executive Officer
Valley National Bank
Cautionary Statement Concerning Forward-Looking Statements. This letter contains statements that may be forward-looking
statements for purposes of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and
include expressions about management’s confidence and strategies and management’s expectations about our business. These
statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “will,” “believe,” “view,”
“opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” or similar
statements or variations of such terms. The Company cautions that these forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements, including
but not limited to those risks and uncertainties identified under Item 1A. Risk Factors in the Company’s Annual Report on Form
10-K for the year ended December 31, 2024. We undertake no duty to update any forward-looking statement to conform the
statement to actual results or changes in our expectations, except as required by law. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or
achievements.
iii
2025 Proxy Statement
A Message from our Chairman of the Board
of Directors and Chief Executive Officer
Dear Fellow Shareholders,
It is my pleasure to invite you to attend Valley National Bancorp’s 2025 Annual
Meeting of Shareholders to be held on Tuesday, May 20, 2025 at 9:00 a.m.
Eastern Time. This year’s meeting will again be held in a virtual only format via
webcast at www.virtualshareholdermeeting.com/VLY2025.
During the meeting we will reflect on a year marked by significant milestones and
challenges. Despite a dynamic and often unpredictable environment, our team
has consistently demonstrated resilience and adaptability, achieving several
notable successes that we are proud to share with you.
At the Annual Meeting, shareholders will vote on a number of important matters
and will have an opportunity to ask questions. Your vote matters. That’s why I
strongly suggest that you read our annual proxy statement to familiarize yourself
with the matters we’ll be voting on at this meeting. I also encourage you to read
my annual Letter to Shareholders, which appears in our 2024 Annual Report to
Shareholders and provides further insight into how we were able to position
Valley for sustainable, long-term growth and profitability while maximizing the
earnings potential for your investment.
As we look ahead, we remain steadfast in our mission to deliver exceptional value
to our stakeholders. The coming year promises to be one of growth and
transformation, and we are excited about the opportunities that lie ahead. We
will continue to build on our strengths, address challenges head-on, and pursue
new avenues for innovation and relevancy in an ever-evolving industry.
As always, I want to thank you, our shareholders, for your continued investment
and confidence in Valley.
Ira Robbins
Chairman of the Board of Directors and Chief Executive Officer
Valley National Bancorp
Cautionary Statement Concerning Forward-Looking Statements. This Proxy Statement contains statements that may be
forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Such statements are not
historical facts and include expressions about management’s confidence and strategies and management’s expectations about
our business. These statements may be identified by such forward-looking terminology as “intend,” “should,” “expect,” “will,”
“believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,”
“project” or similar statements or variations of such terms. The Company cautions that these forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking
statements, including but not limited to those risks and uncertainties identified under Item 1A. Risk Factors in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2024. We undertake no duty to update any forward-looking
statement to conform the statement to actual results or changes in our expectations, except as required by law. Although we
believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
i
70 Speedwell Avenue
Morristown, New Jersey 07960
Notice of Annual Meeting of Shareholders
TO BE HELD TUESDAY, MAY 20, 2025
April 4, 2025
To Our Shareholders:
We hereby invite you to attend the Annual Meeting of Shareholders of Valley National Bancorp (“Valley” or the “Company”) to
be held at 9:00 a.m., Eastern Time, on Tuesday, May 20, 2025, for the following purposes:
1.
To elect 11 directors;
2.
To hold an advisory, non-binding vote on our named executive officers’ compensation; and
3.
To ratify the selection of KPMG LLP as Valley’s independent registered public accounting firm for the fiscal year ending
December 31, 2025.
This year’s Annual Meeting of Shareholders (the “Annual Meeting”) will be held in a virtual format through a live audio webcast. You
will not be able to attend the Annual Meeting in person. We will provide the live webcast of the Annual Meeting at
www.virtualshareholdermeeting.com/VLY2025. For further information on how to participate in the Annual Meeting, see
“Information About the Annual Meeting” on page 79 of this Proxy Statement.
You will be permitted to submit live questions at the Annual Meeting just as if you were attending an in-person meeting. Questions may
be submitted beginning 30 minutes before the start of the Annual Meeting through www.virtualshareholdermeeting.com/VLY2025.
You will need the 16-digit control number printed on your notice, proxy card, or voting instruction form in order to attend, vote, and
ask questions during the meeting. If you have any questions about your control number, please contact the bank, broker, or other
institution where you hold your account.
Valley has utilized the U.S. Securities and Exchange Commission rule allowing companies to furnish proxy materials to their
shareholders over the internet. This process allows us to expedite our shareholders’ receipt of proxy materials, lower the costs of
distribution, and reduce the environmental impact of the Annual Meeting. In accordance with this rule, on or about April 4, 2025,
we mailed to those current shareholders who were shareholders at the close of business on March 24, 2025, a notice of the Annual
Meeting containing a Notice of Internet Availability of Proxy Materials (the “E-Proxy Notice”). The E-Proxy Notice contains
instructions on how to access on the internet the Proxy Statement for the Annual Meeting and the 2024 Annual Report to
Shareholders and how to execute your proxy card or vote online. The E-Proxy Notice also contains instructions on how to request a
paper copy of the proxy materials.
Only shareholders of record at the close of business on Monday, March 24, 2025 are entitled to notice of, and to vote at, the
Annual Meeting. Whether or not you plan to attend the Annual Meeting, please vote in accordance with the instructions provided
in the E-Proxy Notice. If you receive paper copies of the proxy materials, you may execute and return the enclosed proxy card by
mail in the envelope provided or submit your proxy by telephone or via the internet.
Your vote is very important. Regardless of whether you plan to virtually attend the Annual Meeting, we hope you will vote as
soon as possible. You may vote your shares by mail, by telephone, or via the internet in advance of the Annual Meeting, or by
attending and voting at the Annual Meeting. For further information on how to vote, see “How to Vote” on page 80 of this
Proxy Statement. If you vote via the internet or by telephone, or plan to vote virtually at the Annual Meeting, you do not need
to mail in a proxy card.
We appreciate your participation and interest in Valley.
By Order of the Board of Directors,
Ira Robbins
Chairman of the Board and Chief Executive Officer
Important Notice Regarding the Availability of Proxy Materials for the
2025 Annual Meeting of Shareholders to be Held on May 20, 2025:
This Proxy Statement for the 2025 Annual Meeting of Shareholders, our 2024 Annual Report to Shareholders, and the proxy
card or voting instruction form are available at: proxyvote.com.
[THIS PAGE INTENTIONALLY LEFT BLANK]
Table of Contents
Proxy Statement Summary
1
Meeting Information
1
Proxy Statement Highlights
2
ITEM 1: Election of Directors
7
Process for Selecting and Nominating Directors
7
Director Biographies
12
Corporate Governance
20
Engagement
20
Shareholder Rights
21
Board of Directors Matters
21
Committees of the Board of Directors
27
Governance Documents
30
Certain Transactions with Management
32
Sustainability Practices
34
Compensation of Directors
38
Director Fees Earned or Paid in Cash
38
Director Equity Awards
38
Annual Limit on Director Compensation
38
Director Stock Ownership Guidelines
38
Directors Retirement Plan
39
2024 Director Compensation
39
Stock Ownership of Management and Principal
Shareholders
41
Directors and Executive Officers
41
Principal Shareholders
42
Delinquent Section 16(a) Reports
42
ITEM 2: Advisory Vote on our Named Executive Officer
Compensation
43
Compensation Discussion and Analysis
45
Report of the Compensation Committee
61
Executive Compensation Tables
62
CEO Pay Ratio
76
ITEM 3: Ratification of the Selection of Independent
Registered Public Accounting Firm
77
Report of the Audit Committee
78
Other Information
79
Information About the Annual Meeting
79
Other Matters
82
Appendix A – Non-GAAP Financial Information
A-1
[THIS PAGE INTENTIONALLY LEFT BLANK]
Proxy Statement Summary
This summary highlights selected information that is discussed in more detail elsewhere in this Proxy Statement. This summary does
not contain all of the information you should consider, and you should read the full Proxy Statement before voting. Unless the
context otherwise requires, references in this Proxy Statement to “Valley,” the “Company,” “we,” “our,” or “us” refer to Valley National
Bancorp; references to the “Bank” refer to Valley National Bank, the principal subsidiary of the Company; references to the “Board”
refer to our Board of Directors; references to the “common stock” refer to our common stock; and references to the “Annual
Meeting” refer to our 2025 Annual Meeting of Shareholders and any and all adjournments or postponements thereof.
Meeting Information
You are entitled to attend the Annual Meeting if you were a shareholder of record on the record date or hold a valid proxy.
DATE AND TIME:
Tuesday, May 20, 2025
9:00 a.m. Eastern Time
LOCATION:
Virtual Meeting:
www.virtualshareholdermeeting.com/VLY2025
RECORD DATE:
March 24, 2025
Meeting Agenda and Board Recommendations
Voting Matter
Board’s Recommendation
Pages
Item 1: Election of Directors
FOR each director nominee
pages 7—42
Item 2: Advisory Vote on Named Executive Officer Compensation
FOR
pages 43—76
Item 3: Ratification of Selection of Independent Accounting Firm
FOR
pages 77—78
How to Vote
Your vote is very important. You may vote your shares in advance of the Annual Meeting by mail, by telephone, or via the internet,
or by attending and voting at the Annual Meeting. Please refer to the section “How to Vote” on page 80 of this Proxy Statement
for detailed voting instructions. If you vote via the internet or by telephone or plan to vote virtually at the Annual Meeting, you do
not need to mail in a proxy card.
If you received a paper copy
of the proxy materials, send
your completed and signed
proxy card or voting
instruction form using the
enclosed postage-paid
envelope.
If you received a paper copy
of the proxy materials, dial
toll-free (1-800-690-6903) or
the telephone number on
your voting instruction form.
You will need the 16-digit
control number printed on
your notice, proxy card or
voting instruction form.
To vote via the internet
before the Annual Meeting,
visit www.proxyvote.com and
follow the on-screen
instructions. To vote at the
Annual Meeting, visit
www.virtualshareholder
meeting.com/VLY2025. You
will need the 16-digit control
number printed on your
notice, proxy card, or voting
instruction form.
To vote via the internet
before the Annual Meeting,
you can also use your phone
to scan the QR code above.
You will need the 16-digit
control number printed on
your notice, proxy card, or
voting instruction form.
A Notice of the Internet Availability of Proxy Materials was sent to our shareholders on or about April 4, 2025
1
2025 Proxy Statement
PROXY STATEMENT SUMMARY
Proxy Statement Highlights
ITEM 1: Election of Directors
Director Nominee Snapshot
The table below provides summary information about the 11 nominees for election as directors at the Annual Meeting. Each director
nominee is standing for election to hold office until our next annual shareholder meeting and until his or her successor is duly
elected and qualified. Andrew B. Abramson, Peter J. Baum, and Marc J. Lenner will not be standing for reelection at the Annual
Meeting. For additional information regarding our director nominees, see “Director Biographies” beginning on page 12 of this Proxy
Statement.
Committee Membership
Name and Principal Occupation
Independence
Director
Since
AC
CC
NC
RC
Ira Robbins
Chairman of the Board of Directors and Chief Executive Officer of Valley
National Bancorp and Valley National Bank
2018
Eric P. Edelstein
Former Managing Partner at Arthur Andersen LLP
INDEPENDENT
2003
Eyal Efrat
First Executive Vice President and Chief Information Officer, Head of
Technology Division of Bank Leumi Le-Israel B.M.
INDEPENDENT
2025
Peter V. Maio
Former Chief Information Officer of Ally Financial, Inc.
INDEPENDENT
2020
Kathleen C. Perrott
Former Chief Audit Executive of Accenture PLC
INDEPENDENT
2023
Nitzan Sandor
Senior Executive Vice President and Chief Legal Counsel of Bank Leumi
Le-Israel B.M.
INDEPENDENT
2024
Suresh L. Sani
President of First Pioneer Properties, Inc.
INDEPENDENT
2007
Lisa J. Schultz
Former Co-head of Capital Markets of Keefe, Bruyette & Woods
INDEPENDENT
2019
Jennifer W. Steans
Chief Executive Officer of Financial Investments Corporation
INDEPENDENT
2018
Jeffrey S. Wilks
President and Chief Executive Officer of Spiegel Associates
INDEPENDENT
2012
Dr. Sidney S. Williams, Jr.
Chief Executive Officer of Crossing Capital Group Inc.
INDEPENDENT
2020
Chair of Committee
Committee member
AC
Audit Committee
CC
Compensation & Human Capital Management Committee (the “Compensation Committee”)
NC
Nominating, Governance and Corporate Sustainability Committee (the “Nominating Committee”)
RC
Risk Committee
2
2025 Proxy Statement
PROXY STATEMENT SUMMARY
Corporate Governance Highlights
The following illustrate the characteristics of our director nominees as of the Annual Meeting.
91%
10 OF OUR 11 DIRECTOR NOMINEES
are independent; the Chief Executive Officer
(“CEO”) is the only member of management
who is nominated for election
55%
DIVERSE
6 OF OUR 11 DIRECTOR
NOMINEES
self-identify as female or
ethnically diverse
5 YEARS OR LESS
YEARS
59
AVERAGE AGE
of our director nominees,
reflecting our commitment to
board refreshment and focus on
diversity of experience levels
4 of 11 (or 36%)
director nominees have a tenure of 5 years or less, demonstrating our
commitment to board refreshment
Governance Best Practices
•
Appointment of Independent Lead Director if the role of
the Chairman is combined with that of the CEO
•
Independent Lead Director is an active and
empowered role with additional duties and
responsibilities approved by the Board in early 2025
•
Nominating Committee reviews the performance and
position of the Independent Lead Director and makes
recommendation to the independent directors who
annually elect the Independent Lead Director
•
Annual review by the Board of its leadership structure as
part of its self-assessment process
•
Annual Board evaluation and director retirement policy to
help ensure Board refreshment
•
Robust annual Board self-evaluation process
•
Self-evaluation process typically conducted by the
Chair of the Nominating Committee and our
Independent Lead Director, involving both
anonymous questionnaires and one-on-one
conversations with directors
•
In 2024, reflecting its continued focus on board
effectiveness and refreshment, the Nominating
Committee:
•
Engaged an outside advisor to conduct the self-
evaluation process
•
Adopted a more robust self-evaluation
questionnaire to use going forward
•
Active and empowered Committee chairs, all of whom are
independent; 100% independent directors on the Audit
Committee, Compensation Committee, Nominating
Committee, and Risk Committee
•
The Board and its Committees work with management to
diligently monitor and manage risk
•
Executive sessions of non-management directors and of
independent directors are held, in each case, at least
twice per year
•
Regular outreach and engagement throughout the year
by our CEO, Chief Financial Officer (“CFO”), and Director
of Corporate Finance, as well as invitations to
shareholders for engagement with the Chair of our
Nominating Committee, the Chair of our Compensation
Committee, the Chair of our Risk Committee, our CFO,
and General Counsel regarding Company strategy,
business resilience, performance, corporate governance,
enterprise-level risk management, and executive
compensation matters
•
Majority voting for directors with resignation policy in
uncontested elections
•
Shareholders holding at least 25% of our outstanding
common stock who have continuously held the shares for
at least one year may request a special meeting
•
No supermajority vote provisions for amendments to
By-Laws and Certificate of Incorporation or removing a
director from office
3
2025 Proxy Statement
PROXY STATEMENT SUMMARY
•
No shareholder rights plan (commonly referred to as a
“poison pill”)
•
Stock ownership guidelines for directors and executive
officers; required to hold at least 50% of their required
ownership until six months following termination of
service with the Company
•
Clawback policy permitting cancellation of unvested
awards and recoupment of vested equity awards and
previously paid cash awards in the event of an executive
officer’s intentional fraud or intentional misconduct
•
Clawback policy in the event of a financial restatement in
compliance with Nasdaq requirements
•
Policies to prohibit hedging and pledging of Company
securities by directors and executive officers
•
Proxy access for shareholders holding 3% or more of our
outstanding common stock for at least three years
For a description of our corporate governance practices, see “Corporate Governance” beginning on page 20 of this Proxy Statement.
ITEM 2: Advisory Vote on our Named Executive Officer Compensation
(“Say-on-Pay”)
You are being asked to approve on an advisory, non-binding basis the compensation of our named executive officers (“NEOs”) as
disclosed in this Proxy Statement. For additional information regarding our executive compensation program and our NEO
compensation, see “Compensation Discussion and Analysis” beginning on page 45 of this Proxy Statement.
The Board recommends that you vote “FOR” the proposal to approve, on an advisory, non-binding basis, the compensation of our
NEOs as disclosed in this Proxy Statement.
2024 Financial Performance
•
Net income for the year ended December 31, 2024 was
$380.3 million, or $0.69 per diluted common share, as
compared with $498.5 million, or $0.95 per diluted
common share, for 2023.
•
Total deposits increased $833.0 million, or 1.7%, to
$50.1 billion at December 31, 2024 as compared with
December 31, 2023.
•
Total loans decreased $1.4 billion, or 2.8%, to $48.8 billion
at December 31, 2024 as compared with December 31,
2023.
•
Net interest income on a tax equivalent basis of
$1.6 billion for 2024 declined 2.2% from 2023.
•
Our net interest margin on a tax equivalent basis declined
11 basis points to 2.85% for 2024 as compared with 2.96%
for 2023.
•
Net loan charge-offs totaled $201.6 million for 2024 as
compared to $62.0 million for 2023. Our total net loan
charge-offs to average loans was 0.40% and 0.13% for the
years ended December 31, 2024 and 2023, respectively.
Non-accrual loans represented 0.74% of total loans at
December 31, 2024, compared with 0.58% of total loans
at December 31, 2023.
The graphs below summarize certain of the Company’s key financial performance metrics for the 2022-2024 three-year
performance period: ($ in millions)
$569
$499
2022
2023
2024
Net Income
Return on Average Assets
$380
1.09%
0.82%
0.61%
$1,660
$1,671
3.45%
2.96%
2.85%
2022
2023
2024
Net Interest Income (FTE)*
Net Interest Margin (FTE)*
$1,634
*
Net interest income and net interest margin are presented on a fully tax equivalent basis using a 21 percent federal tax rate. Valley believes that this presentation
provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and
SEC rules. On an unadjusted basis, net interest income was $1,656, $1,665, and $1,629, and net interest margin was 3.44%, 2.95%, and 2.84%, respectively, for the
years ended December 31, 2022, 2023, and 2024.
4
2025 Proxy Statement
PROXY STATEMENT SUMMARY
Total Loans
$46,917
$50,210
$48,800
2022
2023
2024
Total Deposits
$47,637
$49,243
$50,076
2022
2023
2024
Our Compensation Program and 2024 Compensation Determinations
Compensation Philosophy
We believe that the Company’s executive compensation should be structured to balance the expectations of our shareholders, our
other stakeholders, and our executives. We have adopted a compensation philosophy that seeks to achieve this balance by taking
into consideration the following factors:
•
Pay is substantially aligned with performance: We
assess our performance and strive to hold our NEOs and,
in particular, our CEO, accountable.
•
We utilize a balanced compensation structure: We
employ a mixture of short-term and long-term financial
rewards to our executives.
•
We benchmark our compensation package against our
peer group: We inform our compensation decisions by
measuring our practices against bank holding companies
that are similar in size and complexity to the Company.
Compensation Elements
Our NEOs’ total direct compensation consists of three main elements:
•
Base salary. Base salary is a customary, fixed element of
compensation intended to attract and retain executives.
Base salary is the only component of the NEOs’ total
direct compensation that is not at-risk.
•
Annual non-equity incentive awards. Awards under our
non-equity incentive compensation program are set at
target levels that reflect our NEOs’ roles and
responsibilities, ranging from 80% to 140% of base salary.
Potential payout opportunities under the non-equity
incentive compensation program are designed to reward
achievement of financial results, as well as the
achievement of shared and individual strategic and
operational goals.
•
Long-term equity incentive awards. 25% of the value of
each NEO’s equity incentive award is granted in the form
of time-based restricted stock units (“RSUs”) that vest pro
rata on an annual basis over a three-year period. The
remaining 75% is granted in the form of performance-
based RSUs that vest based on the Company’s adjusted
Growth in Tangible Book Value (“GITBV”) and relative Total
Shareholder Return (“TSR”) performance over a three-year
performance period. The number of performance-based
RSUs earned at the end of the three-year performance
period is determined based on our actual adjusted GITBV
and relative TSR results compared against target-level
GITBV and TSR. The number of shares that can be earned
for both GITBV and TSR performance-based RSU awards
may range from 0% to 200% of the target, depending on
performance.
2024 Compensation Overview
•
Based on the critical importance of the Company’s
strategic and operational objectives for long-term value
creation, 60% of our non-equity incentive compensation
program is based on the successful completion of such
objectives, with the remaining 40% tied to financial
objectives. For 2024, 15% of our strategic and operational
objectives were tied to risk management and control.
•
In 2024, the annual base salaries of our NEOs were
increased between 3% and 12%, with the larger increases
attributable to promotions.
5
2025 Proxy Statement
PROXY STATEMENT SUMMARY
•
In the context of the continuing challenging economic conditions in the banking industry, we did not meet the financial
objective under our non-equity incentive program, but we achieved many of our strategic objectives. This mixed performance
resulted in our NEOs receiving non-equity incentive awards equal to 73.85% of target on average.
•
A significant portion of NEOs’ compensation is tied to our adjusted GITBV and relative TSR performance—two metrics under
our equity incentive plan that directly align with our shareholders’ interests. Our tangible book value performance was strong
during the 2022-2024 performance period for our GITBV-based RSU awards, exhibiting year-over-year growth during the
period. This resulted in a 103.45% of target payout for these awards. Our cumulative TSR was -2.89% for the three-year
performance period ended December 31, 2024, and our percentile rank against the constituent banks comprising the KBW
Regional Bank Index (the “KRX Index”) was 2.03%. Accordingly, for the 2022 TSR performance-based RSU awards, our
performance achievement resulted in zero payout.
2024 Say-on-Pay Results
The Compensation Committee and the Board value the input of our shareholders regarding our NEO compensation. At our 2024
Annual Meeting of Shareholders (the “2024 Annual Meeting”), 97.7% of the shares voted on our “say-on-pay” proposal voted in favor
of the Company’s executive compensation program.
ITEM 3: Ratification of the Selection of our Independent Registered Public
Accounting Firm
You are being asked to ratify the Audit Committee’s selection of KPMG LLP as our independent registered public accounting firm
for 2025. For additional information regarding the Audit Committee’s selection of, and the fees paid to, KPMG LLP, see “Report of
the Audit Committee” on page 78 and “Item 3: Ratification of the Selection of Independent Registered Public Accounting Firm”
beginning on page 77 of this Proxy Statement.
6
2025 Proxy Statement
ITEM 1
Election of Directors
The Board is recommending 11 nominees for election as directors at the Annual Meeting. All nominees currently serve as directors
on the Board. With the exception of Ms. Sandor, who was appointed to the Board effective November 14, 2024, and Mr. Efrat, who
was appointed to the Board effective March 12, 2025, all of our director nominees were elected by you at our 2024 Annual
Meeting. If any nominee is unable to stand for election for any reason, the shares represented at the Annual Meeting may be voted
for another candidate proposed by the Board, or the Board may choose to reduce its size. The Board has no reason to believe any
director nominee is not available or will not serve if elected.
Each director is nominated to serve until our 2026 Annual Meeting of Shareholders (the “2026 Annual Meeting”) and until a
successor is duly elected and qualified.
Process for Selecting and Nominating Directors
Director Selection and Nomination Process
Under its charter, the Nominating Committee is charged with the review and selection of candidates for nomination to the Board.
Following the review and selection process, the Nominating Committee then recommends the candidates to the Board, which
approves nominees to be voted upon by our shareholders.
The Nominating Committee reviews the Board’s composition as part of the Board self-evaluation process which is undertaken
annually to evaluate the performance and needs of the Board. The ultimate goal of this review is to determine whether directors’
skills, experience, background, and capabilities align with our long-term corporate strategy and shareholder values and to assist in
the identification and vetting of nominees who would make valuable contributions to the Board.
When assessing potential director candidates and the current and future composition of the Board, the Nominating Committee
seeks to identify candidates with diverse backgrounds possessing the desired skills, experience, background, and capabilities for a
well-rounded Board. The Nominating Committee considers how each candidate’s attributes and/or prior board and committee
service will contribute to the Board’s diversity, broadly defined, and how the candidate will complement the Company’s business
strategy. Once an initial assessment is completed, the Nominating Committee identifies those candidates who they deem to be
best suited for the role. Those candidates then interview with our CEO and Chairman of the Board, the Chair of the Nominating
Committee, our Independent Lead Director, as well as other members of the Board, as appropriate. Thereafter, the Nominating
Committee, taking into account the feedback of those involved in the assessment process, finalizes its recommendation of
nominees to the Board for its approval.
1. Evaluation of Board
Composition
2. Identification of
Potential Candidates
3. Assessment of Potential
Candidates
4. Recommendation of
Potential Directors for
Approval
Nominating Committee and
the Board evaluate Board
composition annually to
assess alignment of skills,
experience, background, and
capabilities of the Board as a
whole with the Company’s
needs as its business and
strategy evolve
Identification of potential
candidates using various
sources, including third-party
search firm as appropriate
Evaluate and assess
candidates looking at
qualifications, independence,
background, and experience,
and other relevant
information
Our CEO and Chairman of the
Board, the Chair of the
Nominating Committee, the
Independent Lead Director
and other members of the
Board interview qualified
candidates, as appropriate
Nominating Committee
recommends potential
directors to the Board for
approval
Shareholders vote on
nominees at our annual
meeting of shareholders
7
2025 Proxy Statement
ELECTION OF DIRECTORS
THE NOMINATING COMMITTEE FOCUSES ON THE FOLLOWING KEY FACTORS WHEN RECOMMENDING CANDIDATES:
EXPERIENCE
INTEGRITY
JUDGMENT
DIVERSITY
A
COLLABORATIVE
APPROACH IN
WORKING WITH
OTHERS
THE TIME
COMMITMENT
AVAILABLE TO
THE COMPANY
FROM THE
NOMINEE
Board Refreshment and Succession Planning
In the last several years, the Nominating Committee has paid particular attention to Board refreshment. The Nominating
Committee believes that its actions have demonstrated a continuing commitment to independence and oversight.
The Board believes that diversity of skills, knowledge, expertise, background, experience, and perspectives will enhance the Board’s
ability to best serve the interests of Valley and its shareholders. To this end, while the Board does not have a specific diversity
policy and does not focus on any one of the above factors more than the others, the Board is committed to enhancing the overall
diversity of the Board. The Board believes that a balance of director diversity and tenure is a strategic asset to our investors. The
range of our directors’ tenure encompasses directors who have institutional knowledge of the Company and the competitive
environment, complemented by newer directors with varied backgrounds and skills. The robustness of our refreshment strategy
combines experience and continuity with new perspectives. It is of critical importance to the Company that the Board engage in a
robust annual self-evaluation process and recruit directors who help achieve the goal of a well-rounded Board with diverse
perspectives that functions respectfully and effectively as a unit. As a general matter, the Board is guided by the following
principles in its refreshment efforts:
•
The Board’s self-evaluation process facilitates director succession planning as it helps identify opportunities to enhance Board
composition and individual performance.
•
In connection with the self-evaluation and director nomination processes, the Board will also consider upcoming retirements
under its director retirement policy, the average tenure and overall mix of individual director tenures on the Board, the overall
mix of diverse skills, knowledge, expertise, background, experience, capabilities, and perspectives of directors, the changing
needs of the Company as the banking industry and its business and strategy evolve, feedback from our shareholders, and each
individual director’s performance and contributions to the work of the Board and its Committees, along with the factors
outlined below under “Director Qualifications and Experience” and any other factors the Board deems appropriate at the time.
•
Our Board maintains a retirement age of 76 for directors with the understanding that directors may not necessarily serve until
their retirement age and with some discretion on the part of the Board to waive the retirement policy. Our retirement age
policy is intended to provide for an orderly transition of leadership on the Board and its Committees to facilitate our Board’s
recruitment of new directors with appropriate skills, knowledge, expertise, background, experience, capabilities, and
perspectives.
•
The Nominating Committee reviews the Board and Committee self-evaluation process annually to determine whether it is
designed effectively and assure that appropriate feedback is being sought and reviewed. The Nominating Committee will
periodically consider whether to engage an outside advisor to assist the Board in conducting its self-evaluation process.
8
2025 Proxy Statement
ELECTION OF DIRECTORS
Board Evaluation Process
The Board believes that an effective director evaluation process enables it to gain insights into the effectiveness of the Board, its
Committees, and its individual members, with the goal of continually enhancing Board performance. In this regard, the Board
recognizes that a critical component of an effective self-evaluation is the ability to obtain fulsome and candid feedback from the
directors and take appropriate action in response. The following key components of our Board self-evaluation program are
designed to achieve these objectives.
Board and Committee Self-Evaluation Forms:
Board and Committee self-evaluation forms are reviewed annually and approved by the Nominating
Committee. Directors are then asked to complete the forms for their feedback and observations on an
anonymous basis to encourage candid feedback.
One-on-One Director Discussions:
Individual meetings held by our Chairman of the Board, the Chair of the Nominating Committee, and the
Independent Lead Director (or a third-party facilitator, if applicable) with each director to obtain feedback
about the director’s individual performance and contribution and the performance of the Board and its
Committees.
Board and Committee Executive Sessions:
Each Committee Chair leads a discussion of committee performance and effectiveness in executive session. The
Chair of the Nominating Committee leads a discussion of the results of the Board evaluation in executive
session. The self-evaluation process is expected to result in constructive discussion to identify opportunities for
improvement.
Communication and Implementation of Feedback:
Following the executive sessions, the Nominating Committee considers the contributions and effectiveness of
individual directors (with the support of a third-party facilitator, if applicable) and requests appropriate
follow-up actions to be taken by the Independent Lead Director, the Chairman of the Board, or the Chair of the
Nominating Committee, as applicable.
In 2024, in keeping with the Board’s ongoing commitment to its refreshment efforts, the Nominating Committee:
•
Approved (i) a more robust self-evaluation questionnaire, adding a number of new questions and topics designed to elicit
more detailed and practical feedback regarding the Board’s effectiveness in discharging its responsibilities, to assess individual
performance and to identify opportunities for overall improvement; and (ii) talking points for use during the one-on-one
discussions held with each director, designed to facilitate more productive discussions and elicit candid feedback regarding
Board and individual performance; and
•
Engaged an outside advisor to facilitate the annual self-evaluation process.
As part of this engagement, our advisor conducted an evaluation of the Board and interviewed our CEO and Chairman of the Board
and each other Board member to understand Company and Board dynamics and to seek input on various topics, including skills
that may be relevant now and in the coming years. This process helped to shape the Company’s Board refreshment efforts in 2024
and on an ongoing basis.
9
2025 Proxy Statement
ELECTION OF DIRECTORS
Director Qualifications and Experience
As addressed above, as part of the annual self-evaluation and director nomination process, the Board and the Nominating
Committee consider a number of factors relevant to Board composition, diversity, and effectiveness.
As part of this process, the Nominating Committee is also required to take into account specific qualifications established for
members of the Board, as set forth in our Corporate Governance Guidelines, including the qualifications generally outlined below.
The Board may waive one or more of these requirements under certain circumstances (the U.S. citizenship requirement was waived
for Ms. Sandor and Mr. Efrat). These qualifications include:
•
The maximum age for an individual to join the Board is
age 65, except that such limitation is inapplicable to a
person who, when elected or appointed, is a member of
senior management, or who was serving as a member of
the Board, of another company at the time of its
acquisition by Valley;
•
A director is eligible for reelection if the director has not
attained age 76 before the time of the annual meeting of
the shareholders of the Company. However, the Board in
its discretion may extend this age limit for not more than
one year at a time for any director, if the Board
determines that the director’s service for an additional
year will sufficiently benefit the Company;
•
Each Board member must demonstrate that he or she is
able to contribute effectively regardless of age;
•
Each Board member must be a U.S. citizen and comply
with all qualifications set forth in 12 USC §72;
•
A majority of the Board members must maintain their
principal residences in the states in which the Bank has
branch offices or within 100 miles from the Bank’s
principal office;
•
Board members must satisfy applicable stock ownership
guidelines, as described below under “Compensation of
Directors – Director Stock Ownership Guidelines;”
•
Unless there are mitigating circumstances (such as
medical or family emergencies), any Board member who
attends less than 85% of the Board and assigned
committee meetings for two consecutive years will not be
nominated for reelection;
•
Each Board member must prepare for meetings by reading
information provided prior to the meeting. Each Board
member should participate in meetings, for example, by
asking questions and by inquiring about policies,
procedures, or practices of Valley;
•
Each Board member is expected to be above reproach in
his or her personal and professional lives and his or her
financial dealings with Valley, the Bank, and the
community;
•
If a Board member (i) has his or her integrity challenged by
a governmental agency (indictment or conviction), (ii) files
for personal or business bankruptcy, (iii) materially violates
the Code of Conduct and Ethics, or (iv) has a loan made to
or guaranteed by the director classified as doubtful, the
Board member shall resign upon the request of the Board.
If a loan made to a director or guaranteed by a director is
classified as substandard and not repaid within six
months, the Board may ask the director to resign;
•
No Board member may serve on the board of directors of
any other bank or financial institution or on the board of
directors of more than two other public companies while
a member of the Board without the approval of the Board;
•
Board members should understand basic financial
principles and represent a variety of areas of expertise and
diversity in personal and professional backgrounds and
experiences;
•
Each Board member should be an advocate for the Bank
within the community; and
•
To the extent it is convenient, it is expected that the
Bank’s services will be utilized by the Board member for
his or her personal and business affiliations.
In addition to the above qualifications, the following criteria are also considered by the Nominating Committee when evaluating
director candidates in accordance with our policy regarding the nomination of director candidates:
•
Appropriate mix of educational background, professional
background, and business experience to make a
significant contribution to the overall composition of the
Board;
•
Whether the candidate would be considered a financial
expert or financially literate as described in SEC and
Nasdaq rules;
•
Whether the candidate would be considered independent
under Nasdaq rules;
•
Demonstrated character and reputation, both personal
and professional, consistent with that required for a bank
director;
•
Willingness to apply sound and independent business
judgment;
•
Ability to work productively with the other members of
the Board; and
•
Availability for the substantial duties and responsibilities
of a Valley director.
10
2025 Proxy Statement
ELECTION OF DIRECTORS
Skills Matrix. In assessing the qualifications of our director nominees, the Nominating Committee considers a matrix that
represents certain of the skills, experience, or attributes that the Nominating Committee identified as valuable to the effective
oversight of the Company and execution of its business and strategy, as well as the age and tenure of the directors. The following
matrix sets forth such skills, experience, or attributes and identifies those director nominees that possess them. This matrix
provides a summary only. It does not encompass all of the skills, experience, or attributes of our director nominees and does not
suggest that a nominee who is not listed as having a particular skill, experience, or attribute does not possess that particular skill,
experience, or attribute or is unable to contribute to the decision-making process in that area.
Robbins
Edelstein
Efrat
Maio
Perrott
Sandor
Sani
Schultz
Steans
Wilks
Williams
DEMOGRAPHICS
Age
50
75
49
64
62
45
60
63
61
65
56
Tenure Years
7
21
0
5
1
0
17
6
7
13
4
SKILLS
Audit – Accounting experience at an accounting firm or at a public
or private company
Š
Š
Š
Š
Š
Š
Š
Capital Markets – Experience in capital markets with investment
banking or funds management company
Š
Š
Š
Š
Š
Š
Core Industry – Experience in the banking industry
Š
Š
Š
Š
Š
Š
Š
Š
Innovation, Technology & Cyber – Experience in IT, cyber security
or digital technology
Š
Š
Š
Market Knowledge – Experience in an industry relevant to Valley’s
businesses
Š
Š
Š
Š
Š
Š
Š
Š
Risk – Experience with risk management in investment banking,
insurance or bank regulatory matters at a public or private
company
Š
Š
Š
Š
Š
Š
Š
Š
Š
Š
Senior Executive – Experience as an executive of a public or private
company
Š
Š
Š
Š
Š
Š
Š
Š
Š
Š
Š
Social/Charitable – Executive or board member with social or
charitable responsibilities
Š
Š
Š
Š
Š
Š
Š
11
2025 Proxy Statement
ELECTION OF DIRECTORS
Director Biographies
The biography of each director is set out below and contains information regarding the individual’s tenure as a director, his or her
age, business experience for at least the last five years, any other public company directorships held during the last five years, and
the experiences, qualifications, attributes, or skills that caused the Nominating Committee and the Board to determine that the
person should be nominated to serve as a director. Unless otherwise indicated below, each director nominee has served in his or
her current position for at least five years.
IRA ROBBINS
CHIEF EXECUTIVE OFFICER OF VALLEY NATIONAL BANCORP AND
VALLEY NATIONAL BANK, CHAIRMAN OF THE BOARD
AGE:
50
DIRECTOR SINCE:
2018
Mr. Robbins is Chairman of the Board and CEO of the Company and the Bank, allowing him
to approach his director role from a unique perspective. He joined Valley in 1996 as part of
the Bank’s Management Associate Program and has grown along with the Company. From
college student to thought leader, his nearly 30-year career at Valley has seen him through
several key positions where his invaluable contributions have helped shape Valley’s growth
and success. As CEO, Mr. Robbins has led Valley into the future while keeping true to the
Company’s roots as a local bank. In an ever-evolving digital and mobile world, Mr. Robbins
and the rest of Valley’s leadership team strive to create a stronger, faster, more efficient
and more responsive organization. His vision for success is building a purpose-driven
organization which includes embracing innovation, being customer-centric, promoting
social responsibility and empowering Valley’s associates.
Mr. Robbins earned his Bachelor of Science degree in Finance and Economics from
Susquehanna University, his Master of Business Administration in Finance from Pace
University and is a graduate of Stonier Graduate School of Banking. He is a Certified Public
Accountant (“CPA”) (inactive) in New Jersey and is a member of both the New Jersey
Society of Certified Public Accountants and the American Institute of Certified Public
Accountants.
Mr. Robbins serves on the board of directors of the Mid-Size Bank Coalition of America, the
New Jersey Bankers Association (“NJBA”), the New York Bankers Association and the
Federal Home Loan Bank of New York (“FHLBNY”). He also serves on the board of directors
of the Jewish Vocational Service of MetroWest New Jersey and is on the Morris Habitat for
Humanity Leadership Council. Mr. Robbins takes great pride in community outreach and is
an active supporter of several other philanthropic organizations in his community as well.
ANDREW B.
ABRAMSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER, VALUE COMPANIES, INC.
AGE:
71
DIRECTOR SINCE:
1994
Mr. Abramson is President and CEO of Value Companies, Inc., a real estate development
and property management firm. He is a licensed real estate broker in the States of New
Jersey and New York and is a licensed building contractor in the State of Florida. He is the
co-founder and treasurer of the Cure Breast Cancer Foundation, Inc., a 501(c)(3)
not-for-profit charity that supports innovation and groundbreaking breast cancer research.
Mr. Abramson graduated from Cornell University with a Bachelor of Science degree, and a
Master of Science degree, both in Civil Engineering. With over 40 years as a business
owner, an investor and developer in real estate, he brings management, financial and real
estate market experience and expertise to the Board.
Mr. Abramson will not be standing for reelection at the Annual Meeting.
12
2025 Proxy Statement
ELECTION OF DIRECTORS
PETER J.
BAUM
CHIEF FINANCIAL OFFICER AND CHIEF OPERATING OFFICER OF
ESSEX MANUFACTURING, INC. AND BAUM-ESSEX MANUFACTURING (H.K.), LTD.
AGE:
69
DIRECTOR SINCE:
2012
Mr. Baum is the CFO and Chief Operating Officer of Essex Manufacturing, Inc. (“Essex”) and
Baum-Essex Manufacturing (H.K.), Ltd. Mr. Baum joined Essex in 1978 as an Asian sourcing
manager. Essex has been in business for over 70 years and manufactures and imports
various consumer products from Asia. Essex distributes these products to large retail
customers in the U.S. and globally.
Mr. Baum graduated from The Wharton School at the University of Pennsylvania in 1978
with a Bachelor of Science degree in Economics. He brings over 45 years of business
experience, including as a business owner for 25 years, as well as financial experience and
expertise to the Board. Mr. Baum’s business experience includes serving as a managing
partner of 600 Palmyrita LLC, a company which owns and leases a warehouse facility, and
P&B West Coast Realty, LLC, a company which owns and invests in commercial real estate.
Mr. Baum appears on CNBC (U.S. & Asia) providing commentary on Asia developments.
Mr. Baum will not be standing for reelection at the Annual Meeting.
ERIC P.
EDELSTEIN
FORMER MANAGING PARTNER AT ARTHUR ANDERSEN LLP
AGE:
75
DIRECTOR SINCE:
2003
Mr. Edelstein is a former Executive Vice President and CFO of Griffon Corporation, a
diversified manufacturing and holding company, and a former Managing Partner at Arthur
Andersen LLP, an accounting firm. He was employed by Arthur Andersen LLP for 30 years
and held various roles in the accounting and audit division, as well as the management
consulting division. He is also a former Director of Aeroflex Incorporated, a manufacturer
of microelectronic, test, and measurement products, and Computer Horizon Corp., a
provider of information technology services to telecommunications, insurance, finance,
and manufacturing corporations. Mr. Edelstein received his Bachelor of Business
Administration degree and his Master of Professional Accounting degree from Rutgers
University. With over 30 years of experience as a practicing CPA and as a management
consultant, he brings to the Board in-depth knowledge of generally accepted accounting
principles and auditing standards as well as a wide range of business expertise. He has
worked with audit committees and boards of directors in the past and provides the Board
with extensive experience in auditing and preparation of financial statements.
Mr. Edelstein currently serves as a consultant.
13
2025 Proxy Statement
ELECTION OF DIRECTORS
EYAL EFRAT
FIRST EXECUTIVE VICE PRESIDENT & CHIEF INFORMATION OFFICER, HEAD OF
TECHNOLOGY DIVISION OF BANK LEUMI LE ISRAEL B.M.
AGE:
49
DIRECTOR SINCE:
2025
Mr. Efrat has served as First Executive Vice President & Chief Information Officer, Head of
Technology Division for Bank Leumi Le-Israel B.M. (“Bank Leumi” or “BLITA”) since January
2024. Prior to that role, Mr. Efrat served as First Executive Vice President & Head of
Strategy, Digital and Data of Bank Leumi from October 2021 until December 2023.
Mr. Efrat joined Bank Leumi from Harel Insurance Investments and Financial Services Ltd.,
the largest insurance and financial group in Israel, operating in insurance, asset
management and credit segments (“Harel”), where he served as Executive General Manager
– Tech Division Chief Information Officer from 2018 to 2021, Senior Vice President – Long
Term Investments and Savings and Chief Digital Officer from 2015 to 2018, and as Vice
President – Long Term Investment and Savings from 2008 to 2015. Prior to joining Harel,
Mr. Efrat served in various positions of increasing responsibility at Clal Insurance
Enterprises Holdings Ltd., an Israel-based insurance and financial services company, from
1999 until 2008. Mr. Efrat currently serves as a board member of Garage VC, a venture
capital fund for startups in fintech, artificial intelligence and cyber, and as Chairman of
Leumi Capital Markets. He also serves on the advisory board of Scanovate Ltd., an identity
management company that provides a digital identity management platform for financial
institutions, and Dell EMC EMEA. Mr. Efrat earned a Bachelor of Arts degree in business
with a specialization in Information Systems and Finance from Ono Academic College, as
well as his Master of Business Administration degree in Business Management and Finance
from Baruch College. Mr. Efrat brings over 25 years of experience as a business and tech
leader in the Israel financial sector, leading impactful technological and business
transformations at major financial institutions.
MARC J.
LENNER
CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF
LESTER M. ENTIN ASSOCIATES
AGE:
59
DIRECTOR SINCE:
2007
Mr. Lenner has served as the CEO and CFO at Lester M. Entin Associates (“Lester”), a real
estate development and management company, since January 2000 after serving in
various other executive positions within the company. He has experience in multiple areas
of commercial real estate markets throughout the country (with a focus in the New York
tri-state area), including management, acquisitions, financing, development, and leasing.
Mr. Lenner is the President, Treasurer and Director of The Lester M. & Sally Entin
Foundation, a charitable foundation where he manages a multi-million dollar equity and
bond portfolio. Prior to Lester, he was employed by Hoberman Miller Goldstein and Lesser,
P.C., an accounting firm. He attended Muhlenberg College where he earned a Bachelor of
Business Administration degree and a Bachelor of Accounting degree. With his financial
and professional background, he provides management, finance, investing and real estate
experience to the Board.
Mr. Lenner will not be standing for reelection at the Annual Meeting.
14
2025 Proxy Statement
ELECTION OF DIRECTORS
PETER V.
MAIO
FORMER CHIEF INFORMATION OFFICER OF ALLY FINANCIAL, INC.
AGE:
64
DIRECTOR SINCE:
2020
Mr. Maio is a former Chief Information Officer at Ally Financial, Inc., with responsibility for
Customer Information and Analytics and Corporate Technology. Prior to joining Ally, he
held various technology leadership positions in large financial services companies
including CIT, Charles Schwab, and Fidelity Investments. Mr. Maio served on the board of
advisors of the North Carolina Technology Association from 2015 to 2018. Mr. Maio
currently serves as a consultant.
Mr. Maio holds a Bachelor of Science degree in Economics from The Wharton School at
the University of Pennsylvania and a Master of Business Administration degree in
Information Systems and International Business from The Stern School of Business at New
York University. In 2020, Mr. Maio earned the Computer Emergency Response Team
(“CERT”) Certificate in Cybersecurity Oversight issued by the CERT Division of the Software
Engineering Institute at Carnegie Mellon University. In 2023, Mr. Maio completed the ESG
Executive Certificate Senior Leaders Program at The Wharton School Aresty Institute of
Executive Education, University of Pennsylvania.
Mr. Maio also volunteers as a member of the board of directors of Greater Pike
(Pennsylvania) Community Foundation, a not-for-profit institution supporting regional
charitable causes.
With more than 35 years of technology experience in financial services firms, Mr. Maio
brings to the Board in-depth experience in formulating and executing information
technology strategy as well as experience of technology solution delivery driven from
business-based vision.
KATHLEEN C.
PERROTT
FORMER CHIEF AUDIT EXECUTIVE OF ACCENTURE PLC
AGE:
62
DIRECTOR SINCE:
2023
Ms. Perrott served as Chief Audit Executive at Accenture PLC (“Accenture”), a global public
professional services firm, from September 2014 to August 2020 and retired from the firm
in February 2021. Prior to taking on the role of Chief Audit Executive, Ms. Perrott held a
number of roles of increasing responsibility at Accenture, including as Global Finance Lead
for several different functional service lines from 1992 to 2003, Technology CFO from
2003 to 2009, North America CFO from 2009 to 2012, and Internal Audit Managing
Director from 2012 to 2014. Prior to joining Accenture, Ms. Perrott served in various public
accounting roles in the external audit practice of Arthur Andersen & Co. from 1985 to 1992.
Ms. Perrott earned a Bachelor of Arts degree in Political Science with a concentration in
Accounting from Duke University. Ms. Perrott has served on the board of directors of
Clearwater Marine Aquarium, a non-profit organization committed to the rescue,
rehabilitation and release of injured marine life, since 2021, and assumed the Chair position
effective January 1, 2025. She has also served on the Finance Advisory Board for the town
of Belleair in Florida since 2022 and on the board of directors of Morton Plant Mease
Health Care Foundation since 2023. Ms. Perrott brings to the Board expertise in audit, risk
assessment, and risk management with a specific focus on financial, operational,
information technology, information security, and cyber risks.
15
2025 Proxy Statement
ELECTION OF DIRECTORS
NITZAN
SANDOR
SENIOR EXECUTIVE VICE PRESIDENT AND CHIEF LEGAL COUNSEL OF BANK LEUMI
LE-ISRAEL B.M.
AGE:
45
DIRECTOR SINCE:
2024
Ms. Sandor serves as Senior Executive Vice President, Chief Legal Counsel of Bank Leumi.
Prior to taking on this role at Bank Leumi in September 2024, Ms. Sandor served as
Executive Vice President, Chief Legal Counsel of Israel Discount Bank (“IDB”) from August
2022 until July 2024. While at IDB, Ms. Sandor also served as a director of its subsidiaries,
Israel Discount Bank of New York from October 2022 until July 2024 and Israel Credit
Cards Ltd. from September 2023 until May 2024. Prior to joining IDB, Ms. Sandor was a
partner at the Israeli law firm FISCHER (FBC & Co.) (“FISCHER”) from January 2013 until June
2022 and served as Co-Head of the firm’s Capital Markets practice in 2022 prior to her
departure. Ms. Sandor began her career at FISCHER as an intern in March 2004 and
became an associate at the firm in June 2005. Ms. Sandor received her Bachelor of Laws
degree from Tel Aviv University in 2004. Ms. Sandor brings to the Board over 20 years of
experience in the legal industry, as well as extensive capital markets experience and
banking industry knowledge. Ms. Sandor’s service on the boards of directors of other
banking organizations provides the Board with a multifaceted governance perspective.
SURESH L.
SANI
PRESIDENT OF FIRST PIONEER PROPERTIES, INC.
AGE:
60
DIRECTOR SINCE:
2007
Mr. Sani serves as president of First Pioneer Properties, Inc. (“First Pioneer”), a commercial
real estate management company. Mr. Sani joined First Pioneer in 1989 and is responsible
for the acquiring, financing, developing, leasing, and managing of real estate assets. He has
over 35 years of experience in managing and owning commercial real estate in Valley’s
lending market area. Mr. Sani is also a former Real Estate associate at the law firm of
Shea & Gould LLP and serves as General Counsel for First Pioneer. With that responsibility,
Mr. Sani has considerable experience in different areas of law including real estate, tax,
land use, government regulatory, and labor. Mr. Sani received his Bachelor degree from
Harvard College and a Juris Doctor degree from the New York University School of Law. He
brings a legal background, small business network management and real estate expertise
to the Board.
16
2025 Proxy Statement
ELECTION OF DIRECTORS
LISA J.
SCHULTZ
FORMER CO-HEAD OF CAPITAL MARKETS OF KEEFE, BRUYETTE & WOODS
AGE:
63
DIRECTOR SINCE:
2019
Ms. Schultz retired as co-head of Capital Markets at Keefe, Bruyette & Woods, Inc. (“KBW”),
as of year-end 2018. She joined KBW, a financial services oriented investment bank, as part
of the merger between Stifel Financial Corp. (“Stifel”) and KBW. Ms. Schultz joined Stifel as
part of the merger between Stifel and Ryan, Beck & Co., where she was the Director of
Equity and Fixed Income Capital Markets. During her tenure, she has had primary
responsibility for raising billions of dollars of capital for U.S. depository institutions. She
started her career at Drexel Burnham Lambert Inc. Ms. Schultz received her Bachelor
degree from Simmons College in 1983. With Ms. Schultz’s experience, she brings to the
Board expertise in strategic positioning, investor perspective, capital alternatives, and the
financial services markets.
JENNIFER W.
STEANS
CHIEF EXECUTIVE OFFICER OF FINANCIAL INVESTMENTS CORPORATION
AGE:
61
DIRECTOR SINCE:
2018
Ms. Steans is the CEO of Financial Investments Corporation, a private asset management
firm, where she oversees private equity investments and the Steans Family Office
operations. She was the former Chair of USAmeriBancorp, Inc. until its merger with Valley
in 2018. Ms. Steans also serves on the board of directors of Arabella Advisors and Laramar
and is on the advisory board for 5th Century Partners, Prairie Capital, and Siena Capital
Partners. She also serves on the Executive Committee of The Commercial Club of Chicago.
Prior to her existing positions, Ms. Steans served as a director of MB Financial (“MBFI”), a
publicly traded regional bank holding company located in Chicago. She also served as a
Director of Cole Taylor Bank and Taylor Capital before being acquired by MBFI. Ms. Steans
is active in the nonprofit community, serving on several boards, including Chair of Navy
Pier, the past Chair of Ravinia Festival, Chair of the Health Equity Advisory committee of
RUSH University Medical Center, and Trustee of DePaul University and World Business
Chicago.
She is also involved in many community organizations and ventures in the Greater
Chicago Area.
Ms. Steans brings a strong financial background, experience in risk management,
knowledge about banking strategy and a diverse background to the Board. She received a
Bachelor of Science degree in Mathematics from Davidson College and a Master of
Business Administration degree from the Kellogg School of Management at Northwestern
University. In 2013, she was named as one of American Banker’s 25 Most Powerful Women
in Finance.
17
2025 Proxy Statement
ELECTION OF DIRECTORS
JEFFREY S.
WILKS
PRESIDENT AND CHIEF EXECUTIVE OFFICER OF SPIEGEL ASSOCIATES
AGE:
65
DIRECTOR SINCE:
2012
Mr. Wilks is the CEO of Spiegel Associates Inc., a real estate ownership and development
company. He served as a director of State Bancorp, Inc. (“SBI”) from 2001 to 2011 and was
appointed to the Board in connection with Valley’s acquisition of SBI in January 2012. From
1992 to 1995, he was an Associate Director of Sandler O’Neill, an investment bank
specializing in the banking industry. Prior to that, Mr. Wilks was a Vice President of
Corporate Finance at NatWest USA and Vice President of NatWest USA Capital Corp. and
NatWest Equity Corp., each an investment affiliate of NatWest USA. He serves on the
board of directors of the Museum at Eldridge Street, is a member of the board of directors
of City Parks Foundation and The Association for a Better Long Island. Mr. Wilks served as
director of the Banking and Finance Committee of the United Jewish Appeal Federation of
New York from 1991 to 2001.
He earned his Bachelor of Science in Business Administration degree in Accounting and
Finance from Boston University and brings to the Board experience in banking, finance,
and investments.
DR. SIDNEY S.
WILLIAMS, JR. CHIEF EXECUTIVE OFFICER OF CROSSING CAPITAL GROUP INC.
AGE:
56
DIRECTOR SINCE:
2020
Rev. Dr. Sidney S. Williams, Jr. has more than 30 years of experience in corporate and
community development, which enables him to contribute a unique set of experiences and
expertise to the Board. While working for first-tier investment banks, he participated in
over $10 billion in public equity and debt offerings, acquisitions, mergers, joint ventures
and intellectual property licensing. His board expertise includes ESG, DEI, audit and
investments.
Dr. Williams is a graduate of the Wharton School of Business at the University of
Pennsylvania and completed his undergraduate studies in finance at Howard University.
After a brief, but successful, career on Wall Street, Dr. Williams earned a Master of Divinity
degree from the Wesley Theological Seminary and subsequently a Doctorate in Ministry
degree from Payne Theological Seminary. He has also written dozens of articles and two
books.
In addition to serving as the lead pastor of Bethel Church in Morristown, New Jersey (a
historic African Methodist Episcopal Church) and serving on several non-profit boards of
directors, Dr. Williams is also the founder and CEO of Crossing Capital Group Inc. (“CCG”),
a New Jersey benefit corporation that seeks to address the structural inequities in
underfinanced communities by providing a proprietary approach toward reimagining
physical assets. With deep expertise in the context, culture and customs of these
communities, CCG employs the F.I.S.H.ing Differently framework to advise Black,
Indigenous, People of Color anchor institutions on how to monetize their mission and to
collaborate with place-based investors.
18
2025 Proxy Statement
ELECTION OF DIRECTORS
Directors Whose Service on the Board Will Conclude at the Annual Meeting
Andrew B. Abramson, Peter J. Baum, and Marc J. Lenner will not be standing for reelection and will cease serving on the Board
effective as of the Annual Meeting.
Mr. Abramson joined the Board in 1994 and leaves the Board after 30 years of service to the Company and its shareholders.
Mr. Baum joined the Board in 2012 and leaves the Board after 12 years of service to the Company and its shareholders.
Mr. Lenner joined the Board in 2007 and leaves the Board after 17 years of service to the Company and its shareholders.
We sincerely thank Mr. Abramson, Mr. Baum, and Mr. Lenner for their significant contributions to the Board and our shareholders
throughout their respective terms of service on our Board.
The Board recommends a vote “FOR” election of each of the 11 director nominees to
serve until the next annual meeting.
19
2025 Proxy Statement
Corporate Governance
We are committed to our corporate governance practices, which we believe help us sustain our success and build long-term value
for our shareholders. The Board oversees the Company’s strategic direction and the performance of our business and management.
Our governance structure enables independent, experienced, and accomplished directors to provide advice, insight, guidance, and
oversight to advance the interests of the Company and our shareholders. Periodically, these governance practices are reviewed by
senior management, legal counsel, and the Board.
Engagement
Stakeholder Engagement
Our Board believes engagement with stakeholders enhances transparency and our perspectives, and helps us to prioritize our
goals. In this regard, management and the Chairs of our Compensation Committee, Nominating Committee, and Risk Committee,
proactively engage with our shareholders throughout the year in a variety of forums. Our interactions cover a broad range of
business and governance topics, including strategy and execution, Board refreshment, executive compensation practices, risk
oversight, sustainability, culture, and human capital. These exchanges with shareholders also provide us with a valuable
understanding of our shareholders’ perspectives and meaningful opportunities to share our views with them. Shareholder input is
shared with the Board and the Board is provided with the opportunity to discuss and ask questions about shareholder feedback.
Management also communicates to shareholders the Board’s willingness to meet with them upon request. We believe our regular
engagements with our shareholders have been productive and provide an open exchange of ideas and perspectives for both the
Company and its shareholders. A brief description of our shareholder engagement efforts in 2024 is outlined below.
• Institutional shareholders
• Retail shareholders
• Analyst community
• Annual Report
• Proxy Statement
• SEC filings
• Press releases
• Firm website
• Annual Corporate
Social Responsibility
Report
• Our ESG Report
• Investor presentations
• Quarterly earnings calls
• Investor conferences
• Annual shareholder
meeting
• Shareholder Outreach
Program
• Direct communication
with investors
Senior Management:
• Had approximately 150
in-person or virtual
meetings and calls
with investors
•
Attended 9 in-person or
virtual conferences, and
non-deal roadshows
•
Our CEO presented at
Valley’s 2024 Annual
Meeting and is expected
to do so again at
this year’s meeting
WHO WE
ENGAGE
HOW WE
COMMUNICATE
2024
ENGAGEMENTS
HOW WE
ENGAGE
On sustainability matters, we welcome the views of an even broader range of stakeholders who serve as critical partners to the
Company in identifying our key sustainability areas of impact. We regularly engage with these stakeholders to ensure that we
understand their views and concerns. This diverse engagement is designed to ensure that we are prioritizing issues that are
important to both our stakeholders and our long-term business success. For example, our CEO and senior executives engage with
national consumer policy groups to discuss issues related to Valley’s products, policies, customer-facing practices, communications,
and public policy issues. We also engage periodically with organizations on environmental and social issues and provide
philanthropic support to a broad range of nonprofit organizations that work on issues that are important to Valley. Management
shares insights and feedback from these relationships and engagements with the Board.
20
2025 Proxy Statement
CORPORATE GOVERNANCE
The Board and senior management are committed to maintaining a strong corporate culture that instills and enhances a sense of
purpose, participation, and personal accountability on the part of all of Valley’s associates. Senior management, including our CEO,
holds virtual “town halls” with our associates on a regular and frequent basis.
The Board and senior leaders commit significant time to meeting with our regulators. Frequent interaction helps us learn firsthand
from regulators about matters of importance to them and their expectations of us. It also gives the Board and management a
forum for keeping our regulators well-informed about Valley’s performance and business practices.
2024 Shareholder Proposal. At our 2024 Annual Meeting, a shareholder proposal requesting the adoption of a policy limiting
executive severance benefits to 2.99 times salary plus target bonus was presented for a vote but did not pass. The proposal was
supported by holders of approximately 36% of the votes cast. We considered the outcome of the proposal and related feedback
from our shareholder engagement efforts and determined not to adopt the requested policy. In particular, we considered that over
97% of the votes cast on our 2024 say-on-pay proposal were voted in favor of our executive compensation program, which
includes our executive severance program. Additionally, in December 2024, we adopted the Valley National Bank Executive
Severance Plan which provides for severance benefits to certain key employees, including our named executive officers other than
our CEO, in connection with termination of employment in both change in control (“CIC”) and non-CIC scenarios. The plan does not
include any severance multiplier in excess of 2.00.
Shareholder Rights
Valley’s Certificate of Incorporation and By-Laws provide shareholders with important rights, including:
•
Majority voting for directors with resignation policy in
uncontested elections;
•
Shareholders continuously holding at least 25% of
outstanding common stock for a period of at least one
year may call a special meeting;
•
Proxy access for shareholders holding 3% of outstanding
common stock for three years;
•
No supermajority vote provisions for amendments to the
Certificate of Incorporation or By-Laws or removing a
director from office; and
•
No shareholder rights plan (commonly referred to as a
“poison pill”).
Board of Directors Matters
Director Independence
The Board has determined that 13 of our 14 current directors (and 10 out of our 11 director nominees) and all current members of the
Nominating, Compensation, and Audit Committees are “independent” for purposes of the independence standards of Nasdaq, that
all of the members of the Audit Committee are also “independent” for purposes of Section 10A(m)(3) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and that all of the members of the Compensation Committee meet heightened
independence standards under Nasdaq and SEC rules. Our independent directors currently are: Andrew B. Abramson, Peter J. Baum,
Eric P. Edelstein, Eyal Efrat, Marc J. Lenner, Peter V. Maio, Kathleen C. Perrott, Nitzan Sandor, Suresh L. Sani, Lisa Schultz, Jennifer W.
Steans, Jeffrey S. Wilks, and Dr. Sidney S. Williams, Jr.
With respect to Mr. Wilks, in determining that he was independent, the Board recognized that his spouse benefits from leasing a
branch to the Bank. As set forth in the section “Certain Transactions with Management,” the annual lease payments are made to a
limited partnership from which Mr. Wilks’s spouse benefits. The limited partnership is part of a much larger entity from which
Mr. Wilks’s spouse also benefits. The lease payments are less than 0.5% of the annual gross revenue of the larger organization. The
annual lease payments are $190,000. This payment has remained fixed since Valley acquired the branch in a merger in 2011, and the
lease terms do not provide for any annual increases. Based upon these factors, the Nominating Committee and the Board reached
the judgment that because the lease transaction is de minimis to Mr. Wilks, Mr. Wilks is independent.
With respect to Ms. Sandor and Mr. Efrat, in determining that each of them is independent, the Board recognized that Ms. Sandor
and Mr. Efrat are affiliated with BLITA, which owns approximately 13.0% of Valley’s common stock and has entered into certain
agreements with Valley as described below.
21
2025 Proxy Statement
CORPORATE GOVERNANCE
In connection with our acquisition of Bank Leumi USA in 2022, Valley and BLITA entered into an Investor Rights Agreement, which
provides that, (i) for so long as BLITA holds a number of shares of Valley common stock greater than or equal to 12.5% of the shares
of Valley common stock issued and outstanding as of immediately following (and giving effect to) the merger, BLITA has the right
to designate two directors to each of the Valley Board and the Bank Board (currently Ms. Sandor and Mr. Efrat) and (ii) for so long as
BLITA holds a number of shares of Valley common stock greater than or equal to 5% of the shares of Valley common stock issued
and outstanding as of immediately following (and giving effect to) the merger, BLITA has the right to designate one director to
each of the Valley Board and the Bank Board. BLITA designees must meet the director qualification and eligibility criteria of the
Nominating Committee applicable generally to members of the Board and Board nominees and be approved by the Nominating
Committee. In addition, for so long as at least one BLITA designee is serving on the Valley Board, one BLITA designee will be
entitled to serve on the Nominating Committee, the Risk Committee, and the Executive Committee of the Board.
The Investor Rights Agreement also provides that, from April 1, 2022 until (i) BLITA ceases to own at least 12.5% of Valley’s
outstanding common stock and (ii) BLITA terminates its obligation to own Valley common stock under the Investor Rights
Agreement, BLITA is entitled to designate one individual to be a non-voting observer on the Board. Subject to certain exceptions,
during such period as BLITA is entitled to designate a director to the Board, (i) with respect to certain specified matters, BLITA will
vote its shares of Valley common stock in accordance with the recommendation of the Board and (ii) BLITA will be subject to
certain standstill restrictions. The Investor Rights Agreement further provides that BLITA will be entitled to certain registration
rights and certain preemptive rights with respect to certain issuances of common stock.
Valley and BLITA also entered into a Business Cooperation Agreement whereby the parties agreed to certain understandings
regarding business cooperation matters. This agreement is discussed further under the heading “Certain Transactions with
Management.”
To assist in making determinations of independence, the Board has concluded that the following relationships are immaterial and
that a director whose only relationship with the Company falls within these categories is independent:
•
A loan made by the Bank to a director, his or her
immediate family, or an entity affiliated with a director or
his or her immediate family, or a loan personally
guaranteed by such persons if such loan (i) complies with
federal regulations on insider loans, where applicable; and
(ii) is not classified by the Bank’s credit risk department or
independent loan review department, or by any bank
regulatory agency which supervises the Bank;
•
A deposit, trust, insurance brokerage, investment advisory,
or similar customer relationship between Valley and a
director, his or her immediate family, or an affiliate of his
or her immediate family if such relationship is on
customary and usual market terms and conditions;
•
The employment by Valley of any immediate family
member of the director if the family member serves below
the level of Senior Vice President;
•
Annual contributions by Valley to any charity for which a
director or any immediate family member serves on the
Board if the contributions do not exceed the greater of (i)
$60,000 or (ii) 5% of the charity’s annual revenues in the
calendar year;
•
Payments for property or services that Valley made, or
received from, a business in which (i) a director and his or
her immediate family members, own less than 5% of the
equity interests of that business and (ii) neither the
director nor any immediate family member serves as an
executive officer or partner (other than limited partner) of
the business; or
•
Payments for property or services that Valley made, or
received from, a business in which (i) the director, together
with his or her immediate family members, own more than
5% of the equity interests of that business or (ii) a director
or immediate family member serves as an executive
officer or general partner of the business, if the annual
aggregate payments to such business in the current or
last year do not exceed the greater of $200,000 or 5% of
the gross revenues of the business in such year.
22
2025 Proxy Statement
CORPORATE GOVERNANCE
In determining the independence status of each of our independent directors, the Board considered (i) the banking relationships
summarized in the table below, (ii) contributions to charitable organizations on which the director or their spouse served as a
director, as noted in the table below, and (iii) the information set forth under “Certain Transactions with Management.”
Name
Loans*
Trust Services/Assets
Under Management
Relationship with the Bank
Professional Services
to Valley
Andrew B. Abramson**
Commercial and Residential
Mortgages, Personal and
Commercial Line of Credit
None
Checking, Savings,
Certificate of Deposit
None
Peter J. Baum**
Commercial Mortgage
None
Checking
None
Eric P. Edelstein
Residential Mortgage
None
Checking
None
Eyal Efrat
None
None
None
None
Marc J. Lenner
Commercial and Residential
Mortgages, Personal and
Home Equity Lines of Credit
None
Checking, Certificate of
Deposit, Money Market, IRA
None
Peter V. Maio
None
None
Checking, Certificate of
Deposit, Money Market
None
Kathleen C. Perrott
Home Equity Line of Credit,
Installment Loan
None
Checking, Certificate of
Deposit
None
Nitzan Sandor
None
None
None
None
Suresh L. Sani
Commercial Mortgage
None
Checking, Certificate of
Deposit, Money Market
None
Lisa J. Schultz
None
None
Checking, Money Market
None
Jennifer W. Steans
None
None
None
None
Jeffrey S. Wilks
Commercial Mortgage,
Personal Line of Credit
None
Checking
None
Dr. Sidney S. Williams, Jr.**
None
None
Checking, Money Market
None
* In compliance with Regulation O.
** The Board also considered charitable contributions to entities with which the director is affiliated.
Board Leadership Structure and the Board’s Role in Risk Oversight
Independent Oversight Structure & Independent Lead Director
The Board believes that an independent oversight function is the foundation of good corporate governance. Since 2014, when the
Board first created the position, we have utilized an independent lead director to assure that the Board continuously has
independent leadership. We understand that some companies utilize an independent chairperson and others, an independent lead
director or presiding director. We also believe the structure of independent leadership should be examined regularly. To this end,
the Board carefully considers on an annual basis the independent leadership structure of the Board and maintains a flexible policy
regarding the issue of whether the position of Chairman should be held by an independent director. For 2024, the Board
determined to continue to combine the Chairman and CEO positions. Considering the performance of Mr. Robbins since he was
appointed CEO, the Board determined that electing him as Chairman was appropriate and that he was best suited to contribute to
long-term shareholder value by serving as Chairman.
23
2025 Proxy Statement
CORPORATE GOVERNANCE
In order to provide strong independent Board leadership when the position of Chairman and CEO are held by the same person or
the Chairman is not independent, the independent members of the Board will elect an independent director to serve as the
independent lead director with the substantial leadership responsibilities, duties, and authority summarized below. In 2022,
Mr. Eric P. Edelstein was elected as independent lead director of the Board (the “Independent Lead Director”) and was most recently
reelected to the role in May 2024. As provided in the Corporate Governance Guidelines, the Independent Lead Director, among
other things:
•
Has the responsibility to identify issues for Board
consideration and assist in forming a consensus among
directors;
•
Has the authority to call meetings of independent
directors and non-management directors (including
meetings not in connection with regular Board meetings)
and preside at all executive sessions of independent and
non-management directors;
•
Establishes the agenda for all meetings and executive
sessions of the independent directors and
non-management directors, with input from other
directors;
•
Assists with establishing meeting agendas for the Board
and reviewing the Board meeting materials for
distribution to and consideration by the Board;
•
Assists the Board in fulfilling its responsibility for
reviewing, approving, and overseeing the Company’s
strategic plan by meeting with the CEO to monitor the
status of such plan;
•
Has the authority to retain, and serve as primary point of
contact for, any outside advisors who report directly to
the Board, with the prior approval of the Board;
•
Serves as a liaison between the CEO and the independent
and non-management directors and assists the CEO and/
or Chair with establishing meeting agendas and meeting
schedules and assuring sufficient time for discussion of
agenda items; and
•
Leads the independent director assessment of the CEO.
In addition to strong independent leadership of the full Board, each of the Audit Committee, Nominating Committee, and
Compensation Committee is composed solely of independent directors. Independent directors, therefore, oversee critical, risk-
sensitive matters such as the quality and integrity of our financial statements; the compensation of our executive officers, including
the CEO; the nomination of directors; and the evaluation of the Board, its Committees, and its members.
Board’s Role in Risk Oversight
The Board believes that management of risk is important to the long-term success of the Company’s operations and business
strategies. The Board has ultimate responsibility for overseeing the Company’s risk management and devotes significant attention
to the oversight of risks inherent in our business. As part of its responsibility to ensure that the Company’s enterprise risk
management program is implemented and operating effectively, the Board has approved an Enterprise Risk Management Policy
and Program (“ERM Program”). The ERM Program establishes governance and risk management requirements intended to align with
the Company’s strategic plan and that the Board has determined are appropriate for the Company’s capital, business activities,
size, and risk appetite. The Board also, on an annual basis, approves the Risk Appetite Statement, which defines the level of
exposure the Company is willing to assume in executing our strategic objectives.
24
2025 Proxy Statement
CORPORATE GOVERNANCE
The Board oversees, among other things, management’s performance relative to the ERM Program and adherence to the Risk
Appetite Statement and other risk-related metrics of the Company. While management, through the Executive Risk Committee, is
responsible for defining the various risks facing our Company, risk management policies and procedures, and managing risk
exposures on a day-to day-basis, the Board’s responsibility is to oversee the Company’s risk management process by informing
itself about material risks affecting the Company, evaluating whether management has reasonable risk management and control
processes in place to address those material risks, holding senior management accountable for maintaining an effective ERM
Program, providing credible challenge to management, and providing an effective reporting system to the Board. The Board
performs this risk oversight function primarily through the following Committees:
Board of Directors
Responsible for the risk oversight of:
•
Financial statement risk exposures including level and
adequacy of the allowance for loan and lease losses,
litigation risk, investment portfolio, capital adequacy, and
other significant risks that may arise;
•
The performance, qualifications, and independence of the
independent registered public accounting firm;
•
The performance of the internal audit function and the
adequacy of internal controls; and
•
Compliance with legal, regulatory, and corporate policy
requirements.
Responsible for the risk oversight of:
•
The compensation philosophy, plans, policies, and programs
for non-employee directors and executive officers;
•
The Company’s incentive compensation plans, policies, and
practices for all associates; and
•
Human capital strategy and initiatives.
Responsible for:
•
Confirming the Company has appropriate policies and procedures
for risk governance, risk management practices, and the risk
control infrastructure;
•
Assessing and recommending to the Board risk tolerances and
limits across the Company’s seven risk categories: strategic,
credit, market (including interest rate and price), liquidity,
compliance, operational (including fraud, information security
and cybersecurity risk), and reputational risks;
•
Reviewing stress test effects on the capital plan and
communicating such review to the Board;
•
Discussing and effectively challenging management regarding the
Company’s risk appetite, tolerance, and alignment with the
Company’s strategy;
•
Overseeing the asset liability management function of the
Company;
•
Overseeing management’s monitoring of the overall risk profile
and compliance;
•
Reviewing management’s responses to regulatory policies and
exams;
•
Overseeing the performance of the Chief Risk Officer and related
risk verticals; and
•
Reinforcing the independence of the risk management function.
Audit Committee
Compensation Committee
Risk Committee
Responsible for the risk oversight of the Company’s cybersecurity and
technology risk profile, prevalent cybersecurity risks, our enterprise
information security program, and key enterprise information security
initiatives.
Cyber and Technology Subcommittee
Responsible for the risk oversight of:
•
The Company’s governance structure and other corporate
governance matters;
•
Stock Ownership Guidelines, anti-hedging, and anti-pledging
policies applicable to executives and directors (together with
the Compensation Committee); and
•
Environmental, Social, and Governance strategies and
opportunities.
Nominating Committee
The Audit Committee, Compensation Committee, Nominating Committee, and Risk Committee each have full access to
management as well as the ability to engage advisors. Our Chief Risk Officer also provides regular reports to the Risk Committee.
Each Committee reports to the full Board and works with all members of the Board to fulfill its risk oversight objectives. When
appropriate, senior members of management are invited to attend Board meetings and are available to address questions or
concerns raised by the Board on risk management and other matters.
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Executive Sessions of Independent and Non-Management Directors
Valley’s Corporate Governance Guidelines require the Board to hold separate executive sessions for both independent and
non-management directors. The Board holds an executive session at least twice a year with only independent directors and, when
applicable, holds an executive session with non-management directors at least twice per year. In each instance, the Independent
Lead Director is the presiding director for the session.
Shareholders’ and Interested Parties’ Communications with Directors
The Board has established the following procedures for shareholder or interested party communications with the Board or with the
Independent Lead Director:
•
Shareholders or interested parties wishing to
communicate with the Board, the non-management or
independent directors, or with the Independent Lead
Director should send any communication to Valley
National Bancorp, Corporate Secretary, at 70 Speedwell
Avenue, Morristown, New Jersey 07960. Any such
communication should state the number of shares owned
by the shareholder.
•
The Corporate Secretary will forward such communication
to the Board or, as appropriate, to the particular
Committee Chair or to the Independent Lead Director,
unless the communication is a personal or similar
grievance, a shareholder proposal or related
communication, an abusive or inappropriate
communication, or a communication not related to the
duties or responsibilities of the Board, in which case the
Corporate Secretary has the authority to determine the
appropriate disposition of the communication. All such
communications will be kept confidential to the extent
possible.
Nomination of Directors
Nominations of directors for election may be made at an annual meeting of shareholders, or at any special meeting of shareholders
called for the purpose of electing directors by the Board, or, as described in more detail below, by a shareholder of the Company
who meets the eligibility and notice requirements set forth in our By-Laws.
Shareholder Nominations Not for Inclusion in our Proxy Statement. Under our By-Laws, to be eligible to submit a director
nomination not for inclusion in our proxy materials but instead to be presented directly at the Annual Meeting, the shareholder
must be a shareholder of record on both (i) the date the shareholder submits the notice of the director nomination to the
Company and (ii) the record date for the Annual Meeting. The notice must be in proper written form and be timely received by the
Company. To be in proper written form, the notice must meet all the requirements specified in Article I, Section 3 of our By-Laws,
including specified information regarding the shareholder making the nomination and the proposed nominee. To be timely for our
2026 Annual Meeting, the notice must be received by our Corporate Secretary at our Morristown, New Jersey office, located at 70
Speedwell Avenue, Morristown, New Jersey 07960, no later than January 20, 2026 nor earlier than December 21, 2025. If the 2026
Annual Meeting is called for a date that is not within 30 days before or after the anniversary date of this year’s Annual Meeting
date, notice will be timely if it is received by the Corporate Secretary no later than the close of business on the 10th day following
the date on which public announcement of the date of the 2026 Annual Meeting is first made by the Company.
Further, to comply with the universal proxy rules of the SEC, in addition to satisfying the foregoing advance notice requirements
under our By-Laws, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees
must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act postmarked or transmitted
electronically no later than March 23, 2026. If the 2026 Annual Meeting is called for a date more than 30 days before or after the
anniversary of this year’s Annual Meeting date, then the deadline to postmark or electronically submit such notice will be the later
of 60 calendar days before the date of the 2026 Annual Meeting or the 10th calendar day following the day on which public
announcement of the date of the 2026 Annual Meeting is first made by the Company (or if such day is a Saturday, Sunday or
holiday, the next succeeding business day).
Shareholder Nominations for Inclusion in our Proxy Statement. Our By-Laws provide that if certain requirements are met, an
eligible shareholder or group of eligible shareholders may include their director nominees in the Company’s Annual Meeting proxy
materials. This is commonly referred to as proxy access. The proxy access provisions of our By-Laws provide, among other things,
that a shareholder or group of up to 20 shareholders seeking to include director nominees in our proxy materials must own 3% or
more of our outstanding common stock continuously for at least three years. The number of proxy access nominees appearing in
any annual meeting proxy statement cannot exceed the greater of two or 20% of the number of directors then serving on the
Board. If 20% is not a whole number, the maximum number of proxy access nominees would be the closest whole number below
20%. A nominee who is included in our proxy materials but withdraws from or becomes ineligible or unavailable for election at the
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CORPORATE GOVERNANCE
annual meeting or does not receive at least 25% of the votes cast for his or her election, will not be eligible for nomination by a
shareholder for the next two Annual Meetings. The nominating shareholder or group of shareholders also must deliver the
information required by our By-Laws, and each nominee must meet the qualifications required by our By-Laws.
Requests to include director nominees in our proxy materials for our 2026 Annual Meeting must be received by our Corporate
Secretary at our Morristown, New Jersey office, located at 70 Speedwell Avenue, Morristown, New Jersey 07960, no earlier than
November 5, 2025 and no later than December 5, 2025. If the 2026 Annual Meeting is called for a date that is not within 30 days
before or after the anniversary date of this year’s Annual Meeting date, notice will be timely if it is received by the Corporate
Secretary no later than the close of business on the 10th day following the date on which public announcement of the date of the
2026 Annual Meeting is first made by the Company.
Shareholder Recommendations for Director Candidates. The Nominating Committee has adopted a policy regarding director
candidates recommended by shareholders. The Nominating Committee will consider nominations recommended by shareholders.
In order for a shareholder to recommend a nomination, the shareholder must provide the recommendation along with the
additional information and supporting materials to our Corporate Secretary no earlier than 180 days and no later than 150 days
prior to the anniversary of the date of the preceding year’s mailing of the Proxy Statement for the Annual Meeting. The shareholder
wishing to propose a candidate for consideration by the Nominating Committee must own at least 1% of Valley’s outstanding
common stock. In addition, the Nominating Committee has the right to require any additional background or other information
from any director candidate or the recommending shareholder as it may deem appropriate. For Valley’s 2026 Annual Meeting, we
must receive this notice on or after October 6, 2025, and on or before November 5, 2025. The Nominating Committee will evaluate
shareholder-recommended director candidates using the same criteria and standards as described above.
Board Meetings and Attendance
The Board held 10 meetings in 2024. Each director attended at least 75% of the meetings of the Board and of each Committee on
which he or she served during 2024 (or, as applicable, the portion of 2024 during which he or she served).
Annual Meeting Attendance
It is our policy that all directors attend the Annual Meeting absent a compelling reason, such as family or medical emergencies.
100% of our directors attended the 2024 Annual Meeting of Shareholders and were available to answer questions.
Committees of the Board of Directors
The Board conducts its business through meetings of the Board and the following committees: the Audit Committee, the
Nominating Committee, and the Compensation Committee. In addition to these Committees, the Company also maintains the
following committees to oversee areas of Valley’s operations – a Risk Committee, a Cyber and Technology Risk Subcommittee, and
an Executive Committee.
Committee Composition and Meetings
The table below presents 2024 membership information for each of our Audit, Nominating, Compensation, and Risk Committees
and the number of meetings held by each committee during 2024.
The Audit Committee, Nominating Committee, Compensation Committee, and Risk Committee each operate pursuant to a
separate written charter adopted by the Board. Each Committee reviews its charter at least annually. The charters of the Audit
Committee, Nominating Committee, and Compensation Committee, which describe the responsibilities of each such Committee,
can be viewed at our website at www.valley.com/charters.
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Effective as of the 2024 Annual Meeting, the following changes were made in Committee composition: Mr. Abramson became a
member of the Compensation Committee and ceased membership on the Nominating Committee; Mr. Baum became a member of
the Nominating Committee and ceased membership on the Risk Committee; Mr. Sani replaced Mr. Lenner as Chair of the
Nominating Committee; and Ms. Steans replaced Mr. Sani as Chair of the Compensation Committee.
Director
Audit
Committee
Nominating
Committee
Compensation
Committee
Risk
Committee
Andrew B. Abramson(1)
Peter J. Baum(1)
Eric P. Edelstein
Dafna Landau(2)
Marc J. Lenner(1)
Peter V. Maio
Avner Mendelson(3)
Kathleen C. Perrott
Nitzan Sandor(2)
Suresh L. Sani
Lisa J. Schultz
Jennifer W. Steans
Jeffrey S. Wilks
Dr. Sidney S. Williams, Jr.
2024 Number of Meetings
5
5
5
6
Chair of Committee
Committee member
(1)
Messrs. Abramson, Baum, and Lenner will cease service on the Board and their respective committees effective as of the Annual Meeting.
(2)
Ms. Landau was a member of the Nominating Committee and the Risk Committee until her resignation from the Board effective November 14, 2024, at which time
Ms. Sandor was appointed to the Board and to the Nominating Committee and the Risk Committee.
(3)
Mr. Mendelson was a member of the Risk Committee until his resignation from the Board effective January 24, 2025.
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Audit Committee
The Board has determined that each member of the Audit Committee is financially literate and that more than one member of the
Audit Committee has the accounting or related financial management expertise required by Nasdaq. The Board has also
determined that each of Mr. Edelstein, Ms. Perrott and Ms. Steans meets the SEC criteria of an “Audit Committee Financial Expert.”
The Committee charter gives the Audit Committee the authority and responsibility for the appointment, retention, compensation
and oversight of our independent registered public accounting firm, including pre-approval of all audit and non-audit services to be
performed by our independent registered public accounting firm. Other responsibilities of the Audit Committee pursuant to the
charter include:
•
Reviewing the scope and results of the audit with Valley’s
independent registered public accounting firm;
•
Reviewing with management and Valley’s independent
registered public accounting firm Valley’s interim and
year-end operating results including SEC periodic reports
and press releases;
•
Considering the appropriateness of the internal
accounting and auditing procedures of Valley;
•
Considering the independence of Valley’s independent
registered public accounting firm;
•
Overseeing the internal audit function;
•
Reviewing the significant findings and recommended
action plans prepared by the internal audit function,
together with management’s response and follow-up; and
•
Reporting to the full Board on significant matters coming
to the attention of the Audit Committee.
Nominating Committee
The Nominating Committee reviews the qualifications of and recommends to the Board candidates for election as directors of
Valley, considers the composition of the Board, and recommends committee assignments. The Nominating Committee also reviews
and, as appropriate, approves all related party transactions in accordance with our related party transactions policy. The
Nominating Committee is responsible for approving and recommending to the Board our Corporate Governance Guidelines which
include:
•
Director qualifications and standards;
•
Director responsibilities;
•
Director orientation and continuing education;
•
Limitations on Board members serving on other boards;
•
Director access to management and records;
•
Criteria for the annual self-assessment of the Board, and
its effectiveness; and
•
Responsibilities of the Independent Lead Director.
The Nominating Committee reviews recommendations from shareholders regarding corporate governance and director candidates
and also oversees our ESG Council and sustainability programs.
Compensation Committee
The Compensation Committee determines CEO compensation, recommends to the Board compensation levels for directors, and
sets compensation for NEOs and other executive officers. It also administers the 2023 Incentive Compensation Plan (the “2023
ICP”) and makes awards pursuant to that plan.
In February 2025, in undertaking its responsibilities, the Compensation Committee received from the CEO recommendations
(except those that relate to his own compensation) for salary, cash bonus, and equity awards for the NEOs and other executive
officers. After considering the possible payments and discussing the recommendations with the CEO, and reviewing data provided
by its compensation consultant, in February 2025, the Compensation Committee approved the compensation of executive
officers, other than the CEO. The Compensation Committee met in executive session with its compensation consultant and legal
advisors without the CEO to decide on all elements of the CEO’s compensation, including salary, cash bonus, and equity awards.
Compensation Consultants
In 2023, the Compensation Committee engaged Fredric W. Cook & Co., Inc. (“FW Cook”) as its compensation consultant for 2024.
FW Cook was engaged to review compensation and performance data of a peer group of comparable financial organizations that
had been selected by the Compensation Committee upon the recommendation of FW Cook and in relation to this data, provide an
overview and comments on Valley’s executive compensation as well as director compensation. Also, FW Cook was requested to
provide information relating to market trends in executive compensation matters. FW Cook has reviewed and provided comments
on the compensation disclosures contained in this Proxy Statement.
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Compensation and Risk Management
Our Chief Risk Officer evaluated all incentive-based compensation for employees of the Company and reported to the
Compensation Committee that none of our incentive-based awards individually, or taken together, was reasonably likely to have a
material adverse effect on Valley. None of the compensation or incentives for Valley employees were considered as encouraging
undue or unwarranted risk. The Compensation Committee accepted the Chief Risk Officer’s report.
Equity Grant Procedures
The Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information, and
the Company does not time the release of material nonpublic information based upon grant dates of equity. Annual equity grants
under our long-term incentive program are made at the Compensation Committee’s regularly scheduled meeting held each year in
February and off-cycle grants are made at the regularly scheduled meetings in the third and fourth quarters. The Company does not
have a current practice of granting options or option-like awards and did not grant any such awards during 2024.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are Andrew B. Abramson, Peter J. Baum, Eric P. Edelstein, Marc J. Lenner, Suresh L.
Sani, and Jennifer W. Steans. None of the members of the Compensation Committee or their affiliates, and none of the Company’s
executive officers, have engaged in transactions or relationships required to be reported under the compensation committee
interlock rules promulgated by the SEC.
Risk Committee
The Risk Committee is responsible for:
•
Assisting our Board with oversight of the Company’s
enterprise-wide risk management framework, including
policies and practices established by management to
identify, assess, measure, and manage key risks facing the
Company across all of the Company’s seven risk
categories: strategic, compliance, operational, reputation,
credit, market, and liquidity risk;
•
Discussing with and effectively challenging management
regarding the enterprise’s risk appetite and tolerance, and
alignment with the Company’s strategy, and at least
annually recommending to the full Board the statement of
risk appetite and tolerance to be communicated
throughout the Company;
•
Reviewing and approving annually the credit review plans
and policies, and any significant changes to such plans, as
appropriate;
•
Reviewing and recommending to the Board the
Company’s liquidity risk tolerance at least annually, taking
into account the Company’s capital structure, risk profile,
complexity, activities, and size. Senior management
reports to the Risk Committee regarding the Company’s
liquidity risk profile and liquidity risk tolerance at least
quarterly. Furthermore, the Risk Committee reviews the
results of periodic stress testing of capital;
•
Overseeing the performance of the Chief Risk Officer and
the related risk functions; and
•
Overseeing the Company’s cybersecurity risk profile, top
cybersecurity risks, enterprise cybersecurity program,
customer privacy, and key enterprise cybersecurity
initiatives.
The Risk Committee includes Peter V. Maio, who has significant information security expertise. The Risk Committee oversees the
assessment of cybersecurity risks associated with our vendors and our own system, including conducting phishing training
exercises.
Governance Documents
Code of Conduct and Ethics and Corporate Governance Guidelines
Valley maintains a Code of Conduct and Ethics (the “Code of Conduct”) that sets forth the ethical principles and standards to
which all Valley directors, officers, and employees should adhere in both their corporate and personal conduct. The Code of
Conduct informs employees of their responsibilities regarding, among other things, conflicts of interest, the prohibition on trading
on inside information, how to protect the confidentiality of both Valley and customer information, Valley’s policy on gifts and
entertainment from customers and vendors, and how to promote a work environment in which all employees and customers are
treated with respect and decency.
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Employees are trained annually on the Code of Conduct and are required to speak up about misconduct and report suspected or
known violations of the Code of Conduct, or any law or regulation applicable to Valley’s business. We also maintain procedures
regarding the review and treatment of employee-initiated complaints, including the proper escalation of suspected or known
violations of the Code of Conduct, other Valley policy, or the law. The Code of Conduct prohibits retaliation or discrimination
against anyone who in good faith raises an issue or concern.
Any known or suspected violations of the Code of Conduct can be reported to an employee’s manager, the People Resources
Department, the Ethics Officer, or the Audit Committee. Employees can also submit complaints anonymously through the
Company’s ethics hotline and website, which are hosted by a third party and are available 24 hours a day, 7 days a week.
Suspected violations of the Code of Conduct, other Valley policy or the law are investigated by Valley and may result in an
employee being cleared of the suspected violation or receiving appropriate disciplinary action, including termination of
employment, depending upon the facts and circumstances. The Ethics Officer reports quarterly to the Audit Committee on ethics
complaints from all sources.
The Code of Conduct meets applicable requirements under Nasdaq rules and also meets the definition of “code of ethics” under
the rules of the U.S. Securities and Exchange Commission (the “SEC”). The Code of Conduct is available and can be viewed on our
website at www.valley.com/charters.* The Code of Conduct is also available in print to any shareholder who requests it. We will
disclose any substantive amendments to, or waiver of, provisions of the Code of Conduct made with respect to the CEO, CFO,
Chief Accounting Officer, or any other executive officer or director on our website.
We have also adopted Corporate Governance Guidelines, which are intended to provide guidelines for the governance by the
Board and its Committees. The Corporate Governance Guidelines are also available on our website at www.valley.com/charters.
Third Party Code of Conduct and Ethics
Suppliers, vendors, consultants, contractors, and other third parties working on behalf of Valley (collectively, “third parties”) are
expected to have high standards of business conduct, integrity, and adherence to the law. The Company’s Third Party Code of
Conduct and Ethics (the “Third Party Code of Conduct”) applies to our third parties and communicates our expectations on a range
of issues, including our third parties’ responsibility to comply with laws and regulations as well as Valley’s obligations to its
customers. The Third Party Code of Conduct is available under the Investor Relations section of our website at www.valley.com/
charters.
Our Securities Trading Policy
Insider Trading Policy
Our insider trading policy, the Valley National Bancorp Securities Trading Policy (the “Securities Trading Policy”), governs the
purchase, sale, and other dispositions of our securities by directors, officers, and employees. The restrictions of the Securities
Trading Policy also apply to certain family members of our directors, officers, and employees, as well as entities they may control.
We believe the Securities Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and
regulations, and the Nasdaq listing standards. In addition, it is the policy of the Company to comply with applicable U.S. securities
laws, including laws, rules and regulations related to trading in our securities. The full text of the Securities Trading Policy is filed as
Exhibit 19 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
*
We refer to our website in various places throughout this Proxy Statement. Information on our website is not part of or otherwise incorporated by reference into this
Proxy Statement.
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Hedging Policy
The Securities Trading Policy also prohibits all hedging of the Company’s securities for directors, executives and certain officers.
Under the policy, these covered individuals may not engage in:
•
Short sales of the Company’s securities (sales of securities
that are not then owned), including a “sale against the
box” (a short sale of securities already owned resulting in a
neutral position with respect to gains and losses in the
securities);
•
Transactions in publicly traded options in the Company’s
securities, such as puts, calls, and other derivative
securities, on an exchange or in any other organized
market. Directors and officers also may not engage in
such transactions privately; or
•
Hedging transactions or similar arrangements that are
designed to hedge or offset any decrease in the market
value of Company securities, such as equity swaps, collars,
exchange funds, and forward sale contracts. These
hedging transactions allow an owner of securities to
continue to own hedged securities but without the full
risks and rewards of ownership, which causes
misalignment between the interests of the owners and
the interests of the Company and its shareholders.
Pledging Policy
Under the Securities Trading Policy, directors and executive officers are prohibited from purchasing Company securities on margin,
borrowing against Company securities held in a margin account, or pledging Company securities as collateral for a loan. If
executive officers have Company stock pledged when they join the Company or become executive officers, or if directors have
Company stock pledged when they join the Board, they are required to report this to the General Counsel of the Company and are
required to unwind the pledging as promptly as possible but in any event within three years. The Nominating Committee upon
request may exempt some or all of the pledged shares from this requirement in its discretion if the shares of Company securities
were pledged before the director or executive officer held that position. The prohibition on pledging securities applies to directors
and executive officers, as well as certain of their family members and entities they may control.
In January 2020, at the request of Ms. Steans, the Nominating Committee allowed her to continue pledging the Company
securities she owned which were pledged at the time she became a director. The Nominating Committee considered the fact that
she and her spouse owned certain shares which were pledged while she was the Chair of USAmeriBancorp, Inc., which merged with
Valley in 2018. Pursuant to the terms of the merger, these shares were converted to Company securities. Any shares of Company
securities acquired after Ms. Steans became a director of Valley may not be pledged.
Joseph V. Chillura, who was the President and CEO of USAmeriBancorp, Inc., became an executive officer of Valley in 2020 and the
Nominating Committee has allowed him to continue to pledge the shares he owned at the time he became an executive officer. In
2023, the Nominating Committee determined that Mr. Chillura must unwind his pledged Company securities as promptly as
possible but in no event later than July 2025. Any shares of Company securities acquired after Mr. Chillura became an executive
officer of Valley may not be pledged.
Except for Ms. Steans and Mr. Chillura, no executive officers or directors have any shares of pledged Company securities covered by
the Company’s pledging policy.
Political Contribution Policy
Valley, like all national banks, is prohibited by law from making contributions to candidates in federal, state, and local elections. We
apply the policy to our holding company and our subsidiaries. Valley does not contribute corporate funds to independent
expenditure committees.
Valley belongs to national trade associations, state banking associations, and local chambers of commerce that represent the
interests of both the financial services industry and the broader business community. These organizations work to represent the
industry and advocate on major public policy issues of importance to Valley and the communities we serve.
Certain Transactions with Management
Our related party transactions are governed by our written related party transactions policy. Under our policy, a related party
transaction is a transaction in which Valley or any of its subsidiaries is a participant, the aggregate amount involved in the
transaction exceeds or is expected to exceed $100,000 annually, and any executive officer, director, director nominee, 5% or
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2025 Proxy Statement
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greater shareholder (including BLITA), or any immediate family member of the foregoing (collectively, “insiders”) has a material
interest. To identify potential related party transactions, our directors and executive officers are required to notify the Company of
any potential related party transaction and are required to complete a D&O questionnaire annually which requests information
regarding all potential related party transactions known to them.
The Nominating Committee reviews the facts and circumstances of all proposed related party transactions that require approval
under the policy and will either approve or disapprove entry into the transaction. If a related party transaction is of an ongoing
nature, the Nominating Committee will review it annually to confirm that it remains in compliance with the policy. In determining
whether to approve a related party transaction, the Nominating Committee will take into account, among other factors, whether
the transaction is in the best interest of Valley, whether the transaction is on terms no less favorable than terms generally available
to an unaffiliated third party under the same or similar circumstances, and the extent of the insider’s interest in the transaction. No
director shall participate in any discussion or approval of a related party transaction in which he or she has an interest. The Audit
Committee oversees compliance with the related party transactions policy and is made aware of all approvals under the policy.
We expect our insiders to use the services of the Bank. Loans to insiders by the Bank are governed by Regulation O and are not
subject to the approval requirements of the related party transactions policy. Regulation O requires, among other items, that such
loans be approved by the board of directors of the Bank and be made on the same or substantially similar terms and conditions,
including interest rates and collateral, as those prevailing at the time for comparable loans to third parties. Under the policy, loan,
deposit, trust, asset management, wealth management, insurance brokerage, investment advisory or other services or transactions
offered by Valley are deemed preapproved under the related party transactions policy as long as the transaction or services are on
substantially similar terms to those prevailing at the time for other customers of similar character.
The Bank has made loans to its directors and executive officers and their associates and, assuming continued compliance with
generally applicable credit standards, it expects to continue to make such loans. All of these loans: (i) were made in the ordinary
course of business, (ii) were made on the same terms, including interest rates and collateral, as those available to other persons not
related to Valley, and (iii) did not involve more than the normal risk of collectability or present other unfavorable features.
The following transactions and payments were approved under our related party transactions policy.
•
In 2011, Valley acquired State Bancorp, Inc. (“State
Bancorp”). In connection with the acquisition, it was
agreed between the parties to the merger that Mr. Wilks
was to be elected to the Board. At the time of acquisition,
State Bancorp leased a branch located in Westbury, New
York for which Valley assumed the lease effective
January 1, 2012. The lease provides for fixed rental
payments of approximately $190,000 per year. The lease
may be terminated at any time by the landlord upon not
less than 130 days’ written notice. The lease payments are
made to a limited partnership from which Mr. Wilks’s
spouse benefits. The limited partnership is part of a much
larger entity from which Mr. Wilks’ wife also benefits.
Valley’s lease payments in 2024 represented less than
0.5% of the annual gross revenue of the entity.
•
We have always welcomed as new employees qualified
relatives of our current employees. Currently, a number of
our employees have relatives who also work for Valley.
Valley employs the brother of Joseph V. Chillura, a named
executive officer of Valley, who in 2024 earned a salary of
$350,000 plus a discretionary bonus and equity award.
•
In connection with Valley’s acquisition of Bank Leumi USA,
Valley and BLITA entered into a Business Cooperation
Agreement, dated as of April 1, 2022 (the “Cooperation
Agreement”), pursuant to which Valley agreed to offer
BLITA the opportunity to participate in committed
commercial loans made by Valley and its subsidiaries.
Valley and BLITA have ongoing participation relationships
pursuant to the Cooperation Agreement and it is
expected that new participations will continue to be
entered into, subject to approval in accordance with the
related party transactions policy. From January 1, 2024 to
March 1, 2025, BLITA purchased 49 participation interests
in 33 loan commitments, with BLITA’s purchased interests
totaling $1.3 billion, or 56% of the total loan commitment
amounts, for the period. BLITA also engages in other
ordinary course banking relationships with Valley,
including that BLITA may from time to time open deposit
accounts with Valley and Valley maintains a Nostro
account at BLITA to facilitate foreign currency exchange
transactions in Israel for Valley customers.
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2025 Proxy Statement
Sustainability Practices
Helping communities grow and prosper is at the heart of Valley’s corporate citizenship philosophy. At Valley, we are committed to
the highest standards of corporate governance and making a positive, lasting impact on the communities we serve and in the
world in which we live. We recognize the critical role we play and the unique opportunity we have to create a socially responsible
and sustainable future. Our sustainability initiatives are important to us and we have taken steps to build a vibrant and sustainable
future for our stakeholders: our customers, investors, associates, and community partners. Our approach to sustainability is driven
by our foundational belief that our financial performance and prosperity are tied directly to the success of these key stakeholders.
Our approach to sustainability and corporate responsibility remains balanced, thoughtful, and considerate as we promote
economic growth and vibrancy in the communities we serve. We are committed to giving people and businesses the power to
succeed across our geographic footprint. We work with our stakeholders to identify and understand the challenges that are
presented to them from climate-related events. We promote lending that will enable our clients, potential clients, and stakeholders
to address climate-related challenges, rising insurance costs, carbon footprint reduction, and regulatory compliance.
In July 2024, we shared our second Environmental, Social, and Governance (“ESG”) Report covering 2022-2023. This report,
available on our website, highlights our efforts to ensure compliance with regulatory requirements and best practices in corporate
governance, fostering long-term shareholder value, and trust in the organization.
Governance and Oversight
Our ESG Council (the “Council”), formed in early 2020, was created to strengthen and provide guidance for the implementation of
our sustainability initiatives. The Council has management-level oversight of sustainability-related matters and is responsible for
reviewing strategies, guidelines and policies across the Company. The Council is comprised of members from multiple departments.
An important goal of the Council is to identify, evaluate, and analyze our business to find opportunities to support clients and our
communities for their sustainability-related needs. The Council’s philosophy continues to be proactive, emphasizing the
development of a robust foundation to promote economic and environmental sustainability across all of Valley’s markets.
The Board has delegated ongoing oversight of our ESG matters to the Nominating Committee. The Nominating Committee
receives updates on ESG activities no less than twice a year, with the last update provided in October 2024. Additionally, the Board
receives periodic reports on the Company’s progress on Corporate Social Responsibility (“CSR”) and Community Reinvestment Act
(“CRA”) activities.
Climate and Environmental Sustainability
Property Management and Workplace Solutions
We are mindful of the direct environmental impact of our branch and office operations and seek to reduce negative impacts where
possible. We integrate sustainable practices across our portfolio, from building design and construction to daily operation and
footprint optimization planning. Our project strategies include an environmentally conscientious materials selection, indoor air
quality, energy management, and water efficiency. Recent and ongoing projects include:
•
Replacing aging HVAC units with newer, higher efficiency units that utilize eco-friendly refrigerant, less electricity, and are more
energy efficient.
•
Participating in New Jersey’s Direct Install Program to implement energy efficiency programs, including lighting retrofits and
HVAC upgrades, with potential rebates up to 80% of the installed cost.
•
Restructuring janitorial, trash removal, and recycling contracts to enhance sustainable practices and measure progress more
effectively.
•
Investing in video conferencing technologies and virtual collaboration tools to reduce work-related travel costs, time, and
environmental impact.
•
Using automated building management systems to improve energy efficiency by centrally controlling building systems based
on real-time conditions.
•
Exploring solar panel installation as part of a solar prototype to determine environmental and cost benefits.
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2025 Proxy Statement
SUSTAINABILITY PRACTICES
Credit and Lending
We manage a robust commercial and consumer lending portfolio, and we strive to understand the challenges our clients and
communities face as they navigate climate-related risks and set their own goals towards a lighter carbon footprint. By improving
the identification of the associated underlying data and leveraging our credit underwriting technology platform, we deploy our
lending activities to support these efforts.
We have proactively implemented lending assistance and support for our existing clients negatively impacted by recent climate-
related events, including hurricanes and wildfires. We are proud of our current financing that results in a positive environmental
impact. Since 2021, our indirect automobile and floor plan financing programs have provided discounted financing for hybrid and
electric consumer vehicles. In 2024, Valley funded auto loans for approximately 1,563 electric and/or hybrid vehicles, up from 1,015
units financed in 2023 and 1,178 in 2022. We also provide commercial loans supporting renewable energy businesses and projects.
We continue to identify clients who may need our lending support for their own carbon transition needs for regulatory compliance
or other reasons through our Level III credit concentration threshold. This threshold identifies our lending activities to
environmentally sensitive industries and provides guardrails for loans in that segment measured to a specified percentage of our
capital.
Our lending programs are built on a strong credit culture. We continuously review our credit practices to assess the impacts of
climate change and related events. We ensure that changes in our credit policies to manage climate-related risks do not adversely
affect vulnerable communities or specific industries. All climate mitigation lending approvals and loan structures adhere to our
existing Credit Policy and Risk Acceptance Criteria to maintain a moderate credit risk profile.
The social and economic impact of climate-related events is a significant and pressing global issue, and we are committed to
understanding how it may influence the overt and tangential risks we identify and proactively manage. Notable portions of our
primary markets are located near coastal waters, and we are mindful of the potential negative impact to our operations and client
base from possible future climate-related events. As such, we have updated our commercial underwriting platform to assess the
potential for climate-related risks and remain informed about new opportunities and developments. This involved leveraging our
professional contacts and constituents, including non-profits, business entities, and government sources.
Climate-Related Financial Risk
On an annual basis, we conduct capital stress testing using economic scenarios developed by the Federal Reserve Board to stress
various types of balance sheet risks. Since extreme weather events, such as hurricanes, floods, earthquakes, and wildfires, are
agnostic to economic circumstances, we incorporate operational risk scenarios focused on severe weather events as a component
of our stress testing. This type of analysis strengthens our strategic conversations by enabling us to frame and assess the potential
range of possible business outcomes and weigh management options for consideration. The use of scenario analysis – in which the
resilience of financial institutions is assessed under different hypothetical climate scenarios to better understand climate-related
risks and impacts – is an emerging tool. Through the efforts of Valley’s ESG Council and sub-councils, we are working to enhance
data capture processes to aid in the assessment of risks specific to our organization. We will continue to implement programs to
better understand climate-related risks and how they impact our funding and capital management practices.
Our 2024 capital stress test incorporated two idiosyncratic elements: (i) a cybersecurity exercise; and (ii) a weather-related scenario
centered around catastrophic climate-related events in New York, New Jersey, Florida, Alabama, and California. Given the frequency
of cybersecurity breaches occurring across industries, the need for an organization to understand and quantify its risks is critical.
Valley’s hypothetical weather-related scenarios evaluated the simultaneous occurrence of multiple natural disasters, including
hurricanes impacting our east coast footprint, as well as an earthquake and wildfire on the west coast. The results of these internal
stress tests are considered in combination with other risk management and monitoring practices at Valley to maintain an overall
risk management program.
As we continue to execute our sustainability strategy, management expects to capture meaningful data from our climate-related
experiences. This data will allow us to better inform our strategic planning efforts, enhance the inputs to our stress testing models,
and improve various other processes across the organization. We also seek opportunities to understand the practices of our peers
to better understand the changing industry landscape.
35
2025 Proxy Statement
SUSTAINABILITY PRACTICES
Associate Engagement and Culture Management
We consider our associates to be our most valuable asset, and we recognize that their unique perspectives and experiences are key
to our success. Fostering an inclusive culture where authenticity, collaboration, and innovation thrive enables us to fully leverage
the rich tapestry of our associates’ backgrounds to deliver exceptional service to our customers and the communities we serve.
In 2024, we transitioned Valley Associate Resource Groups to Business Resource Groups (“BRGs”) to better reflect the positive
impact and connection our associates have made with our customers and communities. Our BRGs are open to all associates and
embody the strength and spirit of Valley by creating an environment where a wide range of experiences and perspectives are
encouraged and valued, benefiting both our associates and customers.
We have further developed our capacity to introduce new ideas, ask insightful questions, innovate our practices and products, and
deepen our connections with our communities. One such initiative was our Juneteenth Reception for the Morristown, New Jersey
community, where our headquarters are located. This event highlighted local leaders and customers, reaffirming our commitment
to having a positive impact on our communities.
Our associates, customers, and community members also gathered this year to attend our Inaugural Valley Women’s Symposium,
sponsored by the WISE BRG and Women in Business program. This half-day event featured inspiring sessions with women from
Valley’s executive leadership and our celebrated remarkable women who are trailblazers both in the financial and public services
arenas.
We continue to provide our associates with strong professional development and personal growth programming, which includes
the opportunity to read weekly micro-lessons, attend live sessions, and participate in individual courses that are available to every
associate. For example, our Access to Capital: Financial Empowerment Roundtable Series featured internal sessions of our Journey
to Home Ownership program that were tailored to our associates’ development. Our Widening the Lens, Sharing Our Perspectives
series brings our associates together to celebrate and discuss our various backgrounds, experiences, and viewpoints.
We conducted our third cohort of our BRG Mentorship Program, which provided 50 associates with opportunities to connect and
learn from leaders across Valley over a six-month period.
We consistently nurture our vibrant and rewarding culture by adhering to our guiding principle – we all belong at Valley.
Social Responsibility
Community Reinvestment Act Activities
The CRA requires banks to meet the credit needs of their entire communities, including low-and moderate-income (LMI)
neighborhoods. Valley has proudly received two consecutive “Outstanding” CRA ratings, the highest rating for a bank. This
achievement highlights our dedication to addressing the credit needs of our communities through thoughtful strategies,
comprehensive offering of products and services, and a deep understanding of our local demographics and economic conditions.
Community Development
Community development is central to our mission of promoting a culture of service and empowerment.
The following were the highlights of our community engagement activities in 2024:
•
Volunteerism and Board Service: Our Retail Banking division demonstrated their commitment by dedicating time to
volunteering and serving on boards and committees of CRA-qualified nonprofit organizations. Over 50% of our Retail Market
Managers serve on a CRA board or committee, and our associates volunteered over 16,000 hours throughout our communities
last year.
•
Regional Community Advisory Boards (RCAB): We engaged with our RCAB, comprised of partners across our retail footprint,
to gain invaluable insights into community needs.
•
Small Business Lending: In 2024, 95% of our loans to small businesses served those in LMI communities, supporting local
economic development.
•
Reaching the Unbanked and Underbanked: Through our Bank On certified Journey Checking program and partnerships with
local nonprofits, we provided training and access to banking services for individuals who previously believed they were
ineligible. This resulted in the opening of over 850 new accounts in 2024, increasing the financial capacity of LMI individuals
and communities.
36
2025 Proxy Statement
SUSTAINABILITY PRACTICES
•
Federal Home Loan Bank of New York (FHLBNY) Programs: We actively participated in various FHLBNY programs, supporting
affordable housing and small businesses. In 2024, our projects resulted in $5.8 million in grant subsidies, creating and
rehabilitating 325 affordable housing units across New Jersey and New York. Additionally, we provided a zero percent interest-
rate loan to a nonprofit partner to build group homes.
Community Investments. In 2024, Valley’s community development investment portfolio exceeded $450 million, advancing our
goals in affordable housing, economic development, revitalization/stabilization, and community services. Notable investments
included:
•
New Markets Tax Credit: A $9.3 million investment in Paterson, New Jersey, to rebuild a medical facility, commercial kitchen,
and warehouse space for storing donations.
•
Low-Income Housing Tax Credit: A $5.4 million investment to redevelop a 31-unit affordable housing development in
Alexander City, Alabama, for tenants earning less than 60% of the area median income.
Philanthropy. Valley is committed to responding to community needs, building relationships and championing initiatives that
cultivate strong, local leadership. In 2024, we provided over $5.5 million in grants and donations to community partners, and our
associates volunteered more than 16,000 hours. For example, the Jewish Vocational Service (“JVS”) of Metrowest helps provide
counseling for families in crisis, support services for seniors and people with special needs and career counseling, and job
placement assistance for the unemployed. Valley associates volunteered approximately 350 hours with JVS in 2024. To inspire our
associates to volunteer and contribute to our communities, we offer full-time associates with up to 16 hours of paid time off for
their volunteer activities. Additionally, Valley has a Workplace Giving program, allowing associates to donate to their charities of
choice, with Valley matching their contributions to amplify the impact.
37
2025 Proxy Statement
Compensation of Directors
The compensation of our directors is designed to attract, retain, and motivate highly qualified candidates for director and be
broadly comparable with our peers. Only non-employee directors are paid for their service on the Board. Directors who are
employees of the Company receive no additional compensation for serving on the Board. The Compensation Committee
recommends to the Board the form and amount of compensation for non-employee directors. Director compensation, including
compensation for Committee service, is reviewed at least annually by the Compensation Committee, typically at its regularly
scheduled December meeting, which makes such recommendations to the Board with respect thereto as it deems appropriate. As
part of such review each year, with the assistance of the Compensation Committee and its compensation consultant, the Board
takes various factors into consideration, including, but not limited to, the responsibilities of directors generally, as well as
Committee chairs, and market data for our peer group. Currently, we compensate our non-employee directors with a combination
of cash and equity to help align our directors’ interests with those of our shareholders.
Director Fees Earned or Paid in Cash
In 2024, our non-employee directors received an annual cash retainer of $90,000, paid in four quarterly installments.
The Chair of each of the Audit Committee, Compensation Committee, Nominating Committee, and Risk Committee receives an
annual retainer of $20,000. The Independent Lead Director receives an annual retainer of $50,000. These additional retainers are to
recognize the extensive time that is devoted to serve as Committee Chair or Independent Lead Director and to attend to
Committee matters, including meetings with management, auditors, outside advisors and consultants, and helping to prepare and
review Committee meeting agendas.
The Board also has committees in addition to the Audit Committee, Compensation Committee, Nominating Committee, and Risk
Committee, which generally deal with oversight of various operating matters. The Committee Chairs for these additional
committees also receive an annual retainer of $20,000, with the exception of the Executive Committee Chair who receives no
additional retainer.
Director Equity Awards
Each year, as part of their annual retainer, each non-employee director who was elected or continues to serve as a member of the
Board at the annual meeting of shareholders receives an award under the 2023 ICP of RSUs equal in value to $85,000. Effective for
2025, new non-employee directors appointed during the year receive a prorated annual RSU award for the portion of the year
remaining prior to the next annual meeting of shareholders. These equity grants to our non-employee directors are intended to
strengthen the alignment between shareholder interests and those of our directors. The RSUs are granted on the date of the
annual meeting of shareholders (or for newly appointed directors, on their date of appointment), with the number of RSUs
determined using the closing market price of the common stock as reported by Nasdaq on the business day prior to grant. The
RSUs vest on the earlier of the next annual meeting of shareholders or the first anniversary of the grant date, with acceleration
upon a CIC, death or disability, and retirement (age 65 with five years of service), but not resignation from the Board.
Annual Limit on Director Compensation
Our 2023 ICP provides for our non-employee directors to be eligible recipients of equity awards with an overall annual limit of
$500,000 on the total value of equity awards plus annual cash fees.
Director Stock Ownership Guidelines
As set forth in the Company’s Corporate Governance Guidelines, effective January 2025, each non-employee director is required to
own shares of our common stock having a value equal to four times the director’s annual cash retainer. This represents an increase
from the previous ownership requirement of three times the annual cash retainer. In connection with this increase, the Board also
extended the period to attain compliance. Non-employee directors now have a five-year period to attain compliance with the
ownership requirement unless the Board approves an extension in appropriate circumstances. Until the ownership requirement has
38
2025 Proxy Statement
COMPENSATION OF DIRECTORS
been met, a director may not sell any common stock received as part of the annual retainer. In addition, directors must hold at
least 50% of their required ownership until six months following their termination from service with the Company. For purposes of
calculating the required ownership amount, a non-employee director’s stock ownership includes all shares of common stock
considered beneficially owned under Exchange Act Rule 13d-3.
As a separate requirement, bank regulations require that each Board member own in such director’s own name (or jointly with the
director’s spouse) shares of common stock worth $1,000, none of which may be pledged or hypothecated.
Directors Retirement Plan
We maintain a retirement plan for non-employee directors which was frozen to new participants and for additional benefit accruals
in 2013. The plan provides 10 years of annual benefits to participating directors with five or more years of service. The benefits
commence after a director has retired from the Board and reached age 65. The annual benefit is equal to the director’s years of
service through December 31, 2013, multiplied by 5%, multiplied by the final annual retainer paid to directors as of December 31,
2013 ($40,000). In the event of the death of the director prior to receipt of all benefits, the payments continue to the director’s
beneficiary or estate. As a result of amendments to the plan adopted in 2013, participants no longer accrue further benefits and
directors first elected after 2013 do not participate.
2024 Director Compensation
The total 2024 compensation of our non-employee directors who served on the Board at any time during 2024 is shown in the
table below. Each of these compensation components is described in detail below.
Name
Fees Earned or
Paid in Cash(3)
Stock
Awards(4)
Change in Pension
Value and Non-Qualified
Deferred Compensation
Earnings(5)
All Other
Compensation(6)
Total
Andrew B. Abramson
$
90,000
$
85,000
$
1,231
$
3,624
$ 179,855
Peter J. Baum
90,000
85,000
—
3,624
178,624
Eric P. Edelstein(1)
160,000
85,000
4,708
3,624
253,332
Dafna Landau(2)
78,506
85,000
—
—
163,506
Marc J. Lenner(1)
95,000
85,000
—
3,624
183,624
Peter V. Maio(1)
110,000
85,000
—
3,624
198,624
Avner Mendelson
90,000
85,000
—
687,600
862,200
Kathleen C. Perrott
90,000
85,000
—
3,624
178,624
Nitzan Sandor(2)
11,740
—
—
—
11,740
Suresh L. Sani(1)
110,000
85,000
—
3,624
198,624
Lisa J. Schultz(1)
115,000
85,000
—
3,624
203,624
Jennifer W. Steans(1)
105,000
85,000
—
3,624
193,624
Jeffrey S. Wilks
95,000
85,000
—
3,624
183,624
Dr. Sidney S. Williams, Jr.
90,000
85,000
—
3,624
178,624
(1) Independent Lead Director or Committee Chair (see “Committees of the Board of Directors; Committee Composition and Meetings” on page 27 of this Proxy
Statement).
(2) Ms. Landau served as director until November 14, 2024, at which time Ms. Sandor was appointed to the Board. The amounts shown for “Fees Earned or Paid in Cash”
reflect prorated cash fees for each director’s respective term of service during 2024.
(3) Amounts include the $90,000 annual cash retainer plus any annual cash retainer for service as Independent Lead Director or chair of a Board Committee, as
applicable. For Ms. Schultz, the amount also includes a $5,000 annual cash retainer for service on the board of Valley Financial Management, Inc., a subsidiary of the
Company.
(4) Each non-employee director other than Ms. Sandor, who joined the Board in November 2024, received an RSU award with a value of $85,000 as their annual equity
retainer, granted on the date of the 2024 Annual Meeting. The number of RSUs was determined using the closing market price on the business day prior to grant, and
the RSUs vest on the earlier of the next annual meeting of shareholders or the first anniversary of the grant date, with acceleration upon a CIC, death or disability, and
retirement, but not resignation from the Board.
39
2025 Proxy Statement
COMPENSATION OF DIRECTORS
(5) Represents the change in the present value of pension benefits for 2024 under the Directors Retirement Plan considering the age of each director, a present value
factor, an interest discount factor, and time remaining until retirement. As disclosed above, the Directors Retirement Plan was frozen for purposes of benefit accrual in
2013. The annual change in the present value of the accumulated benefits of Messrs. Baum, Lenner, Sani, and Wilks was a net decrease of $366, $2,933, $2,862, and
$690 from the present value as of December 31, 2023 respectively; therefore, the amount reported is zero. The decrease in present value of the accumulated benefits
as of December 31, 2024, is attributable to the increase in the discount rate from 4.87% to 5.32%. The increase in present value of the accumulated benefit as of
December 31, 2024, for Mr. Abramson and Mr. Edelstein is attributable to the impact due to the time remaining until retirement, offset by the increase in the discount
rate from 4.87% to 5.32%.
(6) For each non-employee director other than Ms. Sandor, who joined the Board in November 2024 and did not receive the annual RSU grant, and Ms. Landau who did
not receive the deferred cash dividend due to her departure from the Board in November 2024, this column reflects deferred cash dividends in the amount of $3,624
earned in 2024 on the RSUs that are part of the director’s annual equity retainer, granted on the date of the annual meeting of shareholders.
For Mr. Mendelson, this amount also reflects payments pursuant to his consulting agreement entered into with the Company in connection with the Company’s
acquisition of Bank Leumi USA in April 2022. The agreement, as in effect in 2024, provided for monthly payments to Mr. Mendelson of $47,100 plus additional
quarterly payments of $90,000. The agreement expired on December 31, 2024 in accordance with its terms.
40
2025 Proxy Statement
Stock Ownership of Management and
Principal Shareholders
Directors and Executive Officers
The table below sets forth information about the beneficial ownership of our common stock as of March 1, 2025 by each current
director, director nominee, and by each of our NEOs named in this Proxy Statement, and by all current directors, director nominees,
and executive officers as a group.
Name of Beneficial Owner
Number of
Shares
Beneficially
Owned(1)
Percent
of
Class(2)
Andrew B. Abramson
305,295(3)
0.05%
Russell Barrett
102,433(4)
0.02
Peter J. Baum
163,845(5)
0.03
Joseph V. Chillura
515,579(6)
0.09
Eric P. Edelstein
120,709
0.02
Eyal Efrat
0
0.00
Michael D. Hagedorn
133,630
0.02
Thomas A. Iadanza
354,021
0.06
Travis Lan
13,180
0.00
Marc J. Lenner
333,172(7)
0.06
Peter V. Maio
47,991
0.01
Kathleen C. Perrott
108
0.00
Ira Robbins
650,975(8)
0.12
Nitzan Sandor
110
0.00
Suresh L. Sani
109,961(9)
0.02
Lisa J. Schultz
70,266
0.01
Jennifer W. Steans
4,370,230(10)
0.78
Jeffrey S. Wilks
470,829(11)
0.08
Dr. Sidney S. Williams, Jr.
22,347
0.00
Directors, Director Nominees, and Executive Officers as a group (22 persons)
7,997,673(12)
1.43
(1) For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act. Beneficially owned shares include shares of
common stock and preferred stock over which the named person exercises either sole or shared voting power or sole or shared investment power. Beneficially
owned shares also include shares owned (i) by a spouse or minor children or by relatives sharing the same home, (ii) by entities owned or controlled by the named
person, and (iii) by the named person if he or she has the right to acquire such shares within 60 days following March 1, 2025 by the vesting or exercise of any right or
option. Unless otherwise noted, all shares are owned of record and beneficially by the named person. The total includes shares of restricted stock that have not yet
vested, but does not include shares that may be issued upon the vesting of outstanding RSUs (except for RSUs scheduled to vest within 60 days following the date
of determination).
(2) For purposes of calculating these percentages, there were 560,275,784 shares of our common stock outstanding as of March 1, 2025. For purposes of calculating
each individual’s percentage of the class owned, the number of shares underlying stock options and RSUs that are included in the amount of shares that the
individual beneficially owns is also added to the total number of shares outstanding.
(3) This total includes 20,157 shares held by Mr. Abramson’s wife, 10,238 shares held by his wife in trust for his children and grandchildren, 40,157 shares held by a family
foundation, 10,401 shares held in a self-directed IRA, and 2,636 shares in a self-directed IRA held by his wife. Mr. Abramson disclaims beneficial ownership of shares
held by his wife and shares held for his children.
(4) This total includes 90,537 shares purchasable pursuant to stock options exercisable within 60 days.
(5) This total includes 6,150 shares held by a trust for the benefit of Mr. Baum’s children of which Mr. Baum is the trustee and 68,351 shares held by Mr. Baum’s father over
which Mr. Baum has power of attorney.
(6) This total includes 73,165 shares purchasable pursuant to stock options exercisable within 60 days. Of the total 515,579 shares, 420,000 shares are pledged as
security for loans.
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2025 Proxy Statement
STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
(7) This total includes 35,009 shares held in a retirement pension, 812 shares held by Mr. Lenner’s wife, 41,619 shares held by his children, 138,606 shares held by a trust of
which Mr. Lenner is 50% co-trustee (Mr. Lenner is an indirect beneficiary of only 25% of the trust and disclaims any pecuniary interest in the ownership of the other
portion of the trust), and 29,393 shares held by a charitable foundation.
(8) This total includes 2,800 shares held by Mr. Robbins’ wife and 407 shares held in trusts for the benefit of Mr. Robbins’ nieces.
(9) This total includes 5,705 shares held in Mr. Sani’s Keogh Plan, 5,705 shares held in trusts for the benefit of his children, and 44,390 shares held in pension trusts of
which Mr. Sani is co-trustee.
(10) This total includes 729,700 shares held by Ms. Steans’ spouse, 211,468 shares held by her spouse in a trust, 868,890 shares held in a family trust of which Ms. Steans is
a trustee, 1,276,374 shares held by a partnership of which Ms. Steans is one of three partners, and 105,000 shares held in her IRA. Ms. Steans holds 163,233 shares in
her own name. The remaining 4,206,997 shares are pledged as security for loans.
(11) This total includes 76,026 shares held by Mr. Wilks’ wife, 10,058 shares held by his wife in trust for one of their children, 4,747 shares held jointly with his wife for a
family foundation, 20,346 shares as trustee for the benefit of their children, 12,187 shares as trustee for the benefit of his wife, 266,804 shares held in an estate-
created trust for which Mr. Wilks is trustee and under which Mr. Wilks’ children are beneficiaries. Mr. Wilks disclaims beneficial ownership of shares held by the estate-
created trust.
(12) This total includes 346,622 shares owned by our executive officers and directors as a group. The total does not include shares held by the Bank’s trust department in
fiduciary capacity for third parties.
Principal Shareholders
The table below sets forth information about the beneficial ownership as of March 1, 2025, except as otherwise provided in the
footnotes, by persons or groups that beneficially own 5% or more of our common stock.
Name and Address of Beneficial Owner
Number of
Shares
Beneficially
Owned
Percent
of
Class(1)
Bank Leumi le-Israel B.M.(2)
24-32 Yehuda Halevi St.
Tel Aviv, 65545
Israel
72,861,862
13.0%
BlackRock, Inc.(3)
55 East 52nd Street,
New York, NY 10055
64,548,658
11.5%
The Vanguard Group, Inc.(4)
100 Vanguard Blvd.,
Malvern, PA 19355
45,625,380
8.1%
State Street Corporation(5)
One Congress Street, Suite 1
Boston, MA 02114
30,368,003
5.4%
Dimensional Fund Advisors LP(6)
6300 Bee Cave Road, Building One
Austin, TX 78746
25,853,204
4.6%
(1) For purposes of calculating these percentages, there were 560,275,784 shares of our common stock outstanding as of March 1, 2025.
(2) Based on a Schedule 13D Information Statement filed with the SEC on April 11, 2022 by Bank Leumi and additional information known to the Company. The Schedule
13D discloses that Bank Leumi has sole voting power and sole dispositive power as to 71,861,862 shares and shared voting power and shared dispositive power as to
71,861,862 shares. Additionally, Bank Leumi purchased 1,000,000 shares of common stock in our common stock offering in November 2024.
(3) Based on a Schedule 13G/A Information Statement filed with the SEC on January 23, 2024 by BlackRock, Inc. The Schedule 13G/A discloses that BlackRock has sole
voting power as to 63,559,181 shares and sole dispositive power as to 64,548,658 shares, and shared voting power and shared dispositive power as to no shares.
(4) Based on a Schedule 13G/A Information Statement filed with the SEC on February 13, 2024 by The Vanguard Group Inc. The Schedule 13G/A discloses that The
Vanguard Group has sole voting power as to no shares, shared voting power as to 392,565 shares, sole dispositive power as to 44,780,406 shares, and shared
dispositive power as to 844,974 shares.
(5) Based on a Schedule 13G Information Statement filed with the SEC on February 5, 2025 by State Street Corporation (“State Street”). The Schedule 13G discloses that
State Street has no sole voting or dispositive power as to any shares, shared voting power as to 3,049,994 shares, and shared dispositive power as to 30,368,003
shares.
(6) Based on a Schedule 13G Information Statement filed with the SEC on October 31, 2024 by Dimensional Fund Advisors LP (“Dimensional”). The Schedule 13G discloses
that Dimensional has sole voting power as to 25,078,614 shares, sole dispositive power as to 25,853,204 shares, and no shared voting or dispositive power as to any
shares.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers, and any beneficial owners of more than 10% of our
common stock to file reports relating to their ownership and changes in ownership of our common stock with the SEC by certain
deadlines. To our knowledge, based solely on a review of the filed reports and written representations by the persons required to
file these reports, we believe that each of our directors and executive officers complied with all such filing requirements during
2024, except that Mark Saeger filed a late Form 4 due to administrative error (to report a grant of shares).
42
2025 Proxy Statement
ITEM 2:
Advisory Vote on our Named Executive
Officer Compensation
In accordance with Section 14A of the Exchange Act, the Company’s shareholders are entitled to vote at the Annual Meeting to
approve the compensation of our NEOs as disclosed in “Compensation Discussion and Analysis” beginning on page 45 of this Proxy
Statement and the related tables, notes, and narrative that follow, commonly referred to as a “say-on-pay vote.” We currently hold
an annual say-on-pay vote.
The Company’s goal for its executive compensation program is to compensate executives who provide leadership for our
organization and contribute to our financial success. The Company seeks to accomplish this goal in a way that is aligned with the
long-term interests of the Company’s shareholders. The Board believes that the Company’s executive compensation program
satisfies this goal. “Compensation Discussion and Analysis” describes the Company’s executive compensation program for 2024
and the decisions made by the Compensation Committee relative to this program.
The Company seeks shareholder approval of the following resolution:
RESOLVED, that the shareholders of Valley National Bancorp (the “Company”) approve, on an advisory basis, the
compensation of the Company’s named executive officers as disclosed pursuant to Item 402 of Regulation S-K promulgated
under the Securities Exchange Act of 1934, as amended, in the Compensation Discussion and Analysis, the Summary
Compensation Table, and the related tables, notes, and narrative set forth in the Proxy Statement for the Company’s 2025
Annual Meeting of Shareholders.
As an advisory vote, this proposal is not binding upon the Board or the Company. However, the Compensation Committee, which is
responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by
shareholders in their vote on this proposal, and will consider the outcome of the vote when making future compensation decisions
for NEOs.
At our 2024 Annual Meeting, 97.7% of the shares voted on our “say-on-pay” proposal voted in favor of the Company’s executive
compensation program.
The Board recommends a vote “FOR”
the advisory approval of the compensation of our NEOs.
43
2025 Proxy Statement
Executive Compensation Disclosure
Table of Contents
Compensation Discussion and Analysis
45
Compensation Program Framework . . . . . . . . . . . . . . . . 46
Compensation Practices and Policies . . . . . . . . . . . . . . 48
2024 Compensation Program . . . . . . . . . . . . . . . . . . . . . 50
2024 Company and Individual Performance . . . . . . . . 54
2024 Compensation Awarded . . . . . . . . . . . . . . . . . . . . . 58
Other Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Report of the Compensation Committee
61
Executive Compensation Tables
62
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . 62
Grants of Plan-Based Awards . . . . . . . . . . . . . . . . . . . . . .
63
Outstanding Equity Awards at Fiscal Year-End . . . . . .
65
Stock Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
Pension Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
Nonqualified Deferred Compensation . . . . . . . . . . . . . .
67
Other Potential Post-Employment Payments . . . . . . .
68
Severance Benefits Table . . . . . . . . . . . . . . . . . . . . . . . . . .
70
Pay Versus Performance . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
Equity Compensation Plan Information . . . . . . . . . . . .
76
CEO Pay Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) describes our executive
compensation program for our CEO, our CFO, and the three other most highly
compensated executive officers who were serving as executive officers at fiscal
year-end 2024, as well as our former CFO (collectively, also referred to as our
“NEOs”). The Compensation Committee oversees all aspects of our NEOs’
compensation.
For 2024, our NEOs are:
•
Ira Robbins, CEO
•
Travis Lan, Senior Executive Vice President (“SEVP”), CFO
•
Thomas A. Iadanza, President
•
Russell Barrett, SEVP, Chief Operating Officer
•
Joseph V. Chillura, former SEVP, President of Commercial Banking
•
Michael D. Hagedorn, former SEVP, CFO
Leadership Changes. Since January 1, 2024, the Company has undergone leadership
changes which have impacted the composition of our NEO group for 2024.
Mr. Hagedorn, our former CFO, ceased serving in this role effective as of
November 30, 2024, and Mr. Lan, our then Executive Vice President (“EVP”), Deputy
CFO, was appointed as our Interim CFO. Mr. Lan was subsequently appointed as
SEVP, CFO effective March 3, 2025.
In December 2024, Mr. Iadanza notified the Company of his intention to retire as
President effective June 30, 2025, after more than 13 years with Valley and more
than 45 years in the banking industry.
Mr. Barrett was appointed as our SEVP, Chief Operations Officer effective January 1,
2024, and on March 3, 2025, he was appointed to the position of SEVP, Chief
Operating Officer.
Mr. Chillura transitioned from his position as SEVP, President of Commercial Banking
effective March 31, 2025 and remains with the Company as a non-executive
employee until June 30, 2025 to facilitate an orderly transition to his successor.
These changes impacted the compensation of our NEOs as described in more detail
below in this CD&A.
2024: Strategic Focus. As we noted in last year’s CD&A, 2023 was an extraordinary
year as Valley remained resilient amid significant disruptions to the banking industry.
In 2024, we saw continued volatility in the economic, interest rate, and operating
landscape, but like 2023, we are proud of our demonstrated ability to navigate
these conditions and focus on the execution of our strategic initiatives. We have
further solidified our financial position and set the operational foundation for
sustained success.
SALARY
KEY FEATURES:
Certain cash payment based on
position, responsibilities and
experience.
PURPOSE:
Offers a stable source of income.
NON-EQUITY
INCENTIVE AWARDS
KEY FEATURES:
Cash payment based on performance,
position, responsibilities, and
experience.
PURPOSE:
Intended to motivate and reward
executives for short-term financial and
strategic achievements.
TIME-BASED
EQUITY INCENTIVE
AWARDS
KEY FEATURES:
Equity incentives earned based on
performance and vested over time.
PURPOSE:
Intended to create alignment with
shareholders and promote retention.
PERFORMANCE-BASED
EQUITY INCENTIVE
AWARDS
KEY FEATURES:
Equity incentives earned based upon
performance and vest based on
meeting pre-established Company
performance objectives.
PURPOSE:
Intended to focus on achievement of
Company performance objectives,
GITBV and relative TSR.
45
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
In early 2024, we continued to focus on our strategic initiatives designed to position us for better performance. We laid out
specific balance sheet targets which reflected increased loan diversity, an improved funding base, and stronger capital ratios. As a
result of disciplined management and the execution of certain balance sheet efforts, we significantly exceeded our original balance
sheet and capital goals at year-end through the actions outlined below:
•
Sold $920 million of commercial real estate loans in December at a modest 1% discount, diversifying our loan portfolio and
providing incremental capacity to reinvest in our relationship-focused clients;
•
Raised $150 million through our preferred stock offering and $450 million through our common stock offering, generating
significant capital resources that position us well to support our communities and clients in 2025 and beyond;
•
Continued to successfully gather deposits and improve our funding base through organic efforts, ending 2024 with reported
total deposits of $50.1 billion, a 1.7% increase over year-end 2023;
•
Demonstrated stability from a revenue perspective despite interest rate volatility throughout 2024, seeing a steady quarter
over quarter increase in net interest income and net interest margin starting in the second quarter 2024; and
•
Reduced our non-interest expense by 5% year over year through efficient expense management.
Through these efforts in 2024, we enhanced our financial flexibility and fortified our financial position as we entered into 2025.
This context regarding our business is important to an understanding of our executive compensation program for 2024.
Compensation Program Framework
Compensation Philosophy. We believe that Valley’s executive compensation should be structured to balance the expectations of
our shareholders, our executives, and our other stakeholders. To this end, our compensation program is designed to support our
primary financial, strategic, and operational objectives, and intended to attract, motivate, and retain our executives who are critical
to the long-term success of the Company. We have adopted a compensation philosophy that seeks to achieve this balance by
taking into consideration the following factors:
•
Pay is substantially aligned with performance: We assess our performance and strive to hold our NEOs and, in particular, our CEO
accountable. Accordingly, we reward NEOs when the Company achieves short- and long-term performance objectives and scale down
or decrease compensation when the Company does not achieve those objectives.
•
Balanced compensation structure: Our compensation program has been structured to balance near-term results with long-term
success, promote effective risk management, and enable us to attract, motivate, and retain our executives for creating shareholder
value. As a result, we employ a mixture of short-term and long-term financial rewards for our executives.
•
We benchmark our compensation package against our peer group: We inform our compensation decisions by measuring our
practices and pay against bank holding companies that are similar in size and complexity to Valley. In addition, our performance-based
RSU awards vest in substantial part based on how the total return from our shares performed against the KRX Index, a leading bank
stock index of 50 banks.
Elements of Compensation. The primary elements of the compensation program for our NEOs are base salary and incentive
compensation delivered through a combination of annual cash incentive awards and long-term equity incentive awards.
•
Base Salary: Base salary is a customary, fixed element of compensation intended to attract and retain executives. Base salary is the only
component of our NEOs’ total direct compensation that is not at-risk. Salaries are determined by an evaluation of individual NEO
responsibilities, performance, and compensation history, as well as a comparison to the salaries of our peers. Salaries can also be
adjusted to reflect experience and tenure in a position, internal pay equity within the executive officer group, promotions or increased
scope of responsibilities, and retention considerations.
•
Non-Equity Incentive Awards: Awards under our non-equity incentive compensation program are set at target levels that reflect our
NEOs’ roles and responsibilities, generally ranging from 80% to 140% of base salary. We award non-equity cash compensation based in
substantial part on the Company’s financial results, as well as the achievement of shared and individual strategic goals.
46
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
•
Equity Incentive Awards: The value of our NEOs’ equity incentive award is generally granted 25% in the form of time-based RSUs and
75% in the form of performance-based RSUs.
•
Time-Based Equity Awards: We award time-based RSU awards which vest pro rata on an annual basis over a three-year
period.
•
Performance-Based Equity Awards: We award performance-based RSU awards which vest based on the Company’s
adjusted GITBV and relative TSR performance against the constituent banks comprising the KRX Index measured over a
three-year performance period.
The principal elements of compensation paid on average to our NEOs who were serving as executive officers in February 2024 at
the time that total target compensation was determined and the percentage that these elements represent of the 2024 total
target compensation for our CEO and these other NEOs are reflected below.
CEO
Other NEOs
At-risk
82%
Equity Incentive
56%
Base salary
18%
Non-Equity Incentive
26%
At-risk
66%
Equity Incentive
37%
Base salary
34%
Non-Equity Incentive
29%
As these charts demonstrate, a substantial amount of our NEOs’ total target compensation is variable, at-risk, and performance-
based. This is intended to both incentivize our executives and align pay with performance to the benefit of our shareholders. The
largest component of total direct compensation for our NEOs is equity incentive awards, as the Compensation Committee wants
to encourage significant focus on long-term growth and shareholder value.
A more detailed description and analysis of each of these elements is set out in more detail on pages 50 to 57 of this Proxy
Statement.
47
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Compensation Practices and Policies
What we do:
✓
At-Risk Compensation: A significant portion of each
executive officer’s incentive compensation is “at-risk” and
equity compensation covers multi-year vesting periods.
✓
Clawback: For a period of six years after the date of the
award, the Compensation Committee may (i) cancel
unvested equity awards in the event of material
misconduct by the executive which harms the Company
financially and (ii) recoup vested equity awards and
previously paid cash awards in the event of intentional
fraud or intentional misconduct by the executive. The
Company also has a separate Clawback Policy in the
event of a financial restatement in accordance with
Nasdaq requirements.
✓
Stock Ownership: To better align the interests of our
NEOs with those of our shareholders, we require each
NEO to own a minimum number of shares of our common
stock as set forth below. We also require our directors to
own 4 times their annual cash retainer.
Title
Minimum Value of Required
Common Stock Ownership
CEO
6x base salary
President & SEVPs
3x base salary
Directors
4x annual cash retainer
✓
Retention Requirement: Officers may not sell any shares
which they are awarded as compensation until they
satisfy the target ownership amount under the guidelines
other than shares withheld for taxes or in the limited
circumstance where the Compensation Committee Chair
approves a financial hardship exception. Shares held by an
NEO’s spouse and minor children count towards the
requirement, as well as unvested time-based RSUs.
Compliance with these stock ownership requirements is
calculated annually and reported to the Compensation
Committee.
✓
Hold Past Termination: Each executive officer must
continue to hold at least 50% of the target ownership
amount under our stock ownership guidelines until six
months following termination of employment with the
Company.
✓
Restrictive Covenants: Acceptance of our equity awards
requires our executives to agree not to solicit Valley
customers and employees for 12 months following
termination of employment.
✓
Independent Compensation Consultant: The
Compensation Committee engages an independent
compensation consultant that provides no other services
to the Company.
What we don’t do:
X
No Excise Tax Gross-ups: We do not offer any excise tax
gross ups for any executive CIC arrangements.
X
No Single Trigger CIC Payments or Equity Vesting: Our
CIC agreements and equity grant agreements provide
that if there is a CIC, an executive officer is not entitled to
severance or accelerated vesting unless he or she is
terminated from employment or resigns for good reason
following the CIC.
X
No Hedging or Pledging: We have a policy prohibiting
executive officers from entering into hedging and
pledging transactions involving the Company’s equity
securities. The Board believes that such transactions,
which have the effect of mitigating the risks and rewards
of ownership, may result in the interests of management
and shareholders of the Company being misaligned. With
the approval of the Nominating Committee, executive
officers and directors may continue, in certain limited
instances, to hold shares that were pledged prior to
joining the Company.
X
No Excessive Risk Taking: We design our compensation
program in a manner that we believe promotes effective
risk management and does not encourage or foster
excessive risk-taking, but instead aligns the financial
interests of our NEOs with those of our shareholders. The
Compensation Committee annually assesses our
compensation program with the Company’s Chief Risk
Officer, with input from the Chair of the Risk Committee,
to determine whether they are well-balanced and that
they do not encourage imprudent risk-taking.
X
Time Equity Grants: Instead, we generally only grant long-
term incentives on pre-determined dates to ensure that
awards cannot be timed to take advantage of material
non-public information.
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Our Compensation Process
Our Compensation Committee sets the compensation of all executive officers, including our CEO and our other NEOs. Each year,
the Compensation Committee reviews and approves the compensation package for our NEOs, which consists of base salary,
non-equity incentive awards, and equity incentive awards, as detailed below. The Compensation Committee met a total of 5 times
during 2024 and early 2025 to discuss NEO compensation for 2024 and target compensation for 2025.
Mr. Robbins, our CEO, and some of our other NEOs attended portions of the meetings. Mr. Robbins presented and discussed with
the Compensation Committee his recommendations for compensation for the other NEOs without such NEOs present. Mr. Robbins
neither made a recommendation to the Compensation Committee about his own compensation nor was he present when his
compensation was discussed or set by the Compensation Committee. The Compensation Committee sets executive compensation
with only Compensation Committee members and consultants present, after presentations by the CEO.
The Compensation Committee has the authority to directly retain the services of independent compensation consultants and
other experts to assist in fulfilling its responsibilities. The Compensation Committee engaged the services of FW Cook, a national
executive compensation consulting firm, to review and provide recommendations concerning all the components of the
Company’s executive and director compensation programs. FW Cook performs services solely on behalf of the Compensation
Committee and has no relationship with the Company or management except as it may relate to performing such services. FW
Cook assists the Compensation Committee in defining Valley’s peer companies for benchmarking executive and director
compensation. FW Cook also assists the Compensation Committee with all aspects of the design of our executive and director
compensation programs. The Compensation Committee assessed the independence of FW Cook and concluded that no conflict of
interest exists that prevents FW Cook from independently representing the Compensation Committee. At Compensation
Committee meetings, the Compensation Committee holds executive sessions at which its independent compensation consultant
is present and provides advice.
Our Peer Group
Because of our need to compete in the market for talent while at the same time aligning compensation with performance,
considering the compensation and performance data of peers is an important factor in our compensation decisions. To this end, in
setting compensation for our executives, we compare total compensation, total target compensation, each compensation element
(specifically base salary, non-equity incentives, and equity incentive compensation), and the Company’s financial performance to a
peer group. The Compensation Committee, with input from its independent compensation consultant, has established the
compensation peer group. Our peer group is reviewed by the Compensation Committee on an annual basis, based on information
provided by FW Cook, to confirm that the peer group remains appropriate for comparison or to approve any changes to the peer
group deemed advisable. When evaluating our peer group or potential new additions to the peer group, our independent
compensation consultant screens for companies that are within our industry and traded on a major U.S. exchange; similarly sized
within appropriate revenue, market capitalization and asset ranges; operating in the same geographies as the Company; and
frequent “peers of peers” screened for size and business model fit.
49
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Our 2024 Peer Group. In June 2023, the Compensation Committee reviewed our peer group and, based on the recommendations
of FW Cook, approved the following changes, resulting in the new peer group for 2024 composed of the 16 financial institutions
listed below:
Changes to 2023 Peer Group
New 2024 Peer Group
Removed from the Peer Group:
•
First Citizens BancShares
(total assets outside range)
•
PacWest Bancorp*
(market cap outside range)
•
Signature Bank
(acquired in March 2023)
•
Texas Capital Bancshares
(total assets outside range)
•
Umpqua Holdings Corporation
(acquired in February 2023)
Added to the Peer Group:
•
Cadence Bank
•
First Horizon Corporation
•
Zions Bancorporation
(three peers added due to: total asset size >$50B, in line with
Valley’s positioning relative to median, frequent peers of the
Company’s peers, and included in the Company’s proxy
advisory firm peer groups)
BankUnited, Inc.
BOK Financial Corporation
Cadence Bank
Comerica Incorporated
Cullen/Frost Bankers, Inc.
First Horizon Corporation
F.N.B. Corporation
Hancock Whitney Corporation
New York Community Bancorp, Inc.**
Prosperity Bancshares, Inc.
SouthState Corporation
Synovus Financial Corp.
Webster Financial Corporation
Western Alliance Bancorporation
Wintrust Financial Corporation
Zions Bancorporation
* Acquired by Banc of California, Inc. in November 2023.
** Changed name to Flagstar Financial, Inc. in October 2024.
The peer group adopted for 2024 consists of companies with revenues between $925 million and $3.7 billion, assets between
$37.2 billion and $123.8 billion, and market capitalization between $1.4 billion and $7.4 billion based on information provided by FW
Cook at the time the peer group was approved. Relative to this 16-company peer group, the Company was positioned near the
median with respect to revenue, between the median and 75th percentile with respect to total assets, and near the 25th percentile
with respect to market capitalization.
This new peer group was used for purposes of establishing the executive compensation framework and various elements of
compensation for 2024. The Compensation Committee refers to this peer group information when setting our CEO compensation
and that of our other NEOs and generally targets CEO and NEO total compensation at levels that are at the median of our peer
group.
Our 2025 Peer Group. In June 2024, the Compensation Committee reviewed our peer group and, based on the recommendation
of FW Cook, determined not to make any changes to the peer group for 2025. This decision was based on the fact that the current
16-company peer group represents a robust sample size and consists of size appropriate companies with suitable business
comparability, and there was no mergers and acquisitions activity that would warrant the removal of an existing peer company.
2024 Say-on-Pay Vote
At the 2024 Annual Meeting, 97.7% of the votes cast were in favor of the advisory, non-binding vote to approve executive
compensation. We believe that these results reflect our commitment to providing our executives with compensation that is in
alignment with our shareholders’ short- and long-term interests. The results also favorably reflected on our continuing outreach
program to our large institutional shareholders. See above under “Corporate Governance – Engagement” for a discussion of our
shareholder engagement efforts in 2024.
2024 Compensation Program
In determining the 2024 compensation package for our NEOs, as in prior years, the Compensation Committee used a combination
of base salary, non-equity incentive awards, and equity incentive awards as detailed below.
50
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
At its February 2024 meeting, the Compensation Committee took the following actions for each NEO:
•
Approved base salaries for 2024;
•
Set target non-equity awards and performance objectives under our annual non-equity incentive award program for 2024, with
such non-equity awards to be paid out in the first quarter of 2025 based on 2024 performance; and
•
Set target award values for equity incentive awards to be granted to our NEOs in 2025, with the actual award value of such
awards to be determined by the Compensation Committee in the first quarter of 2025 based on 2024 performance.
In February 2025, following the Compensation Committee’s assessment of Company and individual performance achievement in
2024, determinations were made regarding (i) the payout of the non-equity incentive awards for 2024 and (ii) the granting of equity
incentive awards for 2024 (in the form of time-based and performance-based RSUs) to each of our NEOs. A more detailed
description and analysis of each of these determinations follows.
Base Salaries
In February 2024, the Compensation Committee approved the following base salary increases for our NEOs based on
consideration of peer and market data, Company performance, and individual performance and tenure:
NEO
2023 Base
Salary
2024 Base
Salary
% Increase
Mr. Robbins
$1,000,000
$1,050,000
5%
Mr. Lan
$
318,000
$
350,000
10%
Mr. Iadanza
$
700,000
$
750,000
7%
Mr. Barrett
$
425,000
$
475,000
12%
Mr. Chillura
$
510,000
$
525,000
3%
Mr. Lan’s base salary increase reflects his promotion to EVP, Deputy CFO in January 2024. Mr. Lan’s base salary was thereafter
increased to $400,000 in November 2024, in connection with his promotion to EVP, Interim CFO, and was increased to $500,000 in
March 2025 in connection with his appointment as our CFO. With respect to Mr. Lan’s appointment as CFO, his base salary was
increased to align with market levels and his increased responsibilities following his promotion.
Mr. Barrett’s base salary increase reflects his promotion to SEVP, Chief Operations Officer in January 2024.
The base salary of our former CFO, Mr. Hagedorn, was maintained at $590,000 for 2024.
Non-Equity Incentive Awards
Each year at its February meeting, the Compensation Committee approves target non-equity incentive awards for each NEO and
approves the framework establishing the performance objectives that must be achieved to earn a non-equity incentive payout for
the year.
2024 NEO Target Award Levels. In February 2024, or in the case of Mr. Lan, in November 2024 in connection with his appointment
as Interim CFO, the Compensation Committee set the following target non-equity incentive awards for 2024 calculated as a
percentage of each executive’s base salary as follows:
NEO
Percentage for 2024
Mr. Robbins
140% of base salary
Mr. Lan
50% of base salary
Mr. Iadanza
100% of base salary
Mr. Barrett
80% of base salary
Mr. Chillura
85% of base salary
Mr. Robbins’ target non-equity incentive award percentage represents a 12% increase from 125% in 2023. This increase was
adopted to further increase the portion of Mr. Robbins’ total target direct compensation attributable to at-risk, performance-based
compensation. The increase also aligned Mr. Robbins’ target more closely with the peer median.
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
In connection with Mr. Lan’s appointment as EVP, Interim CFO in November 2024, the Compensation Committee approved a target
non-equity incentive award of 50% of base salary. His target non-equity incentive award was thereafter increased to 80% of base
salary in March 2025 in connection with his appointment as our CFO, including with respect to internal comparability
considerations. In February 2024, the target non-equity incentive award percentage of our former CFO, Mr. Hagedorn, was also set
at 80% of base salary, but as addressed below under “Special NEO Compensation Arrangements,” Mr. Hagedorn did not receive
payment of his non-equity incentive award for 2024 due to his departure from the Company.
2024 Performance Objectives and Weightings. In February 2024, the Compensation Committee also established the relevant
performance objectives under the non-equity incentive program for 2024 and assigned each objective a weighting, as set forth in
the table below. The below framework was consistent with the 2023 framework, with the exception of an increase in the weighting
of the “Individual Objectives” from 10% to 20%. This additional 10% was reallocated from the core transformation performance
objective that was achieved under non-equity incentive program for 2023 and as a result was not applicable in 2024.
2024 Non-Equity Incentive Program Framework
Company
(65%)
Financial Objective
40%
Financial
(40%)
Company Strategic Objectives
15%
Strategic
(60%)
Customer Experience
10%
Individual
(35%)
Risk Management & Control
15%
Individual Objectives
20%
In February 2025, the Compensation Committee assessed Company and individual performance relative to these performance
metrics and approved the corresponding payout level as a percentage of each NEO’s target non-equity incentive award, as
described in more detail below under “2024 Company and Individual Performance.”
Equity Incentive Awards
Under the Company’s annual equity incentive award program, the Compensation Committee grants (i) time-based RSU awards
which vest pro rata on an annual basis over a three-year period and (ii) performance-based RSU awards which vest based on the
Company’s adjusted GITBV and relative TSR performance measured over a three-year performance period. These awards are
designed to promote retention, which is important in a competitive talent market, to incentivize performance with respect to key
financial measures, and to align NEO and shareholder interests by tying a significant portion of NEOs’ pay to the Company’s long-
term performance.
Each year at its February meeting, the Compensation Committee:
•
Establishes a total target equity award value for each NEO as a percentage of base salary, with achievement relative to this
target to be determined the following February based on the Compensation Committee’s holistic assessment of Company and
individual performance during the prior year;
•
Approves the award mix of the equity awards to be granted for the then-current performance year (i.e., the portion of the total
equity award that will be time-based versus performance-based, and for the performance-based portion of the award, the
portion that will be based on adjusted GITBV versus relative TSR);
•
Grants equity awards with a total value determined relative to target based on prior year performance and determines the
performance goals and metrics (i.e., adjusted GITBV and relative TSR) for the performance-based RSU awards granted at that
meeting; and
•
Certifies performance and payout levels for previously granted performance-based RSU awards, the performance period of
which ended on the immediately preceding December 31.
2024 Target Award Values. Based on this process, in February 2024, the Compensation Committee approved each NEO’s target
total equity award value reflected in the table below. In February 2025, following a holistic assessment of Company financial,
strategic, and operational performance in 2024, as well as achievement of risk management and other individual objectives, as
described in more detail below under “2024 Company and Individual Performance,” the Compensation Committee determined to
award each NEO a total equity award value that was then translated into the number of time-based RSUs and performance-based
RSUs granted to each NEO. See below under “2024 Compensation Awarded – Equity Incentive Awards” for more detail.
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
NEO
2024 Target Equity Award Value
Ira Robbins
$3,180,000
Travis Lan
250,000
Thomas A. Iadanza
800,000
Russell Barrett
500,000
Joseph V. Chillura
500,000
2024 Award Mix. In February 2024, consistent with prior years, the Compensation Committee approved the award mix of the
equity awards, determining to grant 25% of the value of each NEO’s equity award in the form of time-based RSUs and the
remaining 75% in the form of performance-based RSUs. The table below summarizes the mix of our equity incentive awards granted
to our NEOs in February 2025 based on 2024 performance, with the exception of Mr. Lan whose award mix was 50% time-based
RSUs and 50% performance-based RSUs based on his then position as EVP, Deputy CFO.
Form of RSU Award
Percentage of Total
2025 Target Equity
Award Value
(granted for 2024
performance)
Purpose
Performance
Measured
Earned and Vesting Periods
Time-Based Award
25%
Encourages retention. Fosters
shareholder mentality among the
executive team
N/A
Vests in annual one-third
increments on each February 1
following the grant date
GITBV Performance-
Based Award
45%
Encourages retention and ties
executive compensation to our
operational performance
GITBV
Earned and vests after three-
year period based on adjusted
GITBV
TSR Performance-Based
Award
30%
Encourages retention and ties
executive compensation to our
long-term market index
performance
Relative TSR
Earned and vests after three-
year period based on TSR
against the constituent banks
comprising the KRX Index
The percentage mixes described in the table above translate into the dollar value of each type of award granted. The dollar value is
then translated into a number of units using the closing price of the Company’s common stock the day before the effective date of
the grant. Each time-based and performance-based RSU award is settled in the Company’s common stock with any dividend
equivalents accrued during the performance period paid in cash.
Performance Goals and Metrics. As explained below, the Compensation Committee has historically chosen GITBV and relative TSR
performance metrics applicable to our performance-based RSU awards given their significance to our business and to our
shareholders.
Adjusted GITBV Performance-Based Awards. The Compensation Committee has chosen GITBV over a three-year period because it
believes that this metric is a good indicator of the performance and shareholder value creation of a commercial bank, and the
Company has received positive feedback from its investors regarding its use of GITBV in the Company’s equity incentive
compensation program.
GITBV, when used herein, means year-over-year growth in tangible book value, plus dividends on common stock declared during
the year, excluding other comprehensive income (“OCI”) recorded during the year. The add-back of dividends allows the
Compensation Committee to compare our performance to our peers that pay different amounts of dividends. The exclusion of OCI
neutralizes changes in tangible book value related to accounting mechanics and not viewed as tied to financial performance.
Consistent with the terms of the award agreements for performance-based RSUs and the 2023 ICP, the Compensation Committee
has the authority to adjust the calculation of GITBV for certain items that are one-time in nature. From time to time, the
Compensation Committee uses this authority to avoid either rewarding or penalizing executives for certain decisions which may
adversely or positively affect the Company’s short-term results. Adjustments to GITBV primarily related to: (i) in 2022, the impacts
of the Bank Leumi USA (“BLUSA”) acquisition, including adjustments with respect to merger-related charges, the earnings
associated with BLUSA in the year of acquisition, and the shares issued in connection with the BLUSA acquisition; (ii) in 2023, the
impact of the special assessment implemented by the Federal Deposit Insurance Corporation (the “FDIC special assessment”) and
merger related expenses and other merger charges; and (iii) in 2024, the FDIC special assessment.
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In the first quarter of each year, in setting the adjusted GITBV performance levels, the Compensation Committee reviews the
Company’s financial forecast with respect to anticipated growth, the interest rate environment, analyst consensus, and peer group
rates and approves the threshold, target, and maximum performance goals for GITBV awards accordingly.
Earned GITBV awards vest after the end of the three-year performance period following the Compensation Committee’s
certification of performance results. The number of shares that can be earned may range from 0% to 200% of the target,
depending on performance against the threshold, target and maximum performance levels approved by the Compensation
Committee (with linear interpolation between the performance levels).
Relative TSR Performance-Based Awards. These RSUs are earned based on the Company’s relative TSR for a three-year performance
period against the constituent banks comprising the KRX Index. The KRX Index is used as a broad indicator of Valley’s relative
market performance. Earned TSR performance-based awards vest at the end of the three-year performance period and are settled
following the Compensation Committee’s review and certification of the level of performance achievement. The number of shares
that may be earned ranges from 0% to 200% of the target, depending on performance (with linear interpolation between
performance levels) as follows:
TSR
Percentage of Target
Shares Earned
Below 25th percentile of KRX Index
None
25th percentile of KRX Index (Threshold)
50%
50th percentile of KRX Index (Target)
100%
87.5th percentile of KRX Index (Maximum)
200%
If the Company has a negative TSR on an absolute basis at the end of the three-year performance period, then the maximum
number of shares that could be earned, regardless of the Company’s TSR relative to its peer group, would be 100% of target.
2024 Performance Outcomes of our Performance-Based RSUs (2022-2024 Performance Period). In February 2025, the
Compensation Committee reviewed and certified the level of performance achieved with respect to our performance-based RSU
awards granted in 2022 as well as the associated payout level as described below.
GITBV Payout for 2022-2024 Performance Period. The table below sets forth how the GITBV performance-based awards granted in
2022 vested based upon the Company’s performance during the 2022-2024 performance period. For these awards, the threshold
was 10.50%, the target was 13.00%, and the maximum was 15.75%. The 2022 awards vested in February 2025 at 103.45% of target
due to achievement of three-year adjusted GITBV of 13.19%.
GITBV Performance
Cumulative
Performance Measured
Payout as a % of Target
Grant Date
2022
2023
2024
2022-2024
February 15, 2022
17.47%
13.45%
8.64%
13.19%
103.45%
TSR Payout for 2022-2024 Performance Period. The Company’s cumulative TSR was 18.90% for the three-year period ended
December 31, 2024, and the percentile rank against the constituent banks comprising the KRX Index was 2.00%. Accordingly, this
performance achievement resulted in zero payout of the 2022 TSR performance-based RSU awards.
2024 Company and Individual Performance
Through the performance-based program elements described above, our executive compensation is tied to objectives which
reflect Valley’s commitment to driving shareholder value through unwavering service to our clients, our employees, and our
community. The Compensation Committee uses a rigorous approach in establishing performance goals that incentivize NEOs to
deliver on the Company’s financial, strategic, and operational priorities. At the beginning of each year, the Compensation
Committee, with input from our CEO and Chief People Officer, establishes financial, strategic, and operational goals, together with
individual NEO objectives with a focus on supporting broader Company goals. The individual objectives are tailored and specific to
each NEO’s area of responsibility. At the end of the year, the Compensation Committee evaluates Company performance and each
NEO’s performance against the pre-established goals and objectives as well as management’s recommendations as to the level of
performance achieved, other than with respect to our CEO. The outcome of the performance evaluation is then used to determine
NEO compensation. The Compensation Committee’s assessment of the achievement of Company and individual performance
objectives for 2024 is described below.
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2024 Company Performance
Financial Performance (shared outcome). Under our compensation program, 40% of our non-equity incentive compensation was
based on Valley’s financial performance in 2024 and reflects the Compensation Committee’s belief that our executives should
generally be compensated in the context of the Company’s recent financial performance.
The most important financial metric considered by the Compensation Committee relative to non-equity incentive compensation is
core net income available to common shareholders.* For 2024, the Company achieved non-GAAP core net income available to
common shareholders of $322.2 million.
In addition to core net income, GITBV and relative TSR, the Compensation Committee considers other measures of financial
performance to more holistically inform its determinations regarding our non-equity incentive compensation program and other
components of our executives’ compensation. For 2024, these other financial measures included: year-over-year deposit growth of
1.7%, a year-over-year 2.8% decrease in total loans, return on average assets of 0.61%, net interest income of $1.6 billion,
non-interest income of $224.5 million, non-interest expense of $1.1 billion, diluted EPS of $0.69 and a net interest margin on a fully
tax equivalent basis of 2.85%.**
In light of the Company’s results with respect to core net income available to common shareholders, and taking into consideration
the Company’s financial performance results generally, the Compensation Committee determined that the Company did not meet
its financial performance objective for 2024, resulting in zero payout with respect to this component of our non-equity incentive
awards for our NEOs at the SEVP level.
For 2024, Mr. Lan participated in our non-equity incentive program for non-executive officer participants. Under this non-executive
plan, the Compensation Committee approved a partial adjustment with respect to the financial component of the plan, resulting in
a 14% increase to Mr. Lan’s award.
Performance Against Strategic and Operational Goals (shared outcome). In addition to short-term financial performance, the
Compensation Committee, in setting executive compensation, considered Valley’s attainment of shared-outcome objectives,
including specific strategic and operational goals (representing 25% of our non-equity incentive awards). Attainment of these goals
is designed to position Valley for long-term growth for our franchise and stakeholders and for the generation of shareholder value
over time. The Compensation Committee believes that the strategic targets developed and implemented by our CEO and other
NEOs are crucial to the achievement of Valley’s long-term financial objectives. Valley’s compensation program is aligned with these
long-term goals through our use of equity compensation, in particular, our performance-based equity awards.
Customer Experience: One of our strategic objectives in 2024 was based on driving improvement in customer experience.
Customer satisfaction was measured by an index based on customer attitude in terms of satisfaction, advocacy, and effort, and
customer behavior in terms of household growth and number of products per household. Based on management’s successful
efforts to increase our customer experience index in 2024, the Compensation Committee approved management’s assignment of
a 135% achievement level to this strategic goal.
*
Core net income is net income available to common shareholders adjusted for non-core items that the Company believes are not indicative of its core operating
performance. Core net income represents a non-GAAP financial measure. See Appendix A to the Proxy Statement for reconciliations of non-GAAP measures and
related information regarding these non-GAAP measures.
**
Net interest margin is presented on a tax equivalent basis using a 21 percent federal tax rate. Valley believes that this presentation provides comparability of net
interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice and SEC rules. On an unadjusted basis, net interest
margin was 2.84% for the year ended December 31, 2024.
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Company Strategic Objectives: Our other primary strategic objectives for 2024, which were focused on specified three-year
financial imperatives and enhancement of strategic capabilities, are categorized in the table below along with key outcomes:
Strategic Objectives
Key Outcomes in 2024
Optimize commercial banking value proposition:
•
We reduced our commercial real estate loan concentration ratio* to
approximately 362% at December 31, 2024 from 474% at December 31,
2023. This was the result of disciplined new origination activity, continued
CRE payoffs, targeted CRE loan sales, as well as our preferred and common
stock issuances in 2024.
Enhance balance sheet flexibility:
•
We continued to successfully gather core customer deposits and improve
our funding base through organic growth and strategic initiatives. At the
end of 2024, we reported total deposits of $50.1 billion, a 1.7% increase from
$49.2 billion at year-end 2023, net of a $397.2 million reduction in indirect
deposits.
•
We raised $150 million through our preferred stock offering and
$450 million through our common stock offering, generating significant
capital resources.
•
We sold $920 million of commercial real estate loans at a modest 1%
discount, diversifying our loan portfolio and providing incremental capacity
to reinvest in our relationship-focused clients.
•
We completed a synthetic credit risk transfer transaction, related to
$1.5 billion of automobile loans, with the new credit protection significantly
reducing the risk-weighted assets associated with these loans for regulatory
capital purposes.
Drive sustainable fee revenue:
•
We continued to prioritize our suite of value-add commercially adjacent
products and services that support our fee income growth. Our 2023 core
conversion set the foundation for significant enhancements in our product
offerings and service capabilities, including with respect to our enhanced
treasury service offering to commercial depositors rolled out in July 2024,
which meaningfully contributed to a 17% increase in our service charges on
deposit accounts revenue in 2024 as compared to 2023.
Our strategic capabilities objectives related to enhanced use of data and analytics, profitability-informed decision making and
financial analytic capabilities, and business planning. In furtherance of these objectives, the Company implemented technology related
to customer data as well as certain financial analytics, and developed clear alignment between our strategy and executive goals.
Based on its assessment of Company performance with respect to the strategic objectives portion of our 2024 non-equity
incentive award framework, the Compensation Committee approved management’s assignment of a 150% achievement level.
2024 Individual Performance
Under our 2024 compensation program, 35% of our non-equity incentive compensation was based on an individual performance
assessment based on individual risk management and control goals (15%) and individual strategic and operational goals which are
tied directly to the Company strategic and operational goals described above (20%). These goals are designed to hold each NEO
accountable for the Company’s strategic, operational, and risk management objectives.
Risk Management & Control Goals (individual outcome). The Compensation Committee also evaluated each NEO’s individual
performance with respect to goals related to risk management and control. The overall objective of the risk management and
control goal is tied to driving a strong risk management culture and sound control environment, based in part on regulatory
examination and internal audit findings, with specified individual goals including: managing within the Bank’s risk appetite;
managing reputational risk, compliance, governance and controls; technology risk management/cyber risk; and business controls.
The Compensation Committee considers the input of the Chair of the Risk Committee in establishing these risk management and
control goals, as well as in determining whether such goals have been achieved.
Individual Strategic Objectives (individual outcome). The Compensation Committee also evaluates each NEO’s individual
objectives. At the outset of each year, our CEO develops individual goals for himself, which he reviews with the Compensation
Committee. The Compensation Committee provides its feedback and then approves the CEO’s goals, as modified by their
feedback. Our CEO also develops goals with each of our other NEOs for year that are aligned with the Company’s financial and
*
Defined as total commercial real estate loans held for investment and held for sale, excluding owner occupied loans, as a percentage of total risk-based capital.
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ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
strategic objectives, and these goals are approved by the Compensation Committee. At the outset of the following year, the
performance by each NEO against these pre-established goals is evaluated, in the case of our CEO, by the Compensation
Committee, and in the case of our other NEOs, by our CEO and presented to the Compensation Committee together with the
CEO’s compensation recommendations.
In February 2024, the Compensation Committee approved individual performance objectives for our NEOs in accordance with the
process described above, and in February 2025, the Compensation Committee assessed each NEO’s individual performance
relative to these objectives and approved payouts accordingly, taking into account individual performance as well as Company
performance.
Ira Robbins: Individual goals for our CEO set by the Board in February 2024 included:
•
Further develop the foundation for Valley’s relevance with
a focus on non-traditional bank networks and industries;
•
Assess and develop strategic initiatives;
•
Ensure structure and governance around strategic
initiatives;
•
Advance cultural growth of the organization; and
•
Further leadership succession, strengthening talent
pipeline and retaining top talent while acquiring new key
talent.
The Compensation Committee assigned significant weight to the Company’s financial performance in assessing Mr. Robbins’
incentive compensation awards, resulting in below target performance payout with respect to his non-equity incentive award.
The Compensation Committee determined that Mr. Robbins exceeded his individual goals and materially contributed to the
Company’s substantial achievement of its strategic and operational goals. In particular, the Compensation Committee considered
Mr. Robbins’ leadership of the Company in the face of continued challenging conditions.
The Compensation Committee credited Mr. Robbins for the successful deployment of the Company’s strategic plan, noting the
following key results in 2024 toward meeting the Company’s goals: successful execution of balance sheet goals, improved
customer experience index, enhanced organizational discipline with respect to aligning strategic initiatives and executive goals,
and strong achievement relative to strengthening our talent pipeline with an emphasis on leadership and other critical roles.
Travis Lan. The Compensation Committee recognized Mr. Lan for his efforts in his new role as EVP, Deputy CFO commencing in
January 2024 and subsequently in his role as Interim CFO commencing in November 2024. Mr. Lan was also recognized for his
progress with respect to the budget process and customer reporting, as well as his successful management within the bank’s risk
appetite and management of reputational risk, compliance, governance, and controls, as well as strong achievement relative to
advancing Valley’s culture and continuing to strengthen our talent pipeline with an emphasis on leadership and other critical roles.
Thomas A. Iadanza. The Compensation Committee recognized Mr. Iadanza for his key role in driving the Company’s execution of its
strategic financial imperative goals and his enhancement of Valley’s market presence though his robust client engagement plan,
and his significant role in advancing Valley’s culture and continuing to strengthen our talent pipeline with an emphasis on
leadership and other critical roles.
Russell Barrett. The Compensation Committee recognized Mr. Barrett for his significant role in technology oversight in 2024, his
execution with respect to development of the Company’s data and analytics analysis, for his achievements in driving efficiency
across the operations of the organization, and for his successful management of reputational, compliance, governance, controls,
and technology risk. The Committee also recognized his significant role in advancing Valley’s culture and his efforts to continue to
strengthen our talent pipeline with an emphasis on leadership and other critical roles and to build bench strength in key areas.
Joseph V. Chillura. The Compensation Committee recognized Mr. Chillura for his achievements with respect to customer retention
and expansion, with a focus on key customers and key prospect plans, and with respect to his significant role in talent
development and continuing to strengthen our talent pipeline with an emphasis on leadership and other critical roles.
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2024 Compensation Awarded
Summary
Mr. Robbins’ total direct compensation* increased by $238,575 ($5,310,450 in 2024 vs. $5,071,875 in 2023), or approximately 4.7%,
from last year. Mr. Robbins earned $389,550, or approximately 6.8%, less than his target total direct compensation of $5,700,000.
More specifically, the Compensation Committee made the following compensation determinations with respect to Mr. Robbins:
•
Determined to award his non-equity incentive award at
73.5% of target ($1,080,450) for 2024, as compared to
73.8% of target ($921,875) in 2023; and
•
Increased his total equity award from $3,150,000 to
$3,180,000 (or 100% of target) for 2024, which was
consistent with his 2023 total equity award on a percent
of target basis.
The Compensation Committee believes that the compensation determination that it made reflects the Company’s financial
performance, as well as strategic and operational performance in 2024.
Mr. Iadanza earned $1,500,250 in 2024 total direct compensation, consisting of $750,000 in base salary and a $750,250 non-equity
incentive award (representing approximately 100% of his target non-equity incentive award). Mr. Iadanza did not receive an equity
award in 2025. See the section titled “Special NEO Compensation Arrangements” below for additional detail on compensation
arrangements made in connection with Mr. Iadanza’s retirement. His total direct compensation paid for 2024 represents a 25.6%
decrease from 2023 and is 34.8% below his 2024 target total direct compensation approved in February 2024.
Mr. Barrett earned $1,414,450 in 2024 total direct compensation, consisting of $475,000 in base salary, a $314,450 non-equity
incentive award, and a total equity award of $625,000. His total direct compensation paid for 2024 represents an 18.1% increase
from 2023 and is 4.4% above his 2024 target total direct compensation. Mr. Barrett’s non-equity incentive award was 82.8% of
target and his equity award was 125% of target.
Mr. Chillura earned $1,318,409 in 2024 total direct compensation, consisting of $525,000 in base salary, a $293,409 non-equity
incentive award, and a total equity award of $500,000. His total direct compensation paid for 2024 represents a 1.3% increase from
2023 and is 10.4% below his 2024 target total direct compensation. Mr. Chillura’s non-equity incentive award was 65.8% of target
and his equity award was 100% of target.
Mr. Hagedorn, our former CFO, did not receive a non-equity incentive award or an equity award for 2024 due to his departure from
the Company. Mr. Lan’s salary, stock awards and non-equity incentive awards for 2024 reflect the mix of his non-executive Deputy
CFO position and Interim CFO position that he held during the year. Mr. Lan was appointed as our Interim CFO on November 30,
2024, at which time his annual salary increased to $400,000, his target bonus percentage increased to 50%, and his total target
equity award value remained at $250,000. On March 3, 2025, Mr. Lan was promoted to SEVP, CFO, at which time his annual salary
increased to $500,000, his target bonus percentage increased to 80%, and his total target equity award value was increased to
$600,000.
Non-Equity Incentive Awards
The non-equity incentive award for Mr. Robbins was $1,080,450 for 2024, at 73.5% of target. This compares to his $921,875 award
for 2023 and his $1,470,000 target for 2024. While the Compensation Committee recognized Mr. Robbins’ leadership of the
Company through a challenging environment, the Compensation Committee determined it was appropriate that his annual
non-equity incentive award be awarded at 73.5% of target due to the Company not achieving its 2024 financial goal.
Mr. Iadanza was awarded a non-equity incentive award representing approximately 100% of target, or $750,250. The Compensation
Committee determined to award Mr. Iadanza 100% of his target non-equity award in consideration of Company and individual
performance during 2024, and in recognition that he would not be receiving a 2025 equity incentive award, which would otherwise
have been granted to him based on 2024 performance. See “Special NEO Compensation Arrangements” below on page 60 for
additional information.
Our other NEOs were awarded a non-equity incentive award representing the following percentage of their target: Mr. Lan, 88.8%,
Mr. Chillura, 65.8%, and Mr. Barrett, 82.8%. Mr. Hagedorn did not receive a non-equity incentive award for 2024 due to his
departure from the Company.
*
Total direct compensation consists of base salary, non-equity incentive award earned based on 2024 performance (paid in 2025), and grant date fair value of
equity incentive awards earned based on 2024 performance (granted in 2025). Target total direct compensation consists of base salary, target non-equity
incentive award, and target equity incentive award (granted in 2025).
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The table below sets forth the non-equity incentive awards for each NEO as well as the amount of the actual awards relative to
target awards.
NEO
2024 Base
Salary
2024 Target
Non-Equity
Incentive Award
Amount
2024 Target
Non-Equity Incentive
Award as % of Base
Salary
2024 Non-Equity
Incentive Award
Payout
2024 Non-Equity
Incentive Award
as % of Target
Ira Robbins
$1,050,000
$1,470,000
140%
$1,080,450
73.5%
Travis Lan
400,000
200,000
50%
177,600
88.8%
Thomas A. Iadanza
750,000
750,000
100%
750,250
100%
Russell Barrett
475,000
380,000
80%
314,450
82.8%
Joseph V. Chillura
525,000
446,250
85%
293,409
65.8%
Equity Incentive Awards
The table below sets forth the total equity awards granted in 2025 based on 2024 performance for each NEO relative to target, as
well as the amount of the actual awards relative to target awards.
Mr. Iadanza informed the Company in December 2024 of his intention to retire in June 2025 and was therefore not granted an
equity award in 2025 due to his impending retirement (see “Special NEO Compensation Arrangements” below on page 60 for
additional information). Mr. Hagedorn was not granted an equity award in 2025 due to his departure from the Company.
NEO
2024 Target Equity
Award Value
2024 Actual Equity
Award Value
(granted in 2025 based
on 2024 performance)
2024 Actual Equity Award
Value as a % of 2024
Target Equity Award
Value
Ira Robbins
$3,180,000
$3,180,000
100%
Travis Lan
250,000
312,500
125%
Thomas A. Iadanza
800,000
—
—
Russell Barrett
500,000
625,000
125%
Joseph V. Chillura
500,000
500,000
100%
Mr. Lan and Mr. Barrett each received a total equity award with a value in excess of their target awards in recognition of their
respective promotions and increased responsibilities during 2024.
Mr. Lan’s target equity incentive award for 2025 was subsequently increased to $600,000 in connection with his promotion to CFO
in March 2025.
The table below sets forth the time-based RSU awards granted to our NEOs in 2025 based on 2024 performance in both share
amounts and dollar value.
NEO
Time-Based
Equity Awards
(# of Shares)
Value at Grant
Date
Ira Robbins
79,820
$795,000
Travis Lan
15,688
156,250
Thomas A. Iadanza
—
—
Russell Barrett
15,688
156,250
Joseph V. Chillura
12,551
125,000
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The table below sets forth the performance-based RSU awards granted to our NEOs in 2025 based on 2024 performance and the
grant date fair value of each award. Of these awards, 60% are subject to vesting based on the attainment of adjusted GITBV and
40% are based on relative TSR.
Performance-Based RSU Awards at Target
NEO
Based on TSR
Based on GITBV
Total
Ira Robbins
$954,000
$1,431,000
$2,385,000
Travis Lan
62,500
93,750
156,250
Thomas A. Iadanza
—
—
—
Russell Barrett
187,500
281,250
468,750
Joseph V. Chillura
150,000
225,000
375,000
Special NEO Compensation Arrangements
Michael D. Hagedorn. Mr. Hagedorn ceased serving as SEVP, CFO of the Company effective November 30, 2024. In connection
with his separation, the Company and Mr. Hagedorn entered into a Separation Agreement and General Release (the “Separation
Agreement”) which provided for the payment of the following severance benefits following his separation from employment: (i) a
lump sum cash payment of $590,000, representing 52 weeks of base salary; (ii) a lump sum cash payment of $472,000, representing
the annual cash bonus amount (calculated at 100% of target); (iii) a lump sum cash payment of $27,511 equal to 12 months of the
Company’s contribution toward Mr. Hagedorn’s current health and dental insurance; and (iv) a prorated annual cash bonus for 2024
of $433,000 (calculated at 100% of target and prorated through the his separation from employment), payable at the time that the
Company pays annual cash bonuses to active employees in the first quarter of 2025. In addition, the Separation Agreement
provided that Mr. Hagedorn’s unvested time-based and performance-based RSUs scheduled to vest on February 1, 2025 would
remain outstanding and vest on such date, subject to satisfaction of any applicable performance conditions. All other outstanding
and unvested equity awards that Mr. Hagedorn held were forfeited on his separation from employment in accordance with the
terms of the applicable equity plans and the related award agreements.
Payment of the foregoing benefits was subject to certain conditions, including Mr. Hagedorn’s execution and non-revocation of a
general release of claims in favor of the Company and its affiliates and agents and continued compliance with applicable restrictive
covenant obligations, including a non-solicitation covenant with respect to the Company’s customers and employees for twelve
months following his separation from employment.
Mr. Hagedorn was also entitled to accrued benefits under the Company’s Deferred Compensation Plan and the Valley National
Bank Savings and Investment Plan (“401(k) Plan”), to be paid in accordance with the terms of such plans.
Thomas A. Iadanza. In December 2024, Mr. Iadanza announced that he will retire from his position as President effective June 30,
2025 after 13 years with the Company and 45 years in the banking industry. In connection with his planned retirement, the
Compensation Committee determined Mr. Iadanza would be eligible to receive a non-equity incentive award for his full year of
service in 2024 at 100% of his target. Mr. Iadanza’s $750,000 base salary rate remained in effect through the first quarter of 2025,
and for the transition period from April 1, 2025 through his retirement date of June 30, 2025, he will receive a transition salary of
$187,500 for that period. As a result of his retirement, it was determined that Mr. Iadanza would not receive an equity grant in 2025,
which he otherwise would have been awarded based on 2024 performance, and he is not entitled to any non-equity incentive
award for 2025, notwithstanding his employment (including transition period) of six months during 2025. Because Mr. Iadanza is
retirement eligible under the terms of our 2023 ICP, his outstanding time-based RSUs will vest upon his retirement, and his
performance-based RSUs will remain outstanding and vest subject to satisfaction of any applicable performance conditions.
Joseph V. Chillura. In March 2025, it was announced that Mr. Chillura will transition out of his SEVP, President of Commercial
Banking role, effective March 31, 2025, and separate from service with the Company effective June 30, 2025. Mr. Chillura will remain
with the Company through such date as a non-executive employee to facilitate an orderly transition to his successor. In
connection with Mr. Chillura’s departure, the Compensation Committee approved the vesting of his outstanding equity awards
such that, upon his separation from service with Valley, his time-based RSUs will vest and his performance-based RSUs will remain
outstanding and vest subject to satisfaction of any applicable performance conditions, provided that his equity awards granted in
2025 will vest on a prorated basis based on the portion of the year he was employed by Valley prior to his departure.
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Other Compensation
We maintain a deferred compensation plan for our NEOs and other selected executives. The deferral plan is intended to provide a
retirement savings program for earnings above the limits of the Company’s qualified 401(k) Plan. The deferral plan has an employer
match similar to that offered under the 401(k) Plan. Under the deferral plan, an executive may elect to defer up to 5% of his or her
salary and bonus above the 401(k) limits, and the Company will match the executive’s deferral amount up to the 5% limit. The
deferral plan is described in more detail under “Nonqualified Deferred Compensation – Deferred Compensation Plan” below.
We also provide perquisites to senior officers. We provide them either a taxable monthly automobile allowance or, in the case of
our CEO and our President, the use of a company-owned automobile. The automobile facilitates NEO travel between our offices, to
business meetings with customers and vendors, and to investor presentations. NEOs may use the automobile for personal
transportation. Personal use of the automobile results in taxable income to the NEO and we include this in the amounts of income
we report to the NEO and the Internal Revenue Service. Commencing in 2017, the Compensation Committee determined that new
executives will receive a taxable automobile allowance, not use of a company owned car, and this may be applied to existing
executives as their cars come up for replacement.
We also support and encourage our customer-facing executives to hold a membership in a local country club for which we pay
admission costs, dues, and other business-related expenses. We find that club membership is an effective means of obtaining
business as it allows executives to interact with present and prospective customers in a relaxed, informal environment. We require
that any personal use of the country club facilities be paid by the NEO. The cost associated with any such personal use of the club,
as well as club membership dues, are included as perquisites in our Summary Compensation Table.
Historically, we have provided severance agreements and CIC agreements to certain of our NEOs. In December 2024, we adopted
an Executive Severance Plan, effective January 1, 2025, providing for change in control (“CIC”) and non-CIC severance benefits to
certain eligible executives, including our NEOs other than our CEO, with the intent of phasing out the Company’s historical practice
of providing individual severance and CIC agreements. Currently, our CEO and President each have a severance agreement that
provides benefits in the form of lump sum cash payments if terminated by Valley without cause in a non-CIC context. We believe
these agreements support the retention of our executives and continuity of management generally. Each of our NEOs is either a
participant in the Executive Severance Plan or is a party to a CIC agreement which provides for “double trigger” cash payments in
the event of an NEO’s qualifying termination of employment within a specified period following a CIC. These benefits provide the
NEOs with income protection in the event employment is terminated without cause or for good reason following a CIC, support
our executive retention goals, and encourage their independence and objectivity in considering potential CIC transactions.
Additionally, the terms of our equity awards provide for accelerated vesting only upon a “double trigger.” The terms of the
Executive Severance Pan and these agreements are described more fully in this Proxy Statement under “Other Potential Post-
Employment Payments.”
Income Tax Considerations
Section 162(m) of the Internal Revenue Code currently disallows a tax deduction to a public corporation for compensation over
$1,000,000 paid in any fiscal year to a company’s current CEO, CFO, other NEOs, and certain executives who were formerly in these
roles. The Compensation Committee has and expects in the future to authorize compensation in excess of $1,000,000 to NEOs
that will not be deductible under Section 162(m).
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with
management. On the basis of such review and discussions, the Compensation Committee has recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Annual Report on
Form 10-K for the year ended December 31, 2024.
Jennifer W. Steans
Andrew B. Abramson
Peter J. Baum
Eric P. Edelstein
Marc J. Lenner
Suresh L. Sani
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Executive Compensation Tables
Summary Compensation Table
The table below summarizes all compensation in 2024, 2023, and 2022 earned by our NEOs for services performed in all capacities
for Valley and its subsidiaries.
Name and
Principal Position(1)
Year
Salary
Stock
Awards(2)
Non-Equity
Incentive Plan
Compensation(3)
Change in Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(4)
All Other
Compensation(5)
Total
Ira Robbins
CEO
2024
$1,050,000
$3,443,405
$
1,080,450
$40,641
$
490,572
$6,105,068
2023
1,000,000
2,975,661
921,875
93,345
425,582
5,416,463
2022
1,000,000
3,060,578
1,462,500
—
487,257
6,010,335
Travis Lan
CFO
2024
400,000
329,758
177,600
299
24,635
932,292
2023
—
—
—
—
—
—
2022
—
—
—
—
—
—
Thomas A. Iadanza
President and Chief
Banking Officer
2024
750,000
—
750,250
19,315
239,796
1,759,361
2023
700,000
755,729
516,250
16,985
270,353
2,259,317
2022
700,000
844,300
845,000
—
253,583
2,642,883
Russell Barrett
SEVP, Chief
Operating Officer
2024
475,000
676,778
314,450
2,504
57,312
1,526,044
2023
—
—
—
—
—
—
2022
—
—
—
—
—
—
Joseph V. Chillura
SEVP, Commercial
Banking
2024
525,000
541,419
293,409
9,970
169,807
1,539,605
2023
510,000
472,328
290,700
8,697
135,134
1,416,859
2022
510,000
527,688
417,000
—
145,186
1,599,874
Michael D.
Hagedorn
Former SEVP, CFO
2024
590,000
—
—
11,369
1,729,606
2,330,975
2023
590,000
684,879
306,800
8,593
187,490
1,777,762
2022
590,000
765,148
501,000
—
89,446
1,945,594
(1) Mr. Hagedorn ceased serving as our CFO effective November 30, 2024, and Mr. Lan was appointed as Interim CFO, effective as of that date. Mr. Lan was subsequently
appointed as CFO effective March 3, 2025. For Mr. Lan and Mr. Barrett, compensation amounts are reported only for 2024 as 2024 was their first year serving as NEOs
of the Company.
(2) Amounts for 2024 reflect the aggregate grant date fair value of the time-based and performance-based RSU awards under Accounting Standards Codification (ASC)
Topic No. 718, Compensation-Stock Compensation (“ASC Topic 718”), excluding the effect of estimated forfeitures, granted by the Compensation Committee based on
2024 results. For information on the assumptions used in the calculation of these amounts, see Note 1 to our consolidated financial statements contained in the
Annual Report on Form 10-K for the year ended December 31, 2024. The grant date fair value of time-based RSU awards reported in this column for each of our NEOs
was as follows: Mr. Robbins, $795,000; Mr. Lan $156,250; Mr. Barrett $156,250; and Mr. Chillura $125,000. The amounts reported for the performance-based RSU awards
are calculated based on the probable satisfaction of the performance goals for such awards and reflect the value of the awards at the target grant date value level (or
100%). Restrictions on performance-based awards lapse based on achievement of the performance goals set forth in the award agreement. Any shares earned based
on achievement of the specific performance goals vest following the three-year performance period and the Compensation Committee’s approval of the level of
performance achievement. The value on the grant date of the performance-based RSU awards based upon performance goal achievement at target and maximum
would be as follows:
Name
Target Value at
Grant Date
Maximum Value
at Grant Date
Ira Robbins
$2,648,405
$5,296,810
Travis Lan
173,508
347,017
Russell Barrett
520,528
1,041,058
Joseph V. Chillura
416,419
832,838
(3) For 2024, represents the non-equity incentive award paid in cash in 2025 based on 2024 performance.
(4) Amounts reflect above-interest earnings under the Valley National Bancorp Deferred Compensation Plan (the “Deferred Compensation Plan” or “DCP”). For
Mr. Robbins, this amount is also required to include any amount attributable to the change in the actuarial present value of his pension benefits from year to year,
62
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
taking into account his age, a present value factor, and interest discount factor based on their remaining time until retirement. The annual change in present value of
Mr. Robbins’ accumulated benefits as of December 31, 2024, was a net decrease of $25,741 from the present value reported as of December 31, 2023; therefore, the
amount attributable to his pension for 2024 is zero in accordance with SEC rules.
(5) All other compensation includes perquisites and other personal benefits paid in 2024 including automobile, actual dividends paid upon vesting of time-based and
performance-based RSUs, 401(k) and deferred compensation contribution payments by the Company, GTL, and club dues, and for Mr. Hagedorn, his severance
entitlement in connection with his separation from employment.
Name
Auto(a)
Actual Dividends
Paid in 2024(b)
401(k)(c)
DCP(d)
GTL(e)
Club Dues
Severance(f)
Other
Total
Ira Robbins
$15,392
$337,063
$17,250
$83,709
$ 2,622
$27,564
—
$6,972
$
490,572
Travis Lan
—
5,313
13,800
5,154
368
—
—
—
24,635
Thomas A. Iadanza
11,867
133,028
17,250
48,428
14,478
10,566
—
4,179
239,796
Russell Barrett
14,400
2,049
17,250
22,852
761
—
—
—
57,312
Joseph V. Chillura
14,400
83,144
17,250
26,170
2,436
16,657
—
9,750
169,807
Michael D. Hagedorn
13,200
120,555
17,250
52,011
2,572
—
1,522,511
1,507
1,729,606
(a) Auto represents, for Mr. Robbins and Mr. Iadanza, the cost to the Company of the portion of personal use of a company-owned vehicle by the NEO and parking (if
applicable) and, for Mr. Chillura, Mr. Barrett, and Mr. Hagedorn, a monthly automobile stipend during 2024.
(b) Dividends paid on time-based and performance-based RSUs vesting in 2024.
(c) Upon hire, the Company provides to all full-time employees in the plan, including our NEOs, up to 100% of the first 4% of pay contributed and 50% of the next 2% of
pay contributed. An employee must save at least 6% to get the full match (5%) under the Company’s 401(k) Plan.
(d) Effective January 1, 2017, Valley established the Deferred Compensation Plan for the benefit of certain eligible employees, see “Deferred Compensation Plan” under
“Nonqualified Deferred Compensation” below. If the NEO utilizes the Company’s 401(k) Plan to the maximum, for amounts over the maximum compensation amount
allowed under the 401(k) Plan, the NEO may elect to defer 5% of the excess and the Company will match that deferral compensation.
(e) Group Term Life Insurance (“GTL”) represents the taxable amount for over $50,000 of life insurance for benefits equal to two times salary. This benefit is provided to all
full-time employees.
(f) Severance represents the payments and benefits to which Mr. Hagedorn was entitled in connection with his separation from employment. For more information, see
“Special NEO Compensation Arrangements” in the “Compensation Discussion and Analysis” beginning on page 60 of this Proxy Statement.
Grants of Plan-Based Awards
Estimated Possible
Payouts Under
Non-Equity Incentive Plan
Awards(1)
Estimated Possible Payouts
Under Equity Incentive
Plan Awards(1)
All Other Stock
Awards:
Number of
Shares of
Stock (#)(1)
Grant Date
Fair Value
of Stock
Awards(2)
($)
Name
Grant
Date
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Ira Robbins
$1,470,000
$2,940,000
—
—
—
—
—
2/18/2025
—
—
119,729
239,458
478,916
—
$2,648,405
2/18/2025
—
—
—
—
—
79,820
795,000
Travis Lan
200,000
400,000
—
—
—
—
—
2/18/2025
—
—
7,844
15,688
31,376
—
173,508
2/18/2025
—
—
—
—
—
15,688
156,250
Thomas A. Iadanza
750,000
1,500,000
—
—
—
—
—
Russell Barrett
380,000
760,000
—
—
—
—
—
2/18/2025
—
—
23,532
47,064
94,128
—
520,528
2/18/2025
—
—
—
—
—
15,688
156,250
Joseph V. Chillura
446,250
892,500
—
—
—
—
—
2/18/2025
—
—
18,826
37,651
75,302
—
416,419
2/18/2025
—
—
—
—
—
12,551
125,000
Michael D. Hagedorn
472,000
944,000
—
—
—
—
—
(1) Represents the target and maximum non-equity incentive compensation amounts for performance during 2024. The Compensation Committee set target awards
under our non-equity incentive program for 2024 as follows: Mr. Robbins as CEO, 140% of salary; Mr. Lan, 50%, Mr. Iadanza, 100%, Mr. Chillura, 85%, and Mr. Barrett and
Mr. Hagedorn, 80% of salary. Awards were paid based upon achievement of Company and individual goals. See “Compensation Discussion and Analysis” beginning on
page 45 of this Proxy Statement for information regarding our non-equity incentive awards. The Compensation Committee awarded each NEO the cash amount
reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2024. The Compensation Committee also granted each
NEO awards under the 2023 ICP in the form of time-based RSUs (reported above under “All Other Stock Awards: Number of Shares of Stock”) and in the form of
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
performance-based RSUs (reported above under “Estimated Possible Payouts Under Equity Incentive Plan Awards”). The threshold amounts reported above for the
performance-based RSU awards represent the number of shares that would be earned based on achievement of threshold amounts under both the GITBV and relative
TSR performance metrics measured over the cumulative three-year performance period. See “Compensation Discussion and Analysis” for information regarding these
time-based RSUs and performance-based RSU awards.
(2) See grant date fair value details under footnote (2) of the Summary Compensation Table above.
Restrictions on performance-based awards lapse based on achievement of the performance goals set forth in the performance-
based RSU award agreement. Any shares earned based on achievement of the specific performance goals vest following the
completion of the three-year performance period and the Compensation Committee’s approval of the level of performance
achievement. Restrictions on time-based RSU awards lapse at the rate of 33% per year commencing with the first year after the
date of grant.
Dividends are credited on RSUs at the same time and in the same amount as dividends paid to all other common shareholders.
Credited dividends are accumulated and paid upon vesting and are subject to the same time-based and performance-based
restrictions as the underlying units. Upon a “change in control,” as defined in the 2023 ICP, following qualifying termination of
employment, all restrictions on shares of time-based RSUs will lapse and restrictions on shares of performance-based RSUs will
lapse at target, unless otherwise provided in the grant agreement.
The per share grant date fair values under ASC Topic 718 of each share underlying time-based and performance-based RSUs (with
no market condition vesting requirement) was $9.96 per share awarded on February 18, 2025. Performance-based RSUs with
market condition vesting requirements (i.e., TSR) awarded on February 18, 2025, had a per share grant date fair value of $12.71.
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Outstanding Equity Awards at Fiscal Year-End
The table below represents restricted stock and RSU awards outstanding for each NEO as of December 31, 2024 (including
February 18, 2025 awards which were granted based on 2024 performance).
Option Awards
Stock Awards(1)
Name
Grant
Date
Number of
Securities
Underlying
Unexercised
Options
Exercisable
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock
That Have
Not
Vested
(#)
Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)
Plan Awards:
Number of
Unearned
Shares or
Units That
Have Not
Vested
(#)
Equity
Incentive
Plan Awards:
Market
Value of
Unearned
Shares or
Units That
Have Not
Vested(2)
($)
Ira Robbins
2/18/2025
—
—
—
—
79,820
$723,169
478,916
$4,338,979
2/20/2024
—
—
—
—
92,539
838,403
555,230
5,030,384
2/22/2023
—
—
—
—
40,549
367,374
364,934
3,306,302
2/15/2022
—
—
—
—
15,006
135,954
270,108
2,447,178
Total awards
227,914
$2,064,900
1,669,188
$15,122,843
Travis Lan
2/18/2025
—
—
—
—
15,688
$142,133
31,376
$284,267
8/1/2024
—
—
—
—
29,762
269,644
—
—
2/20/2024
—
—
—
—
14,689
133,082
29,378
266,165
2/22/2023
—
—
—
—
5,873
53,209
16,780
152,027
2/15/2022
—
—
—
—
2,017
18,274
14,236
128,978
Total awards
68,029
$616,342
91,770
$831,437
Thomas A. Iadanza
2/18/2025
—
—
—
—
—
—
—
—
2/20/2024
—
—
—
—
23,502
$212,928
141,012
$1,277,569
2/22/2023
—
—
—
—
11,186
101,345
100,672
912,088
2/15/2022
—
—
—
—
5,220
47,293
93,952
851,205
Total awards
39,908
$361,566
335,636
$3,040,862
Russell Barrett
2/18/2025
—
—
—
—
15,688
$142,133
94,128
$852,800
2/20/2024
—
—
—
—
14,689
133,082
88,132
798,476
2/22/2023
—
—
—
—
4,195
38,007
37,752
342,033
4/1/2022
—
—
—
—
1,281
11,606
23,044
208,779
2/24/2020
90,537
—
$8.47
2/24/2027
—
—
—
—
Total awards
35,853
$324,828
243,056
$2,202,088
Joseph V. Chillura
2/18/2025
—
—
—
—
12,551
$113,712
75,302
$682,236
2/20/2024
—
—
—
—
14,689
133,082
88,132
798,476
2/22/2023
—
—
—
—
6,992
63,348
62,920
570,055
2/15/2022
—
—
—
—
3,263
29,563
58,720
532,003
3/1/2017
55,657
—
$6.72
3/1/2027
—
—
—
—
3/1/2016
17,508
—
$5.74
3/1/2026
—
—
—
—
Total awards
37,495
$339,705
285,074
$2,582,770
Michael D. Hagedorn
2/20/2024
—
—
—
—
7,099
$64,317
—
$ 0
2/22/2023
—
—
—
—
5,069
45,925
—
—
2/15/2022
—
—
—
—
4,731
42,863
85,144
771,405
Total awards
16,899
$153,105
85,144
$771,405
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
(1) Restrictions on time-based RSU awards (reported above under “Number of Shares or Units of Stock That Have Not Vested”) lapse at the rate of 33% per year
commencing with the first year after the date of grant. Restrictions on performance-based RSU awards (reported above under “Equity Incentive Plan Awards: Number
of Unearned Shares or Units That Have Not Vested”) lapse based on achievement of the performance goals set forth in the award agreement. Dividends are credited
on these awards at the same time and in the same amount as dividends paid to all other common shareholders. Credited dividends are accumulated and paid upon
vesting and are subject to the same time-based or performance-based restrictions as the underlying RSU.
The award amount in the “Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have Not Vested” column represents the number of shares that
may be earned based on maximum performance achievement over the cumulative three-year performance period with respect to both the GITBV and TSR
performance metrics, for the February 15, 2022 award, February 22, 2023 award, February 20, 2024 award, and February 18, 2025 award.
(2) At per share closing market price of $9.06 as of December 31, 2024.
Stock Vested
The table below sets forth the time-based RSU awards held by our NEOs that vested in 2024, as well as performance-based RSU
awards which vested in early 2025 based on the three-year performance period ended December 31, 2024, and the value realized
upon vesting. None of our NEOs exercised any options in 2024.
Name
Number of Shares
Acquired Upon
Vesting (#)
Value
Realized on
Vesting
($)*
Ira Robbins
134,711
$1,324,421
Travis Lan
11,073
108,024
Thomas A. Iadanza
46,212
454,473
Russell Barrett
10,528
101,586
Joseph V. Chillura
28,882
284,041
Michael D. Hagedorn
41,878
411,851
* Value realized upon vesting of RSU awards is calculated by multiplying the number of RSUs that vested by the fair market value of the underlying shares on the vesting
date. This amount includes the value attributable to the vesting of the final portion of the performance-based RSU awards granted on February 15, 2022 for Mr. Robbins
(83,828 shares), Mr. Lan (4,418 shares), Mr. Iadanza (29,158 shares), Mr. Chillura (18,224 shares), Mr. Barrett (7,151 shares), and Mr. Hagedorn (26,424). These shares vested
based on the achievement of the GITBV performance goals set forth in the award agreement measured over the three-year performance period ending December 31,
2024. Dividends are credited on time-based and performance-based RSU awards at the same time and in the same amount as dividends paid to all other common
shareholders. Credited dividends are accumulated and paid upon vesting and are subject to the same time-based or performance-based restrictions as the underlying
RSUs.
Pension Benefits
Pension Plan. Valley maintains a non-contributory, defined benefit pension plan (the “Pension Plan”) which was frozen effective
January 1, 2014. The annual retirement benefit under the Pension Plan generally was (i) 0.85% of the employee’s average final
compensation up to the employee’s average social security wage base plus (ii) 1.15% of the employee’s average final compensation
in excess of the employee’s average social security wage base up to the annual compensation limit under the law, (iii) multiplied by
the years of credited service (up to a maximum of 35 years). An employee’s “average final compensation” is the employee’s highest
consecutive five-year average of the employee’s annual salary. Employees hired on or after July 1, 2011, including Mr. Lan,
Mr. Iadanza, Mr. Chillura, Mr. Barrett and Mr. Hagedorn, were not eligible to participate in the Pension Plan. As a result of
amendments to the Pension Plan adopted in 2013, participants will not accrue further benefits and their pension benefits will be
determined based on their compensation and service up to December 31, 2013.
Benefit Equalization Plan. Valley maintains a Benefit Equalization Plan (“BEP”) which provides retirement benefits in excess of the
amounts payable from the Pension Plan for certain highly compensated executive officers, which was frozen effective January 1,
2014. Benefits are generally determined as follows: (i) the benefit calculated under Valley pension plan formula without regard to
the limits on recognized compensation and maximum benefits payable from a qualified defined benefit plan, minus (ii) the
individual’s pension plan benefit. Mr. Robbins is a participant in the BEP. Executives hired on or after July 1, 2011, including Mr. Lan,
Mr. Iadanza, Mr. Chillura, Mr. Barrett and Mr. Hagedorn, are not participants in the BEP. As a result of amendments to the BEP
adopted in 2013, participants will not accrue further benefits and their benefits will be determined based on their compensation for
service and years of service up to December 31, 2013. Benefits under the BEP will not increase for any pay or service earned after
such date except participants may be granted up to three additional years of service if employment is terminated in the event of a
CIC. The table below sets forth each pension plan that the NEO participates in, the number of years of credited service and the
present value of accumulated benefits as of December 31, 2024.
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ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Name
Plan Name
# of Years Credited
Service
Present Value of
Accumulated
Benefits ($)
Ira Robbins
Pension Plan
16
$398,932
BEP
16
166,475
Present values of the accumulated benefits under the BEP and Pension Plan were determined as of January 1, 2025 based upon the
accrued benefits under each plan as of December 31, 2024 and valued in accordance with the following principal actuarial
assumptions: (i) post-retirement mortality in accordance with the Pri-2012 White Collar Tables (base year 2006), projected
generationally with Scale MP-2021, (ii) interest at an annual effective rate of 5.72% compounded annually, (iii) retirement at the
earliest age (subject to a minimum age of 55 and a maximum age equal to the greater of 65 and the participant’s age on January 1,
2025) at which unreduced benefits would be payable assuming continuation of employment and (iv) for the BEP payment is based
on an election by the participant and for the Pension Plan it is assumed that 60% of male participants will elect a joint and
two-thirds survivor annuity and 40% will elect a straight life annuity.
Early Retirement Benefits. An NEO’s accrued benefits under the Pension Plan and BEP are payable at age 65, the individual’s
normal retirement age. If an executive terminates employment after both attainment of age 55 and completion of 10 years of
service, he is eligible for early retirement. Upon early retirement, an executive may elect to receive his accrued benefit unreduced at
age 65 or, alternatively, to receive a reduced benefit commencing on the first day of any month following termination of
employment and prior to age 65. The amount of reduction is 0.5% for each of the first 60 months and 0.25% for each of the next
60 months that benefits commence prior to the executive’s normal retirement date (resulting in a 45% reduction at age 55, the
earliest retirement age under the plans). However, there is no reduction for early retirement prior to the normal retirement date if
the sum of the executive’s age and years of vested service at the benefit commencement date equals or exceeds 80.
Late Retirement Benefits. Effective December 31, 2013, the BEP was amended to specify the manner in which actuarial increases
would be applied to benefits for executives postponing retirement beyond April 1st of the year in which the executive reaches
age 70 1⁄2.
Nonqualified Deferred Compensation
Deferred Compensation Plan. Valley established the Deferred Compensation Plan for the benefit of certain eligible employees in
2017. The Deferred Compensation Plan is maintained for the purpose of providing deferred compensation for selected employees
participating in the 401(k) Plan whose contributions are limited as a result of the limitations on the amount of compensation which
can be taken into account under the 401(k) Plan. Each of our NEOs participated in the Deferred Compensation Plan in 2024. Under
the 401(k) Plan, Valley matches the first 4% of salary contributed by an employee each pay period, and 50% of the next 2% of salary
contributed, for a maximum matching contribution of 5%, with an annual limit of $16,500 in 2024.
Participant Deferral Contributions. Each participant in the Deferred Compensation Plan is permitted to defer, for that calendar
year, up to 5% of the portion of the participant’s salary and cash bonus above the limit in effect for that calendar year under the
Company’s 401(k) Plan. The Compensation Committee has the authority to change the deferral percentage, but any such change
only applies to calendar years beginning after such action is taken by the Compensation Committee. No deferrals may be taken
until a participant’s salary and bonus for such calendar year is in excess of the limit in effect under the Company’s 401(k) Plan.
Company Matching Contributions. Each calendar year, it is expected the Company will match 100% of a participant’s deferral
contributions under the Deferred Compensation Plan that do not exceed 5% of the participant’s salary and bonus. A participant
vests in the Company matching contribution after two years of continuous employment at the Company.
Earnings on Deferrals. Participants’ deferral contributions and company matching contributions will be adjusted at the end of each
calendar year by an earnings factor, which for 2024 was an amount equal to the one-month Secured Overnight Financing Rate
average for the applicable calendar year plus the Alternative Reference Rates Committee spread adjustment of 11.448 basis points
plus 300 basis points, multiplied by the balance in the participant’s notional account at the end of the calendar year. Based on this
earnings factor, a portion of the earnings under the Deferred Compensation Plan is considered “above-market,” which is defined
under SEC rules as interest which exceeds 120% of the applicable federal long-term rate, with compounding at the rate that
corresponds to the rate under the plan at the time the interest rate is set. The Compensation Committee sets the earnings factor
each year.
Amount, Form and Time of Payment. The amount payable to the participant will equal the amount credited to the participant’s
account as of his or her separation from service with Valley, net of all applicable employment and income tax withholdings. The
benefit will be paid to the participant in a single lump sum six months following the earlier to occur of the participant’s separation
from service with Valley or the date of a CIC, and will represent a complete discharge of any obligation under the Deferred
Compensation Plan.
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The table below sets forth each NEO’s Deferred Compensation Plan activity during 2024 and in the aggregate:
Name
NEO
Contribution
in 2024
Valley’s
Contribution
in 2024*
Aggregate
Earnings
in 2024*
Aggregate
Withdrawals/
Distribution
Aggregate
Balance at
12/31/2024
Ira Robbins
$83,709
$83,709
$115,264
—
$1,515,535
Travis Lan
5,154
5,154
848
—
11,156
Thomas A. Iadanza
48,428
48,428
54,781
—
720,283
Russell Barrett
22,852
22,852
7,102
—
93,378
Joseph V. Chillura
26,170
26,170
28,277
—
371,798
Michael D. Hagedorn
52,011
52,011
32,245
—
423,967
* Valley’s matching contributions and the NEO’s above-market earnings (as defined by SEC rules) under the Deferred Compensation Plan in 2024 are included in the
Summary Compensation Table above under “All Other Compensation” and “Change in Pension Value and Non-Qualified Deferred Compensation Earnings,” respectively.
Other Potential Post-Employment Payments
Historically, Valley and the Bank have been parties to severance and CIC arrangements with certain of our NEOs. In December
2024, the Board, upon the recommendation of the Compensation Committee, adopted the Valley National Bank Executive
Severance Plan (“Executive Severance Plan” or the “Plan”), effective January 1, 2025, providing for severance benefits in both CIC
and non-CIC scenarios with the intention of phasing out the Company’s past practice of entering into individual severance and/or
CIC agreements. The following discussion describes the Executive Severance Plan and those individual agreements that currently
remain in place.
Executive Severance Plan. Employees at the level of President, SEVP and EVP are eligible to participate in the Executive Severance
Plan, effective January 1, 2025. To participate in the Plan, an employee must be designated by the Compensation Committee as a
participant and must sign a participation agreement agreeing to abide by the terms and conditions of the Plan, including the
restrictive covenants therein. Of our NEOs, Mr. Lan and Mr. Barrett are current participants in the Plan. Mr. Robbins and Mr. Iadanza
remain covered by their individual severance and CIC agreements.
The Executive Severance Plan provides for the following severance benefits:
Termination Without Cause/Good Reason – Non-CIC. Upon a termination by the Company without cause or by the participant for
good reason outside of the two-year period following a CIC, a participant:
•
At the level of President is entitled to a lump sum cash payment equal to two times (2x) base salary plus one times (1x) target
bonus plus a prorated target bonus for the year of termination, as well as a lump sum cash payment representing COBRA
premiums less required employee contributions for a two-year period; and
•
At the level of SEVP is entitled to a lump sum cash payment equal to one times (1x) base salary plus one times (1x) target bonus
plus a prorated target bonus for the year of termination, as well as a lump sum cash payment representing COBRA premiums
less required employee contributions for a one-year period.
Under the Plan, “cause” generally means participant’s willful and continued failure to perform his or her duties or to comply with any
valid and legal directive of his or her supervisor, the CEO or the Board; the willful engaging in dishonesty, illegal conduct or
misconduct which causes, or is reasonably likely to cause, material injury to the Company; the participant’s embezzlement,
misappropriation or fraud; the participant’s conviction of, or plea of guilty or nolo contendere to, a crime that constitutes a felony,
or a misdemeanor involving moral turpitude; or any failure to comply with a material provision of the Company’s written policies,
including those related to discrimination, harassment, performance of illegal or unethical activities, and ethical misconduct which
causes material injury to the Company.
Under the Plan, outside of the two-year period following a CIC, “good reason” generally means: a material reduction of base salary
or (target bonus percentage; the transfer to another geographic location more than 35 miles from the participant’s present office
location which materially increases his or her travel time from his or her then-current residence; or any purported termination of
participant’s employment which is not effected pursuant to all of the requirements of the Executive Severance Plan.
Termination Without Cause/Good Reason – CIC. Upon a termination by the Company without cause or by the participant for good
reason during the two-year period following a CIC (the “Covered Period”), a participant at the level of President or SEVP is entitled
to a lump sum cash payment equal to two times (2x) base salary plus two times (2x) target bonus, as well as a lump sum cash
payment representing COBRA premiums less required employee contributions for a two-year period.
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ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
During the Covered Period, the Plan generally provides that the Company will maintain participants’ base salary, target bonus
percentage and benefits entitlement, including perquisites, on at least the same level that was in effect on the date of the CIC.
Under the Plan, “cause” has the meaning described above under “Termination Without Cause/Good Reason – Non-CIC.” Under the
Plan during the Covered Period, “good reason” generally means: a material reduction of base salary or target bonus percentage; the
transfer to another geographic location more than 35 miles from the participant’s present office location which materially
increases his or her travel time from his or her then-current residence; the assignment of any duties materially and adversely
inconsistent with, or a material reduction of functions associated with participant’s position; the material reduction in the
employment benefit plans, programs or arrangements in which the participant participated in, taken as a whole; or any failure by
the Company to obtain an agreement from any successor to assume and agree to perform the obligations under the Plan; or any
purported termination of participant’s employment which is not effected pursuant to the requirements of the Plan.
Death and Disability. Upon termination due to death or disability (as defined in the Plan), a participant is entitled to a prorated
target bonus for the year of termination.
Upon a termination of employment, equity awards will be treated in accordance with their terms.
If a 280G excise tax is triggered by payments and benefits in connection with a CIC, the participant will be entitled to either (i) full
severance benefits under the Plan with the participant responsible for all taxes or (ii) full benefits cut back to a lesser amount that
would not trigger excise tax, whichever amount would result in the participant receiving the greatest amount of aggregate benefits
on an after-tax basis.
The Plan requires each participant to abide by non-solicitation, non-disparagement and non-disclosure provisions and provides for
applicable exceptions to the non-disclosure provisions to comply with the whistleblower and cooperation rules of the SEC and
other governmental authorities. Entitlement to severance benefits under the Plan is conditioned upon the participant’s release of
claims in favor of the Company.
The Compensation Committee may amend or terminate the Plan at any time prior to a CIC (i) with the advance written consent of
the affected participants or (ii) without the advance written consent of the affected participants by providing at least 12 months’
prior written notice to each participant, provided no amendment or termination of the Plan may become effective during the
Covered Period.
Severance Agreements. Only two of our executives, Mr. Robbins and Mr. Iadanza, have individual severance agreements which
provide enhanced severance protection outside of a CIC scenario. Our other executives are entitled to severance benefits under
our severance plan that is generally available to all eligible employees, with the exception of those executives who are participants
in the Executive Severance Plan.
The severance agreements of Mr. Robbins and Mr. Iadanza provide for the following severance benefits in the event of termination
of employment without cause:
•
A lump sum payment equal to (i) twenty-four months of base salary as in effect on the date of termination plus (ii) one times his
most recent annual cash bonus, and (iii) a fraction of the individual’s most recent annual cash bonus calculated based on the
number of months employed in the year of termination;
•
A lump sum cash payment in place of medical benefits equal to 125% of total monthly premium payments under COBRA
reduced by the amount of the required employee contribution, multiplied by 36; and
•
A lump sum life insurance benefit equal to 125% of our share of the premium for three years of coverage, based on the
coverage and rates in effect on the date of termination.
No severance payment is made under the severance agreements if the NEO receives severance under a CIC agreement (described
below).
For the purpose of the severance agreements, “cause” means willful and continued failure to perform employment duties after
written notice specifying the failure, willful misconduct causing material injury to us that continues after written notice specifying
the misconduct, or a criminal conviction (other than a traffic violation), drug abuse or, after a written warning, alcohol abuse or
excessive absence for reasons other than illness.
Under these agreements, each officer is restricted from competing with us in certain states during the term of his employment and
for a period after termination of his employment.
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ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Change in Control Agreements. Mr. Robbins and Mr. Iadanza each have a CIC agreement. Under the CIC agreements, if the officer
is terminated without “cause” or resigns for “good reason” following a “change in control” (as such terms are defined in the CIC
agreements) during the contract period (which is defined as the period beginning on the day prior to the CIC and ending on the
earlier of (i) the third anniversary of the CIC or (ii) the NEO’s death), the NEO would receive a lump sum cash payment equal to:
•
In the case of the CEO, three times (3x) the sum of
salary and the highest non-equity incentive received
in the three years prior to the CIC; and
•
In the case of the other NEOs, two times (2x) the sum
of salary and the highest non-equity incentive
received in the three years prior to the CIC.
The officers would also receive a lump sum cash payment in place of medical and dental benefits equal to three times (3x) their
aggregate annual premium amounts minus any required employee contribution, each as in effect at the time of termination. The
CIC agreements also provide for a lump sum cash payment upon termination due to death or disability during the contract period
equal to one-twelfth of the executive’s highest base salary in the three years prior to the CIC.
280G Excise Tax – Net Best Provision. Valley has adopted a policy prohibiting tax “gross-up” payments. None of our executive
officers are entitled to receive tax gross-up payments under the Executive Severance Plan or their CIC agreements. Each of our
NEOs has a net best provision in either their CIC agreement or under the Executive Severance Plan whereby they would be entitled
to the greater after-tax benefit of either: (i) their full CIC payments and benefits less any 280G excise tax, the payment of which
would be their responsibility, or (ii) their CIC payments and benefits cut back to the amount that would not result in 280G excise
tax.
Equity Award Acceleration. In the event of a termination of employment as a result of death, all restrictions on an NEO’s equity
awards will immediately lapse (for performance-based RSUs, all restrictions will lapse with respect to the target amount of shares).
In the case of retirement (as defined), all restrictions will lapse on outstanding time-based RSU awards and performance-based RSU
awards will remain outstanding and vest in accordance with the original vesting schedule based on actual performance. However,
awards outstanding for less than one year at the time of retirement will be pro-rated based on the number of months the award
was outstanding divided by 12, and the pro rata amount will remain outstanding and continue to vest as described above.
In the event of a CIC, if the NEO within two years thereafter resigns for good reason or is terminated without cause, the NEO’s
outstanding equity awards will vest (for performance-based RSUs, all restrictions will lapse with respect to the target amount of
shares).
Upon termination of employment for any other reason (other than termination due to disability which may be treated differently),
NEOs will forfeit all unvested equity awards unless otherwise provided.
Pension Plan Payments. The present value of the benefits to be paid to Mr. Robbins following termination of employment over his
estimated lifetime is set forth in the Severance Benefits Table below. Mr. Robbins receives three years additional service under the
BEP upon termination without cause or resignation for good reason occurring during his CIC contract period. Present values of the
BEP and Pension Plan were determined as of January 1, 2025 based on PRI-2012 White Collar Tables projected generationally with
Scale MP-2021, and interest at an annual effective rate of 5.72% compounded annually for the pension plan and the BEP.
Severance Benefits Table
The tables set forth below illustrate the severance amounts and benefits that would be paid to each of the current NEOs, if the
NEO had terminated employment with the Bank on December 31, 2024, the last business day of the most recently completed fiscal
year, under each of the following retirement or termination circumstances: (i) death; (ii) dismissal for cause, (iii) retirement or
resignation; and (iv) dismissal without cause or resignation for good reason following a CIC of Valley on December 31, 2024. Upon
dismissal for cause, the NEOs would receive only their salary through the date of termination and their vested BEP and pension
benefits. These payments are considered estimates as of specific dates as they contain some assumptions regarding stock price,
life expectancy, salary and non-equity incentive compensation amounts and income tax rates and laws.
For a description of the severance payments and benefits to which Mr. Hagedorn became entitled in connection with ceasing to
serve as CFO in November 2024, see above on page 60 under “Special NEO Compensation Arrangements – Michael D. Hagedorn.”
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Ira Robbins
Executive Benefits and Payments Upon Termination
Death
Dismissal
for Cause
Retirement
or
Resignation
Dismissal w/o
Cause
Dismissal w/o
Cause or
Resignation for
Good Reason
Following CIC
Amounts Payable in full on indicated date of termination
Severance – Salary Component(1)
$
—
$
—
$
—
$2,100,000
$ 2,855,824(2)
Severance – Non-Equity Incentive
$
—
$
—
$
—
$
921,875
$ 4,387,500
Time-Based RSU Awards
$1,341,732
$
—
$
—
$
—
$ 1,341,732
Performance-Based RSU Awards(3)
$4,168,343
$
—
$
—
$
—
$ 4,168,343
Deferred Compensation
$1,515,535
$1,515,535
$1,515,535
$1,515,535
$ 1,515,535
Welfare Benefits Lump Sum Payment
$
102,398
$
—
$
—
$
102,398
$
104,565
Automobile & Club Dues(4)
$
—
$
—
$
—
$
—
$
116,759
“Parachute Penalty” Tax Gross Up
N/A
N/A
N/A
N/A
N/A
Sub Total:
$7,128,008
$1,515,535
$1,515,535
$4,639,808
$14,490,258
Present Value of Annuities commencing on indicated date of
termination
Benefit Equalization Plan
$
—
$
—
$
—
$
—
$
39,120
Pension
$
204,742
$
204,742
$
204,742
$
204,742
$
204,742
Total:
$7,332,750
$1,720,277
$1,720,277
$4,844,550
$14,734,120
Travis Lan
Executive Benefits and Payments Upon Termination
Death
Dismissal
for Cause
Retirement
or
Resignation
Dismissal w/o
Cause
Dismissal w/o
Cause or
Resignation for
Good Reason
Following CIC
Amounts Payable in full on indicated date of termination
Severance – Salary Component(1)
$
—
$
—
$
—
$107,692
$
636,000
Severance – Non-Equity Incentive
$
—
$
—
$
—
$
—
$
175,000
Time-Based RSU Awards
$474,209
$
—
$
—
$
—
$
474,209
Performance-Based RSU Awards(3)
$209,096
$
—
$
—
$
—
$
209,096
Deferred Compensation
$ 11,156
$11,156
$11,156
$ 11,156
$
11,156
Welfare Benefits Lump Sum Payment
$
—
$
—
$
—
$
4,123
$
51,757
Automobile & Club Dues(4)
$
—
$
—
$
—
$
—
$
—
“Parachute Penalty” Tax Gross Up
N/A
N/A
N/A
N/A
N/A
Sub Total:
$694,461
$11,156
$11,156
$122,971
$1,557,218
Present Value of Annuities commencing on indicated date of
termination
Benefit Equalization Plan
N/A
N/A
N/A
N/A
N/A
Pension
N/A
N/A
N/A
N/A
N/A
Total:
$694,461
$11,156
$11,156
$122,971
$1,557,218
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Thomas A. Iadanza
Executive Benefits and Payments Upon Termination
Death
Dismissal
for Cause
Retirement
or
Resignation
Dismissal w/o
Cause
Dismissal w/o
Cause or
Resignation for
Good Reason
Following CIC
Amounts Payable in full on indicated date of termination
Severance – Salary Component(1)
$
—
$
—
$
—
$1,500,000
$2,099,999
Severance – Non-Equity Incentive
$
—
$
—
$
—
$
516,250
$2,535,000
Time-Based RSU Awards
$
361,566
$
—
$
326,078
$
—
$
361,566
Performance-Based RSU Awards(3)
$1,094,829
$
—
$
—
$
—
$1,094,829
Deferred Compensation
$
720,283
$720,283
$
720,283
$
720,283
$
720,283
Welfare Benefits Lump Sum Payment
$
77,438
$
—
$
—
$
77,438
$
77,910
Automobile & Club Dues(4)
$
—
$
—
$
—
$
—
$
35,880
“Parachute Penalty” Tax Gross Up
N/A
N/A
N/A
N/A
N/A
Sub Total:
$2,254,116
$720,283
$1,046,361
$2,813,971
$6,925,467
Present Value of Annuities commencing on indicated date of
termination
Benefit Equalization Plan
N/A
N/A
N/A
N/A
N/A
Pension
N/A
N/A
N/A
N/A
N/A
Total:
$2,254,116
$720,283
$1,046,361
$2,813,971
$6,925,467
Russell Barrett
Executive Benefits and Payments Upon Termination
Death
Dismissal
for Cause
Retirement
or
Resignation
Dismissal w/o
Cause
Dismissal w/o
Cause or
Resignation for
Good Reason
Following CIC
Amounts Payable in full on indicated date of termination
Severance – Salary Component(1)
$
—
$
—
$
—
$127,885
$
850,000
Severance – Non-Equity Incentive
$
—
$
—
$
—
$
—
$
628,900
Time-Based RSU Awards
$182,695
$
—
$
—
$
—
$
182,695
Performance-Based RSU Awards(3)
$570,255
$
—
$
—
$
—
$
570,255
Deferred Compensation
$ 93,378
$93,378
$93,378
$ 93,378
$
93,378
Welfare Benefits Lump Sum Payment
$
—
$
—
$
—
$
4,081
$
51,256
Automobile & Club Dues(4)
$
—
$
—
$
—
$
—
$
39,141
“Parachute Penalty” Tax Gross Up
N/A
N/A
N/A
N/A
N/A
Sub Total:
$846,328
$93,378
$93,378
$225,344
$2,415,625
Present Value of Annuities commencing on indicated date of
termination
Benefit Equalization Plan
N/A
N/A
N/A
N/A
N/A
Pension
N/A
N/A
N/A
N/A
N/A
Total:
$846,328
$93,378
$93,378
$225,344
$2,415,625
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2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Joseph V. Chillura
Executive Benefits and Payments Upon Termination
Death
Dismissal
for Cause
Retirement
or
Resignation
Dismissal w/o
Cause
Dismissal w/o
Cause or
Resignation for
Good Reason
Following CIC
Amounts Payable in full on indicated date of termination
Severance – Salary Component(1)
$
—
$
—
$
—
$525,000
$1,020,000
Severance – Non-Equity Incentive
$
—
$
—
$
—
$
—
$
834,000
Time-Based RSU Awards
$
225,993
$
—
$
—
$
—
$
225,993
Performance-Based RSU Awards(3)
$
684,266
$
—
$
—
$
—
$
684,266
Deferred Compensation
$
371,798
$371,798
$371,798
$371,798
$
371,798
Welfare Benefits Lump Sum Payment
$
—
$
—
$
—
$ 10,203
$
51,256
Automobile & Club Dues(4)
$
—
$
—
$
—
$
—
$
84,418
“Parachute Penalty” Tax Gross Up
N/A
N/A
N/A
N/A
N/A
Sub Total:
$1,282,057
$371,798
$371,798
$907,001
$3,271,731
Present Value of Annuities commencing on indicated date of
termination
Benefit Equalization Plan
N/A
N/A
N/A
N/A
N/A
Pension
N/A
N/A
N/A
N/A
N/A
Total:
$1,282,057
$371,798
$371,798
$907,001
$3,271,731
(1) In case of death or disability within three years following a CIC, each NEO would receive a cash payment equal to one twelfth his highest annual salary (including any
401(k) Plan or DCP deferral) paid in any of the three calendar years immediately prior to the CIC equal to the following amount as of December 31, 2024: Mr. Robbins,
$83,333; Mr. Lan $26,500; Mr. Iadanza, $58,333; Mr. Barrett, $35,417; and Mr. Chillura, $42,500.
(2) The individual CIC agreements and the Executive Severance Plan, effective January 1, 2025, include Section 280G net best provisions. The parachute value for
Mr. Robbins exceeds his 280G safe harbor limit, and as such, his severance would be cut back under the net best provision in his CIC agreement. Accordingly, the
value reflected in the “Severance—Salary Component” for Mr. Robbins has been reduced by $144,176 to reflect the cut-back.
(3) Upon death, dismissal without cause upon a CIC, or resignation for good reason upon a CIC, unearned performance-based RSU awards immediately vest at the target
amount.
(4) Includes the present value of the continuation of the personal use of a company-owned vehicle or monthly auto allowance, as applicable, and driving services and
parking (if applicable), and membership in a country club through the contract period following the CIC.
(5) For time-based RSU awards, all restrictions on such awards lapse upon retirement, with the exception of those RSUs that have been outstanding for less than a year at
retirement, in which case, a pro-rated number of such RSUs vest based on the portion of the vesting year that the RSU is outstanding prior to retirement. Upon
retirement, all performance-based RSUs (or in the case of performance-based RSUs that have been outstanding for less than a year at retirement, a pro-rated number
of such RSUs determined in the same manner as referenced above) remain outstanding and vest, if at all, subject to performance achievement.
73
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Pay Versus Performance
The table below reports the compensation of our CEO and the average compensation of the other NEOs as reported in the
Summary Compensation Table for the past four fiscal years, as well as their “compensation actually paid” (or “CAP”) as calculated
pursuant to recently adopted SEC rules, and certain performance measures required by the rules.
Average Summary
Compensation
Table Total for
Non-CEO Named
Executive
Officers($)(2)
Average
Compensation
Actually Paid to
Non-CEO Named
Executive Officers
($)(2)(3)
Value of Initial Fixed $100
Investment Based on:
Year
Summary
Compensation
Table Total
for CEO ($) (1)
Compensation
Actually Paid
to CEO
($) (1)(3)
Total
Shareholder
Return ($)
Peer Group
Total
Shareholder
Return ($)(4)
Net
Income
($)
(millions)
Growth in
Tangible
Book Value
(%)(5)
2024
$6,105,068
$3,445,395
$1,617,655
$1,433,141
$ 99
$131
$380
8.64%
2023
$5,416,463
$5,782,420
$1,789,482
$1,987,653
$113
$116
$499
13.45%
2022
$6,010,335
$4,461,048
$2,609,674
$2,462,181
$112
$116
$569
17.47%
2021
$5,349,830
$7,640,559
$1,789,527
$2,707,854
$131
$125
$474
16.23%
2020
$4,879,048
$3,682,555
$1,737,946
$1,569,427
$ 90
$ 91
$391
13.31%
(1) Reflects compensation for Ira Robbins, who served as our CEO in 2020, 2021, 2022, 2023, and 2024.
(2) Reflects compensation for our other NEOs as follows:
•
2020: Michael D. Hagedorn, Thomas A. Iadanza, Ronald H. Janis and Robert J.
Bardusch
•
2021: Michael D. Hagedorn, Thomas A. Iadanza, Ronald H. Janis and Joseph V.
Chillura
•
2022: Michael D. Hagedorn, Thomas A. Iadanza, Raja A. Dakkuri and Joseph
V. Chillura
•
2023: Michael D. Hagedorn, Thomas A. Iadanza, Raja A. Dakkuri and Joseph
V. Chillura
•
2024: Michael D. Hagedorn, Travis Lan, Thomas A. Iadanza, Jospeh v. Chillura,
and Russell Barrett.
(3) To calculate CAP for our CEO and other NEOs, the following adjustments were made to Summary Compensation Table total pay:
CEO
Other NEO Average
Adjustments
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
Summary Compensation Table
Total
$ 6,105,068 $ 5,416,463 $ 6,010,335 $ 5,349,830 $ 4,879,048 $ 1,617,655 $1,789,482 $2,609,674 $1,789,527 $1,737,946
Deduction for amount
reported in “Stock Awards”
column of the Summary
Compensation Table
$(3,443,405) $(2,975,661) $(3,060,578) $(2,633,731) $(2,285,938) $
(309,591) $ (619,932) $ (692,591) $ (761,890) $ (789,038)
Addition of fair value at fiscal
year (FY) end, of equity awards
granted during the FY that
remained outstanding
$ 3,021,568 $ 2,750,887 $ 1,921,547 $ 2,837,919 $ 1,497,358 $
588,063 $ 622,504 $ 652,868 $ 944,088 $ 713,297
Addition of change in fair value
at FY end versus prior FY end
for awards granted in prior FY
that remained outstanding
$(1,610,197) $
697,863 $
(489,698) $ 1,929,016 $
(186,348) $
(288,464) $
174,527 $ (118,799) $ 685,641 $
(72,162)
Addition of change in fair value
at vesting date versus prior FY
end for awards granted in a
prior FY that vested during the
FY
$
(586,998) $
(50,611) $
79,441 $
157,525 $
(56,413) $
(121,746) $
21,072 $
11,030 $
50,488 $
(20,616)
Deduction of the fair value at
the prior FY end for awards
granted in prior FY that failed
to meet their vesting
conditions
$
— $
— $
— $
— $
— $
(44,085) $
— $
— $
— $
—
Deduction for change in
pension values reported in the
“Change in Pension Value and
Nonqualified Deferred
Compensation Earnings”
column of the Summary
Compensation Table
$
(40,641) $
(56,521) $
— $
— $
(165,153) $
(8,691) $
— $
— $
— $
—
Compensation Actually Paid
(CAP)
$ 3,445,395 $ 5,782,420 $ 4,461,048 $ 7,640,559 $ 3,682,555 $ 1,433,141 $1,987,653 $2,462,181 $2,707,854 $1,569,427
The equity awards included above comprise performance share units and restricted share units granted from 2021 through 2024. The following assumptions underpin
the fair value calculations. Measurement date equity fair values are calculated with assumptions derived on a basis consistent with those used for grant date fair value
purposes. Restricted stock units are valued based on the stock price on the relevant measurement date. Performance stock units are adjusted to reflect an accrued
payout factor consistent with assumptions used for ASC Topic 718 purposes, and the stock price on the relevant measurement date. Stock options are valued using a
Black Scholes model as at the relevant measurement date, using assumptions consistent with those used for the grant date fair value purposes.
(4) Peer Group used for TSR comparisons reflects the KRX Index.
74
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
(5) The Company has identified GITBV as the Company-selected measure for the pay versus performance disclosure. GITBV was chosen from among the following three
financial performance measures that we believe were most important in linking CAP for our CEO and our Other NEOs to Company performance during 2024:
Tabular List of Company Financial Performance Measures:
•
Growth in Tangible Book Value
•
Core Net Income
•
Relative TSR
Further details on these measures and how they are used in our compensation plans can be found in our Compensation Discussion and Analysis in this Proxy
Statement.
The Compensation Committee has chosen GITBV over a three-year period because it believes that this metric is a good indicator of the performance and shareholder
value creation of a commercial bank, and the Company has received positive feedback from its investors regarding its use of GITBV in the Company’s incentive
compensation program. GITBV, when used herein, means year-over-year growth in tangible book value, plus dividends on common stock declared during the year,
excluding OCI recorded during the year. The add-back of dividends allows the Compensation Committee to compare our performance to our peers that pay different
amounts of dividends. The exclusion of OCI avoids changes in tangible book value related to accounting mechanics and not viewed as tied to financial performance.
Consistent with the terms of the award agreements for performance-based RSUs and the 2023 ICP, the Compensation Committee has the authority to adjust the
calculation of the GITBV for certain items that are one-time in nature. From time to time, the Compensation Committee uses this authority to avoid either rewarding
or penalizing executives for certain decisions which may adversely or positively affect the Company’s short-term results. Adjustments to GITBV primarily related to:
(i) in 2022, the impacts of the BLUSA acquisition, including adjustments with respect to merger-related charges, the earnings associated with BLUSA in the year of
acquisition, and the shares issued in connection with the BLUSA acquisition; (ii) in 2023, the impact of the FDIC special assessment and merger related expenses and
other merger charges; and (iii) in 2024, the FDIC special assessment.
Compensation Actually Paid Versus Company Performance. The following charts provide a clear, visual depiction of the
relationships between CAP for our CEO and the average CAP for our other NEOs, to aspects of Valley’s financial performance.
CAP-PEO
CAP-Other NEOs
Company TSR
Peer TSR
$3
$4
$5
$6
$7
$8
$9
$10
Compensation Actually Paid versus Total Shareholder
Return
Indexed Total Shareholder Return
Compensation Actually Paid ($mm)
$0
$20
$40
$60
$160
$180
$200
$140
$120
$100
$80
$2
$1
$0
2020
2021
2022
2023
2024
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
Compensation Actually Paid versus Net Income
CAP-PEO
CAP-Other NEOs
Net Income
$0
$100
$200
$300
$400
$500
$700
$600
$1,000
$900
$800
Net Income ($mm)
Compensation Actually Paid ($mm)
2020
2024
2023
2022
2021
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
Compensation Actually Paid versus Growth in Tangible
Book Value (%)
CAP-PEO
CAP-Other NEOs
Growth in Tangible Book Value (%)
0%
2%
4%
6%
8%
10%
14%
12%
20%
18%
16%
Growth in Tangible Book Value (%)
Compensation Actually Paid ($mm)
2020
2024
2023
2022
2021
75
2025 Proxy Statement
ITEM 2: ADVISORY VOTE ON OUR NAMED EXECUTIVE OFFICER COMPENSATION
Equity Compensation Plan Information
The table below provides information regarding our equity compensation plans as of December 31, 2024.
Plan Category
Number of Shares
to be issued
upon exercise of
outstanding
options and
rights*
Weighted average
exercise price of
outstanding
options and rights
Number of shares
remaining available
for future issuance
under equity
compensation
plans (excluding
shares reflected in
the first column)
Equity compensation plans approved by security holders
11,352,126
$8.39
9,582,588
Equity compensation plans not approve by security holders
—
—
—
Total
11,352,126
$8.39
9,582,588
* Amount includes 2,623,120 options outstanding with a weighted average exercise price of $8.39 and 8,729,006 RSUs measured at maximum vesting at December 31,
2024.
CEO Pay Ratio
Under SEC rules, we are required to disclose the pay ratio of our CEO to our median employee. The pay ratio disclosure below is a
reasonable estimate calculated in a manner consistent with SEC rules and guidance.
As permitted by SEC rules, since there has been no change in our employee population or compensation arrangements in the past
year that we believe would significantly impact the pay ratio disclosure, we are using the same median employee identified for
2023.
We identified our median employee by examining the 2023 total W-2 compensation, including 401(k) Plan deferrals, for all
individuals, excluding our CEO, who were employed by us on October 20, 2023. We included all employees, whether employed on
a full-time, part-time, temporary, or seasonal basis as of that payroll date. We did not make any assumptions, adjustments, or
estimates with respect to such total W-2 reported compensation. We did not annualize the compensation for any full or part time
employees that were not employed by us for all of 2023. We believe the use of total W-2 compensation, including 401(k) Plan
deferrals, for all employees is a consistently applied compensation measure that reasonably reflects the annual compensation of
employees.
We calculated the annual total compensation for the median employee in the same manner we used to determine the annual total
compensation of our NEOs for 2024, as set forth in the Summary Compensation Table.
The annual total compensation in 2024 for our median employee using this methodology was $76,462.
The annual total compensation in 2024 for our CEO using this methodology is shown in the Summary Compensation Table and
was $6,105,068.
The ratio of the annual total compensation of our CEO to the annual total compensation of our median employee in 2024 was 80
to 1.
76
2025 Proxy Statement
ITEM 3:
Ratification of the Selection of Independent
Registered Public Accounting Firm
In accordance with its charter, the Audit Committee is directly responsible for the selection of the independent registered public
accounting firm retained to audit the Company’s financial statements as well as monitoring the performance, qualifications, and
independence of that firm. The Audit Committee has selected KPMG LLP (“KPMG”) as the independent registered public accounting
firm for the Company for the fiscal year ending December 31, 2025. As a matter of good corporate governance, the Board is
requesting that our shareholders ratify KPMG’s appointment. KPMG has served as the Company’s independent registered public
accounting firm continuously since 2008. If shareholders do not ratify the appointment of KPMG, the Audit Committee will
consider the shareholders’ action in determining whether to appoint KPMG as our independent auditor for 2025.
Before selecting KPMG for 2025, the Audit Committee considered KPMG’s qualifications as an independent registered public
accounting firm. This included a review of KPMG’s performance in prior years, its knowledge of the Company and its operations, as
well as its reputation for integrity and competence in the fields of accounting and auditing. The Audit Committee’s review also
included matters required to be considered under rules of the SEC on auditor independence, including the nature and extent of
non-audit services, to ensure that the provision of such services will not impair the independence of the auditors. In addition, the
Audit Committee interviews and approves the selection of KPMG’s new lead engagement partner with each rotation.
The fees billed for services rendered to us by KPMG for the years ended December 31, 2024 and 2023 were as follows:
2024
2023
Audit fees
$3,620,000
$3,592,250(2)
Audit-related fees(1)
$
105,000
$
180,000
Total
$3,725,000
$3,772,250
(1) Audit-related services consist of fees incurred related to U.S. Department of Housing and Urban Development and Uniform Single Attestation Program audits in 2024
and 2023, issuances of consents in 2024 and 2023, and limited assurance services pertaining to a Sustainable Financing Impact Report for 2023.
(2) The amount shown in 2023 represents an increase in audit fees previously reported in the Company’s 2024 proxy statement. Audit fees for 2023 were adjusted to
include final audit billings.
The Audit Committee maintains a policy concerning the pre-approval of audit and non-audit services to be provided by its
independent registered public accountants to Valley. The policy requires that all services to be performed by KPMG, including audit
services, audit-related services and permitted non-audit services, be pre-approved by the Audit Committee. Specific services being
provided by the independent accountants are regularly reviewed in accordance with the pre-approval policy. At each subsequent
Audit Committee meeting, the Audit Committee receives updates on the services actually provided by the independent registered
public accountants, and management may also present additional services for pre-approval.
All services rendered by KPMG are permissible under applicable laws and regulations, and the Audit Committee pre-approved all
audit, audit-related, and non-audit services performed by KPMG during fiscal 2024. Representatives of KPMG will be available at the
Annual Meeting and will have the opportunity to make a statement and answer appropriate questions from shareholders.
The Audit Committee requests that shareholders ratify the selection of KPMG.
The Board recommends a vote “FOR” the
ratification of the selection of KPMG as Valley’s independent registered
public accounting firm for the fiscal year ending December 31, 2025.
77
2025 Proxy Statement
ITEM 3: RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of the Audit Committee
February 18, 2025
To the Board of Directors of Valley National Bancorp:
Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and
financial reporting principles, internal controls, and procedures designed to ensure compliance with accounting standards,
applicable laws and regulations. The Company’s independent registered public accounting firm, KPMG LLP (“KPMG”), performs an
annual independent audit of the financial statements and expresses an opinion on the conformity of those financial statements
with U.S. generally accepted accounting principles.
The following is the report of the Audit Committee with respect to the audited financial statements for fiscal year 2024. With
respect to fiscal year 2024, the Audit Committee has:
•
Reviewed and discussed Valley’s audited financial statements with management and KPMG;
•
Discussed with KPMG the scope of its services, including its audit plan;
•
Discussed with KPMG the matters required to be discussed by the applicable requirements of the Public Company Accounting
Oversight Board and the Securities and Exchange Commission;
•
Received the written disclosures and the letter from KPMG required by applicable requirements of the Public Company
Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence, and
discussed with KPMG their independence from management and Valley; and
•
Approved the audit and non-audit services provided during fiscal year 2024 by KPMG.
Based on the foregoing review and discussions, the Audit Committee approved the audited financial statements included in our
Annual Report on Form 10-K for fiscal year 2024.
Pursuant to Section 404 of the Sarbanes-Oxley Act, management is required to prepare as part of the Company’s 2024 Annual
Report on Form 10-K, a report by management on its assessment of the Company’s internal control over financial reporting,
including management’s assessment of the effectiveness of such internal control. KPMG is also required by Section 404 to prepare
and include as part of the Company’s 2024 Annual Report on Form 10-K, the auditors’ attestation report on management’s
assessment.
During the course of 2024, management regularly discussed the internal control review and assessment with the Audit Committee,
including the framework used to evaluate the effectiveness of such internal control, and at regular intervals updated the Audit
Committee on the status of this process and actions taken by management to respond to issues identified during this process. The
Audit Committee also discussed this review and assessment with KPMG. Management’s assessment report and the auditor’s
attestation report are included as part of the 2024 Annual Report on Form 10-K.
Eric P. Edelstein, Chairman
Andrew B. Abramson
Peter V. Maio
Kathleen C. Perrott
Jennifer W. Steans
Dr. Sidney S. Williams, Jr.
78
2025 Proxy Statement
Other Information
Information About the Annual Meeting
We are providing this Proxy Statement in connection with the solicitation of proxies by the Board for use at the Annual Meeting
and at any adjournment or postponement of the meeting. This year’s Annual Meeting will be held in a virtual format through a live
audio webcast.
The Board adopted a virtual-only Annual Meeting format in 2020 and, based on the success of the virtual format used for each
annual meeting of shareholders held since 2020, the Board has determined to once again hold a virtual Annual Meeting. The Board
believes that the virtual format provides greater access for shareholders to participate in the Annual Meeting as compared to an
in-person meeting held in one geographic location. The virtual meeting format enables consistent opportunities for all
shareholders, regardless of their geographic location, to attend the Annual Meeting, thereby facilitating the potential for greater
shareholder attendance and engagement.
You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on March 24, 2025, the
record date, or hold a valid proxy for the Annual Meeting. To be admitted to the Annual Meeting at
www.virtualshareholdermeeting.com/VLY2025, you must enter the 16-digit control number found next to the label “Control
Number” on your Notice of Internet Availability, proxy card, voting instruction form, or in the email sending you the Proxy
Statement. If you are a beneficial shareholder, you may contact the bank, broker, or other institution where you hold your account
if you have questions about obtaining your control number.
Whether or not you participate in the Annual Meeting, it is important that your shares be part of the voting process. You may log
on to www.proxyvote.com and enter your control number.
You will be permitted to submit live questions at the Annual Meeting just as if you were attending a physical meeting. Questions
may be submitted starting 30 minutes before the start of the Annual Meeting through www.virtualshareholdermeeting.com/
VLY2025. We expect to allow up to 40 minutes to answer questions during the Annual Meeting, including those answered during
the “official business” portion of the Annual Meeting and the “Q&A” portion of the Annual Meeting. To allow us to answer questions
from as many shareholders as possible, we will limit each shareholder to three questions, one asked with respect to the “official
business” portion of the Annual Meeting and two asked with respect to the “Q&A” portion of the Annual Meeting. It will help us if
questions are succinct and cover only one topic per question. In addition, Valley will adhere to the following policies:
•
Only questions from shareholders will be answered during
the Annual Meeting;
•
Questions from multiple shareholders on the same topic
or that are otherwise related may be grouped,
summarized and answered together;
•
Depending on the volume of questions received,
questions submitted will be addressed generally in the
order received as time allows; and
•
If the volume of questions exceeds the time allotted for
the meeting, responses to such additional questions will
be posted on our investor relations’ website and remain
posted for at least two weeks.
We encourage you to access the Annual Meeting before it begins. Online check-in will start approximately thirty minutes before
the meeting. This Proxy Statement is first being made available to shareholders on or about April 4, 2025.
E-Proxy
Pursuant to the rules of the SEC, we are furnishing our proxy materials to certain shareholders over the internet. Most shareholders
are receiving by mail an E-Proxy Notice, which provides general information about the Annual Meeting, the matters to be voted on
at the Annual Meeting, the website on which our Proxy Statement and annual report are available for review, printing and
downloading, and instructions on how to submit proxy votes. The E-Proxy Notice also provides instructions on how to request a
paper copy of the proxy materials and how to elect to receive a paper copy of the proxy materials or electronic copy of the proxy
materials by e-mail for future meetings.
79
2025 Proxy Statement
OTHER INFORMATION
Shareholders who are current employees of Valley or who have elected to receive proxy materials via electronic delivery will receive
via e-mail the Proxy Statement, 2024 Annual Report to Shareholders and instructions on how to vote. Shareholders who elect to
receive paper copies of the proxy materials will receive these materials by mail.
The 2025 E-Proxy Notice, this Proxy Statement, the Company’s 2024 Annual Report to Shareholders and the proxy card or voting
instruction form are referred to as our “proxy materials,” and are available electronically at the following website:
www.proxydocs.com/VLY.
Shareholders Entitled to Vote
The Board has set March 24, 2025 as the record date for the Annual Meeting. Only holders of common stock of record at the close
of business on that date, or their valid proxy holders, are entitled to vote at the 2025 Annual Meeting or by proxy.
On the record date there were 560,028,101 shares of common stock issued and outstanding and, therefore, eligible to vote at the
Annual Meeting. Each share is entitled to one vote on each matter properly brought before the meeting.
Householding
When more than one holder of our common stock shares the same address, in accordance with SEC rules, we may deliver only one
E-Proxy Notice or set of proxy materials, as applicable, to that address unless we have received contrary instructions from one or
more of those shareholders. Similarly, brokers and other intermediaries holding shares of Valley common stock in “street name” for
more than one beneficial owner with the same address may deliver only one E-Proxy Notice or set of proxy materials, as applicable,
to that address if they have received consent from the beneficial owners of the stock.
We will deliver promptly upon written or oral request a separate copy of the E-Proxy Notice or set of proxy materials, as applicable,
to any shareholder of record at a shared address to which a single copy of those documents was delivered. To receive these
additional copies, you may write or call our Shareholder Relations Department, Valley National Bancorp, 70 Speedwell Avenue,
Morristown, New Jersey 07470, telephone (973) 305-3380 or e-mail at InvestorRelations@valleynationalbank.com. If your shares are
held in “street name,” you should contact the broker or other intermediary who holds the shares on your behalf to request an
additional copy of the E-Proxy Notice or set of proxy materials.
If you are a shareholder of record and are either receiving multiple E-Proxy Notices or multiple paper copies of the proxy materials,
as applicable, and wish to request future delivery of a single copy or are receiving a single E-Proxy Notice or copy of the proxy
materials, as applicable, and wish to request future delivery of multiple copies, please contact our Shareholder Relations
Department at the address or telephone number above. If your shares are held in “street name,” you should contact the broker or
other intermediary who holds the shares on your behalf.
Proxies and Voting Procedures
Your vote is very important and you are encouraged to submit your proxy as soon as possible. Each proxy submitted will be voted
as directed. However, if a proxy solicited by the Board does not specify how it is to be voted, it will be voted as the Board
recommends—that is:
•
Item 1 – “FOR” the election of each of the 11 director
nominees named in this Proxy Statement;
•
Item 2 – “FOR” the approval, on an advisory basis, of the
compensation of our NEOs; and
•
Item 3 – “FOR” the ratification of the selection of KPMG;
How to Vote
We are offering you four alternative ways to vote your shares:
By Mail. To vote your proxy by mail, please sign your name exactly as it appears on your proxy card, date, and mail your proxy card
in the postage-paid envelope provided as soon as possible. If you vote your proxy by mail, your proxy card must be received prior
to the Annual Meeting.
By Telephone. If you received a paper copy of the proxy materials and you wish to vote by telephone, call toll-free 1-800-690-6903
or the telephone number on your voting instruction form and follow instructions. Have your E-Proxy Notice or proxy card available
when you call. If you vote by telephone, your vote must be received by 11:59 p.m., Eastern Time, on May 19, 2025.
80
2025 Proxy Statement
OTHER INFORMATION
Via the Internet. If you wish to vote using the internet, you can access the web page at www.proxyvote.com and follow the
on-screen instructions or scan the QR code on your E-Proxy Notice or proxy card with your smartphone. Have your proxy card
available when you access the web page. If you vote using the internet, your vote must be received by 11:59 p.m., Eastern Time, on
May 19, 2025.
During the Annual Meeting. If you wish to vote virtually at the Annual Meeting, you can do so by going to
www.virtualshareholdermeeting.com/VLY2025 during the live audio webcast. Have the information that is printed on your E-Proxy
Notice or proxy card available and follow the on-screen instructions.
Regardless of the method that you use to vote, you will be able to vote virtually at the Annual Meeting or revoke your earlier proxy
if you follow the instructions provided below in the section “Revoking Your Proxy.”
Participants in the Valley National Bank Savings and Investment Plan. If you are an employee or former employee of the
Company and hold shares of our common stock in the 401(k) Plan as of the record date, you have the right to instruct the plan
trustee how to vote those shares. You may vote by telephone, the internet, or proxy card, and any such vote will serve as a voting
instruction for the plan trustee. If you do not provide voting instructions, the plan trustee will vote the shares of common stock
deemed to be held in your 401(k) Plan account in the same proportion as the shares for which the trustee has received voting
instructions under the 401(k) Plan. The deadline to provide voting instructions for shares held in the 401(k) Plan is May 15, 2025, at
11:59 p.m., Eastern Time.
If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all
proxy cards to ensure that all of your shares are voted.
Revoking Your Proxy
You can revoke your proxy at any time before it is exercised by:
•
Following the instructions provided for changing your
vote via the internet or by telephone or delivering a
properly executed, later-dated proxy;
•
Voting at the Annual Meeting; or
•
A written revocation of your proxy.
A later-dated proxy by mail or written revocation must be received before the date of the Annual Meeting by the Corporate
Secretary of the Company, Valley National Bancorp, at 70 Speedwell Avenue, Morristown, New Jersey 07960. You may also revoke
your proxy by submitting a new proxy by telephone or via the internet or by voting virtually at the Annual Meeting. You will be able
to change your proxy as many times as you wish prior to the Annual Meeting and the last vote received chronologically, including a
vote cast at the Annual Meeting, will supersede any prior proxies.
Quorum Required to Hold the Annual Meeting
The presence, in person or by proxy, of the holders of a majority of the shares entitled to vote generally for the election of directors
is necessary to constitute a quorum at the meeting. Abstentions and broker “non-votes” are counted as present and entitled to
vote for purposes of determining whether there is a quorum for the Annual Meeting, but are not counted as votes “FOR” or
“AGAINST” any proposal, nor are they counted to determine the number of votes present for the particular proposal. A broker
“non-vote” occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker
does not have discretionary power to vote with respect to that item and has not received voting instructions from the beneficial
owner. Brokers do not have discretionary power to vote on the following items absent instructions from the beneficial owner: the
election of directors or the advisory vote on executive compensation.
Required Vote
•
To be elected to a new term, directors must receive a
majority of the votes cast (the number of shares voted
“FOR” a nominee must exceed the number of shares voted
“AGAINST” the nominee). Each director is required to
execute a resignation letter which becomes effective if he
or she does not receive a majority of the votes cast in an
uncontested election and the Board votes to accept the
resignation. Abstentions and broker non-votes are not
counted as votes cast and have no effect on the election
of a director.
•
The advisory vote on executive compensation will be
approved if a majority of the votes cast are voted “FOR”
the proposal. Abstentions and broker non-votes are not
counted as votes cast and will have no effect on the
outcome.
•
The ratification of the selection of KPMG will be approved
if a majority of the votes cast are voted “FOR” the
proposal. Abstentions are not counted as votes cast and
will have no effect on the outcome. Because this is
deemed a routine proposal, brokers will have discretionary
authority to vote on this proposal in the absence of
voting instructions from the beneficial owner.
81
2025 Proxy Statement
OTHER INFORMATION
Method and Cost of Proxy Solicitation
This proxy solicitation is being made by our Board and we will pay the cost of soliciting proxies. Proxies may be solicited by officers,
directors, and employees of the Company in person, by mail, telephone, facsimile, or other electronic means. We will not specially
compensate those persons for their solicitation activities. In accordance with the regulations of the SEC and Nasdaq, we will
reimburse brokerage firms and other custodians, nominees, and fiduciaries for their expense incurred in sending proxies and proxy
materials to their customers who are beneficial owners of Valley common stock. We are paying Alliance Advisors Holdings LLC a fee
of $10,000 plus out of pocket expenses to assist with solicitation of proxies.
Shareholder Proposals for the 2026 Annual Meeting
Shareholders of the Company are entitled to present proposals for consideration at forthcoming shareholder meetings provided
that they comply with applicable rules promulgated by the SEC. To be eligible for inclusion in the Company’s proxy materials for the
2026 Annual Meeting, a shareholder proposal must be received by our Corporate Secretary at our Morristown, New Jersey office,
located at 70 Speedwell Avenue, Morristown, New Jersey 07960, on or before December 5, 2025 (except that if the date of our
2026 Annual Meeting is changed by more than 30 days from the anniversary of this year’s Annual Meeting, then the deadline is a
reasonable time before the Company begins to print and send the proxy materials), and must comply in all respects with Rule 14a-8
of the Exchange Act and any other applicable rules of the SEC.
Other Matters
The Board is not aware of any other matters that may come before the Annual Meeting. However, in the event such other matters
come before the meeting, it is the intention of the persons named in the proxy to vote on any such matters in accordance with the
recommendation of the Board.
Shareholders are urged to vote via the internet or telephone or sign the enclosed proxy and return it in the enclosed envelope. The
proxy is solicited on behalf of the Board.
By Order of the Board of Directors
Morristown, New Jersey
April 4, 2025
A copy of our Annual Report on Form 10-K (without exhibits) for the year ended December 31, 2024 filed with the SEC will be
furnished to any shareholder upon written request addressed to our Shareholder Relations Department, Valley National
Bancorp, 70 Speedwell Avenue, Morristown, New Jersey 07960. Our Annual Report on Form 10-K (without exhibits) is also
available at the following website: www.proxydocs.com/VLY.
82
2025 Proxy Statement
Appendix A
Non-GAAP Financial Information
The tables below reconcile certain non-GAAP financial measures determined by methods other than U.S. generally accepted
accounting principles (“GAAP”). The Company believes that these 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 of our current and prior performance with the performance of others in the
financial services industry. Management utilizes these measures for internal planning, forecasting and analysis purposes.
Management believes that Valley’s presentation and discussion of this supplemental information, together with the accompanying
reconciliations to the GAAP financial measures, also allows investors to view performance in a manner similar to management.
These non-GAAP financial measures should not be considered in isolation, as a substitute for or superior to financial measures
calculated in accordance with U.S. GAAP. These non-GAAP financial measures may also be calculated differently from similar
measures disclosed by other companies.
Tangible book value per common share is computed by dividing shareholders’ equity less preferred stock, goodwill and other
intangible assets by common shares outstanding as of December 31, 2024, 2023, 2022, 2021, 2020, and 2019, as follows:
($ in thousands, except for per share data)
As of December 31,
2024
2023
2022
2021
2020
2019
Tangible book value per common
share (non-GAAP):
Common shares outstanding
558,786,093
507,709,927
506,374,478
421,437,068
403,858,998
403,278,390
Shareholders’ equity (GAAP)
$
7,435,127
$
6,701,391
$
6,400,802
$
5,084,066
$
4,592,120
$
4,384,188
Less: Preferred stock
354,345
209,691
209,691
209,691
209,691
209,691
Less: Goodwill and other intangible
assets
1,997,597
2,029,267
2,066,392
1,529,394
1,452,891
1,460,397
Tangible common shareholders’ equity
(non-GAAP)
$
5,083,185
$
4,462,433
$
4,124,719
$
3,344,981
$
2,929,538
$
2,714,100
Tangible book value per common
share (non-GAAP)
$
9.10
$
8.79
$
8.15
$
7.94
$
7.25
$
6.73
A-1
2025 Proxy Statement
APPENDIX A
Core net income available to common shareholders is net income available to common shareholders adjusted for non-core items
that the Company believes are not indicative of its core operating performance and was computed as follows for the years ended
December 31, 2024 and 2023:
($ in thousands)
For the years ended
December 31,
2024
2023
Core net income available to common shareholders (non-GAAP):
Net income, as reported (GAAP)
$380,271
$498,511
Non-GAAP adjustments
Add: FDIC special assessment(1)
8,757
50,297
Add: Restructuring charge(2)
2,039
9,969
Add: Provision for credit losses for available for sale securities(3)
—
5,000
Add: Merger related expenses(4)
—
14,133
Add: Litigation reserve(5)
—
3,540
Add: Net losses on the sale of commercial real estate loans(6)
13,660
—
Add: Losses (gains) on available for sale and held to maturity debt securities, net(7)
15
(401)
Less: Gain on sale of commercial premium finance lending(8)
(3,629)
—
Less: Net gains on sales of office buildings(8)
—
(6,721)
Less: Litigation settlements(9)
(7,334)
—
Less: Income tax benefit(10)
(46,431)
—
Total non-GAAP adjustments to income
$ (32,923)
$75,817
Income tax adjustments related to non-GAAP adjustments(11)
(3,789)
(20,057)
Net income, as adjusted (non-GAAP)
$ 343,559
$554,271
Dividends on preferred stock
21,369
16,135
Core net income available to common shareholders, as adjusted (non-GAAP)
$322,190
$538,136
(1) Included in the FDIC insurance expense.
(2) Represents severance expense related to workforce reductions within salary and employee benefits expense.
(3) Included in provision for credit losses for available for sale and held to maturity securities (tax disallowed).
(4) Primarily represents data processing termination costs within technology, furniture, and equipment expense.
(5) Represents legal reserves and settlement charges included in professional and legal fees.
(6) Represents actual and mark to market losses on commercial real estate loan sales included in (losses) gains on sales of loans, net.
(7) Included in gains (losses) on securities transactions, net.
(8) Included in gains on sale of assets, net.
(9) Represents recoveries from legal settlements included in other income.
(10) Represents the income tax benefit from the reduction in uncertain tax liability positions and accrued interest and penalties due to statute of limitation expirations
included in income tax expense.
(11) Calculated using the appropriate blended statutory tax rate for the applicable period.
A-2
2025 Proxy Statement
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☑
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
☐
TRANS
R
ITION 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 jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification Number)
One Penn Plaza
New York, NY
10119
(Address of principal executive offi
f ce)
(Zip code)
973-305-8800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbols
g
y
Name of exchange on which registered
g
g
Common Stock, no par value
VLY
The Nasdaq Stock Market LLC
Non-Cumulative Perpe
r
tual Prefer
f red Stock, Series A, no par value
VLYPP
The Nasdaq Stock Market LLC
Non-Cumulative Perpe
r
tual Prefer
f red Stock, Series B, no par value
VLYPO
The Nasdaq Stock Market LLC
Non-Cumulative Perpe
r
tual Prefer
f red Stock, Series C, no par value
VLYPN
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defin
f ed in Rule 405 of the Securities Act.
Yes ☑
No ☐
Indicate by check mark if the registrant is not required to file
f
reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for
f
such shorter period that the registrant was required to file
f
such reports), and (2) has been subj
u ect to
such filing requirements for
f
the past 90 days.
Yes ☑
No ☐
Indicate by check mark whether the registrant has submitted electronically every I
r
nteractive Data File required to be submitted pursuant to Rul
R e
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
f
such shorter period that the registrant was required to submit
such files.)
Yes ☑
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated file
f
r,” “accelerated filer,” “smaller reporting company” and
"emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer
☑
Accelerated filer
☐
Smaller reporting company
☐
Non-accelerated filer
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
f
complying with
any new or revised fin
f ancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has file
f
d a report on and attestation to its management’s assessment of the effe
f ctiveness of its
internal control over fin
f ancial reporting under Section 404(b) of the Sarba
r
nes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fir
f m
that prepared or issued its audit report. Yes ☑
No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filin
f
g refle
f ct the correction of an error to previously issued financial statements. ☑
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers dur
d
ing the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rul
R e 12b-2 of the Exchange Act)
Yes ☐
No ☑
The aggregate market value of the voting stock held by non-affi
f liates of the registrant was appr
a
oximately $
ly 3.5 billion on June 30, 2024.
h
There wer 5
e 60,275,784 h
shares f
of Common Sto k
ck outstandidi g
ng at Februa
r
ry 26, 2025.
Documents incorporated by referen
f
ce:
Certain portions of the registrant’s Defin
f itive Proxy Statement (the “2025 Pr
y
oxy Statement”) f
) for
f
hthe 2025 Annual Mee iting of S
f hareholders to be
heldld May 20, 2025
i
willll be incorporated by reference in Part III.
h
The 2025 Proxy Statement will be filed within 120 days of December 31, 2024.
FORM 10-K TABLE OF CONTENTS
Page
g
PART I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Item 1A.
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Item 1B.
Unresolved Staff C
f
omments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
Item 1C.
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
36
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
Item 4.
Mine and Safet
f y Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
Item 6.
[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . .
41
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
Item 8.
Financial Statements and Suppl
u
ementary Data: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82
Consolidated Statements of Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
Consolidated Statements of Changes in Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
Report of Independent Registered Publ
u ic Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
152
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . .
155
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
155
Item 9B.
Other Infor
f
mation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
158
PART III
Item 10.
Directors, Executive Officers and Corpor
r
ate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Item 11.
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Item 12.
Security Ownership of Certain Benefic
f ial Owners and Management and Related Shareholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
Item 13.
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . .
158
Item 14.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
158
PART IV
Item 15.
Exhibits and Financial Statement Schedul
d es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
159
Item 16.
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
162
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163
Glos
l
sary of Defi
e ne
i
d Ter
T
ms
r
The fol
f lowing terms may be used throughout this Report, including the consolidated financial statements and related
notes.
Term
Definition
ACL
Allowance for
f
credit losses
AFS
Availabl
a e-for-sale
ARG
Associate Resource Group
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
Bank
Valley National Bank
Basel III
Capi
a tal rul
r es under a global regulatory f
r
ra
f mework developed by the Basel Committee on Banking
Supe
u
rvision
BHC Act
Bank Holding Company Act of 1956, as amended
Board
Board of Directors of Valley National Bancorp
BSA
Bank Secrecy Act
BSA/AML
Procedur
d
es designed to assure and monitor compliance with BSA regulatory r
r
equirements
CD
Certific
f ate of deposit
CECL
Current expected credit loss model
CET1
Common equity tier 1
CFPB
Consumer Financial Protection Bureau
CODM
Chief Operating Decision Maker
CPI
Consumer Price Index
CRA
Community Reinvestment Act
CRE loan
concentration
ratio
Total commercial real estate loans held for
f
investment and held for
f
sale, excluding owner occupied
loans, as a percentage of total risk-based capital
CRISC
Certifie
f d in Risk and Information Systems Control
DIF
Deposit Insurance Fund administered by the FDIC
Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
EGRRCPA
The 2018 Economic Growth, Regulatory R
r
elief, and Consumer Protection Act
ESG
Environmental, Social and Governance
Exchange Act
Securities Exchange Act of 1934, as amended
Fannie Mae
Federal National Mortgage Association
FASB
Financial Accounting Standards Board
FDIC
Federal Deposit Insurance Corpor
r
ation
FDICIA
Federal Deposit Insurance Corpor
r
ation Improvement Act of 1991
Federal Reserve
Board of Governors of the Federal Reserve System
FRB
Federal Reserve Bank
FHLB
Federal Home Loan Bank
FICO
Fair Isaac Corpor
r
ation
FinCEN
Financial Crimes Enfor
f
cement Network
FINRA
Financial Industry R
r
egulatory A
r
uthority, Inc.
Fintech
Financial technology
Freddie Mac
Federal Home Loan Mortgage Corpor
r
ation
GAAP
U. S. Generally Accepted Accounting Principles
GDP
Gross domestic product
Ginnie Mae
Government National Mortgage Association
HTM
Held to Maturity
Term
Definition
IDIs
Insured depository i
r
nstitutions
Insiders
Valley National Bank's directors, executive offi
f cers, and 10 percent shareholders
Investment
Advisers Act
Investment Advisers Act of 1940, as amended
IRS
Internal Revenue Service
Leverage Ratio
Tier 1 capital to average consolidated assets as reported on consolidated financial statements
LIBOR
London Interbank Offered Rate
Moody’s
Moody’s Investor Services
NAV
Net asset value
OCC
Offi
f ce of the Comptroller of the Currency
OFAC
U.S. Department of the Treasury’
r
s Office of Foreign Assets Control
OREO
Other real estate owned
Oritani
Oritani Financial Corporation
OTC
Over-the-counter
PCAOB
Publ
u ic Company Accounting Oversight Board
PCD
Purchased credit deteriorated
Report
This Annual Report on Form 10-K
ROATE
Return on average tangible shareholders’ equity
ROU assets
Right of use assets
RSU
Restricted stock unit
S&P
Standard and Poor's
SEC
U.S. Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
SERP
Suppl
u
emental Executive Retirement Income Agreement
SOFR
Secured Overnight Financing Rate
SROs
Self-re
f
gulatory o
r
rganizations
U.S.
United States of America
U.S. Treasury
United States Department of the Treasury
r
USA PATRIOT
Act
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001
Valley
May refer
f
to Valley National Bancorp individually, Valley National Bancorp and its consolidated
subs
u
idiaries, or certain of Valley National Bancorp’s subs
u
idiaries, as the context requires
(interchangeable with the "Company," "we," "our" and "us")
VFM
Valley Financial Management, Inc.
PART I
Item 1.
Business
The disclosures set for
f
th in this item are qualified by Item 1A. Risk Fac
F
tors and the section captioned “Cautionary
r
Statement Conc
C
erning Forward-Looking Sta
S tements”
t
in Item 7. Management’s Disc
i
ussion and Analys
l
is of Financial Condi
C
tion
and Results of Operations ("MD
"
&A") of this Repor
e
t and othe
t
r cautionary s
r
tatements s
t
et forth e
t
lsewhere in this Repor
e
t.
General
Valley National Bancorp, headquartered in Morristown, New Jersey, is a New Jersey corporation organized in 1983 and
is registered as a bank holding company and a fin
f ancial holding company with the Federal Reserve under the BHC Act. At
December 31, 2024, Valley had consolidated 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.
Valley advertises and identifie
f s itself under the trade names “Valley Bank” and “Valley.”
Valley’s principal subs
u
idiary, Valley National Bank (commonly refer
f red to as the “Bank” in this Report), has been
chartered as a national banking association under the laws of the United States since 1927. Valley, through the Bank and its
subs
u
idiaries, offer
f s a full suite of national and regional banking solutions through various commercial, private banking, retail,
insurance and wealth management financial services products. Valley provides personalized service and customized solutions to
assist its customers with their financial service needs. Our solutions include, but are not limited to, traditional consumer and
commercial deposit and lending products, commercial real estate financing, asset-based loans, small business loans, equipment
financing, insurance and wealth management solutions, and personal fin
f ancing solutions, such as residential mortgages, home
equity loans and automobile financing. Valley also offers niche fin
f ancial services, including loan and deposit produc
d
ts for
homeowners associations, cannabi
a s-related business banking and venture banking, which we offer nationally.
The Bank also provides convenient account access to customers through a number of account management services,
including access to more than 200 branch locations across New Jersey, New York, Florida, Alaba
a
ma, Califor
f
nia and Illinois;
online, mobile and telephone banking; drive-in and night deposit services; ATMs; remote deposit capture; and safe deposit
facilities. In addition, certain international banking services are availabl
a e to customers, including standby letters of credit,
documentary letters of credit and related products, and certain ancillary services, such as for
f
eign exchange transactions,
documentary collections, and foreign wire transfers.
In addition to the Bank, Valley s’ consolidated subs
u
idiaries include, but are not limited to: an insurance agency offe iri g
ng
property a d
nd casualty
lty l
, lifife a
f
d
nd he lal hth insurance; an asset man g
agement ad i
dviser tha i
t is a regigister d
ed investment d
ad iviser wi h
ith hthe
SEC;
r
a egistered securities broker-dealer with the SEC and member of FINRA, which is also licensed as an insurance agency
to provide life and health insurance; a ti l
itl
i
e insurance
g
agen y
cy in New York,
h
which also pro ivides ser ivices in New Jersey; an
d
ad iviso y
ry fifirm specialili izi g
ng in hth i
e investment and man g
agement of tax cr d
edits; a d
nd a s b
ubsididia y
ry
h
which spe ici lalizes in he lal hth care
eq iuipmen l
t lendidi g
ng and o hther commercial e
i
quipmen l
t leases.
Recent Acquisitio
t n
Bank Leumi Le-Israel Corporation. On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel
Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively refer
f red
to as “Bank Leumi USA.” Bank Leumi USA maintained its headquarters in New York City with commercial banking offi
f ces in
Chicago, Los Angeles, Palo Alto, and Aventura, Florida. The common shareholders of Bank Leumi USA received 3.8025
shares of Valley common stock and $5.08 in cash for each Bank Leumi USA common share that they owned. As a result,
Valley issued approximately 85 million shares of common stock and paid $113.4 million in cash in the transaction. As a result
of the acquisition, Bank Leumi Le-Israel B.M. owned appr
a
oximately 14 percent of Valley's common stock as of April 1, 2022.
See Note 2 to the consolidated financial statements for
f
further details on the Bank Leumi USA and other acquisitions.
Competitio
t
n for
f
Depos
e
its,
t
Lendin
d
g and Othe
t
r Fin
F
ancial Services
Valley National Bank is the largest commercial bank headquartered in New Jersey, with its top markets located in
northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester
County, New York, Florida and Alabama. Valley ranked 10th in competitive ranking and market share based on the deposits
reported by 150 FDIC-insured financial institutions in the New York, Northern New Jersey and Long Island deposit markets as
of June 30, 2024. The FDIC also ranked Valley 6th, 29th, 18th, 17th and 70th in the states of New Jersey, New York, Florida,
Alabama and Califor
f
nia, respectively, based on deposit market share as of June 30, 2024. While we believe our FDIC rankings
5
2024 Form 10-K
reflect a solid foundation in our primary markets, the market for
f
banking and bank-related services is highly competitive and we
face subs
u
tantial competition in all areas of our operations from a variety of bank and non-bank competitors, some of which are
larger and may have more financial resources than Valley. Some of these competitors may h
y have few
f
er regul
gulatory c
r
onstr iaints, or
more resources l, lendidi g
ng lili i
mits and name recogni
gni ition hthan Valllley.
Valley competes with other providers of financial services such as commercial and savings banks, savings and loan
associations, credit unions, money market and mutual funds, mortgage companies, fin
f tech companies, title agencies, asset
managers, insurance companies, and a large list of other local, regional and national institutions which offer fin
f ancial services.
We believe we remain competitive by offering premier relationship banking service and advice, as well as a robust suite of
innovative fin
f ancial products and solutions to keep pace with evolving customer prefer
f ences across our footpr
t
int. The fin
f ancial
services industry i
r
s continually undergoing rapi
a d technological change with frequent introductions of new, technology-driven
products and services, which increases effi
f ciency and enabl
a es financial institutions to better serve customers and to reduce
costs. Fintech and direct bank competitors provide innovative digital solutions to traditional retail banking services and
products, and in some cases without the extensive burden associated with being a regulated depository institution. We work to
meet these challenges by utilizing internal resources and external technology partners to continually enhance our online and
mobile banking products. By combining technology-enabled solutions with our premier relationship-based service model, we
continue to compete effectively in the Commercial and Consumer Banking segments of our business. This level of service and
commitment is particularly impactful because of our strong community presence with almost 100 years of service, providing us
a competitive advantage with such customers over certain competitors that are not traditional banks.
Overall, our customers are influenced by the convenience, solution-based service from our knowledgeable staff a
f
nd
personal contacts, as well as the robust availabi
a lity of our diverse products and services. We provide such convenience through
our multi-channel delivery s
r
ystem, including 229 branch offi
f ces, an extensive ATM network, and our telephone, on-line and
digital banking systems.
We continually review our pricing, products, locations, alternative delivery c
r
hannels and various acquisition prospects,
and periodically engage in discussions regarding possible acquisitions to maintain and enhance our competitive position.
Operatin
t
g Seg
S
me
g
ntst
Our business strategies, operations and reporting struc
r
tures are reassessed by management, at least on an annual basis, to
ensure the proper identific
f ation and reporting of our operating segments. In addition to our annual assessment, Valley re-
evaluated its segment reporting during the second quarter 2022 to consider the Bank Leumi USA acquisition on April 1, 2022,
along with other fac
f
tors, including changes in the internal structur
t
e of operations, discrete fin
f ancial information reviewed by
key decision-makers, balance sheet management strategies and personnel. As a result, Valley currently manages its business
operations under operating segments consisting of Consumer Banking and Commercial Banking. Activities not assigned to the
operating segments are included in Treasury a
r
nd Corporate Other. Valley’s Wealth Management and Insurance Services
Division, comprised of asset management advisory, brokerage, trust, personal and title insurance, tax credit advisory services,
and our international and domestic private banking businesses, is a reporting unit within the Consumer Banking segment. See
Note 21 to the consolidated financial statements for
f
additional details, including the fin
f ancial performance of our operating
segments.
Commercial Banking
i
Commercial and industrial loans. Commercial and industrial loans totaled appr
a
oximately $9.9 billion and represented
20.4 percent of the total loan portfol
f io at December 31, 2024. We make commercial loans to small and middle market
businesses most often located in New Jersey, New York, and Florida, as well as lending on a national basis within our specialty
lines of business. A significant portion of Valley’s commercial and industrial loan portfol
f io consists of loans to long-standing
customers of proven abi
a lity, strong repayment performance, and high character. Underwriting standards are designed to assess
the borrower’s ability to generate recurring cash flo
f w suffi
f cient to meet the debt service requirements of loans granted. While
such recurring cash flo
f w serves as the primary source of repayment, most of the loans are collateralized by borrower assets
intended to serve as a secondary source of repayment should the need arise. Anticipated cash flo
f ws of borrowers, however, may
not occur as expected and the collateral securing these loans may flu
f ctua
t
te in value. In the case of loans secured by accounts
receivabl
a e, the abi
a lity of the borrower to collect all amounts due
d
from its customers may be impaired. Our loan decisions
include consideration of a borrower’s ability to repay debts, collateral coverage, standing in the community and other forms of
suppor
u
t. Strong consideration is given to long-term existing customers that have maintained a favorable relationship with the
Bank. Commercial loan products offe
f red consist of term loans for equipment purchases, working capital lines of credit that
assist our customers’ financing of accounts receivabl
a e and inventory,
r
and commercial mortgages for owner occupi
u ed properties.
Working capital advances are generally used to finance seasonal requirements and are repaid at the end of the cycle. Short-term
commercial business loans may be collateralized by a lien on accounts receivabl
a e, inventory,
r
or equipment and/or partly
2024 Form 10-K
6
collateralized by real estate. Short-term loans may also be made on an unsecured basis based on a borrower’s financial strength
and past performance. Whenever possible, we obtain the personal guarantee of the borrower’s principals to potentially help
mitigate the risk. Unsecured loans, when made, are generally granted to the Bank’s most creditworthy borrowers. Unsecured
commercial and industrial loans totaled $1.4 billion at December 31, 2024. In addition, we provide fin
f ancing to the health care
and industrial equipment leasing market through our leasing subsidiary, Highland Capital Corp.
r
Commercial real estate loans. Commercial real estate and construc
r
tion loans totaled $29.6 billion and represented 60.7
percent of the total loan portfol
f io at December 31, 2024. The fol
f lowing tabl
a e presents the commercial real estate portfol
f io by
loan type and the percent of each loan type to total loans at December 31, 2024 and 2023:
2024
2023
Balance
Outstanding
Percent of Loan
Category to Total
Loans
Balance
Outstanding
Percent of Loan
Category to Total
Loans
($ in thousands)
Commercial real estate:
Non-owner occupi
u ed (1)
$
12,344,355
25.2 % $
15,078,464
30.0 %
Multifamily (2)
8,299,250
17.0
8,860,219
17.7
Owner occupi
u ed (1)
5,886,620
12.1
4,304,556
8.6
Total
$
26,530,225
54.3 % $
28,243,239
56.3 %
Construc
r
tion
3,114,733
6.4
3,726,808
7.4
Total commercial real estate loans
$
29,644,958
60.7 % $
31,970,047
63.7 %
(1)
During the second quarter 2024, approximately $1.1 billion of non-owner occupi
u ed loans were reclassified to owner occupi
u ed loans
based upon
u
Valley's re-assessment of such loans under the applicable bank regulatory g
r
uidance.
(2)
Includes loans collateralized by properties that are greater than 50 percent rent regulated totaling appr
a
oximately $553 million and $531
million at December 31, 2024 and 2023, respectively.
While commercial real estate lending remains a key pillar of the success of our relationship banking model and our
lending expertise, we continued to proactively diversify our loan portfol
f io by reducing new originations of certain types of
commercial real estate lending, such as non-owner occupied and multifam
f
ily loans, and through the sale of $1.2 billion of
performing commercial real estate and construc
r
tion loans dur
d
ing 2024. Within the commercial banking segment, our loan
growth effo
f
rts continued to mainly foc
f
us on commercial and industrial and owner occupi
u ed commercial real estate loans where
we have or can compete for
f
an outsized share of the client's banking relationship. As a result, we have a current strategic
balance sheet goal to reduc
d
e our CRE loan concentration ratio of 362 percent at December 31, 2024 to below 350 percent by
December 31, 2025. See the "Executive Summary" section of Part II Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations for more details.
We originate commercial real estate loans that are secured by various diversifie
f d property types across the New York
metropolitan area (New Jersey, New York and Pennsylvania), Florida and our other primary market footpr
t
ints. Property types
in this portfol
f io range from multifam
f
ily residential properties to non-owner occupi
u ed commercial, industrial/warehouse, retail
and, to a much lesser extent, commercial office buildings. Commercial real estate loans collateralized by offi
f ce buildings
totaled appr
a
oximately $3.1 billion at December 31, 2024 with a combined weighted average loan to value ratio of 62 percent
and debt service coverage ratio of 1.76. The majority of the offi
f ce properties collateralizing our portfol
f io are multi-tenant and
dispersed geographically in Florida, Alabama, New Jersey and New York (including approximately $218.1 million of loans
with properties located in Manhattan at December 31, 2024). All commercial real estate loans are generally written on an
adju
d stable basis with rates tied to a specifically identifie
f d market rate index. Adju
d stment periods generally range between fiv
f e to
ten years and repayment is generally structur
t
ed on a ful
f ly amortizing basis for terms up to thirty years. Commercial real estate
loans are subj
u ect to underwriting standards and processes similar to commercial and industrial loans, but generally they involve
larger principal balances and longer repayment periods as compared to commercial and industrial loans. Commercial real estate
loans are viewed primarily as cash flo
f w loans and secondarily as loans secured by real property. Repayment of most loans is
dependent upon the cash flo
f w generated from the property securing the loan or the business that occupi
u es the property.
Commercial real estate loans may be more adversely affected by conditions in the real estate markets or the overall economy
and accordingly, conservative loan to value ratios are required at origination. Valley also performs regular and comprehensive
stress testing of the portfol
f io to evaluate the potential impact of market changes on loan performance.
With respect to loans to developers and builders, we originate and manage construc
r
tion loans structur
t
ed on either a
revolving or a non-revolving basis, depending on the natur
t
e of the underlying development proje
o ct. Our construc
r
tion loans are
7
2024 Form 10-K
generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk.
Within our construc
r
tion portfol
f io, we have a diverse mix of both residential (for sale and rental) and commercial development
projects. Non-revolving construc
r
tion loans ofte
f n involve the disbursement of subs
u
tantially all committed funds
f
with repayment
subs
u
tantially dependent on the successful
f
completion and sale, or lease, of the proje
o ct. Sources of repayment for
f
these types of
loans may be from pre-committed permanent loans fro
f
m other lenders, sales of developed property, or an interim loan
commitment from Valley until permanent fin
f ancing is obtained elsewhere. Revolving construc
r
tion loans (generally relating to
single-family residential construc
r
tion) are controlled with loan advances dependent upon the presale of housing units financed.
These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due
d
to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic
conditions and the availabi
a lity of long-term financing.
Consumer Banking
Residential mortgage loans. Residential mortgage loans totaled $5.6 billion and represented 11.5 percent of the total
loan portfol
f io at December 31, 2024. Our residential mortgage loans include fixed and variable interest rate loans located
mostly in New Jersey, New York and Florida. Valley’s ability to be repaid on such loans is closely linked to the economic and
real estate market conditions in our lending markets. We also make mortgage loans secured by homes beyond this primary
geographic area; however, lending outside this primary a
r
rea is generally conducted in other branch offi
f ce markets and
neighboring states. Our residential mortgage loan portfol
f io also includes $57.8 million of loans (primarily in California) that are
guaranteed by third parties. Mortgage loan originations are based on underwriting standards that generally comply with Fannie
Mae and/or Freddie Mac requirements. Appraisals and valuations of real estate collateral are contracted through an approved
appraisal management company. The appr
a
aisal management company is required to adhere to all regulatory r
r
equirements. The
Bank’s appr
a
aisal management policy and procedur
d
e complies with regulatory r
r
equirements and guidance issued by the Bank’s
primary regulator. Credit scoring, using FICO® and other proprietary credit scoring models is employed in the ultimate,
judgmental credit decision by Valley’s underwriting staff. Valley does not use third party contract underwriting services. In
deciding whether to originate each residential mortgage, Valley considers the qualific
f ations of the borrower, the value of the
underlying property and other fact
f
ors that we believe are predictive of fut
f ur
t
e loan performance. Valley originated fir
f st
mortgages include both fix
f ed rate and adjustabl
a e rate mortgage products with 10-year to 30-year maturities. The adjustabl
a e rate
loans have a fix
f ed-rate, fix
f ed payment, introductory period of 5 to 10 years that is selected by the borrower. Additionally,
Valley originates jumbo residential mortgage loans, that are mostly fixed-rate with 30-year maturities. At December 31, 2024,
fixed and adju
d stable rate jumbo residential mortgage loans totaled appr
i
oximatelyly $1.6 billion and $898.8
i
milli
llion, respectiv lely.
Interest-o lnly (
y (i.e., non-amor iti izing)
ng) re isidential mor gtg g
ag
l
e loans
i
wi hthin our juju b
mbo portf lol
f io totaled $188.9
ill
million (or 3.35
percent of hthe tot lal re isidential mor gtg g
ag l
e loan portf lol
f io) at Dece b
mber 31, 2024. The Ba k
nk services cert iain resididen iti lal mortgage
portfol
f ios, and it is compensated for loan administrative services performed for mortgage servicing rights related primarily to
loans originated and sold by the Bank. See Notes 5 and 8 to the consolidated financial statements for
f
further details.
Other consumer loans. Other consumer loans totaled $3.6 billion and represented 7.4 percent of the total loan portfol
f io
at December 31, 2024. Our other consumer loan portfol
f io is primarily comprised of direct and indirect automobile loans, loans
secured by the cash surrender value of life i
f
nsurance, home equity loans and lines of credit, and to a lesser extent, secured and
unsecured other consumer loans (including credit card loans). Valley is an auto lender primarily in New Jersey, New York,
Pennsylvania, Florida, Connecticut, Delaware and Alabama offering indirect auto loans secured by either new or used
automobiles. During 2024, we modestly expanded of our indirect auto network into Georgia. Automobile originations
(including light truc
r
k and sport utility vehicles) are largely produced via indirect channels, originated through approved
automobile dealers. Home eq iui yty le di
ndi g
ng consists of both f
h fix
f
d
ed and variablbl
a
i
e interest rate products mainlyly to providid
h
e home
eq iui yty loans to our re isidential mortgage customers or take a secondary position to another lender’s first lien position within the
footpr
t
int of our primary l
r
ending territories. We generally will not exceed a combined (i.e., fir
f st and second mortgage) loan-to-
value ratio of 80 percent when originating a home equity loan. Other consumer loans include direct consumer term loans, both
secured and unsecured, but are largely comprised of personal lines of credit secured by the cash surrender value of lifef
insurance. The product is mainly originated through the Bank’s retail branch network and third party fin
f ancial advisors.
Unsecured consumer loans totaled approximately $90.6
i
millllion i
, includidi g
ng $42.7
i
millllion of cr d
edit ar
c d loans, at December 31,
2024.
Wealth Management. Our Wealth Management and Insurance Services Division provides asset management advisory,
brokerage, trust, commercial, personal and title insurance, tax credit advisory services, and our international and domestic
private banking businesses. Asset management advisory services include investment services for individuals and small to
medium sized businesses, trus
r
ts and investment strategies designed for
f
various investment profile
f
s and objectives. Our
brokerage services mainly facilitate the buying and selling of securities for
f
banking and wealth management customers. Trus
r
t
services include living and testamentary t
r
rusts, investment management, custodial and escrow services, and estate
administration primarily to individuals. Tax credit advisory services include sourcing, syndication, and struc
r
turing federal and
2024 Form 10-K
8
state tax credits for commercial customers and development proje
o cts. We also provide personalized private banking and
management services for select international and domestic clients.
Treasury and Cor
C
por
r
ate O
t
ther
Although we are primarily focused on our lending and wealth management services, a large portion of our income is
generated through investments in various types of securities. Treasu y
ry and Corpor
r
ate O hther la g
rg lely consists of hthe Treasury
r
managed HTM and AFS debt secu iri ities portf lol
f ios m iai lnly u itilili
d
zed in hth l
e liq iuididi yty management ne d
eds of our le di
ndi g
ng segments
and i
d income a d
nd expens
i
e items resul i
lting fro
f
m support func
f
itions not didirectlyly attribibut b
able to a spe icifific s g
egment A
.
s of
December 31, 2024, our total investment securities and interest bearing deposits with banks were $7.0 billion and $1.5 billion,
respectively. See the “Investment Securities Portfol
f io” section of the MD&A and Note 4 to the consolidated financial
statements for additional infor
f
mation concerning our investment securities.
Changes in L
i
oan Portfo
t
lio Com
C
pos
m
ition
At December 31, 2024 and 2023, appr
a
oximately 73 percent and 76 percent of Valley’s gross loans totaling $48.8 billion
and $50.2 billion, respectively, consisted of commercial real estate (including construc
r
tion loans), residential mortgage and
home equity loans. The remaining 27 percent and 24 percent December 31, 2024 and 2023, respectively, consisted of loans not
collateralized by real estate. During 2024, we continued to execute on our strategy to reduce investor commercial real estate
(i.e., multifam
f
ily and non-owner occupi
u ed) and construc
r
tion loans, and maintain greater focus on growth of the commercial and
industrial loan and owner-occupied commercial real estate loan portfol
f ios (see more details in the "Commercial real estate
loans" section above
a
). We also continue to diversify t
f
he types of borrowers within our geographic concentrations in New
Jersey, the New York City metropolitan area, including Westchester County, New York, and Florida. Many external fac
f
tors
outlined in Item 1A. Risk Factors, the “Executive Summary” section of Item 7. MD&A, and elsewhere in this Report may
impact our ability to maintain the current composition of our loan portfol
f io. See the “Loan Portfolio” section in Item 7. MD&A
in this Report for
f
further discussion of our loan composition and concentration risks.
h
The f lol
f lo i
wi g
ng tablbl
a e presents the loan portf lol
f io and l
d loans heldld for s lal b
e by state and the percentage of total l
l loans by
by state at
December 31, 2024.
Commercial
and Industrial
Commercial
Real Estate
Residential
Consumer
Total Loans
% of Total
(in thousands)
New York
$
2,380,333
$
9,425,827
$
1,508,569
$
1,007,797
$ 14,322,526
29 %
Florida
2,846,615
8,411,370
1,475,810
611,301
13,345,096
27
New Jersey
1,858,137
5,947,952
1,888,368
1,159,515
10,853,972
22
Califor
f
nia
490,658
1,054,994
96,703
37,190
1,679,545
4
Illinois
447,906
371,281
4,599
14,057
837,843
2
Alabama
69,121
383,678
34,812
92,624
580,235
1
Other
1,838,630
4,058,606
640,586
668,353
7,206,175
15
Total
$
9,931,400
$ 29,653,708
$
5,649,447
$
3,590,837
$ 48,825,392
100 %
Less: Loans held for
f
sale
—
8,750
16,931
—
25,681
Total loan portfol
f io
$
9,931,400
$ 29,644,958
$
5,632,516
$
3,590,837
$ 48,799,711
Risk
i
Manage
a
ment
Financial institut
t ions must manage a variety of business risks that can significantly affe
f ct their fin
f ancial perform
f
ance.
Significant risks we confro
f
nt are credit risks and asset/liabi
a lity management risks, which include interest rate and liquidity risks.
Credit risk is the risk of not collecting payments pursuant to the contractua
t
l terms of loan, lease and investment assets. Interest
rate risk results from changes in interest rates which may impact the re-pricing of assets and liabi
a lities in diffe
f rent amounts or at
different dates. Liquidity risk is the risk that we will be unabl
a e to fund
f
obligations to loan customers, depositors or other
creditors at a reasonabl
a e cost.
The Board performs its risk oversight function primarily through several standing committees, including its Risk
Committee, all of which report to the Board. The Board regularly engages in discussions of risk management and receives
reports on risk factors fro
f
m our executive management, other members of management and the chair of the Risk Committee.
The Risk Committee assists the Board with, among other things, oversight of management's establ
a ished enterpr
r
ise-wide risk
management framework and risk culture which are intended to align with Valley’s strategic plan and which the Risk Committee
deems appr
a
opriate for Valley’s capital, business activities, size and risk appe
a
tite. Management utilizes the enterpr
r
ise-wide risk
management framework to holistically manage and monitor risks across the organization and to aggregate and manage the risk
9
2024 Form 10-K
appetite approved by the Board. As part of the risk management framework, the Risk Committee reviews and recommends to
the Board risk tolerances and limits for strategic, credit, interest rate, price, liquidity, compliance, operational (including
information security and cybersecurity risk), and reputation risks, oversees risk management within those tolerances and
monitors compliance with applicable laws and regulations. With guidance fro
f
m and oversight by the Risk Committee,
management continually refines and enhances its risk management policies, procedur
d
es and monitoring programs to be abl
a e to
adapt to changing risks.
Valley continues to internally run
r
stress tests of its capital position that are subj
u ect to review by Valley's primary
regulators. The Bank’s 2024 Capi
a tal Stress Test included a climate related scenario that considered geographical climate events
within the Bank’s diverse footpr
t
int. The results of the internal stress tests are considered in combination with other risk
management and monitoring practices at Valley to maintain an overall risk management program.
Information security is also a significant operational risk for
f
Valley. The Board, through its Risk Committee, has primary
oversight responsibility for infor
f
mation security and receives regular updates and reporting fro
f
m management on infor
f
mation
security and cybersecurity matters, including material cybersecurity risks and mitigation strategies and information related to
any third-party assessments of Valley’s cybersecurity program. See Item 1A. Risk Factors for
f
a fur
f
ther discussion of risks
related to cybersecurity and Item 1C. Cybersecurity for a further discussion of risk management strategies and governance
processes related to cybersecurity.
Credit
d
Risk
i
Manage
a
ment and Und
U
er
d
writing Appr
A
oach
Credit risk management. For all loan types, we adhere to a credit policy designed to minimize credit risk while
generating the maximum income given the level of risk appetite. Management reviews and appr
a
oves these policies and
procedur
d
es on a regular basis with subs
u
equent approval by the Board annually. Credit authority relating to a significant dollar
percentage of the overall portfol
f io is centralized and controlled by the Credit Risk Management Division and by a Management
Credit Committee. A reporting system suppl
u
ements the review process by providing management with frequent reports
concerning loan production, loan quality, internal loan classifications, concentrations of credit, loan delinquencies, non-
performing and potential problem loans. Loan portfol
f io diversific
f ation is an important factor utilized by us to manage the
portfol
f io’s risk across business sectors, geographic markets and through cyclical economic circumstances.
Our historical and current loan underwriting practice prohibits the origination of payment option adjustabl
a e residential
mortgages which allow for
f
negative interest amortization and subpr
u
ime loans. Virtua
t
lly all of our residential mortgage loan
originations in recent years have confor
f
med to rul
r es requiring documentation of income, assets sufficient to close the
transactions and debt to income ratios that support the borrower’s ability to repay under the loan’s proposed terms and
conditions. These rules are applied to all loans originated for
f
retention in our portfol
f io or for sale in the secondary market.
Loan underwriting and loan documentation. Loan appr
a
ovals are documented in accordance with specific and detailed
underwriting policies and verification procedur
d
es. General underwriting guidance is consistent across all loan types with
possible variations in procedur
d
es and due
d
diligence dictated by specific loan requests. Due diligence standards require
acquisition and verification of suffi
f cient fin
f ancial information to determine a borrower’s or guarantor’s credit worthiness,
capital support, capacity to repay, collateral support, and character. Credit worthiness is generally verified using personal or
business credit reports from independent credit reporting agencies. Capacity to repay the loan is based on verifia
f bl
a e liquidity
and earnings capa
a
city as shown on fin
f ancial statements and/or tax retur
t
ns, banking activity levels, operating statements, rent
rolls or independent verification of employment. Finally, collateral valuation is determined via appr
a
aisals from independent,
bank-approved, certified or licensed property appr
a
aisers, valuation services, or readily availabl
a e market resources.
Types of collateral. Loan collateral, when required, may consist of any one or a combination of the following asset types
depending upon the loan type and intended purpos
r
e: commercial or residential real estate; general business assets including
working assets such as accounts receivabl
a e or inventory,
r
or fixed assets such as equipment or rolling stock; marketabl
a e
securities or other forms of liquid assets such as bank deposits or cash surrender value of life i
f
nsurance; automobiles; or other
assets wherein adequate protective value can be establ
a ished and/or verified by reliabl
a e outside independent appraisers. Valley
does not accept cryptocurrency assets as loan collateral.
Many times, we will underwrite loans to legal entities for
f
med for
f
the limited purpos
r
e of the business which is being
financed. Credit granted to these entities and the ultimate repayment of such loans is primarily based on the cash flo
f w generated
from the property securing the loan or the business that occupies the property. The underlying real property securing the loans
is considered a secondary source of repayment, and normally such loans are also suppor
u
ted by guarantees of the legal entity
members. Absent such guarantees or approval by our credit committee, our commercial real estate underwriting guidelines
require that the loan to value ratio (at origination) should not exceed 60 percent, except for
f
certain low risk loan categories
2024 Form 10-K
10
where the loan to value ratio requirement may be higher, based on the estimated market value of the property as established by
an independent licensed appr
a
aiser.
Reevaluation of collateral.l Commercial loan renewals, re-financings and other subs
u
equent transactions that include the
advancement of new funds or result in the extension of the amortization period beyond the original term, require a new or
updated appr
a
aisal. Renewals, re-financings and other subs
u
equent transactions that do not include the advancement of new funds
(other than for reasonabl
a e closing costs) or, in the case of commercial loans, the extension of the amortization period beyond
the original term, do not require a new appraisal unless management believes there has been a material change in market
conditions or the physical aspects of the property which may negatively impact the collectability of our loan. In general, the
period of time an appraisal continues to be relevant will vary d
r
epending upon the circumstances affe
f cting the property and the
marketpl
t ace. Examples of factors that could cause material changes to reported values include re-appr
a
aisal triggered by events
such as credit renewal, modification or loan deterioration; the volatility of the local market; the availabi
a lity of financing; the
inventory o
r
f competing properties; new improvements to, or lack of maintenance of; the subject or competing surrounding
properties; changes in zoning and environmental contamination.
Certain collateral dependent loans are reported at the fair value of the underlying collateral (less estimated selling costs) if
repayment is expected solely from the collateral and are commonly refer
f red to as “collateral dependent loans.” Commercial real
estate loans are collateralized by real estate and construc
r
tion loans are generally secured by the real estate to be developed and
may also be secured by additional real estate or other collateral to mitigate the risk. Residential and home equity loans are
collateralized by residential real estate. Collateral values for
f
such existing loans are typically estimated using individual
appraisals performed every 12 months (or 18 months for collateral dependent loans less than $1.0 million with current loan to
value ratios not exceeding 75 percent). Between scheduled appraisals, property values are monitored within the commercial
portfol
f io by reference to current trends in commercial property sales as published by leading industry s
r
ources. Property values
are monitored within the residential mortgage portfol
f io by reference to availabl
a e market indicators, including real estate price
indices within Valley’s primary l
r
ending areas.
Refinanced residential mortgage loans to be held in our loan portfol
f io generally require either a new appraisal or a new
evaluation in accordance with our appraisal policy. However, certain residential mortgage loans may be originated for
f
sale and
sold without new appr
a
aisals when the investor (Fannie Mae or Freddie Mac) accepts a refin
f ance of an existing government
sponsored enterprise loan without the benefit
f
of a new appraisal. Additionally, all loan types are assessed for
f
full or partial
charge-off when they are between 90 and 120 days past due (or sooner when the borrowers’ obligation has been released in
bankrupt
r
cy) based upon their estimated net realizable value. See Note 1 to our consolidated financial statements for
f
additional
information concerning our loan portfol
f io risk elements, credit risk management and our loan charge-off policy.
Loan Renewals and Modi
M
fi
i cations
In the normal course of our lending business, we may renew loans to existing customers upon maturity of the existing
loan. These renewals are granted provided that the new loan meets our standard underwriting criteria for
f
such loan type.
Additionally, on a case-by-case basis, we may extend, restructur
t
e, or otherwise modify the terms of existing loans from time to
time to remain competitive and retain certain profit
f able customers, as well as assist customers who may be experiencing
financial diffi
f culties. All modified loans are reported as such by type of modification unless the modification results in the
creation of a new loan. In certain cases, a modification may be related to loan(s) with an elevated risk profile
f
and/or delinquent
payment(s). These modifications rarely result in the for
f
giveness of principal or accrue
r
d interest. In addition, Valley frequently
obtains additional collateral or guarantor suppor
u
t when modifying such loans. If the borrower has demonstrated perform
f
ance
under the previous terms and Valley’s underwriting process shows the borrower has the capacity to continue to perform under
the modified terms, the loan will continue to accrue interest. Non-accrui
r ng modified loans may be returned to accrua
r
l status
when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both
principal and interest are deemed collectible. See Note 1 and Note 5 to our consolidated financial statements for
f
additional
information.
Extension of C
o
re
C
dit t
i
o P
t
as
P
t Due Borrowers
Loans are placed on non-accrua
r
l status generally when they become 90 days past due and the full and timely collection of
principal and interest becomes uncertain. Valley prohibits the advancement of additional funds
f
on non-accrua
r
l loans, except
under certain workout plans if such extension of credit is intended to mitigate losses.
Allo
l wance for
f
Credit
d
Losses
We maintain an ACL for
f
financial assets measured at amortized cost. The ACL consists of the allowance for
f
loan losses
and unfunde
f
d loan commitments (together, the “allowance of credit losses for
f
loans”), and the allowance for
f
credit losses for
f
HTM securities. The estimate of expected credit losses under the CECL methodology is based on relevant infor
f
mation about the
11
2024 Form 10-K
past events, current conditions, and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts that affe
f ct the collectibility of the reported amounts.
Our CECL methodology to estimate the allowance for
f
loan losses has two components: (i) a collective reserve component for
estimated lifet
f ime expected credit losses for
f
pools of loans that share common risk characteristics and (ii) an individual reserve
component for loans that do not share risk characteristics, consisting of collateral dependent loans. Valley also maintains a
separate allowance for
f
unfunde
f
d credit commitments mainly consisting of undisbursed non-cancellabl
a e lines of credit, new loan
commitments and commercial standby letters of credit. The allowance for
f
unfunde
f
d credit commitments mainly consists of
di
undi b
sbursed non-canc lellablbl
a
l
e lines of cr d
edit, ne
l
w loan com i
mitments a d
nd commercial standby
ndby letters of cr d
edit valu d
ed using a
isi il
milar meth d l
hodol gy
ogy as us d
ed fo l
r loans.
Valley estimated the collective ACL using a current expected credit losses methodology which is based on relevant
information about
a
historical experience, current conditions, and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts that affe
f ct the
collectability of the loan balances. Management's estimate of expected losses inherent in these off-balance sheet credit
exposures also incorporates estimated utilization rate over the commitment's contractua
t
l period or an expected pull-through rate
for new loan commitments. To measure the expect d
ed cr d
edit losses on HTM debt secu iri ities hthat have loss expectations, V lalley
es itimates the expect d
ed cr d
edit losses u isi g
ng
d
a discount d
ed ca h
sh flflow model d
l dev leloped b
d by a hthird-party. The amount of ACL is
based on ongoing, quarterly assessments by management. See Note 1 to the consolidated financial statements for
f
further
discussion regarding CECL methodology.
Loans Origi
i na
i
ted by T
b
hi
T
rd
i
Partie
t s
The Bank makes purchases of certain types of commercial loans and loan participations and residential mortgage loans
originated by, and sometimes serviced by, other fin
f ancial institutions. We generally do not purchase other types of loans. The
loan purchase decision is usually based on several factors, including current loan origination volumes, market interest rates,
excess liquidity, our continuous effo
f
rts to meet the credit needs of certain borrowers under the CRA, as w lell as o hther asset/t/
liliabibi
a lity
lity management strategigies V
.
alley purchased approximately $41.3 million and $
d 25.4 million of 1-4 fam
f
ily loans qualifyi
f ng
for CRA purpos
r
es during 2024 and 2023, respectively. All purchased loans are selected using Valley’s normal underwriting
criteria at the time of purchase, or in some cases guaranteed by third parties. Purchased commercial and industrial and
commercial real estate participation loans are, at times, seasoned loans with expected shorter dur
d
ations, but generally purchased
at inception. Additionally, each purchased participation loan is stress-tested by Valley to assure its credit quality.
Purchased commercial l
l loans (i(includidi g
ng commer ici lal and i
d i d
ndustrial a d
nd commercial r
l
eal estate participatio
l
n loans) a d
nd
re isidential mor gtg g
ag
l
e loans totaled appr
a
i
oximatelyly $2.2 billion and $516.7 million, respectiv lely, at December 31, 2024
represen iting 5
g .3 percent and 9.2 percent of our total commercial a d
nd re isidential mor gtg g
ag l
e loans, respectiv lely.
At December 31, 2024, l
, ess than 1.0 percent of commer ici lal loans o irigiginated b
d by thihi d
rd parties were pas d
t due
d
30 days or
more, whihi h
ch represented 1
d
.1 percent of our total commercial l
l loan portf lol
f io delilinquencies, and 3
d
.4 percent of re isidential
mortgage loans o irigiginated b
d by thihi d
rd parties were pas d
t due
d
30 days or more
h
which represented
e 25.8 percent of our total resididen iti lal
mortgage portf lol
f io delilinquencies.
Human Capi
C
ta
i l
We foster an inclusive and high-performing culture where empowered associates, innovation and collabor
a
ation thrive.
We are a customer-centric organization committed to our associates, our customers, and our shareholders.
As of December 31, 2024, Valley employed 3,732 full and part time employees across our multi-state foo
f
tprint. During
the year 2024, we hired 669 employees, and our voluntary t
r
ur
t
nover rate was 13.5 percent. Our average tenure was 7.1 years.
Our inclusive cultur
t
e of belonging aims to provide a founda
f
tion to fully leverage the rich tapestry o
r
f our associates’
unique perspectives and experiences. Our strong and inclusive culture allows us to provide quality service to our customers, the
communities in which we operate and each other. We remain focused on our guiding principle — we all belong at Valley. This
vision drives associate programming which includes Valley’s Business Resource Group Program (BRG Program), which is
open to every associate. We continue to ensure that we strengthen our connections with our communities, enhance our ability to
bring new ideas to the table, raise new questions, and innovate our practices and products.
We offe
f r competitive total rewards programs to attract, engage, retain, and motivate talent across our footpr
t
int. These
programs include base wages, performance-based bonus and incentive compensation, stock awards, a 401(k) plan with a
competitive company match, healthcare and insurance benefit
f s, voluntary b
r
enefits
f
, commuter benefits
f
, a health savings account,
flexible spending accounts, tuition and adoption reimbursement, paid time off,
f
disabi
a lity, fam
f
ily leave, wellness and employee
assistance programs.
2024 Form 10-K
12
Valley remains committed to the safet
f y, health and well-being of its associates. Valley provides a benefits and wellness
program aimed at promoting healthy lifes
f
tyles with the understanding that a healthy workfor
f
ce contributes to associate
productivity. Our employee assistance program was recently enhanced to offe
f r more mental health access to associates and their
families at no cost. The Valley wellness program now incentivizes participation by awarding points to associates who engage in
the wellness webinars and healthy activities, which can later be redeemed to purchase fitn
f
ess items. Financial wellness is
suppor
u
ted through monthly educational opportunities and resources offered by our 401(k) plan administrator, along with our
competitive 401(k) company matching contribution. Our health and welfar
f e plans are designed to promote preventive care and
financial protection against catastrophic illnesses.
Valley continues to promote work/lif
k
e b
f
alance by offe
f ring paid vacation, sick, personal and volunteer days as well as
remote work arrangements and flexible work hours for
f
many associates. Our Parental Leave Program provides gender-neutral
paid time off t
f
o associates who give birth, adopt or foster a child, and financial assistance to those who adopt. In cases of
illness, Valley offer
f s paid disability leave and workpl
k ace accommodations for associates needing alternative work arrangements
due to special medical needs. We continue to maintain alignment with state, local and CDC mandates and guidance related to
airborne infectious diseases to promote a healthy workplace.
Our Talent Acquisition and Learning & Talent Development teams continue to focus on the attraction, development, and
retention of key and top talent – a cruc
r
ial aspect of Valley's long-term success and strategy. Valley fos
f
ters a culture of internal
mobility and encourages ongoing career development discussions between associates and their leaders. We actively engage our
senior business leaders in reviewing their critical roles in alignment with their strategic talent initiatives through our annual
talent review and succession planning process, which has created a broader understanding of our key talent needs. We continue
to center our workpl
k ace strategies on the people experience, offe
f ring a variety of development opportunities, including our
flagship leadership development, certific
f ations and mentorship programs, to provide meaningful
f
experiences that challenge our
high potential and high performing associates. Our goal is to enhance the core competencies of our top talent in leadership and
management skills to prepare them for fut
f ur
t
e roles. We also continue to strengthen Valley’s position as an employer of choice
by enhancing our associate onboarding experience and leveraging our engagement and pulse survey results to influence our
culture and drive employee satisfaction.
Corporat S
e S
t
oc
S
ial a d
nd En iviro
i
nmental Respon
s
isibibilili
i
yty
i
Valley recognizes the social and environmental responsibility that arises from the impact of our activities on peoples’
lives and society as a whole. To comply with this responsibility, we established an ESG Council in 2020 with respect to
sustainabi
a lity issues. The ESG Council helps guide us to consider how environmental, social and governance issues impact
Valley’s abi
a lity to achieve its long-term strategy while being socially responsible.
Additional infor
f
mation regarding Valley's human capital management and corporate social and environmental
responsibility can be found
f
under “Sustainabi
a lity Practices” in our 2025 Proxy Statement when it is file
f
d with the SEC.
13
2024 Form 10-K
Info
fo
n
rmatio
t n about our Executiv
t
O
e Offi
ffi
O
cersr
Name
Age at
December 31,
2024
Executive
Offi
f cer
Since
Offi
f ce
Principal occupation during last fiv
f e
years other than Valley
Ira Robbins
50
2009
Chairman of the Board and Chief
Executive Offi
f cer of Valley and
Valley National Bank
Thomas A. Iadanza
66
2015
President of Valley and Valley
National Bank
Russell Barrett
49
2024
Senior Executive Vice President,
Chief Operations Offi
f cer of Valley
and Valley National Bank
2013 - 2020 Managing Director -
BNP Paribas
Joseph V. Chillura
58
2020
Senior Executive Vice President of
Valley and President, Commercial
Banking of Valley National Bank
John P. Regan
61
2024
Senior Executive Vice President,
Chief Risk Offic
f er of Valley and
Valley National Bank
2016 - 2022 Chief Audit Executive at
Investors Bancorp, July 2022 - March
2024 Chief Audit Executive at
Industrial and Commercial Bank of
China
Travis Lan
40
2023
Executive Vice President, Interim
Chief Financial Offi
f cer of Valley and
Valley National Bank
2016 - 2020 Director of Investment
Banking at Keefe,
f
Bruye
r
tte & Woods,
Inc.
Yvonne M.
Surowiec
64
2017
Senior Executive Vice President of
Valley and Chief People Officer of
Valley National Bank
Mitchell L.
Crandell
54
2007
Executive Vice President, Chief
Accounting Officer of Valley and
Valley National Bank
Mark Saeger
60
2018
Executive Vice President of Valley
and Chief Credit Offi
f cer of Valley
National Bank
All officers serve at the pleasure of the Board.
Availa
i ble I
l
nf
I
or
f
ma
r
tion
The SEC maintains a website at www.sec.gov which contains reports and other information file
f
d with the SEC
electronically. We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
and amendments thereto availabl
a e on our website at www.valley.com without charge as soon as reasonabl
a y practicable afte
f r
filing or fur
f
nishing them to the SEC. Also availabl
a e on our website are Valley’s Code of Conduct and Ethics that applies to all
of our employees, including our executive officers, as well as non-employee directors, Valley’s Audit Committee Charter,
Valley’s Compensation and Human Capital Management Committee Charter, Valley’s Nominating, Governance, and Corpo
r
rate
Sustainabi
a lity Committee Charter, and Valley’s Corpor
r
ate Governance Guidelines.
Additionally, we will provide without charge a copy of our Annual Report on Form 10-K or the Code of Conduct and
Ethics to any shareholder by mail. Requests should be sent to Valley National Bancorp, Attention: Shareholder Relations, 70
Speedwell Avenue, Morristown, New Jersey, 07960.
We use our website to distribute Company information, including as a means of disclosing material, non-public
information and for complying with our disclosure obligations under Regulation FD. We routinely post and make accessible
financial and other infor
f
mation, including ESG infor
f
mation, regarding the Company on our website. Investors should monitor
our website, including the Investor Relations portion of our website, in addition to our press releases, SEC filings, public
confer
f ence calls and webcasts.
SUPERVISION AND REGULATION
The banking industry i
r
s highly regulated, and banking organizations are subject to regulation, supe
u
rvision, and
examination by various federal and state regulators. The statutory and regulatory f
r
ra
f mework that governs us is intended
primarily for the protection of the FDIC-insured deposits and depositors, consumers, the stabi
a lity of the U.S. banking and
financial system, and the health of the national economy, rather than stockholders. Banking laws and regulations, as well as
2024 Form 10-K
14
examination and supe
u
rvision, increase a bank holding company’s cost of doing business and limit the options of its
management to deploy assets and maximize income. The compliance cost for
f
Valley is significant and subj
u ect to increase as
new governmental regulations are enacted and/or the level and intensity of supe
u
rvision and of enforcement increases. In
particular, Valley employs specialists and retains outside advisors with the expectation that Valley will have sufficient resources
to comply with the regulations and supervision to which it is subj
u ect. Certain of Valley’s competitors, including credit unions,
fintech companies, and others, are not regulated or supe
u
rvised to the extent that Valley and other banks are, which may place
Valley at a competitive disadvantage. Federal and state banking regulators regularly examine Valley and its subs
u
idiaries to
evaluate their fin
f ancial condition and monitor their compliance with laws and regulatory p
r
olicies. Following those exams,
Valley and the Bank are assigned supervisory r
r
atings. These ratings are considered confid
f ential supervisory i
r
nform
f
ation and
disclosure to third parties is not allowed without permission of the issuing regulator. Violations of laws and regulations or
deemed deficiencies in risk management practices may be incorpor
r
ated into these supervisory r
r
atings. A downgrade in these
ratings could limit Valley’s abi
a lity to pursue acquisitions or conduct other expansionary activities for
f
a period of time, require
new or additional regulatory a
r
ppr
a
ovals before engaging in certain other business activities or investments, affe
f ct the Bank’s
deposit insurance assessment rate, and impose additional recordkeeping and corporate governance requirements, as well as
generally increase regulatory s
r
crut
r iny of Valley.
Banking and other financial services statut
t es, regulations, and policies are frequently under review by Congress, state
legislatur
t
es, and federal and state regulatory a
r
gencies. In addition to laws and regulations, state and fed
f
eral bank regulatory
r
agencies may issue policy statements, interpretive letters, and similar written guidance appl
a
icable to Valley and its subsidiaries.
Any change in the statutes, regulations, or regulatory p
r
olicies appl
a
icable to Valley, including changes in their interpretation or
implementation, could have a material effect on our business or organization. The scope of the laws and regulations, and the
intensity of the supervision to which Valley is subject, have increased in recent years, initially in response to the financial crisis,
and more recently in light of other fact
f
ors, including bank failures in 2023, technological factors, market changes and climate
change concerns, and as a result, Valley may face increased scrutiny and possible denials of bank mergers and acquisitions by
federal bank regulators. Regulatory e
r
nfor
f
cement and fines have also increased across the banking and fin
f ancial services sector.
Valley expects that its business will remain subj
u ect to extensive regulation and supe
u
rvision. We expect, however, that the new
U.S. presidential administration will seek to implement a regulatory r
r
efor
f
m agenda that is significantly different than that of the
prior administration, impacting the rulemaking, supe
u
rvision, examination and enforcement priorities of the federal banking
agencies, which could, in turn, have a material effect on our business.
The fol
f lowing discussion describes certain elements of the comprehensive regulatory f
r
ra
f mework applicable to Valley and
the Bank. These descriptions do not summarize all laws and regulations applicable to Valley, the Bank, or Valley’s other
subs
u
idiaries.
Ba k
nk Holdldin
d
g C
g Com
C
pan
m
y R
n
g
eg l
ulat
l io
t n
Valley is a bank holding company and a fin
f ancial holding company within the meaning of the BHC Act. As a bank
holding company, Valley is supe
u
rvised by the Federal Reserve and is required to file
f
reports with the Federal Reserve and
provide such additional infor
f
mation as the Federal Reserve may require.
The BHC Act prohibits a bank holding company, with certain exceptions, fro
f
m acquiring direct or indirect ownership or
control of fiv
f e percent or more of the voting shares of any company which is not a bank and from engaging in any business
other than that of banking, managing and controlling banks or furnishing services to subs
u
idiary banks, except that it may, upon
u
application, engage in, and may own shares of companies engaged in, certain businesses found
f
by the Federal Reserve to be so
closely related to banking “as to be a proper incident thereto.” As detailed fur
f
ther below, a bank holding company that has
elected to be treated as a financial holding company, as Valley has, may engage in a broader range of non-banking activities
that are “financial in natur
t
e.” The BHC Act requires prior approval by the Federal Reserve of the acquisition by Valley of fiv
f e
percent or more of the voting stock of any other bank. Satisfactory c
r
apital ratios, CRA ratings, and anti-money laundering
policies as well as the absence of an enfor
f
cement action or material supervisory c
r
oncerns are generally prerequisites to
obtaining federal regulatory a
r
ppr
a
oval to make acquisitions. Acquisitions through the Bank require approval of the OCC.
As a fin
f ancial holding company, Valley may engage in a broader range of non-banking activities than permitted for
f
bank
holding companies and their subsidiaries that have not elected to become financial holding companies. Financial holding
companies may engage directly or indirectly, either de novo or by acquisition, in activities that are defined under the BHC Act
or determined by the Federal Reserve to be fin
f ancial in nature or incident to a fin
f ancial activity, provided that the financial
holding company gives the Federal Reserve after-the-fact notice of certain new activities. Activities defin
f ed to be financial in
nature include, but are not limited to: providing financial or investment advice; underwriting; dealing in or making markets in
securities; making merchant banking investments, subj
u ect to significant limitations; and any activities previously found by the
Federal Reserve to be so closely related to banking as to be a proper incident thereto. In order to maintain our status
t
as a
financial holding company, we and the Bank are expected to be well capitalized and well managed, as defin
f ed in applicable
15
2024 Form 10-K
regulations and determined by the results of examinations, and must comply with CRA obligations. Failure to maintain these
standards may result in restrictions on our activities and may ultimately permit the Federal Reserve to take enfor
f
cement actions
against us and restrict our ability to engage in activities defin
f ed to be financial in natur
t
e and limits on our ability to engage in
new activities that are financial in natur
t
e.
Valley is required by statute to act as a source of managerial and financial strength to the Bank and to commit resources
to suppor
u
t the Bank in circumstances in which it might not do so absent the statutory requirement.
Regu
e
la ition of B
f B
o
ank S
k S b
ub isididiary
r
The Bank is subject to the supervision of, and to regular examination by, the OCC. Various laws and the regulations
thereunder appl
a
icable to Valley and the Bank impose restrictions and requirements in many areas, including capital
requirements, the maintenance of reserves, establishment of new offices, the making of loans and investments, consumer
protection, employment practices, bank acquisitions and entry into new types of business. There are various legal limitations,
including Sections 23A and 23B of the Federal Reserve Act, which govern the extent to which the Bank may finance or
otherwise supply funds
f
to Valley or Valley’s non-bank subs
u
idiaries. Section 22 of the Federal Reserve Act prohibits the Bank
from paying to a director, officer, attorney or employee a rate on deposits that is greater than the rate paid to other depositors on
similar deposits with the Bank. Regulation W governs and limits transactions between the Bank and Valley. The Bank is also
subj
u ect to collateral security requirements for
f
any loans or extensions of credit permitted by such exceptions.
Ca ipi
a ta
i l Req i
uire
i
mentst
The Federal Reserve and the OCC have rules establishing a comprehensive capi
a tal fra
f mework for U.S. banking
organizations, refer
f red to as the Basel III rules.
Under Basel III, the minimum capital ratios for
f
Valley and the Bank are as fol
f lows:
•
4.5 percent CET1 (common equity Tier 1) to risk-weighted assets.
•
6.0 percent Tier 1 capi
a tal (i.e., CET1 plus Additional Tier 1) to risk-weighted assets.
•
8.0 percent Total capital (i.e., Tier 1 plus Tier 2) to risk-weighted assets.
•
4.0 percent Tier 1 capi
a tal to average consolidated assets as reported on consolidated financial statements (known as the
“leverage ratio”).
Under Basel III, both Valley and the Bank are required to maintain a 2.5 percent “capital conservation buffe
f r” on top of
the minimum risk-weighted asset ratios, effe
f ctively resulting in minimum ratios of (i) CET1 to risk-weighted assets of at least
7.0 percent, (ii) Tier 1 capital to risk-weighted assets of at least 8.5 percent, and (iii) total capital to risk-weighted assets of at
least 10.5 percent. The capital conservation buffe
f r is designed to abs
a
orb l
r
osses dur
d
ing periods of economic stress. Banking
institutions with a ratio of (i) CET1 to risk-weighted assets, (ii) Tier 1 capital to risk-weighted assets or (iii) total capital to risk-
weighted assets above the respective minimum but below the capital conservation buffe
f r will face constraints on dividends,
equity repurchases and discretionary bonus payments to executive officers based on the amount of the shortfal
f l. Basel III also
provides for
f
a number of complex deductions from and adju
d stments to its various capital components.
Pursuant to the FDICIA, each fed
f
eral banking agency has promulgated regulations, specifying the levels at which a
financial institution would be considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly
undercapitalized,” or “critically undercapitalized,” and to take certain mandatory and discretionary supe
u
rvisory a
r
ctions based on
the capital level of the institution.
To be well capi
a talized, the bank must maintain the following capital ratios:
•
Common Equity Tier 1 Capital Ratio of 6.5% or greater;
•
Tier 1 Capi
a tal Ratio of 8.0% or greater;
•
Total Capi
a tal Ratio of 10.0% or greater; and
•
Tier 1 Leverage Ratio of 5.0% or greater.
Failure to be well capi
a talized or to meet minimum capital requirements could result in certain mandatory and possible
additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or
financial condition. Failure to be well-capitalized or to meet minimum capital requirements could also result in restrictions on
2024 Form 10-K
16
our ability to pay dividends or otherwise distribute capital or to receive regulatory a
r
ppr
a
oval of appl
a
ications. See the “Capi
a tal
Adequacy” section of the MD&A for additional disclosure on capital adequacy.
For regulatory c
r
apital purpos
r
es, in accordance with the Federal Reserve’s fin
f al rule issued on August 26, 2020, we
deferred 100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for
credit losses less net charge-offs) for
f
a two-year period ending January 1, 2022. On January 1, 2022, the defer
f ral amount
totaling $47.3 million after-tax started to be phased-in by 25 percent and will increase 25 percent per year until fully phased-in
on January 1, 2025. As of December 31, 2024, approximately $35.5 million of the $47.3 million defer
f ral amount was
recognized as a reduc
d
tion to regulatory c
r
apital and, as a result, decreased our risk-based capital ratios by appr
a
oximately 9 basis
points. The ful
f l defer
f ral amount of $47.3 million was phased-in with a reduc
d
tion of appr
a
oximately 12 basis points to the risk-
based capital ratios on January 1, 2025.
Prompt
m
Correctiv
t
A
e Actio
t n
The FDICIA requires the federal bank regulatory a
r
gencies to take “prompt corrective action” regarding FDIC-insured
depository institutions that do not meet certain capi
a tal adequacy standards. A depository institution’s treatment for purpos
r
es of
the prompt corrective action provisions depends upon its level of capitalization and certain other fact
f
ors. An institut
t ion that fai
f ls
to remain well capitalized becomes subj
u ect to a series of restrictions that increase in severity as its capital condition weakens.
Such restrictions may include a prohibition on capital distributions, restrictions on asset growth or restrictions on the abi
a lity to
receive regulatory a
r
ppr
a
oval of appl
a
ications. The FDICIA also provides for
f
enhanced supe
u
rvisory a
r
uthority over under
capitalized institutions, including authority for the appointment of a conservator or receiver for
f
the institution. In certain
instances, a bank holding company may be required to guarantee the performance of an under capitalized subs
u
idiary bank’s
capital restoration plan.
The Bank’s capital ratios were all above the minimum levels required for
f
it to be considered a “well capitalized” fin
f ancial
institution at December 31, 2024 and 2023, under the “prompt corrective action” regulations. For further discussion of Valley
and the Bank’s regulatory c
r
apital, see the “Capi
a tal Adequacy” section of the MD&A.
Resolution Pla
P nning
The FDIC requires certain insured depository institut
t ions, or IDIs, with more than $50 billion in total consolidated assets
to subm
u
it to the FDIC periodic plans for resolutions in the event of the institution's fai
f lure. In June 2024, the FDIC fin
f alized
amendments to the resolution planning requirements for
f
IDIs with $50 billion or more in total assets. The amendments require
covered IDIs with between $50 billion and $100 billion in total assets, which includes the Bank, to subm
u
it informational fil
f ings
on a three-year cycle, with an interim supplement upda
u
ting key infor
f
mation submitted in the off y
f
ears. The fin
f al rule became
effe
f ctive October 1, 2024, and the Bank's fir
f st informational submission is due by October 1, 2025.
The Dodd-Frank Wal
W l S
l
tr
S eet Refor
f
m a
r
nd Consumer Protec
t
tion Act of 2
o
010 (the
t
Dodd-Frank Act)t
The Dodd-Frank Act significantly changed the bank regulatory l
r
andscape and impacted the lending, deposit, investment,
trading and operating activities of fin
f ancial institutions and their holding companies. Some of the effects are discussed below.
Under the Durbin Amendment contained in the Dodd-Frank Act, the Federal Reserve adopted rules appl
a
ying to banks
with more than $10 billion in assets which established a maximum permissible interchange fee equal to no more than 21 cents
plus 5 basis points of the transaction value for many types of debit interchange transactions. The Federal Reserve also adopted a
rule to allow a debit card issuer to recover 1 cent per transaction for
f
fraud prevention purpos
r
es if the issuer complies with
certain fraud-related requirements required by the Federal Reserve. The Federal Reserve also has rul
r es governing routing and
exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid produc
d
t.
Because we exceed $10 billion in assets, we are subj
u ect to the interchange fee cap.
On October 25, 2023, the Federal Reserve released a notice of proposed rule making that would lower the maximum
interchange fee that a large debit card issuer can receive on a debit card transaction. Under the proposal, initially the base
component would decrease fro
f
m 21.0 cents to 14.4 cents, the ad valorem component would decrease fro
f
m 5.0 basis points to 4
basis points multiplied by the value of the transaction, and the fraud-prevention adjustment would increase fro
f
m 1.0 cents to 1.3
cents for debit card transactions performed from the effe
f ctive date of the final rul
r e to June 30, 2025. In addition, the proposal
would adopt an approach for fut
f ur
t
e adjustments to the interchange fee cap, which would occur every other year based on issuer
cost data gathered from large debit card issuers. We will continue to monitor the status
t
of the proposed rule and are in the
process of evaluating this proposed rul
r e making and assessing the scale of its adverse impact on Valley and the Bank if adopted
as proposed.
17
2024 Form 10-K
The Dodd-Frank Act also imposed stress testing on Valley and the Bank. However, the EGRRCPA and a joint
interagency statement regarding the impact of the EGRRCPA resulted in Valley and the Bank being no longer subject to the
stress testing requirements. However, under safet
f y and soundness principles we continue to conduct stress testing of our own
design.
Volcker Rulel
The Volcker Rule prohibits an insured depository i
r
nstitut
t ion and its affi
f liates fro
f
m: (i) engaging in certain short-term
“proprietary trading” activities, as defin
f ed in the Volcker Rule, and (ii) investing in or sponsoring certain types of “covered
funds
f
,” as defined in the Volcker Rul
R e. The Volcker Rule regulation contains exemptions for market-making, hedging,
underwriting, trading in U.S. government and agency obligations, and also permits certain ownership interests in certain types
of covered funds
f
to be retained. It also permits the offer
f ing and sponsoring of covered funds
f
under certain conditions.
Incentive Com
C
pe
m
nsatio
t n
The fed
f
eral banking agencies have issued joint guidance on incentive compensation designed to ensure that the incentive
compensation policies of banking organizations, such as Valley and the Bank, do not encourage imprudent risk taking and are
consistent with the safet
f y and soundness of the organization. The Federal Reserve and the OCC review the incentive
compensation arrangements of banking organizations as part of their regular risk-focused examination process. These reviews
are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of
incentive compensation arrangements.
The Dodd-Frank Act requires that the federal banking agencies, including the Federal Reserve and the OCC, issue a rule
related to incentive-based compensation. No final rul
r e implementing this provision of the Dodd-Frank Act has, as of the date of
the filin
f
g of this Report, been adopted, but a proposed rule was published in May 2024. The proposed rule is intended to (i)
prohibit incentive-based payment arrangements that the banking agencies determine could encourage certain financial
institutions to take inappropriate risks by providing excessive compensation or that could lead to material financial loss, (ii)
require the board of directors of those fin
f ancial institut
t ions to take certain oversight actions related to incentive-based
compensation, and (iii) require those fin
f ancial institutions to disclose information concerning incentive-based compensation
arrangements to the appropriate federal regulator. Although a fin
f al rule has not been issued, and it is unclear if a fin
f al rule will
be issued, or if issued, what the timing of issuance would be, Valley and the Bank have undertaken effo
f
rts to ensure that their
incentive compensation plans do not encourage inappr
a
opriate risks, consistent with the principles identifie
f d above
a
.
Dividend Limita
i
tions
Valley is a legal entity separate and distinct from its subsidiaries. Valley’s revenues (on a parent company only basis)
result in subs
u
tantial part fro
f
m dividends paid by the Bank. The Bank’s dividend payments are subj
u ect to regulatory l
r
imitations.
Under the National Bank Act, without consent, a national bank may declare, in any one year, dividends only in an aggregate
amount not more than the sum of its net profits for such year and its retained net profits for the preceding two years. In addition,
the bank regulatory a
r
gencies have the authority to prohibit us fro
f
m paying dividends if the supervising agency determines that
such payment would constitute an unsafe o
f
r unsound practice. Among other things, consultation with the Federal Reserve
supe
u
rvisory s
r
taff is required in advance of our declaration or payment of a dividend to our shareholders that exceeds our
earnings for the trailing four
f
-quarter period in which the dividend is being paid.
Transactio
t ns by the Bank with Related Par
P
ties
The Bank’s authority to extend credit to its directors, executive officers and 10 percent shareholders, as well as to entities
controlled by such persons (insiders), is governed by the requirements of the National Bank Act, the Sarbanes-Oxley Act of
2002 and Regulation O of the Federal Reserve. Among other things, these provisions require that extensions of credit to
insiders (i) be made on terms that are substantially the same as, and follow credit underwriting procedur
d
es that are not less
stringent than, those prevailing for
f
comparable transactions with unaffiliated persons and that do not involve more than the
normal risk of repayment or present other unfav
f
orable featur
t
es and (ii) not exceed certain limitations on the amount of credit
extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank’s capital.
Community
i
Reinvestme
t
nt
Under the CRA, as implemented and overseen by federal banking regulators, a national bank has a continuing and
affi
f rmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community,
including low- and moderate-income neighborhoods. The CRA does not establ
a ish specific lending requirements or programs for
financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are
best suited to its particular community. The CRA requires regulators, in connection with its examination of a national bank, to
assess the institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation
2024 Form 10-K
18
of certain applications by such institution. The CRA also requires all institutions to make public disclosure of their CRA
ratings. The Bank received an overall “outstanding” CRA r
R
ating in its most recent completed examination for
f
the three-year
period ending in 2021.
A bank that does not have a CRA program that is deemed "satisfactory"
r
or better by its regulator may be prevented from
making acquisitions.
On October 24, 2023, the fed
f
eral banking agencies finalized a rul
r e to amend their regulations implementing the CRA.
R
The fin
f al rule would, among other things, establish a tailored fra
f mework for CRA evaluations and data collection based on
bank size and business models and, for banks with over $2 billion in total assets, implement separate evaluations for retail
lending, retail services and produc
d
ts, community development fin
f ancing, and community development services. The evaluation
of retail services and products banks would also cover digital delivery s
r
ystems, including online banking or mobile banking, for
banks with over $10 billion in total assets, such as the Bank. The fin
f al rule became effe
f ctive on April 1, 2024, with staggered
compliance dates of January 1, 2026 and January 1, 2027.
Bank Secrecy A
c
ct (BSA
B
)/
A US
/
A P
S
AT
P
RI
T
OT
I
Act
The Bank is subject to the reporting and recordkeeping requirements of the BSA and its implementing regulations. Under
the BSA, the Bank is required, among other things, to establish and maintain a BSA/AML Program with procedur
d
es reasonabl
a y
designed to assure and monitor compliance with BSA regulatory r
r
equirements. As part of the USA PATRIOT Act, Congress
adopted the Anti-Money Laundering Act, which amended the BSA and introduced and expanded certain requirements. For
example, the BSA, as amended by the Anti-Money Laundering Act, requires each financial institution to: (i) establish an anti-
money laundering program; (ii) establish due
d
diligence policies, procedur
d
es and controls that are reasonabl
a y designed to detect
and report instances of money laundering in United States private banking accounts and correspondent accounts maintained for
f
non-United States persons or their representatives; and (iii) avoid establishing, maintaining, administering, or managing
correspondent accounts in the United States for, or on behalf of, a
f
foreign shell bank that does not have a physical presence in
any country. In addition, the BSA, as amended, authorizes the Secretary o
r
f the U.S. Treasury,
r
in consultation with the heads of
other government agencies, to adopt special measures applicable to financial institutions such as banks, bank holding
companies, broker-dealers and insurance companies. In 2021, Congress passed the Anti-Money Laundering Act of 2020, which
amended the BSA and requires FinCEN to undertake a number of rul
r emakings that will update and expand the BSA’s
regulatory r
r
equirements and may affect the Bank’s compliance obligations.
Regulations implementing the BSA, among other things, require covered fin
f ancial institutions to implement customer
identific
f ation and customer due diligence programs, including minimum standards to verify c
f
ustomer identity and maintain
accurate records; encourage cooperation among financial institutions, fed
f
eral banking agencies, and law enfor
f
cement authorities
regarding possible money laundering or terrorist activities; prohibit the anonymous use of “concentration accounts”; require
fin
f ancial institutions to identify a
f
nd report suspicious transactions; and require all fin
f ancial institutions to have in place an anti-
money laundering compliance program reasonabl
a y designed to ensure compliance with the BSA.
The OCC, along with other banking agencies and FinCEN, have strictly enforced various anti-money laundering and
suspicious activity reporting requirements using formal and infor
f
mal enfor
f
cement tools to cause banks to comply with these
provisions.
A bank that is issued a for
f
mal or infor
f
mal enfor
f
cement requirement with respect to its BSA/AML Program may be
prevented fro
f
m making acquisitions.
In July 2024, the fed
f
eral banking agencies, including the Federal Reserve and the OCC, proposed amendments to update
the requirements for
f
supe
u
rvised institutions to establ
a ish, implement and maintain effe
f ctive, risk-based and reasonabl
a y designed
AML and countering the financing of terrorism (CFT) programs. The proposed amendments would require supe
u
rvised
institutions to identify,
f
evaluate and document the institut
t ion’s money laundering, terrorist financing and other illicit finance
activity risks, as well as consider, as appr
a
opriate, FinCEN’s published national AML/CFT priorities. In August 2024, FinCEN
adopted a rul
r e extending anti-money laundering obligations, including maintenance of an anti-money laundering program and
filing certain reports with FinCEN, to registered investment advisers, which are appl
a
icable to certain of our subs
u
idiaries
compliance with these programs required beginning on January 1, 2026.
OFAC
F
Regu
e
lation
The U.S. Department of the Treasury’
r
s OFAC administers and enfor
f
ces economic and trade sanctions against targeted
foreign countries and regimes, under authority of various laws, including designated for
f
eign countries, nationals and others.
OFAC publishes lists of specially designated targets and issues regulations and implements executive orders that restrict
dealings with certain countries and territories. We and the Bank are responsible for, among other things, blocking accounts of,
19
2024 Form 10-K
and transactions with, such targets and countries, prohibiting unlicensed trade and fin
f ancial transactions with them and
reporting blocked transactions afte
f r their occurrence. Failure to comply with these sanctions could have serious legal and
reputational consequences, including causing applicable bank regulatory a
r
uthorities not to approve merger or acquisition
transactions when regulatory a
r
ppr
a
oval is required or to prohibit such transactions even if approval is not required.
Consumer Fina
i
ncial Pro
P
tectio
t n Bureau Supervisi
i on
The Bank is subject to a variety of federal and state statutes and regulations designed to protect consumers and promote
lending to various sectors of the economy and population. The CFPB has broad rulemaking and supervisory p
r
owers under
various federal consumer financial protection laws, including the laws and regulations that relate to deposit products, credit
card, mortgage, automobile, student, and other consumer loans, and other consumer financial products and services offered. The
CFPB also has examination and enforcement authority with respect to consumer financial laws for
f
depository institut
t ions with
$10 billion or more in assets, such as the Bank, including the authority to prevent unfai
f r, deceptive or abus
a
ive practices in
connection with the offering of consumer financial products or services.
The CFPB, along with the U.S. Department of Justice and bank regulatory a
r
uthorities, also seeks to enfor
f
ce
discriminatory l
r
ending laws. In such actions, the CFPB and others have used a disparate impact analysis, which measures
discriminatory r
r
esults without regard to intent. Consequently, unintentional actions by Valley could have a material adverse
impact on our lending and results of operations if the actions are found
f
to be discriminatory b
r
y our regulators.
In December 2024, the CFPB issued a final rul
r e that, among other things, amends Regulation Z (otherwise known as the
“Truth-In-Lending Act”) and impacts extensions of overdraft credit offe
f red by fin
f ancial institutions with more than $10 billion
in assets. The final rul
r e requires that extensions of overdraft credit, which is defin
f ed as generally including consumer credit
extended by a financial institution to pay a transaction fro
f
m a checking or other account held at the fin
f ancial institut
t ion when
the consumer has insuffi
f cient or unavailabl
a e fun
f
ds in that account, adhere to certain consumer protections required of similarly
situated products. If the overdraft fee is at or below the institution’s cost as determined by (i) calculating its own costs and
losses using a standard set for
f
th in the rul
r e, or (ii) utilizing a benchmark fee of fiv
f e dollars, then the charges that exceed costs
and losses will become a covered overdraft credit and subject to Regulation Z which will require additional disclosure regarding
borrowing costs, rates, and fee
f
s. The provisions of the fin
f al rule become effe
f ctive on October 1, 2025.
The Bank is subject to federal consumer protection statut
t es and regulations promulgated under those laws, including, but
not limited to the fol
f lowing:
•
Trut
r h-In-Lending Act and Regulation Z, governing disclosures of credit terms to consumer borrowers;
•
Home Mortgage Disclosure Act and Regulation C, requiring financial institutions to provide certain information about
a
home mortgage and refinanced loans;
•
Equal Credit Opportunity Act and Regulation B, prohibiting discrimination on the basis of race, creed, or other
prohibited fac
f
tors in extending credit;
•
Fair Credit Reporting Act and Regulation V, governing the provision of consumer information to credit reporting
agencies and the use of consumer information; and
•
Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies.
Valley National Bank’s deposit operations are also subject to the following federal statutes and regulations, among
others:
•
The Truth in Savings Act and Regulation DD, which requires disclosure of deposit terms to consumers;
•
Regulation CC, which relates to the availabi
a lity of deposit funds to consumers;
•
The Right to Financial Privacy Act, which imposes a dut
d y to maintain the confid
f entiality of consumer financial records
and prescribes procedures for complying with administrative subpoenas of fin
f ancial records; and
•
Electronic Funds Transfer
f
Act and Regulation E, governing automatic deposits to, and withdrawals fro
f
m, deposit
accounts and customers’ rights and liabi
a lities arising from the use of automated teller machines and other electronic
banking services.
The CFPB examines Valley National Bank’s compliance with such laws and the regulations under them.
2024 Form 10-K
20
Insurance of D
o
eposit Accountst
The Bank’s deposits are insured by the FDIC up to applicable limits, which are generally $250,000 per account
ownership type. The FDIC imposes a risk-based deposit premium assessment system that determines assessment rates for an
insured depository institut
t ion based on an assessment rate calculator, under which insured depository institutions are assigned
to one of four risk categories based on supe
u
rvisory e
r
valuations, regulatory c
r
apital levels and certain other fact
f
ors with less risky
institutions paying lower assessments on their deposits. The assessment rate is appl
a
ied to total average assets less tangible
equity, as defin
f ed under the Dodd-Frank Act. The assessment rate schedul
d e can change from time to time at the discretion of the
FDIC, subject to certain limits. Under the current system, premiums are assessed quarterly.
The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio to meet or
exceed the statutory minimum of 1.35 percent within eight years. This plan did not include an increase in the deposit insurance
assessment rate. Based on the FDIC’s recent proje
o ctions, however, the FDIC determined that the DIF reserve ratio is at risk of
not reaching the statut
t ory m
r
inimum by the statutory deadline of September 30, 2028 without increasing the deposit insurance
assessment rates. In October 2022, the FDIC adopted a fin
f al rule to increase initial base deposit insurance assessment rate
schedules by 2 basis points, beginning with the fir
f st quarterly assessment period of 2023. The FDIC also concurrently
maintained the Designated Reserve Ratio for the DIF at 2 percent.
In November 2023, the FDIC issued a fin
f al rule to implement a special assessment to recoup losses to the DIF associated
with protecting uninsured depositors following the bank fai
f lures in the first half of 2023. Under the rule, the assessment base for
f
the special assessment is equal to an insured depository i
r
nstitution’s estimated uninsured deposits reported as of December 31,
2022, adju
d sted to exclude the fir
f st $5 billion of uninsured deposits. In the first quarter 2024, the FDIC started collection of the
special assessment at an annual rate of appr
a
oximately 13.4 basis points over eight quarterly assessment periods. The special
assessment for
f
the Bank totaled $59.1 million, adju
d sted based upon
u
revised loss infor
f
mation received fro
f
m the FDIC in 2024,
and resulted in pre-tax charges of $50.3 million, $7.4 million and $1.4 million to earnings in the four
f
th quarter 2023, first
quarter 2024 and second quarter 2024, respectively. The FDIC retains the right to cease collection early, extend the special
assessment collection period, and impose a fin
f al shortfal
f l special assessment if actua
t
l losses exceed the amounts collected.
Refer to the “Non-Interest Expense” section of the MD&A for additional infor
f
mation related to the FDIC’s special assessment.
Federal Secu
S
riti
i es Laws
Valley’s common stock is registered with the SEC under the Exchange Act. Valley is subject to the infor
f
mation, proxy
solicitation, insider trading and other requirements and restrictions under the Exchange Act.
Broker-De
-
aler
l
and Secu
S
ritie
i
s Regulat
l io
t n
Our U.S. broker-dealer subs
u
idiary, VFM, is subject to fed
f
eral securities laws relating to all aspects of their securities
business operations, including, but not limited to, sales and trading practices, securities offerings, handling of customer fun
f
ds,
net capital levels, record-keeping, privacy requirements, and the conduct of directors, offi
f cers and employees. VFM is also
subj
u ect to regulation by state securities commissions in those states in which they conduct business. VFM is currently registered
as a broker-dealer in most U.S. states, the District of Columbia and Puerto Rico. VFM is a member of the Securities Investor
Protection Corpor
r
ation and is subj
u ect to rules of certain SROs, including FINRA a
R
nd securities exchanges.
VFM is subject to various requirements related to sales practices and customer relationships, including Regulation Best
Interest, which requires broker-dealers and investment advisers to act in the “best interest” of retail customers at the time a
recommendation is made without placing the fin
f ancial or other interests of the broker-dealer or investment adviser ahead of the
interest of the retail customer. Margin lending by our broker-dealers is regulated by the Federal Reserve’s restrictions on
lending in connection with purchases and short sales of securities. VFM is also subject to maintenance and other margin
requirements imposed under FINRA and other SRO rul
r es.
The SEC and FINRA have active enfor
f
cement functions that oversee broker-dealers and can bring actions that result in
fines, restitution, a limitation on permitted activities, disqualification to continue to conduct certain activities and an inability to
rely on certain favorable exemptions. In addition, certain changes in the activities of a broker-dealer require approval fro
f
m
FINRA,
R
and FINRA takes into account a variety of considerations in acting upon
u
applications for such appr
a
oval, including
internal controls, capital levels, management experience and quality, prior enforcement and disciplinary h
r
istory, and
supe
u
rvisory c
r
oncerns.
Investment Advi
d se
i
rs Act
VFM and our subs
u
idiary Valley Wealth Managers, Inc. (formerly Hallmark Capi
a tal Management, Inc.) are registered
investment advisers. In this capacity, VFM and Valley Wealth Managers, Inc. are subject to the Investment Advisers Act, and
21
2024 Form 10-K
SEC rul
r es and regulations thereunder, including with respect to record-keeping, operational and marketing requirements,
disclosure obligations, fid
f uc
d
iary and other obligations and prohibitions on fraudulent activities. The SEC is authorized to
institute proceedings and impose sanctions for violations of the Investment Advisers Act, ranging from fin
f es and censure to
termination of an investment adviser’s registration. Our investment adviser subsidiaries are also subject to state laws and
regulations, including anti-fraud laws, in those states in which they conduct business. Noncompliance with the Investment
Advisers Act or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement,
fines and reputational harm.
Insurance regulat
l io
t n
Valley’s insurance agency subs
u
idiary, Valley Insurance Services, Inc., provides property and casualty insurance,
employee benefits
f
, risk management, loss control and claims services to business clients, as well as home, auto, boat and life
insurance to individuals. In addition, VFM is licensed as an insurance agency to provide life a
f
nd health insurance in several
states. Regulation of insurance brokerage is generally perfor
f
med at a state, rather than a national, level. Both Valley’s insurance
agency subs
u
idiaries operate in multiple states, and as a result, they and their employees are subject to various state regulatory
r
and licensing requirements. Valley’s insurance agency subs
u
idiaries monitor compliance with the various state insurance
regulators, and also have relationships with third party vendors to ensure compliance and awareness among entities and their
employees of relevant requirements and changes, and emerging regulatory i
r
ssues.
Prohibitions Agains
i
t Tyi
T ng
i
Arrangements
Banks are subject to the prohibitions of 12 U.S.C. Section 1972 on certain tying arrangements. A depository institution is
prohibited, subj
u ect to some exceptions, fro
f
m extending credit to or offe
f ring any other service, or fixing or varying the
consideration for
f
such extension of credit or service, on the condition that the customer obtain some additional service from the
institution or its affi
f liates or not obtain services of a competitor of the institution.
Data Privacy a
c
nd Cybersecurity
i
Regu
e
lation
In the course of our operations, we collect, use, store, disclose, transfer
f
and otherwise process personal inform
f
ation of our
customers, employees and third parties with whom we conduct business. Accordingly, we are subject to a variety of
increasingly stringent federal, state and local laws and regulations relating to data privacy and cybersecurity. For example, at
the U.S. fed
f
eral level, we are subject to, among other laws and regulations, the rules and regulations promulgated under the
authority of the Federal Trade Commission (which has the authority to regulate and enforce against unfai
f r or deceptive acts or
practices in or affe
f cting commerce, including acts and practices with respect to data privacy and security) and the Gramm
Leach Bliley Act (which regulates the confid
f entiality and security of customer information obtained by fin
f ancial institutions
and certain other types of fin
f ancial services businesses). Further, in the spring of 2022, federal banking regulators imposed a
new cybersecurity-related notific
f ation rul
r e that requires banking organizations to notify t
f
heir primary federal regulator as soon
as possible and within 36 hours of incidents that, among other things, have materially disrupt
r
ed or degraded, or are reasonabl
a y
likely to materially disrupt
u
or degrade, the banking organization’s abi
a lity to deliver services to a material portion of its customer
base, jeopardize the viability of key operations of the banking organization, or impact the stabi
a lity of the fin
f ancial sector. The
rule also imposes requirements on bank service providers to notify t
f
heir affe
f cted banking organization customers of certain
computer-security incidents.
At the state level, we are subject to laws and regulations such as the Califor
f
nia Consumer Privacy Act (as amended by the
Califor
f
nia Privacy Rights Act, collectively, the CCPA), which broadly defin
f es personal infor
f
mation and gives Californi
f
a
residents expanded privacy rights and protections, such as affor
f
ding them the right to access and request deletion of their
information and to opt out of certain sharing and sales of personal information. Numerous other states also have enacted, or are
in the process of enacting or considering, comprehensive state-level data privacy and cybersecurity laws and regulations that
share similarities with the CCPA. Moreover, laws in all 50 U.S. states require businesses to provide notice under certain
circumstances to consumers whose personal infor
f
mation has been disclosed as a result of a data breach.
Additionally, the New York State Department of Financial Services (NYDFS) has issued Cybersecurity Requirements for
f
Financial Services Companies, which took effe
f ct in 2017 and were recently amended, and which require banks, insurance
companies and other fin
f ancial services institutions regulated by the NYDFS to establish and maintain a cybersecurity program
designed to protect consumers and ensure the safet
f y and soundness of New York State’s financial services industry.
r
The
cybersecurity regulation includes specific requirements for
f
these institutions’ cybersecurity compliance programs and imposes
an obligation to conduct ongoing, comprehensive risk assessments. Further, on an annual basis, each institution is required to
subm
u
it a certific
f ation of compliance with these requirements.
Recent and ongoing developments may also impact our data privacy- and cybersecurity-related risk profile and internal
controls. On October 22, 2024, the CFPB announced a fin
f al rule regarding personal fin
f ancial data rights that is designed to
2024 Form 10-K
22
promote “open banking.” The rul
r e requires, among other things, that data providers, including financial institutions, make
availabl
a e to consumers and certain authorized third parties upon request certain covered transaction, account and payment
information. Assuming the rul
r e remains in effe
f ct in its current form, compliance is required by April 1, 2027 for depository
institutions that hold between $10 billion and $250 billion in assets, subject to the outcome of pending litigation challenging the
rule.
In May 2024, the SEC finalized amendments to Regulation S-P which requires broker-dealers, investment companies,
registered investment advisers, and transfer
f
agents to address the expanded use of technology and corresponding risks that have
emerged since Regulation S-P was fir
f st adopted by developing, implementing, and maintaining written policies and procedur
d
es
for an incident response program that is reasonabl
a y designed to detect, respond to, and recover fro
f
m unauthorized access to or
use of customer infor
f
mation. The amendments also require individuals affe
f cted by an incident involving sensitive customer
information to be notifie
f d within 30 days with details about the incident and other infor
f
mation intended to help affec
f
ted
individuals respond appropriately.
If laws and regulations relating to data privacy and cybersecurity are implemented, interpr
r
eted or applied in a manner
inconsistent with our current or future practices or policies, or if we fail to comply with applicable laws or regulations, we could
be subj
u ect to investigations, enfor
f
cement actions and other proceedings. See Item 1A. Risk Factors—“We are subject to
complex and evolving laws, regulations, rul
r es, standards and contractua
t
l obligations regarding data privacy and cybersecurity,
which could increase the cost of doing business, compliance risks and potential liabi
a lity” for
f
more information regarding other
risks related to data privacy and cybersecurity and Item 1C. Cybersecurity for more infor
f
mation regarding our cybersecurity
risk management program.
Item 1A.
Risk Factors
An investment in our securities is subj
u ect to risks inherent to our business. The material risks and uncertainties that
management believes may affe
f ct Valley are described below. Befor
f
e making an investment decision, you should careful
f ly
consider the risks and uncertainties described below together with all of the other infor
f
mation included or incorpor
r
ated by
reference in this Report. The risks and uncertainties described below are not the only ones faci
f
ng Valley. Additional risks and
uncertainties that management is not aware of or that management currently believes are immaterial may also impair Valley’s
business operations. The value or market price of our securities could decline due
d
to any of these identifie
f d or other risks, and
you could lose all or part of your investment. This Report is qualifie
f d in its entirety by these risk factors.
Risks Related to the Operating Environment
p
g
Our fin
f
ancial results a
t
nd conditio
d
n may be adverse
r
ly impacted by c
b
hanging economic conditio
d
ns.
Financial institutions are affected by changes in the economic environment, which may be impacted by changing interest
rates, volatility in fin
f ancial markets, and geopolitical instabi
a lity or conflic
f
t. Economic conditions, fin
f ancial markets and
monetary policies may be adversely affected by the impact of inflationary pressures, the impact of current or anticipated fis
f cal
and monetary policies or changes thereto, policies of the new U.S. presidential administration (including trade policies and
tariffs), the potential for an economic recession, uncertainty regarding the U.S. debt ceiling, government shutdowns, or defau
f
lt
by the U.S. government on its obligations, and actua
t
l or perceived instabi
a lity in the U.S. banking system. Changes in global
economic conditions and geopolitical matters, including the conflic
f
ts between Russia and Ukraine and in the Middle East,
foreign currency exchange volatility, volatility in global capital markets, infla
f tionary pressures, and higher interest rates may
meaningful
f ly impact loan production, net interest margin, the value of our securities portfol
f io, and the measurement of certain
significant estimates such as the allowance for
f
credit losses. Moreover, in a period of economic contraction, we may experience
elevated levels of credit losses, reduced interest income, impairment of goodwill and other financial assets, diminished access to
capital markets and other funding sources, and reduced demand for our products and services. Volatility in the housing markets,
real estate values and unemployment levels results in significant write-downs of asset values by fin
f ancial institut
t ions. The
majo
a rity of Valley’s lending is in northern and central New Jersey, the New York City metropolitan area and Florida. As a
result of this geographic concentration, a significant broad-based deterioration in economic conditions in these areas could have
a material adverse impact on the quality of Valley’s loan portfol
f io, results of operations and fut
f ur
t
e growth potential.
Although inflation has slowed dramatically from the levels experienced during 2022 and 2023, possible prolonged
inflationary pressures and any increases in market interest rates may cause the value of our investment securities, particularly
those with longer matur
t
ities, to decrease, although this effe
f ct can be less pronounced for flo
f ating rate instrum
r
ents. In addition,
inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other
utilities, which increases our non-interest expenses. Furthermore, our customers are also affe
f cted by inflation and the rising
costs of goods and services used in their households and businesses, which could have a negative impact on their deposits and/
or ability to repay their loans with us.
23
2024 Form 10-K
Any of these effe
f cts, if sustained, may impair our capi
a tal and liquidity positions, require us to take capital actions, prevent
us from satisfying our minimum regulatory c
r
apital ratios and other supervisory r
r
equirements, or result in downgrades in our
credit ratings and the reduction or elimination of our common stock dividend in fut
f ur
t
e periods. The extent to which the
economic environment has an impact on our business, results of operations, and financial condition, as well as the regulatory
r
capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including
the scope and dur
d
ation of the current economic environment and actions taken by governmental authorities and other third
parties in response to geopolitical conflic
f
ts, infla
f tionary pressure and other changes in economic and political conditions.
Our fin
f
ancial results and conditio
i
n may be adverse
r
ly impacted by b
b
anking
i
failures or any f
n
ut
f
ure similar
l
events.
Certain events impacting the banking industry,
r
including the bank fai
f lures in March and April 2023, resulted in
significant disrupt
u ion and volatility in the capital markets, reduc
d
ed valuations of bank securities, and decreased confid
f ence in
banks among certain depositors, other counterpa
r
rties and investors dur
d
ing most of 2023. These events occurred in the context of
rapi
a dly rising interest rates which, among other things, resulted in unrealized losses in longer dur
d
ation debt securities and loans
held by banks, and increased competition for
f
deposits. These events had, and may continue to have, an adverse impact on the
market price of our common stock.
While the U.S. Department of the Treasury,
r
the Federal Reserve, and the FDIC took steps to ensure that depositors of the
failed banks in early 2023 would have access to their insured and uninsured deposits, and to facilitate sales of certain failed
banks, there is no assurance that these or similar actions will restore customer confid
f ence in the banking system, and we may be
further impacted by concerns regarding the soundness, real or perceived, of other fin
f ancial institutions, or other future bank
failures or disrupt
u ions. The prolifer
f ation of social media may increase the likelihood that negative public opinion from any of
the real or perceived events discussed above
a
could impact our reputation and business. Any loss of client deposits or changes in
our credit ratings could increase the cost of funding, limit access to capital markets or negatively impact our overall liquidity or
capitalization.
The cost of resolving the recent bank fai
f lures has also prompted the FDIC to issue a special assessment to recover costs to
the DIF. The special assessment for
f
the Bank (including subs
u
equent estimated shortfal
f l adjustments by the FDIC) resulted in
pre-tax charges of $8.8 million and $50.3 million to earnings for the years ended December 31, 2024 and 2023, respectively.
Among other things, the FDIC maintains the ability to impose an additional shortfal
f l special assessment based on the diffe
f rence
between actua
t
l losses fro
f
m the bank failures and the amounts collected. For additional infor
f
mation on the FDIC’s special
assessment, see Item 1. Business - "Supervision and Regulation.” The extent to which the shortfal
f l special assessment will
impact our future deposit insurance expense is currently uncertain, and any fut
f ur
t
e additional special assessments, increases in
assessment rates or required prepayments of FDIC insurance premiums, to the extent that they result in increased deposit
insurance costs, would reduc
d
e our profita
f
bi
a lity.
These events and any fut
f ur
t
e similar events may also result in changes to laws or regulations governing bank holding
companies and banks, including higher capital requirements, or the imposition of restrictions through supe
u
rvisory or
enforcement activities, which could materially impact our business.
Risks Associated with Our Business Model
A signi
g
fi
i cant portion of our loan
l
portfol
f io
l
is secured by c
b
ommercial real estat
t e,
t
and events that negat
e
iv
t ely i
l
mp
i
act the
t
real estate market could a
l
dverse
r
ly affe
f ct our asset quality
i
and profi
o ta
i bility
i
for tho
t
se loans secured by r
b
eal prope
o
rty a
t
nd
increase the number of d
o
ef
d au
f
lts a
t
nd the level
l
of losses with
i
in our loan
l
portfol
f io
l .
As of December 31, 2024, total commercial real estate loans, including construc
r
tion loans, represented 60.7 percent of
our loan portfol
f io. These types of loans generally expose a lender to a higher degree of credit risk of non-payment and loss than
residential mortgage loans do because of several fact
f
ors, including dependence on the successful
f
operation of a business or a
project for repayment, and loan terms with a balloon payment rather than ful
f l amortization over the loan term. In addition,
commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers compared
to one-to-four family residential mortgage loans. The value of the real estate collateral that provides an alternate source of
repayment in the event of defau
f
lt by the borrower could deteriorate during the time the credit is extended. Underwriting and
portfol
f io management activities cannot completely eliminate all risks related to these loans. Any significant fai
f lure to pay on
time by our clients or a significant defau
f
lt by our clients would materially and adversely affect us.
Concentrations in commercial real estate are closely monitored by regulatory a
r
gencies and subj
u ect to especially
heightened scrutiny both on a public and confid
f ential basis. Any formal or informal action by our supe
u
rvisors may require us to
increase our reserves on these loans and adversely impact our earnings.
2024 Form 10-K
24
A downtur
t
n in the real estate market in our primary m
r
arket areas could result in an increase in the number of borrowers
who defau
f
lt on their loans and a reduction in the value of the collateral securing their loans, which in turn could have an adverse
effe
f ct on our profit
f ability and asset quality. If we are required to liquidate the collateral securing a loan to satisfy the debt
during a period of reduced real estate values, our earnings and shareholders’ equity could be adversely affected. Any weakening
of the commercial real estate market, particularly certain segments in the New York City market which have struggl
r
ed in recent
years, may increase the likelihood of default on these loans, which could negatively impact our loan portfol
f io’s perform
f
ance
and asset quality. For example, any declines in commercial real estate prices in the New Jersey, New York and Florida markets
we primarily serve, along with the unpredictabl
a e long-term path of the economy, may result in increases in delinquencies and
losses in our loan portfol
f ios. Unexpected decreases in commercial real estate prices coupled with slow economic growth and
elevated levels of unemployment could drive losses beyond those which are provided for
f
in our allowance for
f
loan losses. We
also may incur losses on commercial real estate loans due
d
to declines in occupa
u
ncy rates and rental rates, which may decrease
property values and may decrease the likelihood that a borrower may find permanent fin
f ancing alternatives. Any of these events
could increase our costs, require management's time and attention, and materially and adversely affect us, and there can be no
assurance that our effo
f
rts to reduc
d
e commercial real estate loan concentration and expand other areas of commercial lending
activity will be successful
f
in eliminating or mitigating these effe
f cts.
The los
l
s of o
o
r dec
d
rease in l
i
ow
l
er-c
r ost fund
f
in
d
g sources with
i
in our dep
d
osit base, includin
d
g our inability
i
to achieve dep
d
osit
retentio
t n tar
t
ge
r
ts with
i
in our branch netwo
t
rk, m
k
ay adverse
r
ly impact our net int
i
er
t
est inc
i
ome and net inc
i
ome.
Checking and savings, NOW, and money market deposit account balances and other forms of customer deposits can
decrease when customers perceive alternative investments, such as the stock market, U.S. Treasury s
r
ecurities, and money
market or fixed income mutua
t
l funds
f
, as providing a better risk/return trade-off.
f
Additionally, our customers largely bank with
us because of our local customer service and convenience. For certain customers, this convenience could be negatively
impacted by strategic consolidation or relocation of our branch offi
f ces.
Additionally, the adoption of online banking technology could reduc
d
e the historical stickiness of our core deposits due
d
to
the relative ease with which depositors may transfer deposits to a diffe
f rent depository institution, including in the event that
confid
f ence is lost in the Bank. Valley’s vulnerabi
a lity to a bank run may be heightened by recent trends in depositor behavior.
Highly coordinated depositors via social media or other communications can cause unexpectedly high deposit outflows
resulting in a liquidity crisis, as happened in the case of the bank fai
f lures in early 2023. If customers move money out of bank
deposits and into other investments, Valley could lose a low-cost source of funds, increasing its funding costs and reducing
Valley’s net interest income and net income.
Our dep
d
osit services for businesses in t
i
he
t
stat
t e l
t
ic
l ensed cannabis i
i
nd
i
ustry c
r
ould expos
x
e us to l
t
ia
l bilitie
i
s and regu
e
latory
compliance costs.
In 2020, we implemented specialized deposit services intended for
f
state licensed cannabi
a s business customers. Businesses
engaged in the cultivation, manufact
f
ur
t
e, distribution, and sale of cannabi
a s are legal in numerous states and the District of
Columbia, including our primary m
r
arkets of New Jersey, New York, and Florida. However, such businesses are not legal at the
federal level and marijuana remains a Schedule I drug under the Controlled Substances Act of 1970. In 2014, FinCEN
published guidelines for
f
financial institutions servicing state legal cannabi
a s businesses. We have implemented a comprehensive
control fra
f mework that includes written policies and procedur
d
es related to the on-boarding of such businesses and the ongoing
monitoring and maintenance of such business accounts that confor
f
ms with the FinCEN guidance. Additionally, our policies call
for due
d
diligence review of the cannabi
a s business befor
f
e the business is on-boarded, including confir
f mation that the business is
properly licensed and maintains the license in good standing in the appl
a
icable state. Throughout the relationship, our policies
call for
f
continued monitoring of the business, including site visits where appr
a
opriate, to determine if the business continues to
meet our requirements, including maintenance of required licenses and calls for undertaking periodic fin
f ancial reviews of the
business. In the latter half of 2021, the Bank expanded its cannabi
a s-related business offerings to some limited real estate and
other secured lending. The Bank may offe
f r additional banking products and services to such customers in the future.
There can be no assurance that compliance with our policies and procedur
d
es designed to allow us to operate in
compliance with the FinCEN guidelines will protect us fro
f
m fed
f
eral prosecution or other regulatory s
r
anctions. Federal
prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly
enforce the federal laws governing cannabi
a s. Any change in the fed
f
eral government’s enforcement position could potentially
subj
u ect us to criminal prosecution and other regulatory s
r
anctions. As a general matter, the medical and recreational cannabi
a s
business is considered high-risk, thus increasing the risk of a regulatory a
r
ction against our BSA/AML Program that has adverse
consequences, including, but not limited to, preventing us fro
f
m undertaking mergers, acquisitions and other expansion
activities.
25
2024 Form 10-K
We could i
l
nc
i
ur future goodwill impairm
i
ent.
If our estimates of the fair value of our goodwill change as a result of changes in our business or other factors, we may
determine a goodwill impairment charge is necessary. Estimates of the fai
f r value of goodwill are determined using several
factors and assumptions, including, but not limited to, industry p
r
ricing multiples and estimated cash flo
f ws. Based upon Valley’s
2024 goodwill impairment testing, the fai
f r values of its three reporting units, wealth management, consumer banking, and
commercial banking, were in excess of their carrying values. No assurance can be given that we will not record an impairment
loss on goodwill in the fut
f ur
t
e and any such impairment loss could have a material adverse effect on our results of operations
and fin
f ancial condition. At December 31, 2024, our goodwill totaled $1.9 billion. See Note 8 to the consolidated financial
statements for additional infor
f
mation.
Our marke
r
t share and i
d inc
i
ome m y
ay be d
adverse
r
lyly af
affefe
f ct d
ed
t
by
by ou i
r ina
i
bibility
lity
i
to successfsf l
ul
f
lyly
l
compete a
t
gai
gai
a
ns
i
l
t lar
l
ge
r
r a d
nd more
didiverse
r
fifina
i
ncial ser ivices providider
d
s,
r
didigigi
i ta
i l f
l fin
f
te h
ch star
t
t-up fifirm
i
s a d
nd othe
t
r f
r fin
f
an ici lal services providider
d
s t
r
ha
t
h
t have advan
d
ced
te h
chnologigi
o cal c
bi
apabililit
i
ie
t s.
h
The f
e fin
f
an ici lal services ma k
rket is
d
under
d
goi
goi
r
g
ng
i
ra ipi
a d t
h
ech
t
nologigi
o cal cha g
nges, a
s
d
nd ifif we are unablble t
l
ot
st y
ay
t
current
i
wi h
th
i
h
those cha g
nges, w
s
e will
ill no b
t be ablble t
l
o e
t
ffe
ffe
e
ctiv
t
lely c
l
ompe
m
te.e
Valley fac
f
es subs
u
tantial competition in all areas of its operations from a variety of diffe
f rent competitors, many of which
are larger and may have more fin
f ancial resources than Valley to deal with the potential negative changes in the financial
markets and regulatory l
r
andscape. Many of these competitors may have few
f
er regulatory c
r
onstraints, broader geographic
service areas, greater capi
a tal, and, in some cases, lower cost structur
t
es. Valley competes with other providers of financial
services such as commercial and savings banks, savings and loan associations, credit unions, money market and mutual funds,
mortgage companies, title agencies, asset managers, insurance companies, and a large list of other local, regional and national
institutions which offer fin
f ancial services.
Additionally, the fin
f ancial services industry i
r
s faci
f
ng a wave of digital disrupt
u ion fro
f
m fin
f tech companies and other large
financial services providers. These competitors provide innovative web-based solutions to traditional retail banking services and
products and tend to have stronger operating effic
f iencies and fewer regulatory b
r
urdens than their traditional bank counterpa
r
rts,
including Valley. The fin
f ancial services industry i
r
s continually undergoing rapi
a d technological change with frequent
introductions of new, technology-driven products and services which increase efficiency and enabl
a e fin
f ancial institutions to
better serve customers and to reduce costs and with the use of artific
f ial intelligence, including generative artific
f ial intelligence,
machine learning, and similar tools and technologies that collect, aggregate, analyze or generate data or other materials or
content (collectively, “AI”). These new technologies may be superior to, or render obsolete, the technologies currently used in
our products and services.
Regulatory c
r
hanges may continue to allow new entrants into the markets in which we operate. The result of these
regulatory c
r
hanges will likely cause other non-traditional fin
f ancial services companies to compete directly with Valley. Many
of the companies have stronger operating efficiencies and few
f
er regulatory b
r
urdens than their traditional bank counterpa
r
rts,
including Valley.
Our fut
f ur
t
e success depends, in part, upon our ability to address the needs of our customers by using technology to
provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations.
Many customers have become more reliant on, and their expectations have increased with respect to, this technology. We may
not be able to effe
f ctively implement new, technology-driven products and services or be successful
f
in marketing these products
and services to our customers and service interrupt
u ions, transaction processing errors and system conversion delays and may
cause us to fail to comply with applicable laws. Many of Valley’s competitors have subs
u
tantially greater resources to invest in
technological improvements. Valley may not be able to effe
f ctively implement new technology-driven products and services or
be successful
f
in marketing these products and services to its customers. Failure to successful
f ly keep pace with technological
change affe
f cting the financial services industry c
r
ould have a material adverse impact on Valley’s business and, in turn, Valley’s
financial condition and results of operations. See the “Technology Risks” section below in this Item 1A for additional
information regarding our risks related to technology and use of AI.
Failure to successful
f
ly
l
implement our growth s
t
trateg
t
ies could cause us to i
t
nc
i
ur substantia
t l costs and expe
e
nses which
may n
a
ot be recouped and adverse
r
ly affe
f ct our fut
f
ure profi
o ta
i bili
i ty
i .y
From time to time, Valley may implement new lines of business or offer new products and services within existing lines
of business. There are subs
u
tantial risks and uncertainties associated with these efforts, particularly in instances where the
markets are not fully developed. Valley may invest significant time and resources to develop and market new lines of business
and/or products and services. Initial timetabl
a es for the introduc
d
tion and development of new lines of business and/or new
products or services may not be achieved, and price and profitabi
a lity targets may not prove feasible. External fac
f
tors, such as
compliance with regulations, competitive alternatives, and shiftin
f
g customer preferences, may also impact the successful
f
implementation of a new line of business or a new product or service. Additionally, any new line of business and/or new
2024 Form 10-K
26
product or service could have a significant impact on the effe
f ctiveness of Valley’s system of internal controls. Failure to
successful
f ly manage these risks could have a material adverse effect on Valley’s business, results of operations and fin
f ancial
condition.
Our inv
i
estments i
t
n c
i
ertain tax-
a
advantage
a
d proje
o cts m
t
ay not generate r
t
eturns as anticipated
t
and may have an adverse
r
impact on our results o
t
f o
o
pe
o
rations.
We invest in certain tax-advantaged investments that support qualifie
f d affordable housing proje
o cts, community
development and renewabl
a e energy resources. Our investments in these projects are designed to generate a return primarily
through the realization of fed
f
eral and state income tax credits, and other tax benefits, over specified time periods. Third parties
perform diligence on these investments for
f
us on which we rely both at inception and on an ongoing basis. We are subject to the
risk that previously recorded tax credits, which remain subj
u ect to recapture by taxing authorities based on compliance featur
t
es
required to be met at the proje
o ct level, may fai
f l to meet certain government compliance requirements and may not be able to be
realized. The possible inabi
a lity to realize these tax credits and other tax benefits
f
may have a negative impact on our financial
results. The risk of not being abl
a e to realize the tax credits and other tax benefits
f
depends on many factors outside our control,
including changes in the applicable tax code and the ability of the proje
o cts to be completed.
We are subje
b ct to enviro
i
nmental lia
l bility
i
risk
i
associated
t
with
i
lendin
d
g activ
t ities which could h
l
ave a material adverse
r
effe
f ct on our fin
f
ancial conditi
d
on and results
l
of operations.
A significant portion of our loan portfol
f io is secured by real property. During the ordinary c
r
ourse of business, we may
foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances
could be found
f
on these properties. If hazardous or toxic substances are found,
f
we may be liabl
a e for
f
remediation costs, as well
as for personal injury a
r
nd property damage. Environmental laws may require us to incur substantial expenses and may
materially reduce the affe
f cted property’s value or limit our ability to use or sell the affe
f cted property. In addition, future laws or
more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental
liabi
a lity. Although we have policies and procedur
d
es to perform an environmental review prior to originating certain commercial
real estate loans, as well as before initiating any foreclosure action on real property, these reviews may not be sufficient to
detect all potential environmental hazards. The remediation costs and any other fin
f ancial liabi
a lities associated with an
environmental hazard could have a material adverse effect on our financial condition and results of operations.
We may i
y i
a
nc
i
ur fu
future losse i
s in c
i
onnectio
t n with r
t
epur h
chases and i
d i d
nd
i
em
d
i
nififi
i ca ition p y
ayments r
t
lelat
l
d
ed
t
to mortg g
gage
t
s tha
t
t we
have soldld into h
the seconda y
ry ma k
rket.t
We engage in the origination of residential mortgages for sale into the secondary market, while typically retaining the
loan servicing. In connection with such sales, we make representations and warranties, which, if breached, may require us to
repurchase such loans, substitut
t e other loans or indemnify t
f
he purchasers of such loans for actua
t
l losses incurred in respect of
such loans. The aggregate principal balances of residential mortgage loans serviced by the Bank for
f
others approximated $3.3
billion at both December 31, 2024 and 2023. Over the past several years, we have experienced a nominal amount of repurchase
requests that have actua
t
lly resulted in repurchases by Valley. During 2024, Valley had no repurchased loans and only 3 loans
with aggregate outstanding principal balances of $1.1 million at the repurchase dates during 2023. None of the 2023 loan
repurchases resulted in a material loss. As of December 31, 2024, no reserves pertaining to loans sold were established on our
financial statements. However, it is possible that our careful loan underwriting and documentation standards may not be
sufficient to prevent additional requests to repurchase loans that could occur in the future, and such requests may have a
negative fin
f ancial impact on us.
Interest rate swap fefees
i
wi h
th
i
in ca ipi
a ta
i l marke
r
ts income are a isign
i
ifific
f ant compon
m
ent of o
f o
o
ur non-interest income and couldld
flfluctuat i
e i
t
n f
n f
i
ut
f
ure periods.
Valley executes interest rate swaps
a
with commercial lending customers to faci
f
litate their respective risk management
strategies. Interest rate swap f
a
ee
f
s reported within capi
a tal markets income totaled appr
a
oximately $13.3 million, or 6 percent, and
$28.4 million, or 13 percent, of total non-interest income for the years ended December 31, 2024 and 2023, respectively.
Several fact
f
ors, including, but not limited to, the actua
t
l and expected level of market interest rates, can impact the decisions of
commercial loan customers to use such interest rate swap p
a
roducts. As a result, we can provide no assurance that our interest
rate swap fees will remain at the level reported for
f
the year ended December 31, 2024.
We may n
a
ot be able t
l
o a
t
ttract, develop a
o
nd retain skilled
l
people.
l
Our success depends, in large part, on our ability to attract, develop and retain key people. Competition for the best
people in most activities in which we engage can be intense and we may not be able to hire people or retain them, in particular
due to an increasingly competitive labor
a
market. We have been impacted by an extremely competitive labor market, including
27
2024 Form 10-K
increased competition for
f
talent across all aspects of our business, as well as increased competition with non-traditional
competitors, such as fin
f tech companies. Employers are offering increased compensation and opportunities to work with greater
flexibility, including remote work, on a permanent basis. These can be important factors in a current associate’s decision to
leave us as well as in a prospective associate’s decision to join us. As competition for
f
skilled professionals remains intense, we
may have to devote significant resources to attract and retain qualifie
f d personnel, which could negatively impact earnings. The
unexpected loss of services of one or more of our key personnel, including, but not limited to, the executive officers disclosed
in Item 1. Business of this Report, could have a material adverse impact on our business because we would lose the employees’
skills, knowledge of the market, and years of industry e
r
xperience and may have difficulty promptly finding qualified
replacement personnel.
We are subje
b ct to risk
i
s r
k
elat
l in
t
g to E
t
SG
E
matter
t
s t
r
ha
t
t could adverse
r
ly affe
f ct our reputat
t io
t n, busine
i
ss, fina
i
ncial conditio
i
n
and results
l
of operations, as well as the price of our common and prefer
f
red stock.k
We are subject to a variety of risks, including reputational risk, associated with ESG matters. The public holds diverse
and often conflic
f
ting views on these matters. We have multiple stakeholders, including our shareholders, clients, associates,
federal and state regulatory a
r
uthorities, and the communities in which we operate, and these stakeholders will ofte
f n have
differing priorities and expectations regarding ESG issues. If we take action in conflic
f
t with one or another of those
stakeholders’ expectations, we could experience an increase in client complaints, a loss of business, or reputational harm. For
example, there exists increasing anti-ESG sentiment among certain stakeholders and government institutions, and we may face
f
scrutiny, reputational risk, lawsuits or market access restrictions from these parties regarding any such initiatives we have
adopted. In addition, corporation diversity, equity and inclusion practices have recently come under increasing scrut
r iny. We
could also face
f
negative publicity or reputational harm based on the identity of those with whom we choose to do business. If
we do not successful
f ly manage expectations across varied stakeholder interests, it could erode stakeholder trust, impact our
reputation and constrain our investment opportunities. Any adverse publicity in connection with ESG issues could damage our
reputation, ability to attract and retain clients and associates, compete effe
f ctively, and grow our business.
In addition, proxy advisory firms and certain institut
t ional investors who manage investments in public companies may
take ESG fact
f
ors into their investment analysis. The consideration of ESG factors in making investment and voting decisions is
relatively new. Accordingly, the fra
f meworks and methods for assessing ESG policies are not fully developed, vary considerably
among the investment community, and will likely continue to evolve over time. Moreover, the subjective natur
t
e of methods
used by various stakeholders to assess a company with respect to ESG criteria could result in erroneous perceptions or a
misrepresentation of our actual policies and practices. Organizations that provide ratings information to investors on ESG
matters may also assign unfav
f
orable ratings to us. Certain of our clients might also require that we implement additional ESG
procedur
d
es or standards in order to continue to do business with them. If we fail to comply with specific ESG-related investor
or client expectations and standards, or to provide the disclosure relating to ESG issues that any third parties may believe is
necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial
condition, and/or results of operations, as well as the price of our common and prefer
f red stock could be negatively impacted.
Clima
l
te change and severe weather could a
l
dverse
r
ly impac
m
t our operations, b
s
usiness, and clients.
t
There is an increasing concern over the risks of climate change and related environmental sustainability matters. Climate
change presents (i) physical risks fro
f
m the direct impacts of changing climate patterns and acute weather events, and (ii)
transition risks from changes in regulations, disrupt
u ive technologies, and shiftin
f
g market dynamics towards a lower carbon
economy. The physical risks of climate change include discrete events, such as flo
f ods, hurricanes, tornadoes, heatwaves, and
wildfires, and longer-term shifts in climate patterns, such as higher global average temperatur
t
es, extreme heat, sea level rise,
and more fre
f quent and prolonged droughts. Examples of transition risks include changes in consumer prefer
f ences, additional
regulatory r
r
equirements or taxes and additional counterpa
r
rty or client requirements. These risks could have a material adverse
impact on asset values and the fin
f ancial performance of Valley’s businesses, and those of its clients. Ongoing legislative or
regulatory u
r
ncertainties and changes regarding climate risk management and practices may result in higher regulatory,
r
compliance, credit and reputational risks and costs. Climate change could also present incremental risks to the execution of
Valley’s long-term strategy. Additionally, transitioning to a low-carbon
r
economy may entail extensive policy, legal,
technology, and market initiatives.
A significant portion of our primary markets is located near coastal waters which could generate naturally occurring
severe weather, or do so in response to climate change, which in turn could have a significant impact on our ability to conduct
business. Many areas in New Jersey, New York, Florida and Alaba
a
ma in which the vast majo
a rity of our branches and offices
operate are subject to severe flo
f oding from time to time and significant disrupt
u ions related to the weather may become common
events in the fut
f ur
t
e. Heavy storms and hurricanes can also cause severe property damage and result in business closures,
negatively impacting both the financial health of retail and commercial customers and our ability to operate our business. The
risk of significant disrupt
u ion and potential losses fro
f
m fut
f ur
t
e storm activity exists in all of our primary markets.
2024 Form 10-K
28
In addition, our reputation and client relationships may be damaged as a result of our practices related to climate change,
including our involvement, or our clients’ involvement, in certain industries or proje
o cts, in the abs
a
ence of mitigation and/or
transition measures, associated with causing or exacerbating climate change, as well as any decisions we make to continue to
conduct or change our activities in response to considerations relating to climate change. As climate risk is interconnected with
all key risk types, Valley continues to embed climate risk considerations into risk management strategies. Due to uncertainty
regarding climate change, the Company’s risk management strategies may not be effe
f ctive in ful
f ly mitigating climate risk
exposures. The timing and severity of climate change may not be entirely predictable and our risk management processes may
not be effe
f ctive in mitigating climate risk exposure.
Risks Related to Our Industry
Changes in i
i
nt
i
er
t
est rates
t
could r
l
educe our net int
i
er
t
est inc
i
ome and earnings.
Valley’s earnings and cash flo
f ws are largely dependent upon the Bank’s net interest income. Net interest income is the
difference between interest income earned on interest-earning assets, such as loans and investment securities, and interest
expense paid on interest bearing liabi
a lities, such as deposits and borrowed funds
f
. Interest rates are sensitive to many fact
f
ors that
are beyond Valley’s control, including general economic conditions, competition, and policies of various governmental and
regulatory a
r
gencies and, in particular, the policies of the Federal Reserve. Changes in interest rates driven by such factors will
influence not only the interest the Bank receives on loans and investment securities and the amount of interest it pays on
deposits and borrowings, but such changes could also affect (i) the Bank’s abi
a lity to originate loans and obtain deposits, (ii) the
fair value of Valley’s fin
f ancial assets, including the HTM and AFS investment securities portfol
f ios, and (iii) the average
duration of Valley’s interest-earning assets and liabi
a lities. This also includes the risk that interest-earning assets may be more
responsive to changes in interest rates than interest-bearing liabi
a lities, or vice versa (repricing risk), the risk that the individual
interest rates or rate indices underlying various interest-earning assets and interest-bearing liabi
a lities may not change in the
same degree over a given time period (basis risk), and the risk of changing interest rate relationships across the spectrum
r
of
interest-earning asset and interest-bearing liabi
a lity matur
t
ities (yield curve risk). For example, a flat or inverted yield curve,
where short-term rates are close to, or above, long-term rates, could adversely affect Valley’s fin
f ancial condition and results of
operations. Any subs
u
tantial or unexpected change in market interest rates could have a material adverse effect on Valley’s
fin
f ancial condition and results of operations. See additional infor
f
mation in the “Net Interest Income” and “Interest Rate
Sensitivity” sections of our MD&A.
We may n
a
ot be able t
l
o d
t
et
d ect
t
money l
e
au
l
nder
d
ing and othe
t
r ille
i
gal
e
or imprope
o
r activ
t ities ful
f
ly
l
or on a tim
t
ely b
l
asis,s
which could expos
x
e us to a
t
dditio
i
nal lia
l bility
i
and could have a mater
t
ial adverse
r
effe
f ct on us.
We are required to comply with anti-money laundering, anti-terrorism and other laws and regulations in the United
States. These laws and regulations require us, among other things, to adopt and enfor
f
ce “know-your-customer” policies and
procedur
d
es and to report suspicious and large transactions to applicable regulatory a
r
uthorities. These laws and regulations have
become increasingly complex and detailed, require improved systems and sophisticated monitoring and compliance personnel
and have become the subject of enhanced government supe
u
rvision.
The policies and procedur
d
es that we have adopted to comply with these requirements and to detect and prevent the use of
our banking network for
f
money laundering and related activities may not completely eliminate instances in which we may be
used by customers to engage in money laundering and other illegal or improper activities. To the extent we fai
f l to ful
f ly comply
with applicable laws and regulations, the OCC, along with other banking agencies, have the authority to impose fin
f es and other
penalties and sanctions on us. In addition, our business and reputation could suffe
f r if customers use our banking network for
f
money laundering or illegal or improper purpos
r
es.
Highe
g
r charge-offs
f
and weak credit c
i
onditio
i
ns could r
l
equire
i
us to furthe
t
r inc
i
rease our allo
l wance for
f
credit
d
losses
through a
g
provision charge to e
t
arning
i
s.
g
The process for determining the amount of the allowance for credit losses is critical to our financial results and
conditions. It requires diffi
f cult, subjective and complex judgments about the fut
f ur
t
e, including the impact of national and
regional economic conditions on the abi
a lity of our borrowers to repay their loans. If our judgment proves to be incorrect, our
allowance for
f
credit losses may not be sufficient to cover the lifet
f ime credit losses inherent in our loan and HTM debt securities
portfol
f ios, as well as unfunde
f
d credit commitments. Deterioration in economic conditions affe
f cting borrowers, including as a
result of inflationary pressures or other macroeconomic factors, new infor
f
mation regarding existing loans, identific
f ation of
additional problem loans and other fact
f
ors, both within and outside of our control, may require an increase in the allowance for
f
credit losses. Additionally, bank regulators review the classification of our loans in their examination of us and we may be
required in the future to change the internal classific
f ation on certain loans, which may require us to increase our provision for
f
credit losses or loan charge-offs
f . If actua
t
l net charge-offs were to exceed Valley’s allowance, its earnings would be negatively
29
2024 Form 10-K
impacted by additional provisions for credit losses. Any increase in our allowance for
f
credit losses or loan charge-offs as
required by the OCC or otherwise could have an adverse effec
f
t on our results of operations or financial condition.
An
An increase in our non-perfo
fo
r
rming assets may r
a
d
educe our interest income and i
d inc
i
rease our ne l
t loan
l
h
charge
r
-offff
o s,
f
provision f
n for
f
loan losses, and ope
o
ra iting expe
e
nses.
Non-performing assets (including non-accrua
r
l loans, OREO, and other repossessed assets) totaled $373.3 million at
December 31, 2024. Our non-accrua
r
l loans represented 0.74 percent of total loans at December 31, 2024. These non-performing
assets can d
advers lely affect our ne i
t income m iai lnly t
y hrough decreased interest income and increased operating expenses incurred
to maintain such assets or loss charges related to subs
u
equent declines in the estimated fai
f r value of foreclosed assets. Adverse
changes in the value of our non-performing assets, or the underlying collateral, or in the borrowers’ performance or financial
conditions could adversely affect our business, results of operations and fin
f ancial condition. Potential fur
f
ther stress in the
commercial real estate markets, primarily in New York City, or other fact
f
ors could also negatively impact the futur
t
e
performance of this portfol
f io. There can be no assurance that we will not experience increases in non-performing loans in the
future, or that our non-performing assets will not result in lower fin
f ancial returns in the future.
We may b
a
e require
i
d to c
t
onsult with
i
the Fed
F
er
d
al Reserve befor
f
e decl
d
ar
l
ing cash div
d iden
d
ds on our common stock, w
k
hich
ultima
l
tely may d
a
el
d ay
l
, r
y
educe, or elimin
l
ate s
t
uch div
d iden
d
ds and adverse
r
ly affe
f ct the marke
r
t price of our common stock.k
Holders of our common stock are only entitled to receive such cash dividends as the Board may declare out of funds
legally availabl
a e for
f
such payments. Although we have historically declared cash dividends on our common stock, we are not
required to do so. We may reduc
d
e or eliminate our common stock cash dividend in the future depending upon our results of
operations, fin
f ancial condition or other metrics, which could be adversely impacted by the fact
f
ors described in this Item 1A,
including uncertain U.S. economic conditions.
In July 2020, the Federal Reserve upda
u
ted its supe
u
rvisory g
r
uidance to provide greater clarity regarding the situations in
which bank holding companies, like Valley, may expect an expedited consultation in connection with the declaration of
dividends that exceed quarterly earnings. To qualify, amongst other criteria, total commercial real estate loan concentrations
cannot represent 300 percent or more of total capital and the outstanding balance of the commercial real estate loan portfol
f io
cannot increase by 50 percent or more during the prior 36 months. Currently, we believe that Valley does not meet the standard
for expedited consultation and approval of its dividend, should it be required. As a result, Valley could be subject to a lengthier
and possibly more burdensome review process by the Federal Reserve when considering paying dividends that exceed quarterly
earnings. The delay, reduction or elimination of our quarterly dividend could adversely affect the market price of our common
stock. See additional infor
f
mation regarding our quarterly cash dividend and the current rate of earnings retention in the “Capital
Adequacy” section of the MD&A.
General Commercial, Operational, Financial and Regulatory Risks
,
p
,
g
y
We may b
a
e unable t
l
o a
t
dequatel
t y m
l
anage our liqu
i
idity
d
risk
i
, w
k
hich could a
l
ffe
a
ct our ability
i
to meet our oblig
l atio
t ns as they
become due, capi
a ta
i lize
i
on growth opportuniti
i es, p
s
ay regu
e
lar div
d iden
d
ds on our common stock and generate a
t
dequatet
earnings.
Liquidity risk is the potential that a financial institut
t ion, like Valley, will be unabl
a e to meet its obligations as they come
due, capitalize on growth opportunities as they arise, or pay regular dividends on our common stock because of an inability to
liquidate assets or obtain adequate funding on a timely basis, at a reasonabl
a e cost and within acceptabl
a e risk tolerances.
Liquidity is required to fund
f
various obligations, including withdrawals by depositors, repayment of borrowings, credit
commitments to borrowers, mortgage and other loan originations, dividends to shareholders, operating expenses and capital
expenditures. Liquidity is derived primarily from commercial and retail deposit growth and retention; principal and interest
payments on loans; principal and interest payments on investment securities; sale, matur
t
ity and prepayment of investment
securities; net cash provided fro
f
m operations; and access to other fundi
f
ng sources, such as the FHLB and certain brokered
deposit channels establ
a ished by the Bank.
Our access to fundi
f
ng sources, including the FHLB and brokered deposits, in amounts adequate to finance our activities
could be impaired by fac
f
tors that affe
f ct us specifically or the financial services industry i
r
n general. Unexpected changes to the
FHLB’s underwriting guidelines for wholesale borrowings or lending policies may limit or restrict our ability to borrow, and
therefor
f
e could have a significant adverse impact on our liquidity. Other factors that could have a detrimental impact to our
access to liquidity sources include a decrease in the level of our business activity due to persistent weakness, or downtur
t
n, in
the economy or adverse regulatory a
r
ction against us. Our ability to borrow could also be impaired by fact
f
ors that are not
necessarily specific
f
to us, such as a severe disrupt
r
ion of the financial markets or negative views and expectations about the
prospects for
f
the fin
f ancial services industry a
r
s a whole. In the event of future turmoil in the banking industry o
r
r other
2024 Form 10-K
30
idiosyncratic events, there is no guarantee that the U.S. government will invoke the systemic risk exception, create additional
liquidity programs, or take any other action to stabi
a lize the banking industry o
r
r provide liquidity.
Additionally, our inability to access brokered deposits or other funding sources, such as the FHLB, could require us to
pay significantly higher interest rates on our direct customer deposits which would have an adverse impact on our net interest
income and net income. Valley’s inabi
a lity to monetize liquid assets or to access short-term funding or capital markets could
constrain Valley’s abi
a lity to make new loans or meet existing lending commitments, pay its regular common stock dividend,
jeopardize Valley’s capitalization, and adversely impact Valley’s net interest income and net income.
The CEC
C
L m
C
odel for
f
determining our allo
l wance for
f
credit
d
losses could add volatility to our provisi
i on for credit l
i
os
l
ses
and earning
i
s.
g
The CECL model requires the allowance for
f
credit losses for certain financial assets, including loans, HTM securities and
certain off-b
f
alance sheet credit exposures, to be calculated based on current expected credit losses over the lives of the assets
rather than incurred losses as of a point in time. Our estimation process is subject to risks and uncertainties, including a reliance
on historical loss and trend information that may not be representative of current conditions and indicative of fut
f ur
t
e
performance. Accordingly, our actua
t
l lifet
f ime credit losses may be materially different than the amounts reported in the
allowance due
d
to the inherent uncertainty in the estimation process, including future loss estimates based upon our reasonabl
a e
and supportabl
a e economic forecasts. Also, future credit losses could diffe
f r materially from those estimates due
d
to changes in
values and circumstances afte
f r the balance sheet date. Changes in such estimates could significantly impact our allowance,
provision for credit losses and earnings.
Our controls a
l
nd procedures may f
a
ai
f l o
i
r be circumvented, which may result in a mater
t
ial adverse
r
effe
f ct on our business,
results of operations and fin
f
ancial conditio
d
n.
Management periodically reviews and updates our internal control over fin
f ancial reporting, disclosure controls and
procedur
d
es, and corporate governance policies. Any system of controls, however well designed and operated, is based in part on
certain assumptions and can provide only reasonabl
a e, not absolute, assurances that the objectives of the system are met. Any
failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and procedures
could have a material adverse effect
f
on our business, results of operations and fin
f ancial condition.
We rely on our sys
s
tems of contro
t
ls and procedures, a
s
nd if our sys
s
tem fai
f ls
i , o
s
ur operations could b
l
e dis
d rupt
u ed
t
.d
We face the risk that the design of our controls and procedures, including those to mitigate the risk of fraud by employees
or outsiders, may prove to be inadequate or are circumvented, thereby causing delays in detection of errors or inaccuracies in
data and infor
f
mation, including personal, confid
f ential, proprietary,
r
and sensitive infor
f
mation. We regularly review and upda
u
te
our internal controls, disclosure controls and procedur
d
es, and corporate governance policies and procedur
d
es. Any system of
controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonabl
a e, not
absolute, assurances that the objectives of the system are met. Any fai
f lure or circumvention of our controls and procedures or
failure to comply with regulations related to controls and procedur
d
es could have a material adverse effect on our business,
results of operations and fin
f ancial condition.
We may also be subject to disrupt
u ions of our systems or networks arising from events that are wholly or partially beyond
our control (including, for example, electrical or telecommunications outages), which may give rise to losses in service to
customers and to financial loss or liabi
a lity. We are further exposed to the risk that our external vendors may be unabl
a e to ful
f fill
their contractua
t
l obligations (or will be subj
u ect to the same risk of fra
f ud or operational errors by their respective employees as
us) and to the risk that our (or our vendors’) business continuity and data security systems prove to be inadequate. We maintain
a system of comprehensive policies and a control fra
f mework designed to monitor vendor risks including, among other things,
(i) changes in the vendor’s organizational struc
r
ture or internal controls, (ii) changes in the vendor’s financial condition, (iii)
changes in the vendor’s suppor
u
t for
f
existing products and services and (iv) changes in the vendor’s strategic foc
f
us. While we
believe these policies and procedur
d
es help to mitigate risk, the failure of an external vendor to perform in accordance with the
contracted arrangements under service level agreements could be disrupt
u ive to our operations, which could have a material
adverse impact on our business and, in turn, our financial condition and results of operations.
Our business, fina
i
ncial conditio
i
n and results o
t
f o
o
pe
o
rations could be adverse
r
ly affe
f cted
t
by natural dis
d asters, pandemics,s
acts of terrorism
i
, and othe
t
r catas
t
trophic events.
The occurrence of natur
t
al disasters, extreme weather events, health crises, the occurrence or worsening of disease
outbr
t
eaks or pandemics, or other catastrophic events, as well as government actions or other restrictions in connection with
such events, could adversely affect our financial condition or results of operations. The emergence of widespread health
emergencies or pandemics, such as COVID-19, could lead to quarantines, business shutdowns, labor shortages, disrup
r
tions to
31
2024 Form 10-K
suppl
u
y chains, and overall economic instability. Additionally, New York City and New Jersey remain central targets for
f
potential acts of terrorism against the United States. Such events could affect the stabi
a lity of our deposit base, impair the ability
of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result
in loss of revenue and/or cause us to incur additional expenses. The occurrence of any such event in the future could have a
material adverse effect on our business, which, in turn, could have a material adverse effect on our financial condition and
results of operations.
Our ability
i
to make opportunist
i ic
t
acquisitions is subject to s
t
igni
g
fi
i cant risk
i
s,
k
includin
d
g the
t
risk
i
that regu
e
lators will
i
not
provide t
d
he
t
requisite a
t
ppr
a
ovals.
l
We may make opportunistic whole or partial acquisitions of other banks, branches, financial institutions, or related
businesses fro
f
m time to time that we expect may fur
f
ther our business strategy. Any possible acquisition will be subj
u ect to
regulatory a
r
ppr
a
oval, and there can be no assurance that we will be abl
a e to obtain such appr
a
oval in a timely manner or at all.
Even if we obtain regulatory a
r
ppr
a
oval, these acquisitions could involve numerous risks, including lower than expected
performance or higher than expected costs, difficulties related to integration, diversion of management's attention fro
f
m other
business activities, changes in relationships with customers, and the potential loss of key employees. In addition, we may not be
successful
f
in identifyi
f ng acquisition candidates, integrating acquired institutions, or preventing deposit erosion or loan quality
deterioration at acquired institutions. Competition for acquisitions can be intense, and we may not be able to acquire other
institutions on attractive terms. There can be no assurance that we will be successful
f
in completing or will even pursue fut
f ur
t
e
acquisitions, or if such transactions are completed, that we will be successful
f
in integrating acquired businesses into operations.
Our abi
a lity to grow may be limited if we choose not to pursue or are unabl
a e to successful
f ly make acquisitions in the fut
f ur
t
e.
Extensive regulat
l io
t n and supe
u
rvision have a negat
e
iv
t e imp
i
act on our ability
i
to compete i
t
n a
i
cost-e
t ffe
e
ctiv
t e manner and
may s
a
ubje
b ct us to material compliance costs and penalti
l es, a
s
nd changes in r
i
egulat
l io
t n could adverse
r
ly affe
f ct our business,
fina
i
ncial conditi
i on and results
l
of operations.
Valley, primarily through its principal subsidiary and certain non-bank subs
u
idiaries, is subject to extensive fed
f
eral and
state regulation, supe
u
rvision and examination. Banking laws, regulations, and rules are primarily intended to protect depositors’
funds, fed
f
eral deposit insurance funds
f
and the banking system as a whole. Many laws and regulations affe
f ct Valley’s lending
practices, capital struc
r
ture, investment practices, dividend policy and growth, among other things. They encourage Valley to
ensure a satisfactory l
r
evel of lending in defined areas and establish and maintain comprehensive programs relating to anti-
money laundering and customer identific
f ation. Congress, state legislatures, and fed
f
eral and state regulatory a
r
gencies continually
review banking laws, regulations and policies for
f
possible changes. We expect the new U.S. presidential administration will
seek to implement a regulatory r
r
efor
f
m agenda that is significantly different than that of the prior administration, impacting the
rulemaking, supe
u
rvision, examination and enforcement priorities of the federal banking agencies. Any such changes, including
with respect to statut
t es, regulations or regulatory p
r
olicies and changes in interpr
r
etation or implementation thereof, c
f
ould affect
Valley in substantial and unpredictabl
a e ways. Such changes could subject Valley to additional costs, limit the types of fin
f ancial
services and products it may offer and/or increase the ability of non-banks to offe
f r competing fin
f ancial services and products, or
may impact consumer trus
r
t in fin
f ancial institutions, among other things. Failure to comply with laws, regulations or policies
could result in sanctions by regulatory a
r
gencies, civil money penalties and/or reputational damage, which could have a material
adverse effect on Valley’s business, financial condition and results of operations.
Valley’s compliance with certain of these laws will also be considered by banking regulators when reviewing bank
merger and bank holding company acquisitions. We also anticipate increased regulatory s
r
crut
r iny—in the course of routine
examinations and otherwise—and new regulations designed to respond to negative developments in the banking industry i
r
n
2023, all of which may increase our costs of doing business and reduce our profita
f
bi
a lity. Among other things, there may be
increased focus by both regulators and investors on deposit composition, the level of uninsured deposits, brokered deposits,
unrealized losses in securities portfol
f ios, liquidity, commercial real estate composition and concentration, and capital and
general oversight and control of the foregoing. Valley could face
f
increased scrutiny or be viewed as higher risk by regulators
and/or the investor community, which could negatively affect its results of operations and fin
f ancial condition.
Heightened regulatory s
r
crut
r iny or the results of an investigation or examination may lead to additional regulatory
r
investigations or enforcement actions. Regulatory e
r
nfor
f
cement and fin
f es have increased across the banking and fin
f ancial
services sector. There is no assurance that those actions will not result in regulatory s
r
ettlements or other enforcement actions
against Valley or the Bank. Furthermore, a single event involving a potential violation of law or regulation may give rise to
numerous and overlapping investigations and proceedings by multiple federal and state agencies and offi
f cials. In addition, if
one or more financial institutions are found
f
to have violated a law or regulation relating to certain business activities, this could
lead to investigations by regulators or other governmental agencies of the same or similar activities by other financial
institutions, including Valley, and large fin
f es and remedial measures that may have been imposed in resolving earlier
investigations for the same or similar activities at other financial institutions may be used as the basis for
f
future settlements.
2024 Form 10-K
32
We are subje
b ct to numerous laws design
i
ed to protect
t
consumers,
r
includin
d
g the
t
CRA and fai
f r l
i
en
l
ding
i
laws, a
s
nd failure to
comply with
i
these law
l
s could lead to a wide v
d
ariety of sanctions.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose
community investment and nondiscriminatory l
r
ending requirements on fin
f ancial institutions. The CFPB, the U.S. Department
of Justice and other fed
f
eral agencies are responsible for enfor
f
cing these laws and regulations. A successful
f
regulatory c
r
hallenge
to an institution’s performance under the CRA, the Equal Credit Opportunity Act, the Fair Housing Act or other fai
f r lending
laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, inju
n nctive relief,
restrictions on mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines. Private
parties also may challenge an institution’s performance under fai
f r lending laws in litigation. Such actions could have a material
adverse effect on our business, financial condition and results of operations.
Changes in a
i
ccountin
t
g polic
l ies or accountin
t
g standar
d
ds could c
l
ause us to change the manner in w
i
hich we repor
e
t our
fina
i
ncial results
l
and conditi
i on in adverse
r
ways
a
and could subject us to additio
i
nal costs and expe
e
nses.
Valley’s accounting policies are fundamental to understanding its financial results and condition. Some of these policies
require the use of estimates and assumptions that may affec
f
t the value of Valley’s assets or liabi
a lities and financial results.
Valley identifie
f d its accounting policies regarding the allowance for credit losses, goodwill and other intangible assets, and
income taxes to be critical because they require management to make difficult, subj
u ective and complex judgments about matters
that are inherently uncertain. Under each of these policies, it is possible that materially different amounts would be reported
under diffe
f rent conditions, using different assumptions, or as new information becomes availabl
a e.
From time to time, the FASB and the SEC change their guidance governing the form and content of Valley’s external
financial statements. In addition, accounting standard setters and those who interpret GAAP, such as the FASB, SEC and
banking regulators may change or even reverse their previous interpretations or positions on how these standards should be
applied. Such changes are expected to continue and may accelerate dependent upon the FASB and International Accounting
Standards Board commitments to achieving convergence between GAAP and International Financial Reporting Standards.
Changes in GAAP and changes in current interpretations are beyond Valley’s control, can be hard to predict and could
materially impact how Valley reports its financial results and condition. In certain cases, Valley could be required to appl
a
y new
or revised guidance retroactively or apply existing guidance diffe
f rently (also retroactively) which may result in Valley restating
prior period fin
f ancial statements for material amounts. Additionally, significant changes to GAAP may require costly
technology changes, additional training and personnel, and other expenses that will negatively impact our results of operations.
Clai
l ms
i
and liti
l
gat
i
io
t n could result in sign
i
ific
f ant expe
e
nses, l
s os
l
ses and damage to our reputat
t io
t n.
From time to time as part of Valley’s normal course of business, customers, bankrupt
r
cy trus
r
tees, for
f
mer customers,
contractua
t
l counterpa
r
rties, third parties and current and for
f
mer employees make claims and take legal action against Valley
based on actions or inactions of Valley. If such claims and legal actions are not resolved in a manner fav
f
orable to Valley, they
may result in fin
f ancial liabi
a lity and/or adversely affect the market perception of Valley and its products and services. This may
also impact customer demand for Valley’s products and services. Any fin
f ancial liabi
a lity could have a material adverse effe
f ct on
Valley’s fin
f ancial condition and results of operations. Any reputational damage could have a material adverse effect on
Valley’s business.
Technology Risks
gy
Cybersecurity
i
incidents a
t
nd othe
t
r dis
d rupt
u io
t ns to our inf
i
or
f
ma
r
tion sys
s
tem could expos
x
e us to l
t
ia
l bility
i
, l
y os
l
ses and escalating
operating costs.
Valley regularly collects, transmits, stores and otherwise processes personal, confid
f ential, proprietary or sensitive
information regarding its customers, employees and others for
f
whom it services loans. In some cases, this personal,
confid
f ential, proprietary o
r
r sensitive infor
f
mation is collected, compiled, transmitted, stored or otherwise processed by third
parties on Valley’s behalf. Cybersecurity risks have increased because of the prolifer
f ation of new technologies, including
artific
f ial intelligence, and the increased sophistication and activities of threat actors, including organized criminal groups,
“hacktivists,” terrorists, nation states, nation-state supported actors and other external parties. Many financial institutions and
companies engaged in data processing have reported significant breaches in the security of their websites or other systems or
networks, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to personal,
confid
f ential, proprietary or sensitive infor
f
mation, destroy data, denial-of-service, or sabot
a
age systems or networks, often
through, among other things, the introduction of computer viruses or malware, social engineering attacks (including phishing
attacks), credential stuffing, account takeovers and other means. In addition, there have been well-publicized “ransomware”
attacks against various U.S. companies with the intent to materially disrupt
r
their computer network and services. Globally,
cybersecurity attacks are increasing in number and the attackers are increasingly organized and well-financed, or at times
33
2024 Form 10-K
suppor
u
ted by state actors. In addition, geopolitical tensions or conflic
f
ts, such as Rus
R
sia’s invasion of Ukraine, increasing tension
with China or the unfol
f ding events in the Middle East, may create a heightened risk of cybersecurity attacks. Cybersecurity
risks also may derive from fra
f ud or malice on the part of our employees or third parties, or may result from
f
human error,
mistakes in connection with over-the-air updates, software bugs, server malfunctions, softw
f
are or hardware fai
f lure or other
technological fai
f lure. Such threats may be diffi
f cult to detect for long periods of time and also may be further enhanced in
frequency or effectiveness through threat actors’ use of artific
f ial intelligence.
Valley fre
f quently experiences attempted cybersecurity attacks against its systems and certain attacks have been successful
f .
Valley has also been impacted by cybersecurity breaches of its vendors’ systems. There can be no assurances that Valley will
not incur fut
f ur
t
e breaches of our systems or be impacted by breaches of our vendors’ systems, which in either case may expose
the data of our customers or disrupt
u
our services, exposing us to significant damage, ongoing operational costs and/or
reputational harm. We do not control our vendors and our ability to monitor their cybersecurity is limited, and our cybersecurity
diligence on key vendors may not be sufficient to prevent a fai
f lure or cybersecurity incident that may impact us or our
customers. Some of our vendors may store or have access to our data and we rely on these vendors to implement information
security programs commensurate with the relevant risk. We cannot, however, ensure in all circumstances that their effort
f
s will
be successful
f . A vulnerabi
a lity in our vendors’ software or systems, a fai
f lure of our vendors’ safeguards, policies or procedur
d
es,
or a cyber-attack or other cybersecurity incident affe
f cting any of these third parties could harm our business. We have
experienced cybersecurity incidents in the past, including the unauthorized access by a third party of certain Bank customer data
resulting fro
f
m our third party service providers’ use of the MOVEit file
f
transfer
f
software in 2023. While our business has not
been materially impacted by any such cybersecurity incidents, similar incidents could have a material adverse effect
f
on our
business in the future.
Cybersecurity risk exposure will remain elevated or increase in the future due to, among other things, the increasing size
and prominence of Valley in the fin
f ancial services industry,
r
our expansion of internet and mobile banking tools and new
products based on customer needs, and the system and customer account conversions associated with the integration of merger
targets. Successful
f
attacks on us or any one of our many third-party service providers may adversely affect our business and
result in the loss of, unauthorized access to or disclosure of, or the misuse or misappropriation of, our personal, confid
f ential,
proprietary or sensitive infor
f
mation or that of our customers. There can be no assurance that we or our third-party service
providers will not suffer a cyber-attack or other cybersecurity incident that exposes us to significant damages, operational costs,
litigation, regulatory e
r
nfor
f
cement, investigations, fin
f es, sanctions or other penalties, or reputational harm.
We are s b
ubjeje
b ct to complex a
e
d
nd evolving l
g law
l
s, regu
e
la itions, r
s
l
ules
l
, s
s
ta d
ndar
d
ds and contractu lal
bl
obligig
l atio
t ns regar
e
didi g
ng
i
datat
privacy a
c
d
nd cyb
cyberse
r
cu iri yty
i , w
y
hi
hi h
ch co l
uld i
d i
l
nc
i
rease the
t
cost of
of d i
doi g
ng
i
bu isine
i
ss, compliliance risks and poten
t
itial l
l lia
l bibililit
i
y.
t
We are subject to complex and evolving laws, regulations, rul
r es, standards and contractua
t
l obligations relating to data
privacy and the security of the personal infor
f
mation of clients, employees or others, and any fai
f lure to comply with these laws,
regulations, rul
r es, standards and contractua
t
l obligations could expose us to liabi
a lity and/or reputational damage. The regulatory
r
framework for data privacy and cybersecurity is in considerable flux and evolving rapi
a dly, and these laws and regulations may
be interpreted and applied diffe
f rently over time and fro
f
m jurisdiction to jurisdiction. As new data privacy and security-related
laws, regulations, rul
r es and standards are implemented, the time and resources needed for us to comply with such laws,
regulations, rul
r es and standards, as well as our potential liabi
a lity for non-compliance and reporting obligations in the case of
cyber-attacks, information security breaches or other similar incidents, may significantly increase. Compliance with these laws,
regulations, rul
r es and standards may require us to change our policies, procedur
d
es and technology for infor
f
mation security,
which could, among other things, make us more vulnerabl
a e to operational fai
f lures and to monetary penalties for
f
breach of such
laws, regulations, rul
r es and standards.
In addition to various data privacy and cybersecurity laws and regulations already in place, U.S. states are increasingly
adopting laws and regulations imposing comprehensive data privacy and cybersecurity obligations, which may be more
stringent, broader in scope, or offer greater individual rights, with respect to personal infor
f
mation than fed
f
eral or other state
laws and regulations, and such laws and regulations may diffe
f r fro
f
m each other, which may complicate compliance effort
f
s and
increase compliance costs. Aspects of fed
f
eral and state laws and regulations relating to data privacy and cybersecurity, as well
as their enfor
f
cement, remain unclear, and we may be required to modify our practices in an effo
f
rt to comply with them. See
Item 1. Business—"Supervision and Regulation"—"Data Privacy and Cybersecurity Regulation" for more inform
f
ation
regarding appl
a
icable data privacy and cybersecurity laws and regulations.
Further, we cannot ensure that our privacy policies and other statements regarding our practices will be suffic
f ient to protect
us from claims, proceedings, liabi
a lity or adverse publicity relating to data privacy and security. Although we endeavor to
comply with our privacy policies, we may at times fai
f l to do so or be alleged to have fai
f led to do so. The publication of our
privacy policies and other documentation that provide promises and assurances about data privacy and cybersecurity can
subj
u ect us to potential government or legal action if they are found to be deceptive, unfai
f r, or misrepresentative of our actual
2024 Form 10-K
34
practices. Any concerns about our data privacy and cybersecurity practices, even if unfounde
f
d, could damage our reputation
and adversely affect our business.
Any fai
f lure or perceived fai
f lure by us to comply with our privacy policies, or applicable data privacy and cybersecurity
laws, regulations, rul
r es, standards or contractua
t
l obligations, or any compromise of security that results in unauthorized access
to, or unauthorized loss, destruction, use, modification, acquisition, disclosure, release or transfer of personal inform
f
ation, may
result in requirements to modify or cease certain operations or practices, the expenditure of subs
u
tantial costs, time and other
resources, proceedings or actions against us, legal liabi
a lity, governmental investigations, enfor
f
cement actions, claims, fin
f es,
judgments, awards, penalties, sanctions and costly litigation (including class actions). Any of the foregoing could harm our
reputation, distract our management and technical personnel, increase our costs of doing business, adversely affect
f
the demand
for our products and services, and ultimately result in the imposition of liabi
a lity, any of which could have a material adverse
effe
f ct on our business, financial condition and results of operations.
Our adoptio
t n of a
o
rtif
t ic
f ial int
i
el
t li
l ge
i
nce tool
t
s a
l
nd adoptio
t n by o
b
ur third-par
-
ty vendors a
r
nd service providers may i
a
nc
i
rease
the risk of e
o
rrors, omissions, unfa
n
ir treatment or fraudulent behavior by our employees
o
, c
s
lients,
t
or counter
t
par
r
ties, or othe
t
r
third parties.
We have made, and expect to continue to make investments to integrate artific
f ial intelligence tools into our solutions,
including generative artificial intelligence, machine learning, and similar tools and technologies that collect, aggregate, analyze
or generate data or other contents (collectively, “AI”), and we expect to continue to adopt such tools responsibly and as
appropriate. We also expect our third-party vendors and service providers to increasingly develop and incorpor
r
ate AI into their
product offerings faster than we are abl
a e to do so independently. There are significant risks involved in utilizing AI, and we
cannot assure that our or our third-party vendors’ or service providers’ use of AI will enhance our or our third-party vendors’ or
service providers’ products or services or produce the intended results. The adoption and incorporation of these tools can lead to
concerns around safety and soundness, fair access to fin
f ancial services, fai
f r treatment to customers, inaccuracy of results
broadly known as "hallucinations" and compliance with appl
a
icable laws and regulations. These risks can result from models
being poorly designed or fau
f
lty and/or biased data being used for
f
training, inadequate model testing or validation, narrow or
limited human oversight, inadequate planning or due diligence, inappropriate or controversial data practices by developers or
end-users, and other factors adversely affecting public opinion of AI and the acceptance of AI solutions.
We have implemented an AI governance, oversight, and strategic faci
f
litation func
f
tion that includes a risk assessment of
internal and vendor AI solutions, due
d
diligence, model validation, and controls, and strict guidelines and policies designed to
maintain safety, security, and ethical use of AI. However, given the pace of rapi
a d adoption of these tools by vendors and service
providers, we may not be aware of the addition of AI solutions prior to these tools being introduced into our environment.
Failure to adequately manage AI risks can result in erroneous results and decisions made by misinformation, unwanted for
f
ms of
bias, unauthorized access to sensitive, confid
f ential, proprietary or personal infor
f
mation, and violations of applicable laws and
regulations, leading to operational inefficiencies, competitive harm, reputational harm, ethical challenges, legal liabi
a lity, losses,
fines, and other adverse impacts on our business and financial results. If we do not have sufficient rights to use the data or other
material or content on which the AI tools we use rely, or to use the output
t
s of such AI tools, we also may incur liabi
a lity through
the violation of appl
a
icable laws and regulations, third-party intellectua
t
l property, privacy or other rights, or contracts to which
we are a party.
We may b
a
e require
i
d to e
t
xpe
e
nd sign
i
ific
f ant resources to comply with
i
an uncertain legal
e
and regulat
l or
t
y e
r
nvironment
governing
i
the use of AI, a
I
nd we may h
a
ave to c
t
hange our product offe
f ring
i
s o
g
r business practic
t es, o
s
r prevent or lim
l
it our use
of AI.I
Regulation of AI is rapidly evolving as legislators and regulators are increasingly foc
f
used on powerful emerging
technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectua
t
l
property, data privacy and cybersecurity, consumer protection, competition, equal opportunity, and fair lending laws, and are
expected to be subj
u ect to increased regulation and new laws or new applications of existing laws and regulations. AI is the
subj
u ect of ongoing review by various governmental and regulatory a
r
gencies, and various U.S. states are appl
a
ying, or are
considering appl
a
ying, existing laws and regulations to AI or are considering general legal fra
f meworks for
f
AI. We may not be
able to anticipate how to respond to these rapidly evolving frameworks, and we may need to expend resources to adju
d st our
operations or offe
f rings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions. While we believe we
have taken steps to be thoughtful in our development, training, and implementation of AI, it is not guaranteed that regulators
will agree with our approach to limiting AI risks or to our compliance more generally. In addition, because AI technology itself
is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may
arise relating to the use of AI.
35
2024 Form 10-K
Risks Related to an Investment in Our Securities
We may r
a
educe or eliminate t
t
he
t
cash dividend on our common stock, w
k
hich could a
l
dverse
r
ly affe
f ct the marke
r
t price of
our common stock.k
Holders of our common stock are only entitled to receive such cash dividends as the Board may declare out of funds
legally availabl
a e for
f
such payments. We are not required to continue our historical practice of declaring dividends on our
common stock and may reduce or eliminate our common stock cash dividend in the future depending upon our results of
operations, fin
f ancial condition or other metrics. This reduc
d
tion or elimination of our dividend could adversely affec
f
t the market
price of our common stock.
If our subsidiaries are unable t
l
o p
t
ay dividends o
d
r make dist
i ri
t butions to us, w
s
e may be unable t
l
o m
t
ake dividend paymentst
to our prefe
e rred and common shareholde
l
rs or interest payments o
t
n our long-t
g er
t
m b
r
orrowing
i
s a
g
nd junior subordina
i
ted
debentures issued to capi
a ta
i l tru
t
sts.
t
Valley National Bancorp is a separate and distinct legal entity fro
f
m our banking and non-banking subs
u
idiaries and
depends on dividends, distributions, and other payments fro
f
m the Bank and its non-banking subs
u
idiaries to fund cash dividend
payments on our prefer
f red and common stock and to fund
f
most payments on our other obligations. Regulations relating to
capital requirements affect the abi
a lity of the Bank to pay dividends and other distributions to us and to make loans to us.
Additionally, if our subs
u
idiaries’ earnings are not suffic
f ient to make dividend payments to us while maintaining adequate
capital levels, we may not be able to make dividend payments to our prefer
f red and common shareholders or interest payments
on our long-term borrowings and junior subor
u
dinated debentures issued to capital trusts. Furthermore, our right to participate in
a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s
creditors.
Future acquisitio
t ns may d
a
il
d ute s
t
hareholder
d
value, espe
s
cially
l
tangible book value per share.
We regularly evaluate opportunities to acquire other fin
f ancial institutions. Futur
t
e mergers or acquisitions involving cash,
debt, or equity securities may occur at any time. Acquisitions typically involve the payment of a premium over book and market
values, and therefor
f
e, some dilution of our tangible book value per common share may occur in connection with any future
acquisitions.
Future offe
f ring
i
s o
g
f c
o
ommon stock, p
k
refe
e rred stock, d
k
eb
d
t or other securitie
i
s may adverse
r
ly affe
f ct the marke
r
t price of our
stoc
t
k and dilu
i
te the holdi
l ng
i
s o
g
f e
o
xi
e st
i in
t
g shareholder
d
s.
r
We have increased, and may in the fut
f ur
t
e increase, our capital resources or, if our or the Bank’s actua
t
l or projected
capital ratios fal
f l below or near the current (Basel III) regulatory r
r
equired minimums, we or the Bank could be for
f
ced to raise
additional capital by making additional offerings of common stock, preferred stock or debt securities. Additional equity
offe
f rings may dilute the holdings of our existing shareholders or reduce the market price of our common stock, or both. Holders
of our common stock are not entitled to preemptive rights or other protections against dilution. Upon liquidation, holders of our
debt securities and shares of prefer
f red stock, and lenders with respect to other borrowings will receive distributions of our
availabl
a e assets prior to the holders of our common stock. See Note 18 to the consolidated financial statements for
f
more details
on our common and prefer
f red stock, including stock issuances during the second half of 2024.
Item 1B.
Unresolved Staf
t
f C
f
om
C
mentst
None.
Item 1C.
Cybersecurity
i
We have an enterprise-wide infor
f
mation security program designed to provide controls, technologies and other processes
to identify,
f
assess and manage material cyber and information security risks and threats. Our infor
f
mation security program
leverages the National Institut
t e of Standards and Technology (NIST) framework, which organizes cybersecurity risks into fiv
f e
categories: identify, protect, detect, respond and recover.
The Board has primary oversight responsibility for our cyber and information security risk as a key part of its oversight of
Valley’s enterpr
r
ise-wide risk management (ERM) fra
f mework, and we employ personnel dedicated to assisting the Board in
fulfilli
f
ng this oversight responsibility. As a general matter, Valley seeks to address cyber and information security risks through
a cross-functional appr
a
oach, as described below, that is focused on identifyi
f ng, preventing and mitigating cybersecurity threats
and effectively responding to cybersecurity incidents when they occur. Our infor
f
mation security team reviews ERM-level
2024 Form 10-K
36
cybersecurity risks annually, and key cybersecurity risks are incorporated into the ERM framework, which is periodically
reviewed by management throughout the year at its Executive Risk Committee.
As part of this framework, we have a set of enterprise-wide policies and procedur
d
es concerning cybersecurity matters
which go through an internal review process and are appr
a
oved by appr
a
opriate members of senior management or the Board,
which include an Information Security Policy, as well as other policies and procedur
d
es that directly or indirectly relate to
cybersecurity, and practices related to encryption, antivirus
r
protection, remote access, multi factor authentication, the protection
of confid
f ential infor
f
mation and the use of the internet, social media, email, and wireless devices.
Governance. Having the appr
a
opriate governance structur
t
e in place is critical to the func
f
tioning of our cyber and
information security risk framework. As noted above, our Board has primary o
r
versight responsibility for our cyber and
information security risk, and it performs this oversight function primarily through its Risk Committee, which reports to the ful
f l
Board. Additionally, to keep pace with the speed of disrupt
r
ive innovation and associated cyber risks, the Board has establ
a ished
a dedicated Cyber & Technology Risk Subc
u
ommittee (the “Cyber Subcommittee”) that reports to the Risk Committee. The Risk
Committee, through the Cyber Subcommittee, oversees the Company’s cybersecurity risk profile
f
, prevalent cybersecurity risks,
our enterprise information security program and key enterprise information security initiatives.
We also have a team of employees, including at the senior management level, who are dedicated to assisting the Board in
fulfilli
f
ng its oversight responsibility for cyber and information security. Valley’s Chief Information Security Officer (CISO),
who is responsible for developing and implementing our cyber and information security program, has over 24 years of
experience leading cyber security oversight and holds a CRISC certific
f ation, and others on our information security team have
cybersecurity experience or certifications. The CISO and Director of Cyber Risk Management each participate in all meetings
of the Cyber Subcommittee.
Our Board, through the Risk Committee and the Cyber Subcommittee, receives regular updates and reporting from
management on cyber and information security matters, including information related to third-party assessments of Valley’s
information security program, as well as a wide range of topics such as recent developments, evolving standards, Valley’s
vulnerabi
a lity assessments, third-party and independent reviews, the threat environment, technological trends and inform
f
ation
security considerations arising with respect to Valley’s peers and third parties. On an annual basis, the Board and its Risk
Committee discuss Valley’s appr
a
oach to cyber and information security risk management. Senior management is briefed
f
by our
information security team on cyber and information security matters, preparedness and any incidents requiring the attention of
our security incident response team.
Risk
i
Manage
a
ment and Str
S ateg
t
y
g
Our cyber and information security risk management fra
f mework and strategy is foc
f
used on the fol
f lowing key areas:
Identification, Protection and Detection. Valley maintains a threat team and internal committees to identify any new
threats and risks to its information systems. We identify a
f
nd assess risks fro
f
m cybersecurity threats by monitoring and
evaluating our threat environment and our risk profil
f e through various methods including, for example, using manual and
automated tools, subs
u
cribing to threat intelligence reports and services, analyzing threats and threat actors, conducting scans of
the threat environment, evaluating our industry’
r
s risk profile, utilizing internal and external audits and conducting threat and
vulnerabi
a lity assessments.
Technical Safeg
f
uards. Valley also deploys technical safeg
f
uards that are designed to protect Valley’s inform
f
ation
systems fro
f
m cybersecurity threats, including firewalls, intrus
r
ion prevention and detection systems, anti-malware fun
f
ctionality
and access controls, continuous scanning of our environments for potential weaknesses, behavioral-based protections against
malware and filtering of inbound emails to protect the firm against phishing attacks. The effectiveness of these safeguards is
evaluated through vulnerabi
a lity assessments and cybersecurity threat intelligence with the goal of implementing improvements
as needed.
Third-Party Risk Management. Valley maintains a risk-based appr
a
oach to identifying and overseeing cybersecurity
risks presented by vendors, service providers and other third parties, as well as the systems of third parties that could adversely
impact its business in the event of a cybersecurity incident affe
f cting those third-party systems. We have integrated security
reviews into the third-party vendor management program. We assess third-party cybersecurity controls and include security and
privacy provisions in our contracts where applicable. However, ultimately, we rely on the third parties we use to implement
information security programs commensurate with the relevant risk, and we cannot ensure in all circumstances that their effort
f
s
will be successful
f .
Education and Awareness. Valley provides mandatory cybersecurity training at least annually for all employees, which
is intended to equip them with tools to identify a
f
nd address cybersecurity threats, and to communicate Valley’s evolving
37
2024 Form 10-K
information security policies, standards, processes and practices. We also require employees in certain roles to complete
additional role-based, specialized cyber and information security training.
Incident Response and Recovery Planning. Valley maintains incident response and recovery plans that are intended to
assist in Valley’s response to a cyber or infor
f
mation security incident, and such plans are evaluated on a regular basis. In the
event of an incident, we intend to follow our incident response plan, which outlines the steps to be followed fro
f
m incident
detection to eradication, recovery and notific
f ation, including notifyi
f ng functional areas (e.g., legal), as well as senior
management and the Board, as appropriate. As part of these plans, we have also implemented controls and procedures
providing for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and
reporting of such incidents, including to regulators and governmental agencies, can be made by management in a timely
manner.
Outside Consultants. While we have deployed personnel to perform testing and oversight functions internally, we also
leverage external consultants and other tools to test the effe
f ctiveness of our operating environment and the protection of our
data. We engage third parties to perform assessments on our cybersecurity measures, including information security maturity
assessments, audits and reviews of our information security control environment and operating effectiveness. These assessment
effo
f
rts include a wide range of activities such as tabletop exercises, vulnerabi
a lity testing, and other exercises foc
f
used on
evaluating the effe
f ctiveness of our cybersecurity measures and planning. The results of these assessments are reported to the
Risk Committee and the Board. Valley adjusts its cyber and information security program as necessary based on the
information provided by these assessments, audits and reviews.
Impac
m
t of C
o
yb
C
erse
r
curity
i
Threatst
We are regularly subj
u ect to cybersecurity attacks. Cybersecurity threats, including as a result of any previous
cybersecurity incidents, have not, to date, materially affe
f cted or are reasonabl
a y likely to affect Valley, including our business
strategy, results of operations or financial condition. Notwithstanding the comprehensive approach we take to cybersecurity, we
may not be successful
f
in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. For
more information, see Item 1A. Risk Factors for
f
further infor
f
mation about
a
these risks.
Item 2.
Propertie
t s
We conduct our business at 229 retailil ba ki
nki g
ng centers locations in nor hthern a d
nd centr lal New Jersey, hthe New Yo k
rk
i
Ci yty
bor
boroughs
oughs of Ma h
nhattan, Bro kl
oklyn and Queens, Lo g
ng Isla d
nd, West h
chester County, New York,
l
Floridida,
l
Al b
abama, Calif
lifor
f
inia a d
nd
lIllilin iois. We ow 9
n 6 of our ba ki
nki g
ng center fa icilili ities a d
nd several non-bran h
ch opera iti g
ng fa icilili ities. The other properties are leas d
ed
for various terms. Vallll y
ey considider i
s its properties t b
o be s iuitablbl
a e a d
nd d
adequate fo i
r its current business n
d
eed .s
The fol
f lowing tabl
a e summarizes our leased and owned retail banking centers in each state:
Leased
Owned
Number of banking
centers
% of Total
New Jersey
Northern
60
40
100
43.7 %
Central
8
19
27
11.8
Total New Jersey
68
59
127
55.5
New York
Manhattan, Brooklyn and Queens
15
7
22
9.6
Long Island
9
3
12
5.2
Westchester County
7
0
7
3.1
Total New York
31
10
41
17.9
Florida
26
15
41
17.9
Alabama
4
12
16
7.0
Califor
f
nia
3
—
3
1.3
Illinois
1
—
1
0.4
Total
133
96
229
100.0 %
Our principal executive office is located at One Penn Plaza in New York, New York. Our New York City corporate
offi
f ces are primarily used as a central hub for New York based lending activities of senior executives and other commercial
2024 Form 10-K
38
lenders. During the third quarter 2023, Valley completed the sale of two corporate office buildings located in Wayne, New
Jersey and relocated its headquarters to a new leased location at 70 Speedwell Avenue in Morristown, New Jersey.
Du iri g
ng 2022 we ac
i
quired two leas d
ed offifi
f ce
i
s in New Yo k
rk
i
Ci yty from Bank Leu i
mi USA that are primarilily used f
d for
f
commercial l
l lendidi g
ng and our br k
oke d
r-d
l
ealer, VFM. We lalso lease seven non-ba k
nk offifi
f ce fa icilili itie i
s in Flo irida, used f
d for
f
opera itional,
execu itive a d
nd le di
ndi g
ng purpos
r
es.
d
Addidi itional i
l infor
f
ma ition r g
egardidi g
ng Valllley’ l
s leas d
ed locations and own d
ed fa icili i
lities can be fo
d
und
i
wi hthin Note 6. “Leases” and
Note 7. “Premises and E
i
quipment, Net,” respectiv lely, in hthe Notes to hthe Cons lolididat d
ed
i
Financial Statements cont iained i
d in Item
8.
i
Financial Statements a d
nd Su
l
ppl
u
ementa y
ry Data.
Item 3.
Legal
e
Proceedin
d
gs
In the normal course of business, we are a party to various outstanding legal proceedings and claims. In the opinion of
management, our financial condition, results of operations, and liquidity should not be materially affe
f cted by the outcome of
such legal proceedings and claims.
Item 4.
Mine
i
and Saf
S
et
f y D
t
isclos
l
ures
Not appl
a
icable.
39
2024 Form 10-K
PART II
Item 5.
Marke
r
t for
f
Regi
e st
i ra
t
nt’s Common Equity,
t
Related Sto
S ckho
k
lder
d
Matters and Issu
I
er Purchases of E
o
quityt
Securitie
i
s
Our common stock is traded on the NASDAQ Global Select Market under the ticker symbol “VLY.” There were 6,537
shareholders of record as of December 31, 2024.
We declared cash dividends of $0.11 per share in each of the first, second, third and fourth quarters of 2024. The
declaration and payment of fut
f ur
t
e dividends to holders of our common stock is at the discretion of our Board and depends upon
many factors, including our financial condition, earnings, capital requirements, legal requirements, regulatory c
r
onstraints and
other fact
f
ors that our Board deems relevant.
Perfrfor
f
ma
r
nc G
e Gra
G
h
ph
a
The fol
f lowing graph compares the cumulative total retur
t
n on a hypothetical $100 investment made on December 31,
2019 in: (a) Valley’s common stock; (b) the KBW Regional Banking Index ("KRX"); and (c) the S&P 500 Stock Index ("S&P
500"). The graph
a
is calculated assuming that all dividends are reinvested during the relevant periods. The graph shows how a
$100 investment would increase or decrease in value over time based on dividends (stock or cash) and increases or decreases in
the market price of the stock.
riod Ending
Dollars
Index of Total Returns
Valley
KRX
R
S&P 500
12/19
12/20
12/21
12/22
12/23
12/24
50
100
150
200
250
12/19
12/20
12/21
12/22
12/23
12/24
Valley
$
100.00 $
89.94 $
131.11 $
111.97 $
112.74 $
99.26
KRX
R
100.00
91.32
124.78
116.15
115.69
130.96
S&P 500
100.00
118.39
152.34
124.73
157.48
196.85
The infor
f
mation under “Performance Graph” is not deemed to be “soliciting material” or to be “file
f
d” with the SEC or
subj
u ect to Section 18 of the Exchange Act, and the information shall not be deemed to be incorporated by reference in any filing
by us under the Securities Act or the Exchange Act, whether made befor
f
e or after the date hereof and irrespective of any general
incorporation language in any such filin
f
g, except to the extent specific
f ally incorporated by reference into such a filing.
2024 Form 10-K
40
Issuer Repu
e
rchase of
of Eq i
ui yty
i
Secu iri itie
i
s
The fol
f lowing tabl
a e presents the repurchases of equity securities during the three months ended December 31, 2024:
Period
Total Number of
Shares Purchased (1)
Average
Price
Paid Per
Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans (2)
Maximum Number of
Shares that May Yet
Be
Purchased Under the
Plans (2)
October 1, 2024 to October 31, 2024
27,552
$
8.93
—
25,000,000
November 1, 2024 to November 30, 2024
7,567
9.47
—
25,000,000
December 1, 2024 to December 31, 2024
6,844
10.64
—
25,000,000
Total
41,963
$
9.31
—
(1)
Includes repurchases made in connection with the vesting of employee restricted stock awards.
(2)
On Februa
r
ry 21, 2024, Valley publicly announced a new stock repurchase program for up t
u
o 25 million shares of Valley common stock.
The authorization to repurchase under the new repurchase program became effective on April 26, 2024 and will expire on April 26,
2026.
Item 6.
[Reserved]
Item 7.
Manage
a
ment’s Disc
i
ussion and Analysis (
i
MD
(
&A) o
A
f F
o
in
F
ancial Conditio
d
n and Results of Operatio
t ns
The purpos
r
e of this analysis is to provide the reader with information relevant to understanding and assessing Valley’s
results of operations and fin
f ancial condition for
f
each of the past two years. In order to ful
f ly appreciate this analysis, the reader
is encouraged to review the consolidated financial statements and accompanying notes thereto appe
a
aring under Item 8 of this
Report, and statistical data presented in this document. For comparison of our results of operations for the years ended
December 31, 2023 and 2022, please refer to Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations of our Report on Form 10-K for
f
the year ended December 31, 2023, filed with the SEC on Februa
r
y
ry 29,
2024.
Cautio
t nary Stat
t em
t
ent Con
C
cerni
r
ng
i
Forward-Lo
-
oking
i
Stat
t em
t
ents
This Report, both in MD&A and elsewhere, contains forward-looking statements within the meaning of the Private
Securities Litigation Refor
f
m Act of 1995. Such statements are not historical facts and include expressions about management’s
confid
f ence and strategies and management’s expectations about our business, new and existing programs and products,
acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements
may be identifie
f d by such for
f
ward-looking terminology as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,”
“allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “proje
o ct”
or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties.
Actual results may diffe
f r materially from such for
f
ward-looking statements. Factors that may cause actual results to diffe
f r
materially from those contemplated by such forward-looking statements in addition to those risk fact
f
ors listed under Item 1A.
Risk Factors of this Report include, but are not limited to:
t
•
he impact of market interest rates and monetary and fis
f cal policies of the U.S. federal government and its agencies in
connection with prolonged infla
f tionary pressures, which could have a material adverse effect on our clients, our business,
our employees, and our ability to provide services to our customers;
•
the impact of unfav
f
orable macroeconomic conditions or downtur
t
ns, including an actua
t
l or threatened U.S. government
shutdown, debt default or rating downgrade, instability or volatility in financial markets, unanticipated loan
delinquencies, loss of collateral, decreased service revenues, increased business disrupt
u ions or failures, reductions in
employment, and other potential negative effects on our business, employees or clients caused by fact
f
ors outside of our
control, such as future legislation and policy changes under the new U.S. presidential administration, geopolitical
instabilities or events; natural and other disasters, including severe weather events, health emergencies, acts of terrorism;
or other external events;
•
the impact of potential instabi
a lity within the U.S. fin
f ancial sector in the aftermath of the banking failures in 2023 and
continued volatility thereafte
f r, including the possibility of a run on deposits by a coordinated deposit base, and the
impact of the actua
t
l or perceived soundness, or concerns about the creditworthiness of other financial institutions,
including any resulting disrupt
r
ion within the fin
f ancial markets, increased expenses, including Federal Deposit Insurance
Corporation insurance assessments, or adverse impact on our stock price, deposits or our ability to borrow or raise
capital;
41
2024 Form 10-K
•
the impact of negative public opinion regarding Valley or banks in general that damages our reputation and adversely
impacts business and revenues;
•
changes in the statut
t es, regulations, policy, or enforcement priorities of the federal bank regulatory a
r
gencies;
•
the loss of or decrease in lower-cost fundi
f
ng sources within our deposit base;
•
damage verdicts or settlements or restrictions related to existing or potential class action litigation or individual litigation
arising fro
f
m claims of violations of laws or regulations, contractua
t
l claims, breach of fiduciary responsibility,
negligence, fraud, environmental laws, patent, trademark or other intellectua
t
l property infri
f ngement, misappropriation or
other violation, employment related claims, and other matters;
•
a prolonged downtur
t
n and contraction in the economy, as well as an unexpected decline in commercial real estate values
collateralizing a significant portion of our loan portfol
f io;
•
higher or lower than expected income tax expense or tax rates, including increases or decreases resulting fro
f
m changes in
uncertain tax position liabi
a lities, tax laws, regulations, and case law;
•
the inability to grow customer deposits to keep pace with loan growth;
•
a material change in our allowance for
f
credit losses under CECL due
d
to forecasted economic conditions and/or
unexpected credit deterioration in our loan and investment portfol
f ios;
•
the need to suppl
u
ement debt or equity capital to maintain or exceed internal capital thresholds;
•
changes in our business, strategy, market conditions or other fact
f
ors that may negatively impact the estimated fai
f r value
of our goodwill and other intangible assets and result in fut
f ur
t
e impairment charges;
•
greater than expected technology related costs due to, among other fact
f
ors, prolonged or fai
f led implementations,
additional proje
o ct staffi
f ng and obsolescence caused by continuous and rapid market innovations;
•
increased competitive challenges, including our ability to stay current with rapi
a d technological changes in the financial
services industry;
r
•
cyberattacks, ransomware attacks, computer viruses, malware or other cybersecurity incidents that may breach the
security of our websites or other systems or networks to obtain unauthorized access to personal, confid
f ential, proprietary
or sensitive infor
f
mation, destroy data, disabl
a e or degrade service, or sabot
a
age our systems or networks, and the
increasing sophistication of such attacks;
•
results of examinations by the OCC, the FRB, the CFPB and other regulatory a
r
uthorities, including the possibility that
any such regulatory a
r
uthority may, among other things, require us to increase our allowance for
f
credit losses, write-down
assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;
•
appl
a
ication of the OCC heightened regulatory s
r
tandards for
f
certain large insured national banks, and the expenses we
will incur to develop policies, programs, and systems that comply with the enhanced standards appl
a
icable to us;
•
our inability or determination not to pay dividends at current levels, or at all, because of inadequate earnings, regulatory
r
restrictions or limitations, changes in our capital requirements, or a decision to increase capital by retaining more
earnings;
•
unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effec
f
ts on
our business caused by severe weather, pandemics or other public health crises, acts of terrorism or other external events;
•
our ability to successful
f ly execute our business plan and strategic initiatives; and
•
unexpected significant declines in the loan portfol
f io due to the lack of economic expansion, increased competition, large
prepayments, risk mitigation strategies, changes in regulatory l
r
ending guidance or other factors.
We undertake no dut
d y to upda
u
te any for
f
ward-looking statement to confor
f
m the statement to actua
t
l results or changes in
our expectations, except as required by law. Although we believe that the expectations reflected in the forw
f
ard-looking
statements are reasonabl
a e, we cannot guarantee future results, levels of activity, performance or achievements.
2024 Form 10-K
42
Critical Accounting
i
Estima
i
tes
Our accounting and reporting policies conform, in all material respects, to GAAP. In preparing the consolidated financial
statements, management has made estimates, judgments and assumptions that affe
f ct the reported amounts of assets and
liabi
a lities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated.
Actual results could diffe
f r materially from those estimates.
Valley’s accounting policies are fundamental to understanding management’s discussion and analysis of its financial
condition and results of operations. Our significant accounting policies are presented in Note 1 to the consolidated financial
statements. We identifie
f d our policies for
f
the allowance for credit losses, goodwill and other intangible assets, and income taxes
to be critical because management has to make subj
u ective and/or complex judgments about matters that are inherently uncertain
and because it is likely that materially different amounts would be reported under diffe
f rent conditions or using diffe
f rent
assumptions. Management has reviewed the appl
a
ication of these policies with the Audit Committee of the Board.
The judgments and estimates used by management in applying the critical accounting policies discussed below may be
affe
f cted by significant changes in the economic environment, which may result in changes to fut
f ur
t
e fin
f ancial results.
Specifically, subsequent evaluations of the loan portfol
f io, in light of the fact
f
ors then prevailing, may result in material changes
in the allowance for
f
credit losses in fut
f ur
t
e periods, and the inabi
a lity to collect on outstanding loans could result in increased
loan losses.
Allowance for
f
Credit Losses. Deter i
mining the lallowance for
f
cr d
edit losses for
f
loan h
s has hihistoric lallyly been ididen itififi d
ed as a
cri i
itic lal accounting estimate. W
e
e
stimate and recognize an allowance for
f
lifet
f ime expected credit losses for
f
loans, unfunde
f
d
credit commitments and HTM debt securities measured at amortized cost. See Notes 1, 4 and 5 to the consolidated financial
statements for fur
f
ther discussion of our accounting policies and methodologies for establishing the allowance for
f
credit losses.
The accounting estimate of the allowance for
f
credit losses is a “critical accounting estimate” for
f
the fol
f lowing reasons:
•
Changes in the provision for credit losses can materially affe
f ct our financial results;
•
Estimates relating to the allowance for
f
credit losses require us to project future borrower performance, delinquencies
and charge-offs
f , along with, when appl
a
icable, collateral values, based on a reasonabl
a e and suppor
u
tabl
a e fore
f
cast period
utilizing for
f
ward-looking economic scenarios in order to estimate probabi
a lity of default and loss given defau
f
lt;
•
The allowance for
f
credit losses is influ
f enced by fact
f
ors outside of our control such as industry a
r
nd business trends,
geopolitical events and the effects of laws and regulations as well as economic conditions such as trends in GDP,
unemployment, housing prices, interest rates, inflation, and energy prices; and
•
Judgment is required to determine whether the models used to generate the allowance for
f
credit losses produce an
estimate that is suffi
f cient to encompass the current view of lifet
f ime expected credit losses.
Additionally, management’s determination of the amount of the ACL is a critical accounting estimate because it requires
significant reliance on the credit risk we ascribe to individual borrowers, the use of estimates and significant judgment as to the
amount and timing of expected future cash flo
f ws on individually evaluated loans, significant reliance on historical loss rates on
homogenous portfol
f ios, consideration of our quantitative and qualitative evaluation of past events, current conditions, and
reasonabl
a e and suppor
u
tabl
a e for
f
ecasts that affe
f ct the collectability of the reported amounts. Changes in such estimates could
significantly impact our allowance and provision for credit losses. Accordingly, our actua
t
l credit loss experience may not be in
line with our expectations.
Changes in O
i
ur Allo
l wance for
f
Credit
d
Losses for
f
Loans
Valley considers it diffi
f cult to quantify t
f
he impact of changes in the economic forecast on its allowance for
f
credit losses
for loans. However, management believes the following discussion may enable investors to better understand the variabl
a es that
drive the allowance for
f
credit losses for
f
loans, which totaled $573.3 million and $465.6 million at December 31, 2024 and
2023, respectively.
As discussed fur
f
ther in the “Allowance for
f
Credit Losses” section in this MD&A, we incorporated a mul i
lti-scenario
economic forecast for
f
es itima iting l
g lififet
f ime expect d
ed cr d
edit losses at Dece b
mber 31, 2024 and 2023. The qualilita itive economic
component of our reserves at December 31, 2024 decreased by $43.8 million to appr
a
oximately 8 percent of total allowance for
f
credit losses for
f
loans at December 31, 2024 as compared to 19 percent at December 31, 2023 largely due
d
to gradua
d
l
improvements in most economic indicators, including inflation, during 2024 and a hihighe
ghe l
r lev lel of previouslyly expect d
ed losses
tran isi itio ini g
ng as re laliz d
ed losse (
s (i.e., cha g
rge-offs
f ) through
gh our ACL m d
odel i
l in
.
2024 Other qualitative non-economic reserves,
largely based upon management judgements about
a
certain inherent factors in acquired loan portfol
f ios not reflected in our
43
2024 Form 10-K
quantitative reserves, also decreased $48.0 million to appr
a
oximately 4 percent of total allowance for
f
credit losses for
f
loans at
December 31, 2024 as compared to 16 percent at December 31, 2023. The decline was mostly due to the passage of time and
better than expected performance of these portfol
f ios. The net positive developments in these significant judgmental fac
f
tors
during 2024 were more than offs
f et by increases in the quantitative portion of our allowance based upon a transition matrix
model which calculates an expected life o
f
f loan loss percentage for
f
each loan pool by generating probabi
a lity of default and loss
given defau
f
lt metrics.
h
The allllowance for
f
cr d
edit losses for
f
loans als
i
o included spe icifific reserves tot laling $75.9
i
millllion and $74.2
il
millilion,
respectiv lely, at Dece b
mber 31, 2024 and 2023. These reserves ar b
e bas d
ed upon management's valuation of c lollateral f
l for
f
collllater lal
depe d
ndent loans.
h
These spe icifific reserve i
s include $25.8
i
millllion and $37.7
i
milli
llion at Dece b
mber 31, 2024 and 2023, respectiv lely,
related to New Yo k
rk
i
Ci yty taxix medallion loan valuations based on the estimated value of the underlying medallions. See
additional details regarding our non-performing taxi medallion loan portfol
f io under the “Non-performing Assets” section of this
MD&A.
Goodwill and Other Intangible Assets. We have significant goodwill and other intangible assets related to our
acquisitions totaling $1.9 billion and $128.7 million at December 31, 2024, respectively. We record all acquired assets,
including goodwill and other intangible assets, and assumed liabi
a lities in purchase acquisitions at fair value as of the acquisition
date, and expense all acquisition related costs as incurred as required by ASC Topic 805, “Business Combinations.” The initial
recording of goodwill and other intangible assets requires subjective judgments concerning estimates of the fair value of the
acquired assets and assumed liabi
a lities. Goodwill is subject to annual tests for impairment or more often, if events or
circumstances indicate it may be impaired. Our determination of whether or not goodwill is impaired requires us to make
significant judgments and to use significant estimates and assumptions regarding estimated fut
f ur
t
e cash flo
f ws. If we change our
strategy or if market conditions shift,
f
our judgments may change, which may result in adjustments to the recorded goodwill
balance. Other intangible assets are amortized over their estimated useful lives and are subj
u ect to impairment tests if events or
circumstances indicate a possible inabi
a lity to realize the carrying amount. Such evaluation of other intangible assets is based on
undiscounted cash flo
f w proje
o ctions.
An impairment loss is recognized if the carrying value of the net assets assigned to the reporting unit exceeds the fai
f r
value of the reporting unit, with the impairment loss not to exceed the amount of goodwill recorded. We perform our annual
goodwill impairment test in the second quarter of each year, or more ofte
f n if events or circumstances warrant. In d
addidi ition to the
annual i
l imp iairment test, we assessed the immedidiate a d
nd lo g
ng-term impact of isigni
gnifificant market a d
nd ba k
nk regul
gulatory c
r
ha g
nges, ifif
ap lplic b
able, on the macroeconomic va iri b
ables a d
nd economic forecasts and h
d how hthose migight impact hthe f iai
f r v lalue of our repor iting
i
units
h
each quarter end. Afte
f r considideration of these va iri b
ables a d
nd other pos isiblble t irigg
gge iri g
ng events or icircumstances, as wellll as
our opera iting res lults, w
d
e deter i
min d
ed it was more-lilikelyly-than-not hthat hthe f iai
f r v lalues of our hthree repor iting u inits, Weal h
lth
Management, Consumer Ba ki
nki g
ng, and Commercial Bankiki g
ng, were in excess of their car y
rying v lalue d
s dur
d
ing 2024. Therefore,
we concluded there were no trigigge iri g
ng events hthat wo luld req iuire
d
addidi itional g
l g
d
oodwill
ill imp iairment test of the repor iting u inits
during 2024.
In 2025, we will continue to monitor and evaluate the overall economic conditions that may impact our market
capitalization and any triggering events that may indicate a possible impairment of goodwill allocated to our reporting units.
While not expected at this time, we may be required to record a charge to earnings should there be a defic
f iency in our estimated
fair value of one or more of our reporting units during our subs
u
equent annual (or more frequent) impairment tests. See the
“Operating Segments” section in this MD&A for
f
more information regarding our business segments/reporting units.
Fair value is determined using certain discounted cash flo
f w and market multiple methods. Estimated cash flo
f ws may
extend far into the future and, by their natur
t
e, are diffi
f cult to determine over an extended timeframe. Factors that may materially
affe
f ct the estimates include, among others, macroeconomic conditions such as a deterioration in general economic conditions
and economic forecasts, competitive for
f
ces, customer behaviors and attrition, changes in revenue growth trends, cost struc
r
tures
and technology, and changes in discount rates, growth rate, terminal values, and specific industry o
r
r market sector conditions.
Additionally, we perform a market capitalization reconciliation to suppor
u
t the appropriateness of our reporting unit fai
f r values
and impairment test results. In performing this reconciliation, we compare the sum of fai
f r value of the reporting units to our
market capitalization, adju
d sted for the present value of estimated synergies which a market participant acquirer could
reasonabl
a y expect to realize fro
f
m a hypothetical acquisition of Valley.
To assist in assessing the impact of potential goodwill or other intangible assets impairment charges at December 31,
2024, the impact of a fiv
f e percent impairment charge on these intangible assets would result in a reduction in pre-tax income of
approximately $99.9 million. See Note 8 to the consolidated financial statements for
f
additional infor
f
mation regarding goodwill
and other intangible assets.
2024 Form 10-K
44
Income Taxes. We are subj
u ect to the income tax laws of the U.S., its states and municipalities. The income tax laws of
the jurisdictions in which we operate are complex and subject to different interpretations by the taxpayer and the relevant
government taxing authorities. In establ
a ishing a provision for income tax expense, we must make judgments and interpre
r
tations
about the appl
a
ication of these inherently complex tax laws to our business activities, as well as the timing of when certain items
may affect taxabl
a e income.
Our interpr
r
etations may be subject to review during examination by taxing authorities and disputes may arise over the
respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately
through the court systems when appl
a
icable. We monitor relevant tax authorities and revise our estimate of accrue
r
d income taxes
due to changes in income tax laws and their interpretation by the courts and regulatory a
r
uthorities on a quarterly basis.
Revisions of our estimate of accrue
r
d income taxes also may result fro
f
m our own income tax planning and fro
f
m the resolution of
income tax controversies. Such revisions in our estimates may be material to our operating results for any given quarter.
The provision for income taxes is composed of current and defer
f red taxes. Defer
f red taxes arise fro
f
m diffe
f rences between
assets and liabi
a lities measured for fin
f ancial reporting versus income tax return purpos
r
es. Defer
f red tax assets are recognized if,
in management’s judgment, their realizability is determined to be more likely than not. We perform regular reviews to ascertain
the realizability of our deferred tax assets. These reviews include management’s estimates and assumptions regarding fut
f ur
t
e
taxabl
a e income, which also incorpor
r
ate various tax planning strategies. In connection with these reviews, if we determine that a
portion of the deferred tax asset is not realizable, a valuation allowance is establ
a ished. Management determined it is more likely
than not that Valley will realize its net defer
f red tax assets, except for
f
immaterial valuation allowances, as of December 31, 2024
and 2023.
We also maintain, when necessary, a reserve related to certain tax positions that management believes contain an element
of uncertainty. An uncertain tax position is measured based on the largest amount of benefit that management believes is more
likely than not to be realized. Our income tax expense refle
f cted a decrease of $46.4 million in 2024 and increases of $3.0
ill
million a d
nd $1.8 million in 2023 and 2022, respectively, to our tax provision related to reserve for uncertain tax liabi
a lity
positions and/or accrue
r
d interest related to such positions at December 31, 2024, 2023 and 2022, respectively.
See Notes 1 and 13 to the consolidated financial statements and the “Executive Summary” and “Income Taxes” sections
in this MD&A for an additional discussion on the accounting for
f
income taxes.
New Authoritative Accounting Guidance. See Note 1 of the consolidated financial statements for
f
a description of
recent accounting pronouncements including the dates of adoption and the anticipated effe
f ct on our results of operations and
financial condition.
Executive Summary
Company Overview. At Dece b
mber 31, 2024, V lalley h
y h d
ad cons lolididat d
ed total assets of $62.5 bibillllion, tot lal ne l
t loans of
$48.2 bibilli
llion, tot lal deposits of $50.1 bibillllion and tot lal h
shar h
eh lolders’ e
i
qui yty of $7.4 bibillllion. Our commer ici lal ba k
nk opera itions
in lcl d
ude bran h
ch offifi
f ce loca itions in nor hthern a d
nd central New Jers y
ey, the New York City
ity boroughs
oughs of Ma h
nhattan, Br
kl
ooklyn and
Queens, Lo g
ng Isla d
nd, Westchester County, New York,
l
Floridida, Calif
lifor
f
inia,
l
Al b
abama a d
nd lIllilin iois. Of our current 229 bran h
ch
network, 56 percent, 18 percent, a d
nd 18 percent of hth b
e branches are locat d
ed in New Jersey, New York, and Flo irida, respectiv lely,
i
wi hth hthe rem iai ini g
ng 8 percent of hth b
e branche i
s in Alaba
a
ma, C lalififor
f
inia a d
nd lIllili
i
nois combibined. Over hthe past sever lal years, we have
grown sigig inififican ltly through
ough orga inic efforts a d
nd our ba k
nk acq iui isi ition of Bank Leu i
mi USA on Aprilil 1, 2022.
Weather Related Events. In earlyly Janua y
ry 2025, destructive wilildf
dfir
f es br k
oke out in hthe P
i
acifific P lalis d
ades area of Los
Angeles, Calif
lifor
f
inia. At hthis itime, w h
e have minim lal didirect loan exposure to thihis area, however, we continue to lclos lely m
i
onitor
hthe ongoi
ngoi g
ng impact of hthese a d
nd other r g
egional wilildf
dfir
f es on our Calif
lifor
f
inia clilient base and,
h
where appr
a
opriate, we wilill work
construc
r
itiv lely with i
h i di
ndi ividual b
l borrowers. We are co
i
mmitt d
ed to hth g
e greater Los A g
ngeles market, and recently
tly opened a bran h
ch
locatio i
n in Beverlyly
i
Hilllls in August 2024. At December 31, 2024, appr
i
oximatelyly $1.7 billion, or 3.5 percent, of our $48.8 billion
loan portfol
f io is located in Califor
f
nia and mostly consists of commercial real estate loans. We also have a relatively small
amount of Califor
f
nia municipal bond issuers within our AFS and HTM investment securities portfol
f ios at December 31, 2024
and we do not expect any impairment of these securities at this time.
As of December 31, 2024, hthe credidit qualility of our
l
Floridid l
a loan portf lol
f io has also rem iained resili
ilient in hthe afterma hth of
Hu i
rricanes Helene and Mililton,
h
which h
h hit
l
Floridid i
a in Septe b
mber and Oct b
ober 2024, respectiv lely. At hthis itime, there have been
rela itiv lely few
f
loan conces isions (mostly
tly in hthe for
f
m of l
f loan p y
ayment deferrals up to 90 days) f
) for
f
didistressed b
d borrower i
s impact d
ed
by
by hth h
e hur iricanes. At Dece b
mber 31, 2024, hth h
e hur iricanes didid not have a sigig inififican i
t impact on hth l
e lev lel of reserves or expect d
ed
loan h
charge-offs
i
wi hthin our lallowance for
f
loan losses. As a res lult, our pr
i
ovi ision fo l
r loa l
n losses for
f
hthe four
f
hth quarter 2024 was
net of an $8.0
i
milli
llion release of qualilita itive reserves for estimat d
ed losses r lelat d
ed to hth h
e hur iricanes in our lallowance at Septe b
mber
30, 2024.
45
2024 Form 10-K
Financial Condition. During 2024, we continued to strengthen the position of our balance sheet to best perform
f
in the
current economic environment, while also prude
r
ntly managing and reduc
d
ing the overall risk of our loan portfol
f io. The
following items, including key balance sheet initiatives, are highlights at Dece b
mber 31,
.
2024
•
Commercial Real Estate Loan Concentration: Total commercial real estate loans (including construc
r
tion loans) totaled
$29.6 billion, or 60.7 percent of total loans at Dece b
mber 31, 2024 as compared to $32.0 billion, or 63.7 percent of total
loans at December 31, 2023. While commercial real estate lending remains a key pillar of the success of our relationship
banking model and our lending expertise, we continue to proactively diversify our loan portfol
f io by reducing new
originations of certain types of transactional commercial real estate lending, such as non-owner occupi
u ed and multifamily
loans to single-product borrowers. We remain foc
f
used on growing our commercial and industrial, owner occupied
commercial real estate, and consumer loan portfol
f ios. As a result, we have a current balance sheet goal to reduc
d
e our CRE
loan concentration ratio to below 350 percent by December 31, 2025. At December 31, 2024, our CRE loan concentration
ratio declined to 362 percent as compared to 421 percent and 474 percent at September 30, 2024 and December 31, 2023,
respectively. The decline in the ratio was largely due to (1) bulk sales of commercial real estate and construc
r
tion loans
completed in the first half of 2024 and the fourth quarter 2024, (2) our prefer
f red and common stock issuances in the
second half of 2024, and (3) loan repayment activity in 2024, which outpa
t
ced new and refinanced loan volumes due to the
planned lower production within the non-owner occupi
u ed and multifam
f
ily loan categories. See fur
f
ther details of our loan
activities under the “Loan Portfol
f io” section below.
•
Regulatory Capital and Shareholders' Equity: Total shareholders' equity increased $733.7 million to $7.4 billion at
December 31, 2024 as compared to December 31, 2023 largely due
d
to net proceeds of $448.9 million and $144.7 million
from the issuances of common stock and Series C prefer
f red stock through registered public offe
f rings in November and
August 2024, respectively, and retained earnings generated fro
f
m our 2024 net income. Valley's total risk-based capital,
common equity Tier 1 capital, Tier 1 capital and Tier 1 leverage capital ratios were 13.87 percent, 10.82 percent, 11.55
percent, and 9.16 percent, respectively, at Dece b
mber 31, 2024 as compared to 11.76 percent, 9.29 percent, 9.72 percent
and 8.16 percent, respectively, at December 31, 2023. Currently, we expect that Valley's common equity Tier 1 capital
will gradua
d
lly increase to appr
a
oximately 11 percent by December 31, 2025 largely through projected growth in our
retained earnings and continuous management of the overall regulatory r
r
isk weighted asset profile of our balance sheet,
including the goal to reduc
d
e our commercial real estate loan concentration. See the "Capital Adequacy" section below for
more information.
•
Allowance for
f
Credit Losses: The ACL for loans totaled $573.3 million and $465.6 million at Dece b
mber 31, 2024 and
December 31, 2023, respectively, representing 1.17 percent and 0.93 percent of total loans at each respective date. The
increase refle
f cts, among other fac
f
tors, an increase in quantitative reserves across most of our commercial loan categories
driven by higher net loan charge-offs
f
and nearly 8 percent loan growth in our commercial and industrial loan portfol
f io in
2024. Given our current projections for continued growth in our commercial and industrial loan portfol
f io and credit trends
within our loan portfol
f io, we anticipate the ACL will migrate towards appr
a
oximately 1.25 percent of total loans at
December 31, 2025. However, we can provide no assurance that our actual future ACL for
f
loans required under our
CECL methodology will not exceed this current projection due to the uncertain nature of our assumptions. See the
“Allowance for
f
Credit Losses" section for
f
additional infor
f
mation.
•
Credit Quality: Non-performing assets (NPAs) as a percentage of total loans and NPAs increased to 0.76 percent at
December 31, 2024 as compared to 0.58 percent at December 31, 2023. Total net loan charge-offs t
f
o average loans were
0.40 percent for
f
the four
f
th quarter 2024 as compared with 0.13 percent for
f
the four
f
th quarter 2023. See the “Non-
Performing Assets” section for additional infor
f
mation.
•
Liquid Assets: Our liquid assets totaled $5.5 billion at Dece b
mber 31,
,
2024 representing 9.6 percent of interest earning
assets as compared with $2.4 billion, or 4.3 percent of interest earning assets at December 31, 2023. We continue to
maintain significant access to readily availabl
a e, diverse fundi
f
ng sources to fulfill
f
both short-term and long-term funding
needs. Currently, we have a strategic goal to maintain a ratio of loans to deposits at or below 97 percent in 2025, which is
relatively unchanged as compared with our actual ratio of loans to deposits of 97.5 percent at Dece b
mber 31, 2024 S
.
ee the
“Bank Liquidity” section for additional infor
f
mation.
•
Deposits: Total deposits increased $833.0 million to $50.1 billion at Dece b
mber 31, 2024 as compared to $49.2 billion at
December 31, 2023 mainly due to higher direct commercial customer money market and NOW deposits, partially offs
f et
by a decrease in both brokered and retail time deposits. Total indirect customer deposits (including both brokered money
market and time deposits) totaled $7.1 billion at Dece b
mber 31, 2024 and declined $397.2 million as compared with
December 31, 2023. During the four
f
th quarter 2024, we used a significant portion of the net proceeds from
f
the sale of
commercial real estate loans held for sale to repay maturing indirect customer deposits. See the “Deposits and Other
Borrowings” section for
f
more details.
2024 Form 10-K
46
•
Investment Securities: Total investment securities increased $1.9 billion to $7.0 billion, or 11.2 percent of total assets, at
December 31, 2024 as compared to December 31, 2023 mainly due to targeted purchases of residential mortgage backed
securities primarily issued by Ginnie Mae (with a risk-weighting of zero for
f
regulatory c
r
apital purpos
r
es) in the second
half of 2024 that were classified as AFS. See the “Investment Securities Portfol
f io” section for
f
more details.
Annual Results. Net income for the year ended December 31, 2024 was $380.3 million, or $0.69 per diluted common
share as compared to $498.5 million, or $0.95 per diluted common share for
f
2023. The $118.2 million decrease in net income
as compared to 2023 was mainly due
d
to the fol
f lowing changes:
•
a $
a 258.6 million increase in our pr
i
ovi ision for credidi l
t losse d
s d irive b
n by h
y higigher quantitative reserves for
f
commercial l
l loans;
a
•
$36.8 million decrease in net interest income mostly due to a higher cost of deposits, partially offs
f et by an increase in
loan yield; and
•
a $1.2 million decrease in non-interest income;
h
Which was partially
lly offs
f et by:
by:
•
a $121.6 million decrease in income tax expense mostly due to lower pre-tax income and a fourth quarter 2024 tax benefit
f
resulting fro
f
m a $46.4 million total reduction in uncertain tax liabi
a lity positions and related accrued interest; and
•
a $56.8 million decrease in non-interest expense mainly due
d
to a $67.1 million decrease in non-core items, including a
$41.5 million reduction in the FDIC special assessment expense related to certain bank fai
f lures (highlighted in the “—
Non-GAAP Financial Measures” section below);
See the “Net Interest Income,” “Non-Interest Income,” “Non-Interest Expense,” a d
nd “Income Taxes” sec itions in hthis
MD&A for mor d
e det iails on hth i
e items b
above and o hther non-core items impacting our 2024 annual res lults.
Operating Environment. Re lal gros d
s domes itic pr d
oduc (
t (GD )
P) increas d
ed at an annual rate of 2.8 percent as compar d
ed to
2.9 percen d
t dur
d
ing 2023.
h
Th
i
e increas
i
e in 2024 was p irima irilyly driven by
by gross p irivate domes itic investment and personal
consumption.
h
Th
g
e g iains were partlyly offs
f et by
by decrease i
s i
g
n government consumption expe di
nditures a d
nd net exports. I fl
nflation
continued to m d
odestlyly improve
i
wi hth hthe consumer pric
i
e i d
ndex on a year ove y
r year ba isi
d
s d
l
ecelerating fro
f
m 3.3 percent at
December 31, 2023 to 2.9 percent at December 31, 2024.
Star iting i
g in midid-Septe b
mber 2024 at its Federal Open Market Com i
mittee meeting,
hthe F d
eder lal Reserve began to
incrementally
lly lower the ta g
rget ra g
nge for the federal f
l f
d
unds
f
rate at hthree consecu itive meetings from 5.25 - 5.50 percent to the
current ta g
rget of 4.25 - 4.50 percen i
t in December 2024. In December 2024, hthe Com i
mitte i
e i di
ndicat d
ed it expects j
s just two 25 ba isis
poi
points cut i
s in 2025. At its recent meeting i
g in Janua y
ry 2025, hthe Com i
mitte l
e left t
f
he current ta g
rget federal f
l f
d
unds
f
rate uncha g
nged
la g
rg lely d
y due
d
to
h
a healthy
hy labor
a
ma k
rket, elevated i
d infla
f
ition and an uncertain economic outlo k
ok caused b
d by sever lal factors, in lcl di
udi g
ng
hthe u k
nknow i
n impact of poten iti lal new p lolicie i
s implement d
ed by
by hthe U.S. pre isidential administration. In d
addidi ition, hthe Com i
mittee
indidicat d
ed it wo luld continue reducing i
g its h l
holdidi g
ngs of Treasury s
r
ecu iri ities a d
nd
g
agen y
cy debt and mor gtg g
age-ba k
ck d
ed secu iri ities, as
desc iribed i
d i i
n its previouslyly announc d
ed lplans.
h
The 10-year U.S. Treasu y
ry not y
e yieldld increased to 4.58 at Dece b
mber 31, 2024 from 3.88 percent one year g
ago, and the 2-
year U.S. Treasury n
r
ot y
e yieldld ended 2024 increased
b
d 2 basis
i
points to 4.25 percent at December 31, 2024 as compar d
ed to 2023.
Total l
l loans and l
d leases for
f
U.S. commercial b
l banks increas d
ed 2.9 percen i
t in 2024 compar d
ed to 2.2 percen i
t in 2023.
Consumer loan g
s gre
b
w by 3.0 percent,
h
whilile commercial a d
nd industrial a d
nd commercial r
l
eal estate loan i
s increas d
ed 1.3 percent
and 1.2 percent, respec itiv lely, from 2023 to 2024. Over lall, most ba k
nks reported easing of u d
nderw iri iting sta d
nda d
rds on commercial
loans.
h
Throughout
ughout hth
y
e year of 2024, hthe combibina ition of r lelativ lely h
y higigh mor gtg g
ag
i
e interest rates and tigight inventorie
k
s kept
re isidential mor gtg g
ag l
e loan activity
ity low.
Afte
f
y
r yieldld curv i
e inversion of more than two years, hthe normalilization of i
f interest rates in late 2024 h
sh
l
ould set hthe stage for
a mor b
e benigign opera iti g
ng en ivironment for
f
ba k
nks in 2025.
h
The outlo k
ok for economic grow hth, a d
nd general opti i
imism aro
d
und ea isi g
ng
ba
ba k
nk regul
gulatio
i
n in the wake of hthe U.S. pre isidential election fur
f
hther suppor
u
ts hthe expectation for
f
an improv d
ed opera iti g
ng
en ivironment. However, several o hther factors, in lcl di
udi g
ng hthose recently
tly not d
ed by
by hthe F d
eder lal Reserve, have made hthe fut
f ur
t
e
didirection of the economy uncertain, a d
nd
h
sh
l
ould economic co di
ndi itions dete iriorate, cau isi g
ng business activity
ity, spe di
ndi g
ng and
investment to de lcline, hthese a d
nd other fact
f
ors m y
ay
d
advers lely i
y impact our fifinancial res lults, a
h
s higighlhligight d
ed in hthe rem iai ini g
ng
MD&A didiscus ision below.
Deposits and Other Borrowi g
ngs. We defifine cumula itive deposit beta as hthe cha g
nge in our cost of total d
l deposits rela itive
to hthe cha g
nge in hthe average Fed Funds (uppe
u
b
r b
d)
ound) rate. W d
e dififfe
f rentiate between hthe cum lulativ d
e deposit beta during the rate
47
2024 Form 10-K
increase cycle, whihi h
ch bega
i
n in the fifirst quarter of 2022 and e d
nded i
d in the seco d
nd quarter of 2024, and the cumula itiv d
e deposit
be
beta during the rate decrease y
cy lcle whihi h
ch started i
d in the hthird quarter of 2024. Our cum lulativ d
e deposit beta in hth i
e interest rate
increase cycle (b
(between Dece b
mber 31, 2021 and June 30,
)
2024) was appr
a
i
oximatelyly 58 percent.
h
The F d
eder lal Reserve start d
ed an
interest rate decrease y
cy lcl d
e dur
d
ing the hthird quarter 2024. Our cum lulativ d
e deposit beta in hthis current interest rate decrease y
cy lcle
(b
(between June 30, 2024 and December 31,
)
2024) was 34 percent. Our cum lulativ d
e deposit beta for the four hth quarter 2024 was
51 percent.
h
Th b
e bet i
a in the four hth quarter was m iai lnly d
y d irive b
n by a fullll quarter’s impact of hthe F d
eder lal Reserve' i
s i ini itial rate cut,
and our
b
abili
ili yty to broadldly r d
educ
d
e costs of interest bearing d
g deposit pr d
oducts co
l
upl d
ed
i
wi hth an overallll increas
i
e in non-interest
be
bearing d
g deposit balances from customers and a reduc ition of hihighe
gher cost, indidirect customer CDs. See the "Net Interest Income"
section for
f
d
addidi itional d
l det iails on hthe cha g
nge i
s in our cost of deposits during the four hth quarter 2024.
Total average deposits increased by $1.3 billion to $49.8 billion for
f
the year ended December 31, 2024 as compared to
2023. Average savings, NOW and money market deposit balances increased $1.9 billion largely due to our strong focus on
deposit generation fro
f
m both direct commercial customers and national specialized deposits, as well as continuing to benefit
from some inflo
f ws from the non-interest bearing deposit category.
r
Average time deposits balances increased $716.5 million
primarily due to our increased use of fully insured indirect customer (i.e., brokered) CDs as an alternate and attractively priced
funding source (mainly compared to similar term FHLB borrowings) starting in the second quarter 2024. These increases were
partially offs
f et by a $1.4 billion decrease in average non-interest bearing deposits caused by the level of market interest rates
and a continued shift in customer prefer
f ence to interest bearing deposit products and other attractive investment alternatives to
deposits during most of 2024. Aver g
age non-interest bearing d
g deposits; sa ivi g
ngs, NOW and money marke d
t deposits; and time
deposits represented appr
a
i
oximatelyly 23 percent, 51 percent and 27 percent of total d
l deposit a
s t December 31, 2024, respectiv lely,
as compar d
ed to 26 percent, 48 percent and 26 percent of total d
l deposits at December 31, 2023, respectiv lely.
Actual ending balances for deposits increased $833.0 million to $50.1 billion at December 31, 2024 as compared to 2023
mostly due to an increase of $1.8 billion in savings, NOW and money market deposits, partially offs
f et by decreases of $834.2
million and $110.8 million in time and non-interest bearing deposits, respectively. The increase in savings, NOW and money
market deposits was largely due to broad-based direct commercial deposits and, to a lesser extent, consumer customer inflows,
as well as increases in digital and national specialized deposit accounts at December 31, 2024. The decrease in time deposits
was mostly due to maturity and repayment of both indirect and direct customer CDs, as we elected to pay down these higher
cost funding sources with excess cash liquidity during the fourth quarter 2024. As a result, total indirect customer deposits
(primarily brokered CDs and, to a lesser extent, money market deposits) decreased to $7.1 billion at December 31, 2024 as
compared to $9.1 billion and $7.5 billion at September 30, 2024 and December 31, 2023, respectively. While non-interest
bearing balances continued to be challenged by the level of market interest rates and the afor
f
ementioned changes in customer
behavior during most of 2024, we did experience solid non-interest bearing deposit inflows fro
f
m both commercial and
consumer customers dur
d
ing the fourth quarter 2024 resulting in a $274.9 million increase to $11.4 billion at December 31, 2024
from September 30,
.
2024 Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits
represented appr
a
oximately 23 percent, 53 percent and 25 percent of total deposits as of December 31, 2024, respectively, as
compared to 23 percent, 50 percent and 27 percent as of December 31, 2023, respectively.
The fol
f lowing tabl
a e summarizes CDs included in time deposits in excess of the FDIC insurance limit by maturity at
December 31, 2024:
2024
(in thousands)
Less than three months
$
944,311
Three to six months
491,200
Six to twelve months
721,818
More than twelve months
209,319
Total
$
2,366,648
Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits (i.e.,
deposits eliminated in consolidation), totaled approximately $12.6 billion, or 25 percent of total deposits, at December 31, 2024
as compared to $12.2 billion, or 25 percent of total deposits, at December 31, 2023.
While we maintained a diversified commercial and consumer deposit base at December 31, 2024, deposit gathering
initiatives and our current deposit base could be challenged due
d
to market competition, attractive non-deposit investment
alternatives in the fin
f ancial markets and other fact
f
ors. As a result, we cannot guarantee that we will be able to maintain deposit
levels at or near those reported at December 31, 2024. Management continuously monitors liquidity and all availabl
a e fundi
f
ng
sources including non-deposit borrowings discussed below. See the "Liquidity and Cash Requirements" section of this MD&A
for additional infor
f
mation.
2024 Form 10-K
48
h
The f lol
f lo i
wi g
ng tablbl
a e presents average h
short-term a d
nd lo g
ng-term borro i
wi g
ngs for the years e d
nded Dece b
mber 31, 2024 and
2023:
2024
2023
(in thousands)
Average short-term borrowings:
FHLB advances
$
375,505
$
1,713,448
Securities sold under repurchase agreements
64,946
89,430
Federal funds
f
purchased
4,809
78,822
Total
$
445,260
$
1,881,700
Average long-term borrowings:
FHLB advances
$
2,428,428
$
1,446,790
Subor
u
dinated debt
641,206
723,852
Junior subor
u
dinated debentures issued to capi
a tal trusts
57,283
56,936
Total
$
3,126,917
$
2,227,578
Average short-term borrowings decreased $1.4 billion at December 31, 2024 as compared to 2023 mostly due to a shift
from the use of short-term FHLB advances to primarily indirect customer money market and time deposits in our average mix
of funding sources and $1.0 billion of new long-term FHLB advances issued in the fir
f st quarter 2024.
Average long-term borrowings (including junior subor
u
dinated debentures issued to capit lal trus
r
ts
h
which are presented
separatelyly on hthe cons lolididat d
ed statements of fifinancial c
di
ondi iti
)
on) increased $
d 899.3 million at December 31, 2024 as compared to
2023.
h
Th i
e increas w
e
as mainly due to the new FHLB advances totaling $1.0 billion issued in early March 2024. The new long-
term FHLB borrowings have a weighted average rate of 4.54 percent and a weighted average remaining contractua
t
l term of 2.8
years at December 31, 2024.
Actual ending balances for short-term borrowings decreased $845.1 million to $72.7 million at December 31, 2024 as
compared to 2023 mainly due to a moderate decline in securities sold under repurchase agreements. Long-term borrowings
increased $845.8 million to $3.2 billion at December 31, 2024 as compared to $2.3 billion at December 31, 2023 primarily due
d
to the new FHLB advances issued during the first half of 2024. See the “Net Interest Income” sectio b
n b lelow and Note 10 to hthe
cons lolididat d
ed fifinancial statements for
f
additional details on our borrowed funds
f
.
Non-GAAP Financial Measures. The table below presents selected performance indicators, their comparative non-
GAAP measures and the (non-GAAP) efficiency ratio for the periods indicated. Valley believes that the non-GAAP financial
measures provide useful
f
suppl
u
emental infor
f
mation to both management and investors in understanding Valley’s underlying
operational performance, business, and performance trends, and may faci
f
litate comparisons of our current and prior
performance with the performance of others in the fin
f ancial services industry.
r
Management utilizes these measures, on a
consolidated basis, for internal planning, forecasting and analysis purpos
r
es. Management believes that Valley’s presentation
and discussion of this suppl
u
emental infor
f
mation, together with the accompanying reconciliations to the GAAP financial
measures, also allows investors to view our overall performance in a manner similar to management. These non-GAAP
financial measures should not be considered in isolation, as a substitute for or superior to financial measures calculated in
accordance with GAAP. These non-GAAP financial measures may also be calculated diffe
f rently from similar measures
disclosed by other companies.
49
2024 Form 10-K
The fol
f lowing tabl
a e presents our annualized performance ratios for
f
the three years ended December 31, 2024, 2023 and
2022:
2024
2023
2022
Selected Perfor
f
mance Indicators
($ in thousands, except for
f
%)
GAAP measures:
Net income, as reported
$
380,271
$
498,511
$
568,851
Return on average assets
0.61 %
0.82 %
1.09 %
Return on average shareholders’ equity
5.51
7.60
9.50
Non-GAAP measures:
Net income, as adju
d sted
$
343,559
$
554,271
$
650,452
Return on average assets, as adjusted
0.55 %
0.91 %
1.25 %
Return on average shareholders’ equity, as adjusted
4.98
8.45
10.87
Return on average tangible shareholders’ equity (ROATE)
7.78
11.05
14.08
ROATE, as adju
d sted
7.03
12.29
16.10
Effi
f ciency ratio, as adju
d sted
57.98 %
56.62 %
50.55 %
As of December 31,
Common Equity Per Share Data:
2024
2023
2022
Book value per common share (GAAP)
$
12.67
$
12.79
$
12.23
Tangible book value per common share (non-GAAP)
9.10
8.79
8.15
Non-GAAP Reconciliations to GAAP Financial Measures
Adju
d sted net income for
f
the three years ended December 31, 2024, 2023 and 2022 is computed as follows:
2024
2023
2022
(in thousands)
Net income, as reported (GAAP)
$
380,271
$
498,511
$
568,851
Non-GAAP adju
d stments:
Add: FDIC Special assessment (1)
8,757
50,297
—
Add: Restructur
t
ing charge (2)
2,039
9,969
—
Add: Provision for credit losses for
f
availabl
a e for
f
sale securities (3)
—
5,000
—
Add: Non-PCD provision for credit losses (4)
—
—
41,012
Add: Merger related expenses (5)
—
14,133
71,203
Add: Litigation reserve (6)
—
3,540
—
Add: Net losses on the sale of commercial real estate loans (7)
13,660
—
—
Add: Losses (gains) on availabl
a e for
f
sale and held to matur
t
ity debt
securities, net (8)
15
(401)
(95)
Less: Gain on sale of commercial premium fin
f ance lending division (9)
(3,629)
—
—
Less: Net gains on sales of office buildings (9)
—
(6,721)
—
Less: Litigation settlements (10)
(7,334)
—
—
Less: Income tax benefit
f
(11)
(46,431)
—
—
Total non-GAAP adju
d stments to net income
(32,923)
75,817
112,120
Income tax adjustments related to non-GAAP adju
d stments (12)
(3,789)
(20,057)
(30,519)
Net income, as adju
d sted (non-GAAP)
$
343,559
$
554,271
$
650,452
2024 Form 10-K
50
(1) Included in the FDIC insurance assessment.
(2) Represents severance expense related to workforce reduc
d
tions within salary and employee benefits
f
expense.
(3) Included in provision for credit losses for
f
availabl
a e for
f
sale and held to matur
t
ity securities (tax disallowed).
(4) Represents provision for credit losses for
f
non-PCD assets and unfunde
f
d credit commitments acquired dur
d
ing the period.
(5) Primarily represents data processing termination costs within technology, furniture and equipment expense for
f
2023. Merger related
expenses were primarily salary and employee benefit
f s expense for
f
2022.
(6) Represents legal reserves and settlement charges included in professional and legal fees
f
.
(7) Represents actual and mark to market losses on commercial real estate loan sales included in (losses) gains on sales of loans, net.
(8) Included in gains (losses) on securities transactions, net.
(9) Included in gains on sale of assets, net.
(10) Represents recoveries from legal settlements included in other income.
(11) Represents the income tax benefit fro
f
m the reduction in uncertain tax liabi
a lity positions and accrue
r
d interest and penalties due
d
to statut
t e
of limitation expirations included in income tax expense.
(12) Calculated using the appropriate blended statutory tax rate for
f
the app
a
licable period.
In addition to the items used to calculate net income, as adjusted, in the table above, our net income is, from time to time,
impacted by fluctuations in the overall level of net gains on sales of loans, wealth management and trust fees, and capi
a tal
markets fees
f
. These amounts can vary widely from period to period due
d
to, among other fact
f
ors, the amount and timing of
residential mortgage loans originated for sale, brokerage and tax credit investment advisory activities and commercial loan
customer demand for certain interest rate swap products. See the “Non-Interest Income” section below for more details.
Adju
d sted annualized return on average assets for the three years ended December 31, 2024, 2023 and 2022 is computed
by dividing adju
d sted net income by average assets, as fol
f lows:
2024
2023
2022
($ in thousands)
Net income, as adjusted (non-GAAP)
$
343,559
$
554,271
$
650,452
Average assets (GAAP)
$ 61,973,902
$ 61,065,897
$ 52,182,310
Annualized return on average assets, as adju
d sted (non-GAAP)
0.55 %
0.91 %
1.25 %
Adju
d sted annualized retur
t
n on average shareholders' equity for the three years ended December 31, 2024, 2023 and 2022
is computed by dividing adju
d sted net income by average shareholders' equity, as fol
f lows:
2024
2023
2022
($ in thousands)
Net income, as adjusted (non-GAAP)
$
343,559
$
554,271
$
650,452
Average shareholders' equity (GAAP)
$
6,900,204
$
6,558,768
$
5,985,236
Annualized return on average shareholders' equity, as adjusted (non-GAAP)
4.98 %
8.45 %
10.87 %
ROATE and adju
d sted ROATE for
f
the three years ended December 31, 2024, 2023 and 2022 are computed by dividing net
income and adjusted net income, respectively, by average shareholders’ equity less average goodwill and average other
intangible assets, as fol
f lows:
2024
2023
2022
($ in thousands)
Net income, as reported (GAAP)
$
380,271
$
498,511
$
568,851
Net income, as adju
d sted (non-GAAP)
$
343,559
$
554,271
$
650,452
Average shareholders’ equity (GAAP)
$
6,900,204
$
6,558,768
$
5,985,236
Less: Average goodwill and other intangible assets (GAAP)
2,012,713
2,047,172
1,944,503
Average tangible shareholders’ equity (non-GAAP)
$
4,887,491
$
4,511,596
$
4,040,733
Annualized ROATE (non-GAAP)
7.78 %
11.05 %
14.08 %
Annualized ROATE, as adju
d sted (non-GAAP)
7.03 %
12.29 %
16.10 %
51
2024 Form 10-K
The efficiency ratio for
f
the years ended December 31, 2024, 2023 and 2022 is computed as follows:
2024
2023
2022
($ in thousands)
Total non-interest expense, as reported (GAAP)
$
1,105,860
$
1,162,691
$
1,024,949
Less: FDIC Special assessment (1)
8,757
50,297
—
Less: Restructur
t
ing charge (2)
2,039
9,969
—
Less: Merger related expenses (3)
—
14,133
71,203
Less: Litigation reserve (4)
—
3,540
—
Less: Amortization of tax credit investments
18,946
18,009
12,407
Total non-interest expense, as adju
d sted (non-GAAP)
1,076,118
1,066,743
941,339
Net interest income, as reported (GAAP)
1,628,708
1,665,478
1,655,640
Total non-interest income, as reported (GAAP)
224,501
225,729
206,793
Add: Net losses on the sale of commercial real estate loans (5)
13,660
—
—
Less: Net gains on sales of office buildings (6)
—
(6,721)
—
Less: Gain on sale of commercial premium fin
f ance lending division (6)
(3,629)
—
—
Less: Losses (gains) on availabl
a e for
f
sale and held to matur
t
ity debt
securities transactions, net (7)
15
(401)
(95)
Less: Litigation settlements (8)
(7,334)
—
—
Total net interest income and non-interest income, as adjusted (non-
GAAP)
$
227,213
$
218,607
$
206,698
Gross operating income, as adju
d sted (non-GAAP)
$
1,855,921
$
1,884,085
$
1,862,338
Effi
f ciency ratio, (non-GAAP)
57.98 %
56.62 %
50.55 %
(1)
Included in the FDIC insurance expense.
(2)
Represents severance expense related to workforce reduc
d
tions within salary and employee benefits
f
expense.
(3)
Prima irilyly represents data proces isi g
ng termination costs
i
wi hthin te h
ch
l
nol gy
ogy, furniture and e
i
quipment expense for
f
2023. Me g
rger related
expenses were prima irilyly sala y
ry and employe b
e benefit
f s expense for
f
2022.
(4)
In lcl d
uded i
d in profe i
ssional a d
nd legal f
l fees
f
.
(5)
In lcl d
uded i
d i (
n (losses) g
) g iains on sales of l
f loans, net.
(6)
Included in gains on sales of assets, net.
(7)
Included in gains (losses) on securities transactions, net.
(8)
Represents recoveries from legal settlements included in other income.
Tangible book value per common share is computed by dividing shareholders’ equity less prefer
f red stock, goodwill and
other intangible assets by common shares outstanding for the two years ended December 31, 2024 and 2023, as follows:
2024
2023
($ in thousands, except for
f
share data)
Common shares outstanding
558,786,093
507,709,927
Shareholders’ equity (GAAP)
$
7,435,127
$
6,701,391
Less: Prefer
f red stock
354,345
209,691
Less: Goodwill and other intangible assets
1,997,597
2,029,267
Tangible common shareholders’ equity (non-GAAP)
$
5,083,185
$
4,462,433
Tangible book value per common share (non-GAAP)
$
9.10
$
8.79
Book value per common share (GAAP)
12.67
12.79
2024 Form 10-K
52
Net Int
I
er
t
est Inc
I
ome
Net interest income consists of interest income and dividends earned on interest earning assets less interest expense on
interest bearing liabi
a lities and represents the main source of income for Valley. The net interest margin on a ful
f ly tax equivalent
basis is calculated by dividing tax equivalent net interest income by average interest earning assets and is a key measurement
used in the banking industry t
r
o measure income fro
f
m interest earning assets.
Annual Period 2024. Net interest income on a tax equivalent basis decreased by $37.1 million to $1.6 billion for
f
2024 as
compared to 2023. Interest income on a tax equivalent basis increased $218.3 million to $3.4 billion for
f
2024 as compared to
2023. The increase was mostly due to higher yields on both new originations and adjustabl
a e rate loans for most of 2024 and a
$678.7 million increase in average loan balances driven by organic new loan volumes and, to a lesser extent, a continuation of
slower loan prepayments in 2024. The increase in interest income was offse
f
t by an increase of $255.4 million in total interest
expense to $1.7 billion for 2024 as compared to 2023 mainly due to higher costs on most interest bearing deposit products
during the first nine months of 2024 coupled with an increase in average interest bearing deposit balances.
Average interest earning assets totaling $57.3 billion for the year ended December 31, 2024 increased $817.4 million, or
1.4 percent, as compared to 2023 mainly due to a $678.7 million increase in average loan balances driven by organic growth
concentrated mostly in the commercial and industrial, commercial real estate non-owner occupi
u ed and automobile loan
categories of our portfol
f io during 2024. Average taxable investments also increased $750.6 million largely due to additional
purchases of residential mortgage-backed securities classified as availabl
a e for
f
sale during year ended December 31, 2024. These
increases were partially offs
f et by a $568.9 million decrease in average interest bearing cash balances as compared to 2023, as
we significantly reduced the level of excess cash held overnight in the latter half of 2023 and the full year of 2024. The average
interest bearing cash balances were prude
r
ntly held at elevated levels for an extended period of time during 2023 as part of our
liquidity management navigating the fallout from the banking failures in the first half of 2023.
Average interest bearing liabilities increased $2.1 billion to $42.1 billion for
f
the year ended December 31, 2024 as
compared to 2023 mainly due to increases of $2.6 billion and $899.3 million in average interest bearing deposits and long-term
borrowings, respectively, offs
f et by a $1.4 billion decrease in average short-term borrowings. The increase in average interest
bearing deposits was largely due to strong inflows fro
f
m direct commercial customer and specialized national deposits dur
d
ing
2024, as well as greater use of indirect customer CDs as an alternate fundi
f
ng source. Average long-term borrowings increased
as compared to 2023 mostly due to new FHLB advances totaling $1.0 billion issued in early March 2024. The decrease in
average short-term borrowings was mostly the result of a significant shift from the use of short-term FHLB advances to indirect
customer CDs in our mix of liquidity funding sources dur
d
ing 2024. See additional infor
f
mation under "Deposits and Other
Borrowings" in the Executive Summary section above
a
.
Net interest margin on a tax equivalent basis was 2.85 percent for
f
the year ended December 31, 2024 and decreased 11
basis points as compared to 2023.
h
The decrease as compared to 2023 was mostly driven by a 42 basis point increase in the cost
of average interest-bearing liabi
a lities which outpa
t
ced a 30 basis point increase in the yield on average interest earning assets
primarily due to the higher level of short-term market interest rates and a prolonged inverted yield curve during most of 2024.
The cost of total average deposits increased 9 basis points to 3.13 percent for
f
2024 as compared to 2023. The yield on average
loans increased 31 basis points to 6.16 percent for
f
2024 as compared to 5.85 percent in 2023 largely due
d
to higher interest rates
on new originations and adjustabl
a e rate loans for most of 2024. The yield on average taxable investments increased 50 basis
points as compared to 2023 largely due
d
to higher yielding investment securities purchased during 2024. The yield on interest
bearing deposits with banks (mainly overnight cash balances held at the FRB of New York) also increased 32 basis points as
compared to 2023 due to the high level of short-term interest rates dur
d
ing most of 2024.
Fourth Quarter 2024. Net interest income on a tax equivalent basis of $424.3 million for
f
the fourt
f
h quarter 2024
increased $12.5 million and $25.7 million as compared to the third quarter 2024 and four
f
th quarter 2023, respectively. Interest
income on a tax equivalent basis decreased $25.7 million to $836.1 million for
f
the four
f
th quarter 2024 as compared to the third
quarter 2024. The decrease was mostly driven by lower interest income on adjustabl
a e rate loans caused by downward repricing
and lost interest income related to the commercial real estate loan sales dur
d
ing the fourth quarter 2024, partially offset by higher
interest income from targeted purchases of taxabl
a e investments within the availabl
a e for
f
sale securities portfol
f io and higher
yields on new and renewed loan originations. Total i
l interest expense decreased $38.2
il
millilion to $411.8
il
millilion for the four hth
quarter 2024 as compared to the hthird quarter 2024 mainly due to lower costs on most interest bearing deposit products and a
$702.2 million decrease in average time deposit balances primarily related to the repayment of indirect customer CDs
throughout the four
f
th quarter.
Net interest margin on a tax equivalent basis of 2.92 percent for
f
the four
f
th quarter 2024 increased 6 basis points and 10
basis points fro
f
m 2.86 percent and 2.82 percent, respectively, for
f
the third quarter 2024 and four
f
th quarter 2023. The increase as
compared to the third quarter 2024 was mostly due
d
to the 31 basis point decline in our cost of total average deposit, partially
53
2024 Form 10-K
offs
f et by the lower yield on average interest earning assets. The yield on average interest earning assets decreased by 23 basis
points to 5.75 on a linked quarter basis largely due to downward repricing of our adju
d stable rate loans and a higher amount of
our average earning assets held in relatively lower-yielding cash and investment securities, partially offs
f et by higher yielding
investment purchases.
h
The overallll cost of aver g
ag i
e interes b
t bea iri g
ng liliabibi
a lilities d
s ecreased by 37 basis points to 3.85 percent for
f
the
fourth quarter 2024 as compared to the linked third quarter 2024 largely due
d
to lower interest rates on deposits. Our cost of tot lal
aver g
ag d
e deposits wa 2
s .94 percent for
f
the four
f
th quarter 2024 as compared to 3.25 percent and 3.13 percent for
f
the third quarter
2024 and f
d our
f
th quarter 2023, respectiv lely.
Based upon
u
our latest model estimates, we anticipate net interest income growth of approximately 9 to 12 percent for
f
the
full year of 2025 as compared to 2024. While we are optimistic about the proje
o cted net interest income for
f
2025, our forecasts
include several uncertain assumptions, including an expected incremental decrease in our funding costs over the next 12-
months and stabi
a lity in yield from our fixed rate loan portfol
f io. As such, we cannot provide any assurances that our net interest
income or margin will remain at the levels reported for
f
the four
f
th quarter 2024.
2024 Form 10-K
54
The fol
f lowing tabl
a e refle
f cts the components of net interest income for each of the three years ended December 31, 2024,
2023 and 2022:
ANALYSIS OF AVERAGE ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY AND
NET INTEREST INCOME ON A TAX EQUIVALENT BASIS
2024
2023
2022
Average
Balance
Interest
Average
Rate
Average
Balance
Interest
Average
Rate
Average
Balance
Interest
Average
Rate
($ in thousands)
Assets
Interest earning assets:
Loans (1)(2)
$ 50,030,586
$3,079,958
6.16 %
$ 49,351,861
$ 2,887,026
5.85 %
$ 41,930,353
$1,828,576
4.36 %
Taxabl
a e investments (3)
5,741,591
206,898
3.60
4,990,942
154,847
3.10
4,628,353
117,184
2.53
Tax-exempt investments (1)(3)
573,491
24,371
4.25
616,555
25,703
4.17
586,956
22,687
3.87
Interest bearing deposits with
banks
972,258
51,482
5.30
1,541,170
76,809
4.98
921,719
13,064
1.42
Total interest earning assets
57,317,926
3,362,709
5.87
56,500,528
3,144,385
5.57
48,067,381
1,981,511
4.12
Allowance for
f
loan losses
(502,236)
(452,713)
(442,068)
Cash and due
d
from banks
429,075
395,895
386,399
Other assets
4,882,916
4,805,711
4,254,389
Unrealized gains (losses) on
securities availabl
a e for
f
sale, net
(153,779)
(183,524)
(83,791)
Total assets
$ 61,973,902
$ 61,065,897
$ 52,182,310
Liabilities and Shareholders’
Equity
Interest bearing liabilities:
Savings, NOW and money
market deposits
$ 25,148,637
$ 913,963
3.63 %
$ 23,228,453
$
739,025
3.18 %
$ 22,652,502
$
186,709
0.82 %
Time deposits
13,421,273
644,964
4.81
12,704,775
535,749
4.22
5,009,302
69,691
1.39
Total interest bearing deposits
38,569,910
1,558,927
4.04
35,933,228
1,274,774
3.55
27,661,804
256,400
0.93
Short-term borrowings
445,260
22,047
4.95
1,881,700
94,869
5.04
1,024,352
17,453
1.70
Long-term borrowings
3,126,917
147,815
4.73
2,227,578
103,770
4.66
1,504,111
47,190
3.14
Total interest bearing liabi
a lities
42,142,087
1,728,789
4.10
40,042,506
1,473,413
3.68
30,190,267
321,043
1.06
Non-interest bearing deposits
11,208,053
12,558,441
14,789,661
Other liabi
a lities
1,723,558
1,906,182
1,217,146
Shareholders’ equity
6,900,204
6,558,768
5,985,236
Total liabilities and
shareholders’ equity
$ 61,973,902
$ 61,065,897
$ 52,182,310
Net interest income/interest rate
spread (5)
1,633,920
1.77 %
1,670,972
1.89 %
1,660,468
3.06 %
Tax equivalent adju
d stment
(5,212)
(5,494)
(4,828)
Net interest income, as
reported
$1,628,708
$ 1,665,478
$1,655,640
Net interest margin (6)
2.84 %
2.95 %
3.44 %
Tax equivalent effe
f ct
0.01
0.01
0.01
Net interest margin on a fully
tax equivalent basis (6)
2.85 %
2.96 %
3.45 %
(1)
Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.
(2)
Loans are stated net of unearned income and include non-accrua
r
l loans.
(3)
The yield for securities that are classified as AFS is based on the average historical amortized cost.
(4)
Includes junior subor
u
dinated debentures issued to capital trusts which are presented separately on the consolidated statements of
condition.
(5)
Interest rate spread represents the diffe
f rence between the average yield on interest earning assets and the average cost of interest bearing
liabi
a lities and is presented on a fully tax equivalent basis.
(6)
Net interest income as a percentage of total average interest earning assets.
55
2024 Form 10-K
The fol
f lowing tabl
a e demonstrates the relative impact on net interest income of changes in the volume of interest earning
assets and interest bearing liabi
a lities and changes in rates earned and paid by Valley on such assets and liabi
a lities. Variances
resulting fro
f
m a combination of changes in volume and rates are allocated to the categories in proportion to the absolute dollar
amounts of the change in each category.
r
CHANGE IN NET INTEREST INCOME ON A TAX EQUIVALENT BASIS
2024 Compared to 2023
2023 Compared to 2022
Change
Due to
Volume
Change
Due to
Rate
Total
Change
Change
Due to
Volume
Change
Due to
Rate
Total
Change
(in thousands)
Interest income:
Loans*
$
40,137
$
152,795
$
192,932
$
361,377
$
697,073
$ 1,058,450
Taxabl
a e investments
25,103
26,948
52,051
9,714
27,949
37,663
Tax-exempt investments*
(1,822)
490
(1,332)
1,179
1,837
3,016
Federal funds
f
sold and other interest bearing
deposits
(29,868)
4,541
(25,327)
13,437
50,308
63,745
Total increase in interest income
33,550
184,774
218,324
385,707
777,167
1,162,874
Interest expense:
Savings, NOW and money market deposits
64,286
110,652
174,938
4,867
547,448
552,315
Time deposits
31,428
77,787
109,215
200,705
265,353
466,058
Short-term borrowings
(71,155)
(1,667)
(72,822)
23,174
54,242
77,416
Long-term borrowings and junior subor
u
dinated
debentur
t
es
42,492
1,553
44,045
28,178
28,402
56,580
Total increase in interest expense
67,051
188,325
255,376
256,924
895,445
1,152,369
(Decrease) increase in net interest income
$
(33,501) $
(3,551) $
(37,052) $
128,783
$
(118,278) $
10,505
*
Interest income is presented on a tax equivalent basis using a 21 percent fed
f
eral tax rate.
Non-In
-
terest Income
Non-interest income represented 6.3 percent and 6.7 percent of total interest income plus non-interest income for 2024
and 2023, respectively. For the year ended December 31, 2024, non-interest income decreased $1.2 million as compared to the
year ended December 31, 2023. See fur
f
hther detailil b
s b lelow.
The fol
f lowing tabl
a e presents the components of non-interest income for the years ended December 31, 2024, 2023, and
2022:
2024
2023
2022
(in thousands)
Wealth management and trus
r
t fees
f
$
62,616
$
44,158
$
34,709
Insurance commissions
12,794
11,116
11,975
Capi
a tal markets
27,221
41,489
52,362
Service charges on deposit accounts
48,276
41,306
36,930
Gains (losses) on securities transactions, net
100
1,104
(1,230)
Fees from loan servicing
12,393
10,670
11,273
(Losses) gains on sales of loans, net
(5,840)
6,054
6,418
Gains on sales of assets, net
3,727
6,809
897
Bank owned life i
f
nsurance
16,942
11,843
8,040
Other
46,272
51,180
45,419
Total non-interest income
$
224,501
$
225,729
$
206,793
2024 Form 10-K
56
Wealth management and trust fees income increased by $18.5 million for
f
the year ended December 31, 2024 as compared
to 2023. The increase was mainly driven by stronger fee
f
production from tax credit advisory services and, to a lesser extent,
increased brokerage commissions due to stronger customer trading volume at our broker dealer subs
u
idiary during 2024.
Br k
okerage fees totaled $
d 23.4 million and $19.1 million for the years e d
nded Dece b
mber 31, 2024 and 2
d 023, respectively.
Capi
a tal markets income decreased $14.3 million for
f
the year ended December 31, 2024 as compared to 2023 mainly due
to a decline in the volume of interest rate swap t
a
ransactions executed for
f
commercial customers, as well as a $2.1 million
decrease in loan syndication and participation fees
f
. Swap fe
i
e income tot lal d
ed $13.3 million and $28.4 million December 31,
2024 and 2023, respectively. These decreases wer p
e
artially offset by a $3.4 million increase in for
f
eign exchange fees for the
year ended December 31, 2024 as compared to 2023.
e
S rvice charges on deposit accounts increased $7.0 million for
f
the year ended December 31, 2024 as compared to 2023
mainly due to additional treasury s
r
ervice related fees
f
for commercial deposit accounts. In addition, the level of our 2023 service
charges on deposit accounts was modestly impacted by waived transactional fees
f
for customers around the time of our core
system conversion in October 2023.
h
The net gains on securities transactions for the year ended D
d
ecember 31, 2023 in lcl d
uded a $
n $869 hthousand g
d g iain on the sale
of a pre iviouslyly impair d
ed corporat b
e b
d
ond issu d
ed by
by
i
Signature Ba k
nk and net gains r lelat d
ed to mu ini icipal b
l b
d
ond tr d
ading activi i
ities.
See Note 4 for addi
ddi itional d
l det iails.
Net gains on sales of assets for the year ended December 31, 2024 includes a $3.6 million net gain realized on the sale of
our commercial premium fin
f ance lending business in the first quarter 2024. Net gains on sales of assets for the year ended
December 31, 2023 were mainly attributable to a $6.7 million net gain on the sale of non-branch offi
f ces located in Wayne, New
Jersey in the third quarter 2023.
Net losses on sales of loans were $5.8 million for
f
the year ended December 31, 2024 as compared to net gains of $6.1
million for
f
2023 mostly due to $13.7 million of realized losses resulting fro
f
m the sale of performing commercial real estate
loans in the fourth quarter 2024. These losses were partially offs
f et by net gains on sales of residential mortgage loans originated
for sale and a gain of $944 thousand related to $75.5 million of seasoned residential mortgage loans sold during the fourth
quarter 2024. Overall, our ability to generate net gains on sales of residential mortgage loans originated for sale continues to be
challenged by several factors, including the higher level of mortgage interest rates, lower customer demand for
f
confor
f
ming loan
products, and our decision to not originate certain residential mortgage loans for sale. This decision can be influenced by many
factors, including our current goal to reduc
d
e our commercial real estate loan concentration and further diversify our loan
portfol
f io. See further discussions of our residential mortgage loan origination activity under the “Loan Portfol
f io” section of this
MD&A below.
Bank owned life i
f
nsurance income increased $5.1 million for the year ended December 31, 2024 as compared to 2023
due to income and increases in market value of the underlying investment securities.
Other non-interest income decreased $4.9
i
millllion for the year ended Dece b
mber 31, 2024 as compar d
ed to 2023 la g
rg lely d
y due
d
to
$
a $2.9
illi
million decrease in hthe f iai
f r v lalue of eq iui yty secu iri ities a d
nd
$
a $1.2
illi
millio d
n decreas i
e in credidit card f
d fee
f
income.
h
Through
ugh orga inic a d
nd ac
i
qui isi itive effo
f
rts, we have developed a robust s iuite of fe i
e income product a d
nd service offer
f ings for
our growing custome b
r base, in lcl di
udi g
ng our treasury m
r
an g
agement ser ivices to commercial b
l bankiki g
ng customers expect d
ed to help us
generate d
addidi itional f
l fee
f
income and attract new customers. During 2025, we
lplan to furthe l
r lever g
age the investments that we
have made in our treasu y
ry solu itions, for
f
ieign ex h
change and syndi
yndication platfor
f
ms, a d
nd continue to focus o
g
n gro i
wi g
ng revenues
from i
m nterest rate swap t
a
ransactions and our broker dealer subsidiary.
Non-In
-
terest Expe
x
nse
Non-interest expense decreased $56.8
il
millilion to $1.1 bibillllion for the year ended Dece b
mber 31, 2024 as compar d
ed to 2023
mainlyly driven by
by decrease
i
s in the FDIC insurance assessment expense, tet chnology, furnitur
t
e and equipment expense and
profes
f
sional and legal fee
f
s. See furthe d
r det iails below.
57
2024 Form 10-K
The fol
f lowing tabl
a e presents the components of non-interest expense for
f
the years ended December 31, 2024, 2023 and
2022:
2024
2023
2022
(in thousands)
Salary and employee benefit
f s expense
$
558,595
$
563,591
$
526,737
Net occupa
u
ncy expense
102,124
101,470
94,352
Technology, furnitur
t
e and equipment expense
135,109
150,708
161,752
FDIC insurance assessment
61,476
88,154
22,836
Amortization of other intangible assets
35,045
39,768
37,825
Profes
f
sional and legal fee
f
s
70,315
80,567
82,618
Amortization of tax credit investments
18,946
18,009
12,407
Other
124,250
120,424
86,422
Total non-interest expense
$
1,105,860
$
1,162,691
$
1,024,949
Sala y
ry and employe
b
e benefit
f s expense decreased $5.0
i
milli
llion for the year ended Dece b
mber 31, 2024 as compar d
ed to
2023. The decrease was m iai lnly att iribut b
able
$
a $7.9
il
millilion reduc itio
i
n in restruc
r
tu iri g
ng h
charges, consis iting of severance expense
related to workf
kfor
f
ce reduc itions i
, in 2024. Me g
rger costs r lelat d
ed to hthe acq iui isi ition of Bank Leu i
mi USA, prima irilyly consis iti g
ng of
severance a d
nd retention compensation, totaled $
d $4.1
il
millilion during the year ended December 31, 2023. The effect of these items
was partially offs
f et by normal increases in labor
a
costs dur
d
ing 2024.
Te h
ch
l
nol gy
ogy, furnitur
t
e a d
nd eq iuipment expense d
e
ecreased $15.6
i
millllion for the year ended Dece b
mber 31, 2024 as
compar d
ed to 2023 primarilily d
y due
d
to decrease
i
s in merger r lelat d
ed expense, eq iuipment m iaintenance and rep iair expense, and
telecommu inica ition expens
i
e in 2024. Me g
rger expenses related to the termination of certain te h
ch
l
nol gy
ogy contracts tot lal d
ed $10
ill
millio i
n in 2023.
FDIC insurance assessment expense decreased $26.7
il
millilion for the year ended Dece b
mber 31, 2024 as compar d
ed to 2023
mainlyly due to $41.5
il
millilion decreas i
e in the special assessment a
l
ppl
a
ied to us to recove l
r losse i
s in the Deposit Insurance Fu d
nd
from protecting u ininsur d
ed depo isitors follllo i
wi g
ng hthe Sililicon Valllley Bank a d
nd
i
Signature Ba k
nk faililures.
h
Th
d
e decreas
i
e in the
sp
i
eci lal assessment cha g
rge was prima irilyly offs
f et by
by normal i
l increases in our FDIC assessmen d
t due
d
to hthe overallll grow hth of our
ba
balance sheet, as w lell as a i
n increas i
e in our intern lallyly lclas isififi d
ed loans as compared to 2023.
Amor itization of o hther intangi
ngiblbles decreased
ed $4.7
i
millllion for the year ended Dece b
mber 31, 2024 as compar d
ed to 2023
mainlyly due to lower amortization expense of cor d
e deposits and o hther intangi
ngiblble assets. See Note 8 to hthe cons lolididat d
ed fifinancial
statements for addi
ddi itional i
l infor
f
ma ition.
Profes
f
isional a d
nd legal f
l fee
f
s decreased $10.3
il
millilion for the year ended Dece b
mber 31, 2024 as compar d
ed to 2023 mainlyly
due to lower technology managed services and consulting expenses. In addition, legal fees
f
in lcl d
uded a $3.5
i
millllion cha g
rge for
f
legal set ltlements for
f
hth y
e year e d
nded Dece b
mber 31, 2023.
Other non-interest expense increased $3.8
i
millllion for the year ended Dece b
mber 31, 2024 as compar d
ed to 2023 wa d
s due
d
,
in part, to addi
ddi itional costs related to a loan cr d
edit iri k
sk transfer
f
transaction, consis iting of a cr d
edit defa lult swap,
a
execut d
ed in June
2024.
h
The pre i
mium expense a d
nd other transaction costs asso iciat d
ed
i
wi hth hthis cr d
edit protection tot lal d
ed $6.8
illi
million for hth y
e year
ended December 31, 2024.
h
This and o hther moderate general i
l increases
i
wi hthin hthis cat g
egory w
r
ere par itially
lly offs
f et by
by decrease i
s in
d
advertising expense a d
nd interest h
charges on c lollateral h
l h leld r lelat d
ed to de iriva itive transactions as compar d
ed to 2023.
Income Taxe
a
s
Income tax expense was $58.2 million for
f
the years ended December 31, 2024, reflecting an effe
f ctive tax rate of 13.3
percent, as compared to $179.8 million for
f
the year ended December 31, 2023, reflecting an effe
f ctive tax rate of 26.5 percent.
The decrease in both income tax expense and the effec
f
tive rate during 2024 was mostly due to a $46.4 million tax benefit
realized on the total reduction in our uncertain tax liabi
a lity positions and related accrue
r
d interest due
d
to statut
t e of limitation
expirations during the fourth quarter 2024, as well as lower pre-tax income as compared to 2023. The uncertain tax liabi
a lity
positions solely related to certain tax credits and other tax benefits
f
previously recognized by Valley, where subsequently, a
third-party fra
f ud was uncovered by the U.S. Department of Justice in 2018.
GAAP requires that any change in judgment or change in measurement of a tax position taken in a prior annual period be
recognized as a discrete event in the quarter in which it occurs, rather than being recognized as a change in effe
f ctive tax rate for
the current year. Our adherence to these tax guidelines may result in volatile effe
f ctive income tax rates in fut
f ure
t
quarterly and
2024 Form 10-K
58
annual periods. Factors that could impact management’s judgment include changes in income, tax laws and regulations, and tax
planning strategies. Based on the current information availabl
a e, we anticipate that our effe
f ctive tax rate will be approximately
within the 23 to 25 percent range for 2025.
See additional infor
f
mation regarding our income taxes under our “—Critical Accounting Estimates” section above
a
, as
well as Note 13 to the consolidated financial statements.
Operatin
t
g Seg
S
me
g
ntst
Valley manages its business operations under operating segments consisting of Consumer Banking and Commercial
Banking. Activities not assigned to the operating segments are included in Treasury a
r
nd Corporate Other.
The CEO of Valley is the CODM who assesses performance of each operating segment to better understand their cost,
opportunity value and impact to Valley's consolidated earnings. Each operating segment is reviewed routinely for
f
its asset
growth, contribution to our income before income taxes, return on average interest earning assets and impairment (if events or
circumstances indicate a possible inabi
a lity to realize the carrying amount). Valley regularly assesses its strategic plans,
operations, and reporting structur
t
es to identify i
f
ts reportabl
a e segments.
h
The accounting for
f
ea h
ch opera iting s g
egment and Treasury a
r
d
nd Corporate O hther in lcl d
ude
i
s internal accounting p lolicies
designed to measure consistent and reasonabl
a e fin
f ancial reporting and may result in income and expense measurements that
differ fro
f
m amounts under GAAP. The financial reporting for
f
each segment contains allocations and reporting in line with
Valley’s operations, which may not necessarily be comparable to those of any other fin
f ancial institution. Furthermore, changes
in management structur
t
e or allocation methodologies and procedur
d
es may result in changes in reported segment financial data.
Cert iain p irior pe iri d
od amount h
s hav
b
e been re lclas isififi d
ed to confor
f
m to the current presenta ition for
f
h
each opera iti g
ng segment a d
nd
Treasury a
r
d
nd Corporate O hther S
.
ee Note 21 to the consolidated financial statements for
f
additional infor
f
mation.
The fol
f lowing tabl
a es present the financial data for
f
Valley's operating segments, and Treasury a
r
nd Corporate Other for the
years ended December 31, 2024 and 2023:
2024
Consumer
Banking
Commercial
Banking
Treasury and
Corporate
Other
Total
($ in thousands)
Average interest earning assets
$
9,914,917
$ 40,115,669
$
7,287,340
$ 57,317,926
Interest income
$
478,680
$
2,596,066
$
282,751
$
3,357,497
Interest expense
299,048
1,209,945
219,796
1,728,789
Net interest income
179,632
1,386,121
62,955
1,628,708
Provision for credit losses
24,561
284,827
(558)
308,830
Net interest income after provision for credit losses
155,071
1,101,294
63,513
1,319,878
Non-interest income
135,331
77,690
11,480
224,501
Non-interest expense
Salary and employee benefit
f s expense
118,953
389,622
50,020
558,595
Net occupa
u
ncy expense
18,003
71,360
12,761
102,124
Technology, furnitur
t
e, and equipment expense
25,681
93,811
15,617
135,109
FDIC insurance assessment
10,448
42,271
8,757
61,476
Profes
f
sional and legal fee
f
s
11,254
52,666
6,395
70,315
Other segment items *
58,282
54,007
65,952
178,241
Total non-interest expense
$
242,621
$
703,737
$
159,502
$
1,105,860
Income (loss) before income taxes
$
47,781
$
475,247
$
(84,509)
$
438,519
Return on average interest earning assets (pre-tax)
0.48 %
1.18 %
(1.16)%
0.77 %
Net interest margin
1.81 %
3.45 %
0.86 %
2.84 %
59
2024 Form 10-K
2023
Consumer
Banking
Commercial
Banking
Treasury and
Corporate
Other
Total
($ in thousands)
Average interest earning assets
$
9,620,508
$ 39,731,353
$
7,148,667
$ 56,500,528
Interest income
$
415,585
$
2,471,345
$
251,961
$
3,138,891
Interest expense
250,882
1,036,109
186,422
1,473,413
Net interest income
164,703
1,435,236
65,539
1,665,478
Provision for credit losses
6,162
39,463
4,559
50,184
Net interest income after provision for credit losses
158,541
1,395,773
60,980
1,615,294
Non-interest income
105,282
93,618
26,829
225,729
Non-interest expense
Salary and employee benefit
f s expense
111,748
389,666
62,177
563,591
Net occupa
u
ncy expense
19,313
69,780
12,377
101,470
Technology, furnitur
t
e, and equipment expense
25,661
98,716
26,331
150,708
FDIC insurance assessment
7,380
30,477
50,297
88,154
Profes
f
sional and legal fee
f
s
13,016
56,755
10,796
80,567
Other segment items *
48,650
56,188
73,363
178,201
Total non-interest expense
$
225,768
$
701,582
$
235,341
$
1,162,691
Income (loss) before income taxes
$
38,055
$
787,809
$
(147,532)
$
678,332
Return on average interest earning assets (pre-tax)
0.40 %
1.98 %
(2.06)%
1.20 %
Net interest margin
1.71 %
3.61 %
0.91 %
2.95 %
*
Other segment items include amortization of intangible assets, amortization of tax credit investments and other general operating
expenses.
Consumer Banking Segment.
h
The Consumer Ba ki
nki g
ng segment represent d
ed 18.9 percent of the total l
l loan portf lol
f io at
December 31,
,
2024 and was mainly comprised of residential mortgage loans and automobile loans, and to a lesser extent,
home equity loans, secured personal lines of credit and other consumer loans (including credit card loans). The dur
d
ation of the
residential mortgage loan portfol
f io (which represented 11.5 percent of our total loan portfol
f io at December 31, 2024) is subj
u ect
to movements in the market level of interest rates and for
f
ecasted prepayment speeds. The weighted average life o
f
f the
automobile loans portfol
f io (representing 3.9 percent of total loans at December 31, 2024) is relatively unaffected by movements
in the market level of interest rates. However, the average life m
f
ay be impacted by new loans as a result of the availabi
a lity of
credit within the automobile marketpl
t ace and consumer demand for purchasing new or used automobiles. Consumer Banking
also includes the Wealth Management and Insurance Services Division, comprised of asset management advisory, brokerage,
trus
r
t, personal and title insurance, tax credit advisory services, and our international and domestic private banking businesses.
Consumer Banking’s average interest earning assets increased $294.4 million to $9.9 billion for
f
the year ended
December 31, 2024 as compared to 2023. The increase was largely due
d
to strong origination volumes and steady growth in our
indirect automobile loan portfol
f io over the last 12-month period, new residential mortgage loan volumes originated for
investment rather than sale and a moderate uptick in home equity loan balances, partially offs
f et by a decline in secured personal
lines of credit balances during 2024.
For the year ended December 31, 2024 income before income taxes generated by the Consumer Banking segment
increased $9.7 million to $47.8 million for
f
the year ended December 31, 2024 as compared to $38.1 million for
f
the year ended
December 31, 2023. The i
e ncrease was mainly driven by higher non-interest income and net interest income, partially offse
f
t by
higher provision for loan losses and non-interest expense. The
-
non interest income increased $30.0 million as compared to 2023
mainly due to a hihighe
gher v lolume of transac ition and o hther related f
d fees
f
generated b
d by b
y both our tax credidit ad i
dviso y
ry and b
d brokerage
subs
u
ididia iries, as w lell as an upt
u ick i
k i
s
n
ervice charges on deposit accounts. Net interest income increased $14.9 million as
compared to 2023 mainly due to the increase in overall yield of the loan portfol
f io during 2024. The provision for loan losses
increased $18.4 million for the year ended December 31, 2024 from $6.2 million for
f
2023 mainlyly due to loan grow hth in 2024
and h
d higigher quantita itive reserves at December 31, 2024 S
.
ee further details in the “Allowance for
f
Credit Losses” section of this
MD&A. Non-interest expense increased $16.9 million to $242.6 million for
f
the year ended December 31, 2024 as compared to
2024 Form 10-K
60
2023 largely driven by increases in salaries and employee benefits
f
, other expense (including $6.8
i
millllion of pre i
mium fees
f
asso iciat d
ed
i
wi hth a credidit risk transfer transaction, consis iti g
ng of a credidi d
t defau
f
lt swap, executed i
d in 2024 for a por ition of our auto
portf lol
f io) a d
nd hthe FDI
i
C insurance assessmen d
t dur
d
ing 2024. See mor
d
e det iails in hthe "Non-Interest Expense" section of thihis
MD&A.
Net interest margin on the Consumer Banking portfol
f io increased 10 basis points to 1.81 percent for
f
the year ended
December 31, 2024 as compared to 2023 mainly due to a 51 basis point increase in the yield on average loans, partially offs
f et
by a 41 basis point increase in the costs associated with our funding sources. The increase in loan yield was largely due to
higher yielding new loan volumes and adjustabl
a e rate loans (for
f
the majority of 2024) in our portfol
f io. The increase in our
funding costs was mainly driven by higher interest rates on most of our interest bearing deposit products and indirect customer
deposits during 2024. See more details in the “Net Interest Income” section of this MD&A.
Commercial Banking Segment. The Commercial Banking segment is comprised of floating rate and adju
d stable rate
commercial and industrial loans and construc
r
tion loans, as well as fix
f ed rate owner occupi
u ed and commercial real estate loans.
Due to the portfol
f io’s interest rate characteristics, Commercial Banking is Valley’s operating segment that is most sensitive to
movements in market interest rates. Commercial and industrial loans totaled appr
a
oximately $9.9 billion and represented 20.4
percent of the total loan portfol
f io at December 31, 2024. Commercial real estate and construc
r
tion loans totaled $29.6 billion and
represented 60.7 percent of the total loan portfol
f io at December 31, 2024.
Average interest earning assets in Commercial Banking segment increased $384.3 million to $40.1 billion for the year
ended December 31, 2024 as compared to the same period in 2023. This increase was due to our continued foc
f
us on organic
loan growth largely within the commercial and industrial loan portfol
f io over the 12-month period ended December 31, 2024,
partially offs
f et by normal runof
r
f s
f
chedul
d ed maturities and sales of certain commercial real estate loans.
For the year ended December 31, 2024, income before income taxes for
f
Commercial Banking decreased $312.6 million
to $475.2 million as compared to 2023. The decrease was mainly attributable to a $245.4 million increase in the provision for
loan losses. The increase in the provision for loan losses was mainly due to higher than expected loan charge-offs, increased
quantitative reserves allocated to commercial real estate loans and the reserve build resulting fro
f
m commercial and industrial
loan growth in 2024. See details in the “Allowance for
f
Credit Losses for
f
Loans” section of this MD&A. Net interest income
decreased $49.1 million in 2024 as compared to 2023 mainly due to the higher cost of fundi
f
ng, which outpa
t
ced the yield on the
loan portfol
f io. Non-interest income decreased $15.9 million in 2024 as compared to 2023 primarily driven by a $15.1 million
decrease in swap f
a
ee
f
s generated in 2024 due to a decline in the volume of interest rate swap t
a
ransactions executed for
commercial loan customers. See fur
f
ther details in the "Non-Interest Income" section of this MD&A.
The net interest margin for this segment decreased 16 basis points to 3.45 percent for
f
the year ended December 31, 2024
as compar d
ed to hthe same period i
d i 2
n 023 due to a 41 basis point increase in the cost of our funding sources, partially offset by a
25 basis point increase in the yield on average loans.
Treasury and Corporate Other. Treasu y
ry and Corpor
r
ate O hther la g
rg lely consists of hthe Treasury m
r
an g
ag d
ed HT
d
M d b
ebt
secu iri ities a d
nd AF
d
S d b
ebt securities portf lol
f ios m iai lnly u itililized f
d for
f
hth l
e liq iuididi yty management ne d
eds of our le di
ndi g
ng segments and
income and expens i
e items resul i
lting fro
f
m support fun
f
ctions not didirectlyly attribibut b
able to a spe icifific s g
egment. Interest income is
generated through
ough investment i
s in various ytypes of securi i
ities (m iai lnly compris d
ed of fifixed rate secu iri itie )s) and i
d interest-bearing
deposits
i
wi hth othe b
r banks (p irima irilyly hthe F d
eder lal Reserve Bank of New Yo k
rk). Expenses related to the bran h
ch network, lall o hther
components of ret iail b
l bankiki g
ng, lal
g
ong
i
wi hth hth b
e back offic
f
d
e departments of hthe Bank are lallocat d
ed from Treasury a
r
d
nd Corporate
Other to opera iting s g
egments. Other non-interest income items a d
nd general expenses are allllocat d
ed from Treasury a
r
d
nd Corporate
Other to e
h
ach opera iti g
ng segment u ili
tilizing a me hth d l
odol gy
ogy hthat in
l
volves an allllocation of opera iting a d
nd fu di
ndi g
ng cost b
s bas d
ed on
h
each segment's respective mix of aver g
ag
i
e interest ear ini g
ng assets outstandidi g
ng for the pe iri d
od, number of d
f deposits, or didirect
lallocations to hthe s g
egment b
s bas d
ed on hthe natur
t
e of i
f income a d
nd expense.
n
U allocated items included in Treasury a
r
nd Corporate
Other mainly consist of net gains and losses on AFS and HTM securities transactions, amortization of tax credit investments, as
well as other non-core items, including merger, restruc
r
turing and FDIC special assessment charges and income from
f
litigation
settlements.
Treasury a
r
nd Corporate Other's average interest earning assets increased $138.7 million to $7.3 billion for
f
the year ended
December 31, 2024 as compared to 2023 primarily due
d
to higher average AFS investment securities balances driven by
additional purchases of residential mortgage-backed securities during 2024. The increase in average investment securities was
partially offs
f et by a $568.9 million decline in average interest bearing cash held overnight, as our excess liquidity returned to
more normalized levels in 2024 afte
f r being prude
r
ntly elevated by management during a portion of 2023 in response to the
uncertain operating environment caused by a few large bank failures.
For the year ended December 31, 2024, net loss befor
f
e taxes in this segment totaled $84.5 million for
f
the year ended
December 31, 2024 compared to $147.5 million for
f
2023. The $63.0 million decrease in pre-tax loss was la g
rg lely d
y d irive
b
n by
61
2024 Form 10-K
decreases in non-interest expense a d
nd pr
i
ovi ision for credidi l
t losses, partialllly offset by
by lower non-interest income N
. Non-interest
expense decreased $75.8
illi
million to $159.5
illi
million for the year ended December 31, 2024 as compared to 2023 largely due
d
to:
(i) a $41.5 million decrease in the FDIC insurance special assessment allocated to Treasury a
r
nd Other, (ii) a $10 million
decrease in t
h
ech
l
nol gy
ogy, furnitur
t
e a d
nd eq iuipment expense r lelat d
ed to hthe ter i
mina ition of certain te h
ch
l
nol gy
ogy contract d
s dur
d
ing 2023,
and (
d (iii)
iii)
d
a decreas i
e in s lalaries a d
nd em lpl y
oye b
e benefit
f s expense m iai lnly caused b
d by certain 2023 me g
rger expenses related to the
acq iui isi ition of Bank Leu i
mi USA. No
N n-interest income decreased $15.3
i
millllio
f
n or
f
the year ended December 31, 2024 as
compared to 2023 mainly due to an aggregate realized net loss of $13.7 million on the sales of commercial real estate loans
during 2024. See more details in the "Non-Interest Income" and "Non-Interest Expense" sections of this MD&A. The provision
for credit losses decreased $5.1 million in 2024 mainly due to a $5 million charge-off in 2023 related to a corporate bond issued
by one failed bank within our AFS debt securities portfol
f io.
Treasury a
r
d
nd Corporate O hther's ne
i
t interest margigin decreased 5 ba isis p ioints to 0.86 percent for the year ended
December 31, 2024 as compar d
ed to hthe same period i
d in 2023 due to a 41 ba isis p ioint increase in cost of our fu di
ndi g
ng source,
la g
rg lely offset by
by a 36 ba isis p ioint increase in hth y
e yieldld on aver g
ag i
e investments.
h
The increased
ed yiyi leld on average investments as
compar d
ed to 2023 wa l
s largelyly driven by
by ne
h
w higighe y
r yieldlding i
g investments.
ASSET/LIABILITY MANAGEMENT
Interest Rate Sensitiv
t ityt
Our success is largely dependent upon our ability to manage interest rate risk. Interest rate risk can be defined as the
exposure of our interest rate sensitive assets and liabi
a lities to the movement in interest rates. Our Asset/Liabi
a lity Management
Committee is responsible for managing such risks and establishing policies that monitor and coordinate our sources and uses of
funds. Asset/Liabi
a lity management is a continuous process due
d
to the constant change in interest rate risk factors. In assessing
the appr
a
opriate interest rate risk levels for us, management weighs the potential benefit
f
of each risk management activity within
the desired parameters of liquidity, capital levels and management’s tolerance for
f
exposure to income flu
f ctua
t
tions. Many of the
actions undertaken by management utilize fai
f r value analysis and attempt to achieve consistent accounting and economic
benefits for fin
f ancial assets and their related fundi
f
ng sources. We have predominantly focused on managing our interest rate
risk by attempting to match the inherent risk and cash flo
f ws of financial assets and liabi
a lities. Specifically, management
employs multiple risk management activities, such as optimizing the level of new residential mortgage originations retained in
our mortgage portfol
f io through increasing or decreasing loan sales in the secondary market, product pricing levels, the desired
maturity levels for new originations, the composition levels of both our interest earning assets and interest bearing liabi
a lities, as
well as several other risk management activities.
We use a simulation model to analyze net interest income sensitivity to movements in interest rates. The simulation
model proje
o cts net interest income based on various interest rate scenarios over a 12-month period. The model is based on the
actua
t
l matur
t
ity and re-pricing characteristics of rate sensitive assets and liabi
a lities. The model incorpor
r
ates certain assumptions
which management believes to be reasonabl
a e regarding the impact of changing interest rates, non-maturity deposit betas, and
the prepayment assumptions of certain assets and liabi
a lities as of December 31, 2024. The model assumes immediate changes in
interest rates without any proactive change in the composition or size of the balance sheet, or other future actions that
management might undertake to mitigate this risk. In the model, the for
f
ecasted shape
a
of the yield curve remains static as of
December 31, 2024. The impact of interest rate derivatives, such as interest rate swaps
a
, is also included in the model.
Our simulation model is based on market interest rates and prepayment speeds prevalent in the market as of
December 31, 2024. Although the size of Valley’s balance sheet is forecasted to remain static as of December 31, 2024, in our
model, the composition is adjusted to refle
f ct new interest earning assets and fundi
f
ng originations coupled with rate spreads
utilizing our actua
t
l originations during the fourth quarter 2024. The model utilizes an immediate parallel shift i
f
n market interest
rates at December 31, 2024.
The assumptions used in the net interest income simulation are inherently uncertain. Actua
t
l results may diffe
f r
significantly from those presented in the table below, due to the fre
f quency and timing of changes in interest rates and changes
in spreads between maturity and re-pricing categories. Overall, our net interest income is affected by changes in interest rates
and cash flo
f ws from our loan and investment portfol
f ios. We actively manage these cash flo
f ws in conjunction with our liability
mix, dur
d
ation and interest rates to optimize the net interest income, while structur
t
ing the balance sheet in response to actua
t
l or
potential changes in interest rates. Additionally, our net interest income is impacted by the level of competition within our
marketpl
t ace. Competition can negatively impact the level of interest rates attainable on loans and increase the cost of deposits,
which may result in downward pressure on our net interest margin in fut
f ur
t
e periods. Other factors, including, but not limited to,
the slope of the yield curve and projected cash flo
f ws will impact our net interest income results and may increase or decrease
the level of asset sensitivity of our balance sheet.
2024 Form 10-K
62
Convexity is a measure of how the dur
d
ation of a financial instrum
r
ent changes as market interest rates change. Potential
movements in the convexity of bonds held in our investment portfolio, as well as the duration of the loan portfol
f io may have a
positive or negative impact on our net interest income in varyi
r ng interest rate environments. As a result, the increase or decrease
in forecasted net interest income may not have a linear relationship to the results reflected in the table below. Management
cannot provide any assurance about
a
the actua
t
l effec
f
t of changes in interest rates on our net interest income.
The fol
f lowing tabl
a e refle
f cts management’s expectations of the change in our net interest income over the next 12-month
period considering the afor
f
ementioned assumptions. While an instantaneous and severe shift in interest rates was used in this
simulation model, we believe that any actua
t
l shift in interest rates would likely be more gradual and would therefore have a
more modest impact than shown in the tabl
a e below.
Estimated Change in
Future Net Interest Income
Changes in Interest Rates
Dollar
Change
Percentage
Change
(in basis points)
($ in thousands)
+300
$
155,505
8.48 %
+200
105,300
5.75
+100
53,232
2.90
- 100
(59,207)
(3.23)
- 200
(120,217)
(6.56)
- 300
(180,067)
(9.82)
As noted in the table above, a 100 basis point immediate decrease in interest rates combined with a static balance sheet
where the size, mix, and proportions of assets and liabi
a lities remain unchanged is proje
o cted to decrease net interest income over
the next 12-month period by 3.23 percent. Management belilieves hth i
e interest rate sen isi itivity
ity of our balance sheet remains wi h
ithin
an expect d
ed tolerance range at December 31, 2024. However, the level of net interest income sensitivity may increase or
decrease in the future as a result of several factors, including potential changes in our balance sheet strategies, the slope of the
yield curve and proje
o cted cash flo
f ws.
The fol
f lowing tabl
a e sets for
f
th the amounts of interest earning assets and interest bearing liabi
a lities that were outstanding
at December 31, 2024. The expected cash flo
f ws are categorized based on each financial instrum
r
ent’s anticipated maturity or
interest rate reset date in each of the fut
f ur
t
e periods presented.
INTEREST RAT
R
E SENSITIVITY ANALYSIS
2025
2026
2027
2028
2029
Thereafter
Total
Balance
($ in thousands)
Interest sensitive assets:
Availabl
a e for
f
sale debt securities
$
540,303
$
302,276
$
474,316
$
246,545
$
244,718
$
1,561,566
$
3,369,724
Held to maturity debt securities
335,887
280,231
207,244
205,392
181,998
2,321,468
3,532,220
Loans and loans held for
f
sale
15,423,061
7,768,632
5,706,127
3,829,515
3,366,178
12,731,879
48,825,392
Interest bearing deposits with banks
1,478,713
—
—
—
—
—
1,478,713
Total interest sensitive assets
$ 17,777,964
$
8,351,139
$
6,387,687
$
4,281,452
$
3,792,894
$ 16,614,913
$ 57,206,049
Interest sensitive liabilities:
Deposits:
Savings, NOW and money market
$ 26,304,639
$
—
$
—
$
—
$
—
$
—
$ 26,304,639
Time
9,240,979
1,781,725
1,257,252
22,548
28,710
11,330
12,342,544
Short-term borrowings
72,718
—
—
—
—
—
72,718
Long-term borrowings
373,000
1,528,604
—
822,551
—
450,000
3,174,155
Junior subor
u
dinated debentures
—
—
—
—
—
57,455
57,455
Total interest sensitive liabi
a lities
$ 35,991,336
$
3,310,329
$
1,257,252
$
845,099
$
28,710
$
518,785
$ 41,951,511
Interest sensitivity gap
a
$(18,213,372) $
5,040,810
$
5,130,435
$
3,436,353
$
3,764,184
$ 16,096,128
$ 15,254,538
Ratio of interest sensitive assets to interest
sensitive liabi
a lities
0.49:1
2.52:1
5.08:1
5.07:1
132.11:1
32.03:1
1.36:1
The above
a
tabl
a e provides an appr
a
oximation of the proje
o cted re-pricing of assets and liabi
a lities at December 31, 2024
based on the contractua
t
l matur
t
ities, adju
d sted for anticipated prepayments of principal and schedul
d ed rate adju
d stments. The
63
2024 Form 10-K
prepayment experience reflected herein is based on historical experience combined with market consensus expectations derived
from independent external sources. The actua
t
l repayments of these instruments could vary s
r
ubstantially if future prepayments
differ fro
f
m historical experience or current market expectations. While all non-maturity deposit liabi
a lities are reflected in the
year 2025 column in the table above, management controls the re-pricing of the vast majo
a rity of the interest-bearing instrum
r
ents
within these liabi
a lities.
The total gap r
a
e-pricing within one year as of December 31, 2024 was a nega itive $18.2 bibillllio ,n representing a ratio of
interest sensitive assets to interest sensitive liabi
a lities of 0.49:1. The total gap r
a
e-pricing position, as reported in the tabl
a e above
a
,
reflects the projected interest rate sensitivity of our principal cash flo
f ws based on market conditions as of December 31, 2024.
As the market level of interest rates and associated prepayment speeds move, the total gap re-pricing position will change
accordingly, but not likely in a linear relationship. Management does not view our one-year gap p
a
osition as of December 31,
2024 as presenting an unusually high risk potential, although no assurances can be given that we are not at risk from interest
rate increases or decreases or liquidity and cash requirements (discussed in the section below).
Liqu
i
idit
d y a
t
nd Cash Requirements
Bank Liquidity. Liquidity measures Valley’s abi
a lity to satisfy i
f
ts current and fut
f ur
t
e cash flo
f w needs. Our objective is to
have liquidity availabl
a e to ful
f fill loan demands, repay deposits and other liabi
a lities, and execute balance sheet strategies in all
market conditions while adhering to internal controls and income targets. Valley’s liquidity program is managed by the
Treasury D
r
epartment and routinely monitored by the Asset and Liability Management Committee and Board Risk Committee.
Among other actions, the Treasury Department actively monitors Valley's current liquidity profile
f
, sources and stabi
a lity of
funding, availabi
a lity of assets for pledging or sale, opportunities to gather additional funds
f
, and anticipated future funding
needs, including the level of unfunde
f
d commitments.
The Bank adheres to certain intern lal lili
i
quididi yty measures in lcl di
udi g
ng ra itios of loans t
d
o deposit
b
s b lelow 110 percent and
h
wh loles lale f
di
undi
f
g
ng to total f
l f
di
undi
f
g
ng belo
2
w
5 percent, as summariz d
ed in hthe t b
able below. Management maintains fle
f
ixibibilili yty to
temporarily
ily exce d
ed hthese intern lal lili i
mits in cert iain opera iting e
i
nvironments b
, but
lalso st irives to outpe
t
rform hthes
l
e limits when
pos isiblble. The Bank was in compliance with the for
f
egoing policies at December 31, 2024.
h
The f lol
f lo i
wi g
ng tablbl
a e presents V lalley' l
s loans to deposits a d
nd
h
wh loles lale f
di
undi
f
g
ng to total f
l f
di
undi
f
g
ng ra itios a D
t
ecember 31,
2024 and 2023:
2024
2023
Loans to deposits
97.5 %
102.0 %
Wholesale fundi
f
ng to total fundi
f
ng
18.7
19.5
At December 31, 2024, the Ba k
nk had various contractua
t
l oblbligigations totaliling $16.2 bibillllion and $9.8 bibilli
llion of maturing
liabi
a lities due in 12 months or less and greater than 1 year included in the tabl
a e below.
The fol
f lowing tabl
a e summarizes maturities of contractua
t
l obligations of the Bank at December 31, 2024:
One Year
or Less
One to
Three Years
Three to
Five Years
Over Five
Years
Total
(in thousands)
Time deposits
$
9,240,979
$
3,038,977
$
51,258
$
11,330
$ 12,342,544
Short-term borrowings
72,718
—
—
—
72,718
Long-term borrowings
373,000
1,528,604
840,000
450,000
3,191,604
Junior subor
u
dinated debentures issued to capital
trus
r
ts
—
—
—
60,827
60,827
Lease obligations
52,066
99,305
91,351
145,581
388,303
Capi
a tal expenditures
21,134
—
—
—
21,134
Other purchase obligations
51,876
38,487
22,452
337
113,152
Total
$
9,811,773
$
4,705,373
$
1,005,061
$
668,075
$ 16,190,282
In the ordinary c
r
ourse of operations, the Bank enters into various financial obligations, including contractua
t
l obligations
that may require fut
f ur
t
e cash payments. As a fin
f ancial services provider, we routinely enter into commitments to extend credit,
including loan commitments, standby and commercial letters of credit. Such commitments are subj
u ect to the same credit
policies and approval process accorded to loans made by the Bank. We enter into for
f
ward commitments for
f
the fut
f ur
t
e delivery
r
of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of
2024 Form 10-K
64
future changes in interest rates on the Bank's commitments to fund
f
the loans, as well as on its portfol
f io of mortgage loans held
for sale. Commitments to extend credit and standby letters of credit are subject to change since many of these commitments are
expected to expire unused or only partially used based upon
u
our historical experience; as such, the total amounts of these
commitments do not necessarily reflect future cash req iuirements. At December 31, 2024, our off-b
f
alance sheet commitments
totaled $13.1 billion, inclusive of commitments of $7.8 billion with a remaining term of 12 months or less. See Note 15 to the
consolidated financial statements for
f
further details.
Management believes the Bank has the ability to generate and obtain adequate amounts of cash to meet its short-term and
long-term obligations as they come due by utilizing various cash resources described below.
On the asset side of the balance sheet, the Bank has numerous sources of liquid funds
f
in the for
f
m of cash and due from
banks, interest bearing deposits with banks (including the Federal Reserve Bank of New York) and other sources.
h
The
follllo i
wi g
ng tablbl
a e summa irizes Vallll y
ey's sources of liquid assets at December 31, 2024 and
:
2023
2024
2023
(in thousands)
Cash and due
d
from banks
$
411,412
$
284,090
Interest bearing deposits with banks
1,478,713
607,135
Trading debt securities
—
3,973
Held to maturity debt securities (1)
220,056
194,094
Availabl
a e for
f
sale debt securities (2)
3,369,724
1,296,576
Loans held for
f
sale
25,681
30,640
Total liquid assets
$
5,505,586
$
2,416,508
(1)
Represents securities that are maturing within 90 days or would otherwise qualify a
f
s matur
t
ities if sold (i.e., 85 percent of original cost
basis has been repaid) within the held to matur
t
ity debt security portfol
f io.
(2)
Includes ap
appr
i
oximatelyly $1.8 bibilli
llion and $840.3
i
milli
llion of va irious investment secu iri ities that were pledge
dged to counterpa
r
rties to support
our ear ini g
ng asset fun
f
didi g
ng strategigies at December 31, 2024 and 2023, respectiv lely.
Total l
l liq iuid assets represented 9.6 percent and 4.3 percent of interest ear ini g
ng assets at December 31, 2024 and 2023,
respectiv lely.
h
Whilile not part of our liquidity management strategy, we executed certain asset sales (largely under an initiative to reduc
d
e
our commercial real estate loan concentration risk and the sale of a small specialized commercial lending business) and the
issuance of common and prefer
f red stock in registered public offe
f rings with the primary goal to bolster our regulatory capi
a tal.
These transactions benefited the Bank's liquidity and cash position dur
d
ing the year ended December 31, 2024, including the
following:
•
net cash proceeds of $1.2 billion related to targeted sales of performing commercial real estate and construc
r
tion loans
to reduce our CRE loan concentration dur
d
ing 2024;
•
additional capital contributions totaling $545 million to the Bank from Valley dur
d
ing the second half of 2024 related to
the combined net cash proceeds of $593.6 million from Valley's issuance of common stock and Series C prefer
f red
stock in registered public offe
f rings;
•
net cash proceeds of $98.1 million fro
f
m the sale of our commercial premium fin
f ance lending division, mostly
consisting of commercial and industrial loans, in the first quarter 2024; and
•
Valley also sold a relatively modest amount of performing residential mortgage loans from the held for investment
loan portfol
f io during the fourth quarter 2024.
While not isolated from the mix of our other sources of funds, these discrete transactions contributed to funding primarily
used to grow our availabl
a e for
f
sale debt securities portfol
f io during the year ended December 31, 2024 and repay higher cost
maturing indirect customer CDs dur
d
ing the fourth quarter 2024. At December 31, 2024, the level of cash liquidity on the
balance sheet was elevated as compared to one year ago (as noted in the table above) largely due to the timing of certain
transactions highlighted above. We anticipate that our cash balances will decline to more normalized levels during the first
quarter 2025, as part of our liquidity management, including the level of our wholesale and indirect customer deposit funding
sources, and our expected loan growth in 2025 noted elsewhere in this MD&A.
65
2024 Form 10-K
Other sources of f
d
unds
f
on hthe asset sidide are de irived f
d fro
f
m s h
ch d
ed lul
d
d
ed loan payments of prin icipal a d
nd interest, as w lell as
prep y
ayments receiv d
ed. A D
t
ecember 31, 2024, estimat d
ed ca h
sh inflflows fro
f
m tot lal loans are projojected
e to be approximately $15.2
billion over the next 12-month period. As a contingency plan for
f
any liquidity constraints, liquidity could also be derived from
the sale of confor
f
ming residential mortgages from our loan portfol
f io or alleviated from the temporary c
r
urtailment of lending
activities. We anticipate the receipt of approximately $876.0 million in principal payments fro
f
m securities in the total
investment portfol
f io at December 31, 2024 over the next 12-month period due
d
to normally scheduled principal repayments and
expected prepayments of certain securities, primarily residential mortgage-backed securities.
On the liabi
a lity side of the balance sheet, we utilize multiple sources of funds to meet liquidity needs, including
commercial and consumer deposits, ful
f ly FDIC-insured indirect customer deposits, collateralized municipal deposits, and short-
term and long-term borrowings. Our core deposit base, which generally excludes all fully insured indirect customer deposits, as
well as retail certific
f ates of deposit over $250 thousand, represents the largest of these sources. Aver g
age cor d
e deposits tot lal d
ed
appr
i
oximatelyly $39.1 bibillllion and $37.6 bibillllion for the years e d
nded Dece b
mber 31, 2024 and 2023, respectiv lely, represen iti g
ng 68.3
percent and 66.6 percent of aver g
ag i
e interest ear ini g
ng assets for the respective periods. The level of i
f interes b
t bearing d
g deposit i
s is
affe
f ct d
ed by
by interest rates offered,
h
which i
h is often inflfluenc d
ed by
by our ne d
ed for f
d
unds
f
, rates prev iaililing i
g in the ca ipi
a tal markets,
competi i
ition, and the ne d
ed to manage interest rate iri k
sk sensitivity
ity.
In addition to customer deposits, the Bank has access to readily availabl
a e borrowing sources to su
l
ppl
u
emen i
t its current and
projected funding needs.
h
The f lol
f lo i
wi g
ng tablbl
a e presents short-term borro i
wi g
ngs outstandidi g
ng at Dece b
mber 31, 2024 and 2023:
2024
2023
(in thousands)
FHLB advances
$
—
$
850,000
Securities sold under agreements to repurchase
72,718
67,834
Total short-term borrowings
$
72,718
$
917,834
The fol
f lowing tabl
a e summarizes the Bank's estimated unused availabl
a e non-deposit borrowing capa
a
ici ities at December 31,
2024 and 2023:
2024
2023
(in thousands)
FHLB borrowing capa
a
city*
$
5,853,596
$
13,604,000
Unused FRB discount window*
11,509,000
8,530,000
Unused federal funds
f
lines availabl
a e fro
f
m commercial banks
2,140,000
2,140,000
Unencumbered investment securities
3,415,834
1,129,000
Total
$
22,918,430
$
25,403,000
*
Used and unused FHLB and FRB borro i
wi g
ngs are c lollateraliliz d
ed by
by certain
lpl d
edged secu iri ities, in lcl di
udi g
ng but not li i
limited to U.S.
government and agency mor gtg g
age-ba k
ck d
ed secu iri ities a d
nd blblanket qualif
lifyiyi
f
g
ng fifirs l
t lien on certain re lal estate and resididen itial mor gtg g
age
secured l
d loans.
Corporation Liquidity. Valley’s recurring cash requirements primarily consist of dividends to prefer
f red and common
shareholders and interest expense on subordinated notes and junior subor
u
dinated debentures issued to capital trusts. As part of
our ongoing asset/liabi
a lity management strategies, Valley could also use cash to repurchase shares of its outstanding common
stock under its share repurchase program or redeem its callabl
a e junior subor
u
dinated debentures and subor
u
dinated notes. Valley's
cash needs are routinely satisfied by dividends collected from the Bank. Projected cash flo
f ws from the Bank are expected to be
adequate to pay preferred and common dividends, if declared, and interest expense payable to subor
u
dinated note holders and
capital trusts, given the current capital levels and current profit
f able operations of the Bank. In addition to dividends received
from the Bank, Valley can satisfy i
f
ts cash requirements by utilizing its own cash and potential new funds borrowed from
outside sources or capi
a tal issuances, such as the undistributed net proceeds of our common stock and Series C prefer
f red stock
offe
f rings in November and August 2024, respectively (see Note 18 to the consolidated financial statements for
f
more details).
Valley also has the right to defer interest payments on the junior subor
u
dinated debentures, and therefore distributions on its trus
r
t
prefer
f red securities for consecutive quarterly periods of up to five years, but not beyond the stated matur
t
ity dates, and subject to
other conditions.
2024 Form 10-K
66
Investment Securiti
i es Portfo
t
lio
As of December 31, 2024, our investment securities portfol
f io consisted of equity and debt securities, with the debt
securities classified as either trading, AFS or HTM. The AFS and HTM debt securities portfol
f ios, which comprise the majo
a rity
of the securities we own, include U.S. Treasury s
r
ecurities, U.S. government agency securities, tax-exempt and taxable issuances
of states and political subdi
u
visions, residential mortgage-backed securities, single-issuer trus
r
t preferred securities principally
issued by bank holding companies, and high quality corpo
r
rate bonds. Among other securities, our AFS debt securities include
securities such as bank issued and other corporate bonds, as well as municipal special revenue bonds, which may pose a higher
risk of future impairment charges to us as a result of the uncertain economic environment and its potential negative effect
f
on the
future performance of the security issuers. The equity securities consist of tw p
o publicly traded mutual funds, CRA investments
and several other equity investments that we have made in companies that develop new financial technologies and in
partnerships that invest in such companies. Our CRA and other equity investments are a mix of both publicly traded entities and
privately held entities. We had no trading securities at December 31, 2024.
The primary purpos
r
e of our AFS and HTM investment portfol
f ios is to provide a source of earnings and liquidity, as well
as serve as a tool for managing interest rate risk. The decision to purchase or sell securities is based upon the current assessment
of long and short-term economic and fin
f ancial conditions, including the interest rate environment and other statement of
financial condition components. See additional infor
f
mation under “Interest Rate Sensitivity,” “Liquidity and Cash
Requirements” and “Capi
a tal Adequacy” sections elsewhere in this MD&A.
We continually evaluate our investment securities portfol
f io in response to established asset/liabi
a lity management
objectives, changing market conditions that could affec
f
t profitabi
a lity, and the level of interest rate risk to which we are exposed.
These evaluations may cause us to change the level of funds we deploy into investment securities, change the composition of
our investment securities portfol
f io, and change the proportion of investments primarily made into the AFS and HTM debt
securities portfol
f ios.
67
2024 Form 10-K
Investment securities at December 31, 2024 and 2023 were as follows:
2024
2023
(in thousands)
Equity securities
$
71,513
$
64,464
Trading debt securities
—
3,973
Available for
f
sale debt securities
U.S. Treasury s
r
ecurities
291,549
288,157
U.S. government agency securities
22,543
23,702
Obligations of states and political subdivisions:
Obligations of states and state agencies
45,529
47,695
Municipal bonds
146,980
143,995
Total obligations of states and political subdi
u
visions
192,509
191,690
Residential mortgage-backed securities
2,681,076
626,572
Corporate and other debt securities
182,047
166,455
Total availabl
a e for
f
sale debt securities
3,369,724
1,296,576
Total investment securities (fair value)
$
3,441,237
$
1,365,013
Held to maturity debt securities
U.S. Treasury s
r
ecurities
$
25,480
$
26,232
U.S. government agency securities
301,315
305,996
Obligations of states and political subdivisions:
Obligations of states and state agencies
68,025
88,556
Municipal bonds
304,464
316,914
Total obligations of states and political subdi
u
visions
372,489
405,470
Residential mortgage-backed securities
2,710,642
2,885,303
Trus
r
t preferred securities
36,081
37,062
Corporate and other debt securities
86,213
80,350
Total investment securities held to matur
t
ity (amortized cost)
$
3,532,220
$
3,740,413
Allowance for
f
credit losses
647
1,205
Total investment securities held to matur
t
ity, net of allowance for
f
credit losses
3,531,573
3,739,208
Total investment securities
$
6,972,810
$
5,104,221
During the year ended 2024, we purchased approximately $2.5 billion of residential mortgage backed securities mainly
issued by Ginnie Mae within the AFS portfol
f io. The purchases were largely to utilize a portion of our excess cash liquidity
partly generated fro
f
m loan sales, higher average deposits, and issuances of both preferred and common stock, as well as our
normal reinvest continued repayments and prepayments within both the availabl
a e for
f
sale and held to matur
t
ity portfol
f ios.
Approximately 54.5 percent, 30.0 percent, and 15.5 percent of our total residential mortgage-backed securities portfol
f io were
issued and guaranteed by Ginnie Mae, Fannie Mae, and Freddie Mac, respectively, at December 31, 2024.
2024 Form 10-K
68
The fol
f lowing tabl
a e presents the weighted-average yields, calculated on a yield-to-matur
t
ity basis, on the remaining
contractua
t
l matur
t
ities (unadjusted for
f
expected prepayments) of HTM debt securities at December 31, 2024:
0-1 year
1-5 years
5-10 years
Over 10
years
Total
Held to maturity debt securities
U.S. Treasury s
r
ecurities
3.71 %
— %
— %
— %
3.71 %
U.S. government agency securities
—
—
4.45
3.34
3.57
Obligations of states and political subdivisions: (1)
Obligations of states and state agencies
—
—
4.17
4.53
4.46
Municipal bonds
3.81
3.86
3.74
4.31
4.14
Total obligations of states and political
subdi
u
visions
3.81
3.86
3.81
4.36
4.20
Residential mortgage-backed securities (2)
2.92
4.78
3.49
2.86
2.88
Trus
r
t preferred securities
—
—
6.75
7.45
7.13
Corporate and other debt securities
4.20
3.69
4.94
—
4.08
Total
3.81 %
3.97 %
4.30 %
3.05 %
3.16 %
(1)
Average yields on obligations of states and political subdi
u
visions are generally tax-exempt and calculated on a tax-equivalent basis using
a statutory federal income tax rate of 21 percent.
(2)
Residential mortgage-backed securities yields are shown using stated contractua
t
l matur
t
ity dates.
The residential mortgage-backed securities portfol
f io is a significant source of our liquidity through the monthly cash flo
f w
of principal and interest. Mortgage-backed securities, like all securities, are sensitive to changes in the interest rate environment,
increasing and decreasing in value as interest rates fall and rise. As interest rates fal
f l, the potential increase in prepayments can
reduce the yield on the mortgage-backed securities portfol
f io and reinvestment of the proceeds will be at lower yields.
Conversely, rising interest rates may reduce cash flo
f ws from prepayments and extend anticipated duration of these assets. We
monitor the changes in interest rates, cash flo
f ws and dur
d
ation, in accordance with our investment policies. Management seeks
out investment securities with an attractive spread over our cost of funds.
Allo
l wance for
f
Credit
d
Losses and Impai
m
rm
i
ent Analysisi
Available for
f
sale debt securities. AFS debt securities in unrealized loss positions are evaluated for impairment related
to credit losses at least quarterly. In assessing whether a credit loss exists, we compare the present value of cash flo
f ws expected
to be collected from the security with the amortized cost basis of the security. If the present value of cash flo
f ws expected to be
collected is less than the amortized cost basis for
f
the security, a credit loss exists and an allowance for
f
credit losses is recorded,
limited to the amount that the fai
f r value is less than the amortized cost basis. Declines in fair value that have not been recorded
through an allowance for
f
credit losses, such as declines due to changes in market interest rates, are recorded through other
comprehensive income, net of appl
a
icable taxes.
We have ev laluated all AFS debt securities that are in an unrealized loss position as of December 31, 2024 and
December 31, 2023 and determined that the declines in fair value are mainly attributable to changes in market volatility, due
d
to
factors such as interest rates and spread factors, but not attributable to credit quality or other fact
f
ors. During the fir
f st quarter
2023, Valllley recogni
ognized a cr d
edit related i
d imp iairment of one corporat
b
e b
d
ond issued by Signature Bank resulting i
g i
b
n both a
pr
i
ovi ision for credidi l
t losses a d
nd fullll h
charge-off of hthe secu iri yty totaliling $5.0
i
millllion ba
b sed on a comparison of the present value of
expected cash flo
f ws to the amortized cost. The bond was subsequently sold, and the sale resulted in a $869 thousand gain
during the fourth quarter 2023. There was no other impairment recognized within the AFS debt securities portfol
f io during the
years ended December 31, 2024, 2023 and 2022.
Valllley d
y does not inte d
nd to sellll any of i
f its AF
d
S d b
ebt securi i
ities in an unr
l
ealiz d
ed loss posi i
ition p irior to recove y
ry of our
amor itiz d
ed cost ba isis, and i
d i i
t is mor l
e likik lely than not hthat Valllley will
ill not be re
i
quired to s lell a y
ny of its secu iri ities p irior to recove y
ry
of our amor itiz d
ed cost ba isis. None of hthe AFS debt secu iri ities were past due as of December 31, 2024 and there was no
allowance for
f
credit losses for
f
AFS debt securities at December 31, 2024 and 2023.
Held to maturity debt securities. As discussed fur
f
ther in Note 4 to the consolidated financial statements, Valley
estimates the expected credit losses on HTM debt securities that have loss expectations using a discounted cash flow model
developed by a third party. Valley has a zero-loss expectation for
f
certain securities within the HTM portfol
f io, including U.S.
Treasury s
r
ecurities, U.S. agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and
Freddie Mac, and collateralized municipal bonds. To measure the expected credit losses on HTM debt securities that have loss
69
2024 Form 10-K
expectations, we utilize a third party discounted cash flow model. The assumptions used in the model for
f
pools of securities
with common risk characteristics include the historical lifet
f ime probabi
a lity of default and severity of loss in the event of default,
with the model incorporating several economic cycles of loss history d
r
ata to calculate expected credit losses given default at the
individual security level. HTM debt securities were carried net of an allowance for
f
credit losses totaling $647 thousand and
$1.2 million at December 31, 2024 and 2023, respectively. There were no net charge-offs of HTM debt securities dur
d
ing the
years ended December 31, 2024, 2023 and 2022.
Investment grades. The investment grades in the table below refle
f ct the most current independent analysis performed by
third parties of each security as of the date presented and not necessarily the investment grades at the date of our purchase of the
securities. For many securities, the rating agencies may not have performed an independent analysis of the tranches owned by
us, but rather an analysis of the entire investment pool. For this and other reasons, we believe the assigned investment grades
may not accurately reflect the actual credit quality of each security and should not be viewed in isolation as a measure of the
quality of our investment portfol
f io.
The fol
f lowing tabl
a e presents availabl
a e for
f
sale and held to matur
t
ity debt investment securities by investment grades at
December 31, 2024.
2024
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
(in thousands)
Available for
f
sale investment grades:*
AAA/AA/A Rated
$
3,331,220
$
3,816
$
(173,870) $
3,161,166
BBB Rated
91,157
—
(2,894)
88,263
Not rated
129,896
247
(9,848)
120,295
Total
$
3,552,273
$
4,063
$
(186,612) $
3,369,724
Held to maturity investment grades:*
AAA/AA/A Rated
$
3,368,128
$
2,097
$
(493,482) $
2,876,743
BBB Rated
6,000
—
(186)
5,814
Not rated
158,092
10
(12,375)
145,727
Total
$
3,532,220
$
2,107
$
(506,043) $
3,028,284
*
Rated using external rating agencies. Ratings categories include entire range. For example, “A Rated” includes A+, A, and A-. Split rated
securities with two ratings are categorized at the higher of the rating levels.
The unrealized losses in the AAA/AA/A rated categories of both the AFS and HTM debt securities portfol
f ios (in the
above tabl
a e) were largely related to residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac
and continue to be driven by the higher market interest rate environment. The investment securities AFS and HTM debt
securities included $129.9 million and $158.1 million, respectively, of investments not rated by the rating agencies with
aggregate unrealized losses of $9.8 million and $12.4 million, respectively, at December 31, 2024. The unrealized losses within
non-rated AFS debt securities mostly related to several large corpor
r
ate bonds negatively impacted by higher interest rates
during 2024, and not changes in underlying credit. The unrealized losses within non-rated HTM debt securities mainly related
to four isingl
ngle-issuer ba
b nk trus
r
t preferred issuances with a combined amortized cost of $36.1
i
millllion with $6.9 million gross
unrealized losses and several corpor
r
ate debt securities that were negatively impacted by rising interest rates, and not changes in
their underlying credit.
See Note 4 to the consolidated financial statements for
f
additional infor
f
mation regarding our investment securities
portfol
f io.
2024 Form 10-K
70
Loan Portfo
t
lio
The fol
f lowing tabl
a e refle
f cts the composition of the loan portfol
f io at December 31, 2024 and 2023:
2024
2023
($ in thousands)
Commercial and industrial
$
9,931,400
$
9,230,543
Commercial real estate:
Non-owner occupi
u ed (1)
12,344,355
15,078,464
Multifamily (2)
8,299,250
8,860,219
Owner occupi
u ed (1)
5,886,620
4,304,556
Total
26,530,225
28,243,239
Construc
r
tion
3,114,733
3,726,808
Total commercial real estate
29,644,958
31,970,047
Residential mortgage
5,632,516
5,569,010
Consumer:
Home equity
604,433
559,152
Automobile
1,901,065
1,620,389
Other consumer
1,085,339
1,261,154
Total consumer loans
3,590,837
3,440,695
Total loans (3)
$
48,799,711
$
50,210,295
As a percent of total loans:
Commercial and industrial
20.4 %
18.4 %
Commercial real estate:
Non-owner occupi
u ed
25.2
30.0
Multifamily
17.0
17.7
Owner occupi
u ed
12.1
8.6
Construc
r
tion
6.4
7.4
Total commercial real estate
60.7
63.7
Residential mortgage
11.5
11.1
Consumer loans
7.4
6.8
Total
100.0 %
100.0 %
(1)
During the second quarter 2024, approximately $1.1 billion of non-owner occupi
u ed loans reclassified to owner occupi
u ed loans based
upon Valley's re-assessment of such loans under the applicable bank regulatory guidance.
(2)
Includes loans collateralized by properties that are greater than 50 percent rent regulated totaling appr
a
oximately $553 million and $531
million at December 31, 2024 and 2023, respectively.
(3)
Includes net unearned discount and defer
f red loan fees
f
of $45.3 million and $85.4 million at December 31, 2024 and 2023, respectively.
Total loans decreased by $1.4 billion, or 2.8 percent to $48.8 billion at December 31, 2024 from December 31, 2023
mainlyly as a result of bulk sales of commercial real estate and construc
r
tion loans completed in the fir
f st half of 2024 and the
fourth quarter 2024 and commercial real estate loans repayment activity in 2024, which outpa
t
ced new and refinanced loan
volumes due to the planned lower production within the non-owner occupi
u ed and multifam
f
ily loan categories. Loans held for
f
sale are presented separat lely fro
f
m tot lal loans on the cons lolididat d
ed statements of fifinancial c
di
ondi ition totaled $25.7 million and
$30.6 million at December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, we transfer
f red and
subs
u
equently sold performing commercial real estate and construc
r
tion loans from the held for investment loan portfol
f io to loans
held for sale. See Note 3 for d
addidi itional i
l infor
f
ma ition r g
egardidi g
ng loan h
s h leld f
d for
f
sale.
Commercial and industrial loans increased $700.9 million to $9.9 billion at December 31, 2024 from December 31, 2023.
h
The o g
rganic grow hth during 2
g 024 was la g
rg lely d
y due
d
to our continued m lul iti-year strategigi i
c i ini itia itive to expa d
nd ne
l
w loan produc ition
fro
d
m diverse rela itionshihip-driven
id
middldle marke b
t businesse
i
s in our prima y
ry ma k
rkets, as wellll as na itionwidid
b
e businesses.
h
The
increase with thihis cat g
egory w
r
as partially
lly offs
f et by
by hthe s lale of $
f $93.6
illi
million of l
f loans asso iciat d
ed
i
wi hth hthe s lale of our premium
fifinanc
l
e lendidi g
ng didi ivi ision in hthe fir
f st quarter 2024, and the subs
u
equent run-off o
f
f the vast majojo
a
iri yty of hthe ret iained pre i
mium
fifinanc l
e loan portf lol
f io S
.
ee Note 5 for
f
d
addidi itional i
l infor
f
ma ition r g
egardidi g
ng hthis transaction.
71
2024 Form 10-K
Commercial real estate loans (excluding construc
r
tion loans) decreased $1.7 billion to $26.5 billion at December 31, 2024
from December 31, 2023 primarily due to our strategic efforts to reduc
d
e our CRE loan concentration. As part of these efforts,
we sold $64.5 million of multifam
f
ily loans and $89.3 million of non-owner occupi
u ed loans through loan participation
agreements at par value with a related party, Bank Leumi Le-Israel B.M. (BLITA), during the first quarter 2024. During the
fourth quarter 2024, we sold $257.5 million of multifamily loans and $662.8 million of non-owner occupi
u ed loans to an
unrelated party. In addition, we continued to be highly selective with new loan originations, which were outpa
t
ced by run
r
offf
from normal repayment activity within the non-owner occupied and multifam
f
ily loan categories. At December 31, 2024, our
CRE loan concentration ratio declined to 362 percent as compared to 421 percent and 474 percent at September 30, 2024 and
December 31, 2023, respectively. During the second quarter 2024, we reassessed the loan classification of skilled nursing
facility loans based on the qualifyi
f ng criteria for
f
owner occupi
u ed loans outlined in the appl
a
icable bank regulatory r
r
eporting
guidance. As a result, we reclassified loans totaling appr
a
oximately $1.1 billion fro
f
m non-owner occupi
u ed to owner occupi
u ed
loans dur
d
ing the second quarter 2024. Over lall, commer ici lal re lal estate loans are wellll d
-diver isififi d
ed across our footpr
t
int areas in
l
Floridida,
l
Al b
abama, New Jersey, New York a d
nd Ma h
nhattan with a co b
mbin d
ed weigight d
ed aver g
ag l
e loan to vala ue ratio of 58 percent
and debt service coverage ratio of 1.66 at December 31, 2024 as compared to 57 percent and debt service coverage ratio of 1.67
at December 31, 2023.
Construc
r
ition loans decreased $612.1
i
milli
llion to $3.1 bibillllion at December 31, 2024 fro
D
m
ecember 31, 2023 mostly due to
the migration of completed projects to both internal and external permanent fin
f ancing (mostly owner occupi
u ed) and a low level
of new advances on existing projects dur
d
ing 2024. We also sold approximately $79.7 million of construc
r
tion loan participations
at par value to BLITA dur
d
ing the first half of 2024, and $14.2 million of construc
r
tion loans to an unrelated party dur
d
ing fou
f
rth
quarter 2024.
Residential mortgage loans totaled $5.6 billion at December 31, 2024 and increased $63.5 million fro
f
m December 31,
2023 la g
rg lely d
y due
d
to lower prepayment activity a d
nd continued reten ition of a hihighe
gher percentage of ne
l
w loan v lolumes for
investment ra hther
hthan for s lale. During 2024, we retained approximately 67 percent of the total residential mortgages
originations in our held for investment loan portfol
f io. In addition, dur
d
ing 2024, we purchased $41.3 million of 1-4 family
residential mortgage loans from an unrelated third party lender for
f
qualifyi
f ng CRA purpos
r
es. Our new and refinanced
residential mortgage loan originations totaled $611.7 million for
f
the year ended December 31, 2024 as compared to $649.9
million in 2023. The volume of residential mortgage loan applications remained relatively low during 2024 largely due
d
to the
stubbor
t
nly high level of mortgage interest rates, as well as declines in new home purchase activity which may continue to
challenge our ability to grow this loan category i
r
n 2025. Valley also sold $75.5 million of residential mortgage loans dur
d
ing the
fourth quarter 2024.
Consumer loans increased $150.1 million to $3.6 billion at December 31, 2024 from December 31, 2023 mainly due to
increases in automobile and home equity loans, partially offse
f
t by lower other consumer loans. Automobile loans increased
$280.7 million, or 17.3 percent to $1.9 bibillllion at December 31, 2024 from December 31, 2023 mainly due to continued
consumer demand generated by our indirect auto dealer network and low prepayment activity within the portfol
f io. Home equity
loans increased $45.3 million to $604.4 million at December 31, 2024 from $559.2 million at December 31, 2023 largely due
d
to
moderate increases in pre-existing liline utili
ilization,
h
whilile new home e
i
qui yty loan origiginations remain
h
ch lalle g
nged d
d due
d
to hthe
unfav
f
or b
able hihigh i
h interest rate e
i
nvironment.t Other consumer loans decreased $175.8 million to $1.1 billion at December 31,
2024 as compared to 2023 primarily due
d
to the negative impact of high market interest rates on the demand and usage of
collateralized personal lines of credit, however, the usage of collateralized personal lines of credit showed a slight increase
during the fourth quarter 2024.
A significant part of our lending is in northern and central New Jersey, New York City, Long Island and Florida. To
mitigate our geographic risks, we make efforts to maintain a diversifie
f d portfol
f io as to type of borrower and loan to guard
against a potential downward tur
t
n in any one economic sector.
Looking forward to 2025, we continue to proactively diversify our loan portfol
f io by reducing new originations of certain
types of commercial real estate lending, such as non-owner occupied and multifam
f
ily loans through highly selective new loan
origination. We also intend to focus greater effo
f
rts on commercial and industrial loan products. For 2025, we expect an overall
loan growth, net of continued run
r
off f
f
ro
f
m schedul
d ed maturities of commercial real estate non-owner occupi
u ed and multifamily
loans, in the range of 3 to 5 percent based on total loans at December 31, 2024. However, there can be no assurance that we will
achieve such levels given the potential for
f
unfor
f
eseen changes in the market and other conditions detailed in our risk factors set
forth under Item 1A. Risk Factors of this Report.
2024 Form 10-K
72
The fol
f lowing tabl
a e presents the contractua
t
l matur
t
ity distribution of loans by category a
r
t December 31, 2024:
1 Year or Less
1 to 5 Years
5 to 15 Years
Over 15 Years
Total
(in thousands)
Commercial and industrial
$
2,208,501
$
4,638,823
$
2,793,268
$
290,808
$
9,931,400
Commercial real estate
3,117,541
10,527,207
10,348,661
2,536,816
26,530,225
Construc
r
tion
1,270,952
1,212,507
403,598
227,676
3,114,733
Residential mortgage
16,893
229,038
435,125
4,951,460
5,632,516
Consumer
103,265
968,457
2,440,404
78,711
3,590,837
Total loans
$
6,717,152
$
17,576,032
$
16,421,056
$
8,085,471
$
48,799,711
We may renew loans at matur
t
ity when requested by a customer. In such instances, we generally conduct a review which
includes an analysis of the borrower’s financial condition and, if applicable, a review of the adequacy of collateral via a new
appraisal fro
f
m an independent, bank appr
a
oved, certified or licensed property appr
a
aiser or readily availabl
a e market resources. A
rollover of the loan at maturity may require a principal reduction or other modified terms.
The fol
f lowing tabl
a e presents the contractua
t
l matur
t
ities after one year for fix
f ed and adjustabl
a e rate loans within each loan
category a
r
t December 31, 2024:
Loans Maturing After One Year
Fixed Rate
Adjustable Rate
Total
(in thousands)
Commercial and industrial
$
2,847,150
$
4,875,749
$
7,722,899
Commercial real estate
12,359,346
11,053,338
23,412,684
Construc
r
tion
274,189
1,569,592
1,843,781
Residential mortgage
4,372,803
1,242,820
5,615,623
Consumer
2,397,017
1,090,555
3,487,572
Total loans
$
22,250,505
$
19,832,054
$
42,082,559
Non-pe
-
rfor
f
min
r
g Assets
NPAs include non-accrua
r
l loans, OREO, and other repossessed assets (which consist of automobiles and taxi medallions)
at December 31, 2024. Loans are generally placed on non-accrua
r
l status when they become past due in excess of 90 days as to
payment of principal or interest and/or the ful
f l and timely collection of principal and interest becomes uncertain. Exceptions to
the non-accrua
r
l policy may be permitted if the loan is suffic
f iently collateralized and in the process of collection. OREO is
acquired through foreclosure on loans secured by land or real estate. OREO and other repossessed assets are reported at lower
of cost or fair value, less estimated cost to sell.
Our NPAs increased $79.9 million, or 27.2 percent, to $373.3 million at December 31, 2024 as compared to
December 31, 2023 mainly due to higher non-accrua
r
l commercial and industrial and commercial real estate loan balances.
NPAs as a percentage of total loans and NPAs totaled 0.76 percent and 0.58 percent at December 31, 2024 and 2023,
respectively, (as shown in the tabl
a e below). While our total NPAs have increased from one year ago due
d
, in part, to a few
f
larger
commercial loan relationships in our New York market, we believe our total NPAs have remained relatively low as a
percentage of the total loan portfol
f io and NPAs, which is refle
f ctive of our consistent approach to the loan underwriting criteria
for both Valley originated loans and loans purchased from third parties. For additional details, see the “Credit quality
indicators” section in Note 5 to the consolidated financial statements.
Our lending strategy is based on underwriting standards designed to maintain high credit quality, and we remain
optimistic regarding the overall future performance of our loan portfol
f io. During the year ended December 31, 2024, the
majo
a rity of our borrowers continued to demonstrate resilience despite the impact of higher borrowing costs, inflation, labor
a
costs and other fac
f
tors. We continue to proactively monitor our commercial loans for potential negative trends/borrower
weakness due to the current operating environment and internally risk rate them accordingly. However, management cannot
provide assurance that the non-performing assets will not increase fro
f
m the levels reported at December 31, 2024 due to the
afor
f
ementioned or other factors potentially impacting our lending customers.
73
2024 Form 10-K
The fol
f lowing tabl
a e sets for
f
th by loan category,
r
accrui
r ng past due and non-performing assets on the dates indicated in
conjunction with our asset quality ratios at December 31, 2024 and 2023:
2024
2023
($ in thousands)
Accruing past due loans
30 to 59 days past due:
Commercial and industrial
$
2,389
$
9,307
Commercial real estate
20,902
3,008
Residential mortgage
21,295
26,345
Total consumer
12,552
20,554
Total 30 to 59 days past due
d
57,138
59,214
60 to 89 days past due:
Commercial and industrial
1,007
5,095
Commercial real estate
24,903
1,257
Residential mortgage
5,773
8,200
Total consumer
4,484
4,715
Total 60 to 89 days past due
d
36,167
19,267
90 or more days past due:
Commercial and industrial
1,307
5,579
Construc
r
tion
—
3,990
Residential mortgage
3,533
2,488
Total consumer
1,049
1,088
Total 90 or more days past due
d
5,889
13,145
Total accrui
r ng past due loans
$
99,194
$
91,626
Non-accrual loans:
Commercial and industrial
$
136,675
$
99,912
Commercial real estate
157,231
99,739
Construc
r
tion
24,591
60,851
Residential mortgage
36,786
26,986
Total consumer
4,215
4,383
Total non-accrua
r
l loans
359,498
291,871
Other real estate owned (OREO)
12,150
71
Other repossessed assets
1,681
1,444
Total non-performing assets (NPAs)
$
373,329
$
293,386
Total non-accrua
r
l loans as a % of loans
0.74 %
0.58 %
Total NPAs as a % of loans and NPAs
0.76
0.58
Total accrui
r ng past due and non-accrua
r
l loans as a % of loans
0.94
0.76
Allowance for
f
loan losses as a % of non-accrua
r
l loans
155.45
152.83
Loans pas d
t due
d
30 to 59 days decreased $2.1
i
milli
llion to $57.1
i
millllion at Dece b
mber 31, 2024 as compar d
ed to December 31,
2023 due to de lclines in most loan categories, except for
f
an increase in commercial r
l
eal estate loans whihi h
ch wa l
s largelyly driven by
by
a $15.1
illi
million loan in lcl d
uded i
d in thihis earlyly st g
ag d
e d lelinquency cat g
egory a
r
t Dece b
mber 31, 2024. Whihile hthis commercial real estate
loan is intern lallyly lclas isififi d
ed as subs
u
ta d
nda d
rd, man g
agemen b
t b lelieve i
s i i
t is w lell secured a d
nd in hthe process of c lollection.
Loans past due
d
60 to 89 days increased $16.9 million to $36.2 million at December 31, 2024 as compared to
December 31, 2023 due to higher commercial real estate loan delinquencies, partially offs
f et by decreases in all other loan types
within this delinquency category.
r
Commercial real estate loan delinquencies included an $18.6 million matured performing loan
in the process of its renewal.
Loans 90 days or more past due
d
and still accrui
r ng decreased $7.3 million to $5.9 million at December 31, 2024 as
compared to December 31, 2023 largely due
d
to the ful
f l repayment of a $4.0 million construc
r
tion loan that was included in this
2024 Form 10-K
74
delinquency category a
r
t December 31, 2023, as well as a decline in commercial and industrial loan delinquencies within this
category.
r
All the loans past due
d
90 days or more and still accrui
r ng are considered to be well secured and in the process of
collection.
Non-accrua
r
l loans increased $67.6 million to $359.5 million at December 31, 2024 as compared to December 31, 2023.
Non-accrua
r
l commercial a d
nd industrial l
l loans increased $36.8 million at December 31, 2024 as compared to December 31, 2023
mainly due to a few
f
additional large non-performing loan relationships, including one matured substandard loan totaling $19.6
million with specific
f
reserves of $2.5 million within our allowance for
f
loan losses at December 31, 2024. Non-accrua
r
l
commercial r
l
eal estate loans i
s ncreased $57.5 million at December 31, 2024 as compared to December 31, 2023 driven by
d
addidi itional non-performing l
g loan r lelationshihips i, includidi g
ng tw l
o loan r lelationshihips totaliling $
g $38.3
illi
millio i
n included i
d in thihis cat g
egory a
r
t
December 31,
.
2024 Non-accrua
r
l construc
r
tion loans decreased $36.3
i
milli
llion to $24.6 million at December 31, 2024 compar d
ed
to December 31, 2023 mainlyly due to fullll repayments and par iti lal loan
h
charge-offs t
f
ot laling $
g $23.8
illi
million a d
nd $12.2
il
millilion,
respectiv lely, related to three loan rela itionshihips.
Non-performing taxi medallion loan i
s included i
d in non-accrua
r
l commercial a d
nd industrial l
l loans totaled $
d
49.5 million at
December 31, 2024 and had related reserves of $25.8 million, or 52.1 percent of su h
ch loans,
i
wi hthin hthe allllowance for
f
loan
losses as com a
p red to $63.3 million of loans with related reserves of $37.7 million at December 31, 2023. During 2024, we
closely monitored the performance of our taxi medallion loans (primarily collateralized by New York City medallions). Due to
the challenging opera iting e
i
nvironment for
f
iride services and uncertain borrower performance,
lall of the ta ixi medallllio
l
n loans
remain on non-accrua
r
l status at Dece b
mber 31, 2024. Fur hther poten iti lal de lclines in hthe market v lalua ition of ta ixi medallllions and
hthe current operating environment mainly within New York City may negatively impact the performance of this portfol
f io.
OREO totaled $12.2 million at December 31, 2024 as compared to $71 thousand at December 31, 2023. The
December 31, 2024 balance is primarily comprised of two commercial real estate properties transferred to OREO dur
d
ing 2024.
Sales of OREO properties and the related gains or losses were not material for the years ended December 31, 2024 and 2023.
The for
f
eclosed residential real estate properties included in OREO totaled $152 thousand and $71 thousand at December 31,
2024 and 2023, respectively. See Notes 1 and 3 to the consolidated financial statements for
f
additional infor
f
mation regarding
OREO.
Although the timing of collection is uncertain, management believes that the majo
a rity of the non-accrua
r
l loans at
December 31, 2024, are well secured and largely collectible, based in part on our quarterly review of collateral dependent loans
and the valuation of the underlying collateral, if applicable. Any estimated shortfal
f l in the net realizable value for
f
collateral
dependent loans is charged-off when a loan is 90 or 120 days past due or sooner if it is probabl
a e that a loan may not be fully
collectible. If interest on non-accrua
r
l loans had been accrue
r
d in accordance with the original contractua
t
l terms, such interest
income would have amounted to approximately $32.5 million, $28.8 million and $21.7 million for the years ended
December 31, 2024, 2023 and 2022, respectively; none of these amounts were included in interest income dur
d
ing these periods.
As
Asse C
t Con
C
centratio
t n a d
nd
i
Ri k
sk
i
l
Elem
l
ents
Most of our lending i
g is withihin our primary m
r
arkets locat d
ed in nor hthern a d
nd centr lal New Jersey, New York City,y Long
Island, Westchester County, New York and Florida, and, to a lesser extent, Alabama, Califor
f
nia and Illinois. As part of our
bus
business strat g
egy, we have pr
i
ovided commercial l
l lendidi g
ng to new customers in a few
f
ta g
rget d
ed states beyond
yond our ge g
ographihic
footpr
t
int. In addition to our primary m
r
arkets, automobile loans are mostly originated in several other contiguous states. To
i i
mitigate our ge g
ographihic risks, we m k
ake efforts to m iaint iain a didiversififie
f d portf lol
f io as to ytype of borrower a d
nd loan to gua d
rd
g
ag iainst a poten iti lal downward tur
t
i
n in a y
ny one economic sector D
.
ue to the level of our underwriting standards appl
a
ied to all
loans, management believes the out of market loans generally present no more risk than those made within the market.
However, each loan or group of loans made outside of our primary markets poses different geographic risks based upon
u
the
economy of that particular region.
For our commercial loan portfol
f io, comprised of commercial and industrial loans, commercial real estate loans, and
construc
r
tion loans, a separate credit department is responsible for risk assessment and periodically evaluating overall
creditworthiness of a borrower. Additionally, effor
f
ts are made to limit concentrations of credit to minimize the impact of a
downtur
t
n in any one economic sector. We believe our loan portfol
f io is diversifie
f d as to type of borrower and loan. However,
loans collateralized by either commercial or residential real estate represented appr
a
oximately 73 percent of total loans at
December 31, 2024. Most of hth
l
e loans collllater laliz d
ed by
by re lal estate ar
i
e in New Jers y
ey, New Yo k
rk and Flo irida presen iti g
ng a
ge g
ographihi
l
cal cr d
edit iri k
sk ifif hthere was isigni
gnififican b
t bro d
ad b
-bas d
ed dete irioratio i
n in economic co di
ndi itions
i
wi hthin hthese r g
egions. See Item
1A.
i
Ri k
sk Factors—“Risks Related to the Operating E
i
nvironment.”
Additionally, our commercial real estate portfol
f io includes credit risk exposures to loans collateralized by offi
f ce buildings
and multifam
f
ily properties in Manhattan and other markets. At December 31, 2024, total commercial real estate loans
75
2024 Form 10-K
collateralized by offi
f ce buildings were approximatelyly $3.1 billion (i(includidi g
ng appr
i
oximatelyly $218.1 million locat d
ed in
Ma h
nhatta )
n) of the total $26.5 billion portfol
f io. The majo
a rity of the offic
f e space loans are multi-tenant and dispersed
geographically in Florida, Alabama, New Jersey and New York. Multifam
f
ily loans within the portfol
f io totaled $8.3 billion at
December 31, 2024, and included $553 million of loans exposures to greater than 50 percent rent regulated buildings located
mainly in Manhattan. We continue to lclos lely m
i
onitor these loan ytypes for
f
lelevat d
ed iri k
sks or weaknesses, and i
d internally
lly iri k
sk rate
and reserve for the
i
m in our lallowance for
f
loan losses accordidingl
ngly.
Consumer loans are comp irised of resididen iti lal mortgage loans, home e
i
qui yty loans, automobibile loans a d
nd other consum rer
loans. Residential mortgage loans are secured by 1-4 family properties mostly located in New Jersey, New York and Florida.
We do provide mortgage loans secured by homes beyond this primary geographic area; however, lending outside this primary
area has generally consisted of loans made in suppor
u
t of existing customer relationships, as well as targeted purchases of certain
loans guaranteed by third parties. Our mortgage loan originations are comprised of both jumbo (i.e., loans with balances above
conventional conforming loan limits) and conventional loans based on underwriting standards that generally comply with
Fannie Mae and/or Freddie Mac requirements. The weighted average loan-to-value ratio of all residential mortgage originations
in 2024 was 73.5 percent while FICO® (independent objective criteria measuring the creditworthiness of a borrower) scores
averaged 758. Home equity and automobile loans are secured loans and are made based on an evaluation of the collateral and
the borrower’s creditworthiness.
Management realizes that some degree of risk must be expected in the normal course of lending activities. Allowances
are maintained to abs
a
orb s
r
uch lifet
f ime expected credit losses inherent in the portfol
f io. See the “Loan Portfolio Risk Elements
and Credit Risk Management” section in Note 5 to the consolidated financial statements for
f
additional infor
f
mation.
Allo
l wance for
f
Credit
d
Losses
The ACL for loans includes the allowance for
f
loan losses and the reserve for unfunde
f
d credit commitments. Under
CECL, our methodology to establ
a ish the allowance for
f
loan losses has two basic components: (i) a collective reserve
component for estimated expected credit losses for
f
pools of loans that share common risk characteristics and (ii) an individually
evaluated reserve component for loans that do not share risk characteristics, consisting of collateral dependent loans. Valley
also maintains a separate allowance for
f
unfunde
f
d credit commitments mainly consisting of undisbursed non-cancellabl
a e lines of
credit, new loan commitments and commercial standby letters of credit.
Valley estimates the collective ACL using a current expected credit losses methodology which is based on relevant
information about
a
historical experience, current conditions, and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts that affe
f ct the
collectability of the loan balances. In estimating the component of the allowance on a collective basis, we use a transition
matrix model which calculates an expected life o
f
f loan loss percentage for each loan pool by using probabi
a lity of default and
loss given defau
f
lt metrics. The probabi
a lity of default and loss given defau
f
lt metrics are adju
d sted using a scaling fact
f
or to
incorporate a full economic cycle.
The expected life o
f
f loan loss percentages are determined by analyzing the migration of loans within the commercial and
industrial loan categories fro
f
m performing to loss by credit quality rating or delinquency categories using historical life-of-loan
data for each loan portfol
f io pool, and by assessing the severity of loss based on the aggregate net lifet
f ime losses incurred. The
expected credit losses based on loss history a
r
re adju
d sted for qualitative fact
f
ors. Among other things, these adju
d stments include
and account for diffe
f rences in: (i) the impact of the reasonabl
a e and suppor
u
tabl
a e economic forecast, relative probabi
a lity
weightings and economic variables under each scenario and reversion period, (ii) other asset specific risks to the extent that
they do not exist in the historical loss information, and (iii) net expected recoveries of charged-off l
f
oan balances. These
adju
d stments are based on qualitative fact
f
ors not reflected in the transition matrix but are likely to impact the measurement of
estimated credit losses. The expected lifet
f ime loss rate is the life o
f
f loan loss percentage from the transition matrix model plus
the impact of the adjustments for qualitative fac
f
tors. The expected credit losses are the product of multiplying the model’s
expected lifet
f ime loss rate by the exposure at defau
f
lt at period end on an undiscounted basis.
Valley utilizes a two-year reasonabl
a e and suppor
u
tabl
a e for
f
ecast period fol
f lowed by a one-year period over which estimated
losses revert to historical loss experience on a straight-line basis for the remaining life o
f
f the loan. The forecast consists of
multi-scenario economic forecasts to estimate future credit losses and are governed by a cross-functional committee. The
committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the
model, as well as the relative probabi
a lity weightings of the selected scenarios, based upon
u
all readily availabl
a e inform
f
ation. The
model proje
o cts economic variables under each scenario based on detailed statistical analyses. We have identifie
f d and selected
key variabl
a es that most closely correlated to our historical credit performance, which include GDP, unemployment and the
Case-Shiller Home Price Index.
2024 Form 10-K
76
Valley maintained the majo
a rity of its probability weighting used in the economic forecast to the Moody’s Baseline
scenario with less emphasis on the S-3 downside and S-1 ups
u
ide scenarios. The probabi
a lity weightings were unchanged from
f
December 31, 2023. At Dece b
mber 31, 2024, the standalone Moody'
ody's Bas leline scenario, refle
f ct d
ed a more optimis itic outlo k
ok as
compar d
ed to Dece b
mber 31, 2023 in terms of most met irics hihighl
ghligight d
ed below.
At December 31, 2024, the Moody'
ody's Bas leline for
f
ecas i
t included the f lollo i
wi g
ng sp
i
ecifific assump itions:
•
GDP expansion b
n by about
a
2.2 percent in the first quarter 2025;
•
Unem lpl y
oym n
e t of 4.1 percent in the first quarter 2025 and over the remainder of the forecast period ending in
the four
f
th quarter 2026;
•
h
The F d
eder lal Reserve range was 4.25 - 4.50 percent with two possible cuts totaling 0.25 percent in 2025; and
•
Infla
f tion was at 2.9 percent in the fourth quarter 2024 driven by elevated shelter infla
f tion. The infla
f tion rate is
expected to continue decreasing to reach the target rate of 2 percent around 2027.
h
Th
a
e
llowance for
f
credit losses for
f
loans methodology and accounting policy are fully described in Note 1 to the
consolidated financial statements.
The fol
f lowing tabl
a e summarizes the relationship among loans, loans charged-off, loan recoveries, the provision for credit
losses and the allowance for
f
credit losses for
f
the years ended December 31, 2024, 2023 and 2022:
2024
2023
2022
Allowance for
f
credit losses for
f
loans
($ in thousands)
Beginning balance
$
465,550
$
483,255
$
375,702
Impact of the adoption of ASU No. 2022-02 (1)
—
(1,368)
—
Allowance for
f
purchased credit deteriorated (PCD) loans (2)
—
—
70,319
Beginning balance, adju
d sted
465,550
481,887
446,021
Loans charged-off:
Commercial and industrial
(68,299)
(48,015)
(33,250)
Commercial real estate
(125,858)
(11,134)
(4,561)
Construc
r
tion
(12,637)
(11,812)
—
Residential mortgage
(29)
(194)
(28)
Total Consumer
(8,289)
(4,298)
(4,057)
Total loan charge-offs
f
(215,112)
(75,453)
(41,896)
Charged-off l
f
oans recovered:
Commercial and industrial
6,038
11,270
17,081
Commercial real estate
3,595
34
2,073
Construc
r
tion
1,535
—
—
Residential mortgage
140
201
711
Total Consumer
2,194
1,986
2,929
Total loans recovered
13,502
13,491
22,794
Total net loan charge-offs
f
(201,610)
(61,962)
(19,102)
Provision for credit losses for
f
loans
309,388
45,625
56,336
Ending balance
$
573,328
$
465,550
$
483,255
Components of allowance for
f
credit losses for
f
loans:
Allowance for
f
loan losses
$
558,850
$
446,080
$
458,655
Allowance for
f
unfunde
f
d credit commitments
14,478
19,470
24,600
Allowance for
f
credit losses for
f
loans
$
573,328
$
465,550
$
483,255
Components of provision for credit losses for
f
loans:
Provision for credit losses for
f
loans
$
314,380
$
50,755
$
48,236
(Credit) provision for unfunde
f
d credit commitments
(4,992)
(5,130)
8,100
Total provision for credit losses for
f
loans
$
309,388
$
45,625
$
56,336
Allowance for
f
credit losses for
f
loans as a % of total loans
1.17 %
0.93 %
1.03 %
77
2024 Form 10-K
(1) Represents the opening adju
d stment for the adoption of ASU No. 2022-02 effe
f ctive January 1, 2023.
(2) Represents the allowance for
f
acquired PCD loans. For 2022, the allowance for
f
acquired PCD loans is net of PCD loan charge-offs
f
totaling $62.4 million in the second quarter 2022.
The fol
f lowing tabl
a e presents the relationship among net loans charged-off a
f
nd recoveries, and average loan balances
outstanding for the years ended December 31, 2024, 2023 and 2022:
($ in thousands)
Net loan (charge-offs) recoveries
Commercial and industrial
$
(62,261)
$
(36,745)
$
(16,169)
Commercial real estate
(122,263)
(11,100)
(2,488)
Construc
r
tion
(11,102)
(11,812)
—
Residential mortgage
111
7
683
Total consumer
(6,095)
(2,312)
(1,128)
Total
$
(201,610)
$
(61,962)
$
(19,102)
Average loans outstanding
Commercial and industrial
$
9,448,128
$
8,999,783
$
7,691,496
Commercial real estate
27,838,032
27,610,042
23,127,504
Construc
r
tion
3,642,785
3,849,473
2,977,688
Residential mortgage
5,642,067
5,498,563
4,899,854
Total consumer
3,459,574
3,394,000
3,233,811
Total
$
50,030,586
$
49,351,861
$
41,930,353
Net loan charge-offs
f
(recoveries) to average loans outstanding
Commercial and industrial
0.66%
0.41%
0.21%
Commercial real estate
0.44
0.04
0.01
Construc
r
tion
0.30
0.31
0.00
Residential mortgage
0.00
0.00
(0.01)
Total consumer
0.18
0.07
0.03
Total net loan charge-offs
f
to total average loans outstanding
0.40
0.13
0.05
2024
2023
2022
Net loan charge-offs
f
increased $139.6 million to $201.6 million in 2024 as compared to $62.0 million in 2023 primarily
due to higher gross loan charge-offs within commercial loan categories.
Gros c
s ommercial and industrial loan h
ch rarge-offs totaling $68.3 million for the year ended December 31, 2024 included
(i) partial charge-offs
f
totaling $9.5 million related to one non-performing taxi medallion loan relationship that was fully
reserved for in our allowance for
f
loan losses (ii) an $11.0 million of partial loan charge-offs
f
related to one commercial and
industrial loan (with prior reserves within the allowance for
f
loan losses totaling $8.0 million, and (iii) a few
f
larger partial loan
charge-offs. Gros
c
s
ommercial real estate loan charge-offs
f
totaling $125.9 million for
f
the year ended December 31, 2024
included (i) full charge-off of $54.1 million non-performing loan relationship, (ii) partial charge-offs
f
of $20.6 million related to
a single non-performing commercial real estate loan relationship and (iii) a few
f
larger partial loan charge-offs
f
that had
combined specific reserves of $25.9 million within the allowance for
f
loan losses. Gross construc
r
tion loan charge-offs
f
totaling
$12.6 million for
f
the year ended December 31, 2024 included partial charge-offs of four construc
r
tion loans with total allocated
specific reserves of $4.9 million.
While elevated as compared with the low levels of net charge-offs
f
experienced in 2023 and 2022, the overall level of net
loan charge-offs (as presented in the above
a
tabl
a e) for the year ended December 31, 2024 continued to largely trend within
management's expectations for the credit quality of the loan portfol
f io during 2024.
2024 Form 10-K
78
The fol
f lowing tabl
a e summarizes the allocation of the allowance for
f
credit losses to specific loan portfol
f io categories at
December 31, 2024 and 2023:
2024
2023
Allowance
Allocation
Percent of
Loan Category
to Total Loans
Allowance
Allocation
Percent of
Loan Category
to Total Loans
($ in thousands)
Loan Category:
Commercial and industrial
$
173,002
20.4 % $
133,359
18.4 %
Commercial real estate:
Commercial real estate
251,351
54.4
194,820
56.2
Construc
r
tion
52,797
6.3
54,778
7.4
Total commercial real estate
304,148
60.7
249,598
63.6
Residential mortgage
58,895
11.5
42,957
11.1
Total consumer
22,805
7.4
20,166
6.9
Total allowance for
f
loan losses
558,850
100.0 %
446,080
100.0 %
Allowance for
f
unfunde
f
d credit commitments
14,478
19,470
Total allowance for
f
credit losses for
f
loans
$
573,328
$
465,550
h
The allllowance for
f
cr d
edit losses for
f
loans, comp irised of our lallowance for
f
loan losses a d
nd unf
d
unde
f
d credidit com i
mitments
(i(includidi g
ng letters of cr d
edit), as a percentage of total l
l loans was 1.17 percent at Dece b
mber 31, 2024 and 0.93 percent at
December 31, 2023. The lallowance for
f
cr d
edit losses for
f
loan i
s increas d
ed $107.8
il
millilion at Dece b
mber 31, 2024 as compar d
ed to
December 31, 2023.
h
The pro ivi ision for credidi l
t losses for
f
loans tot lal d
ed $309.4
il
millilion and $45.6
il
millilion for the year ended December 31, 2024
and 2023, respectiv lely.
h
Th
i
e increas
i
e in the 2024 pr
i
ovi ision was m iai lnly d
y due
d
to (
: (i)i) hihighe
gher quantita itive reserves r lelat d
ed to
cri i
iticiz d
ed and cla i
ssififi d
ed loans wi h
ithin hthe commercial r
l
eal estate (
, (ii)
ii) commercial a d
nd industrial l
l loa
g
n growth, (i(iii)
ii)
d
addidi itional
sp
i
ecifific reserves a d
nd h
charge-offs a
f
sso iciat d
ed
i
wi hth hthe rev lalua ition of collllateral d
l dependent commercial l
l loans (i(i )
v) hth i
e impact of
loan h
charge-offs, was partialllly offset by
by lower economic forecast a d
nd other qualilita itive reserves.
As of December 31, 2024, hthe credidit qualility of our
l
Floridid l
a loan portf lol
f io has also rem iained resili
ilient in hthe afterma hth of
Hu i
rricanes Helene and Mililton,
h
which h
h hit
l
Floridid i
a in Septe b
mber and Oct b
ober 2024, respectiv lely. At hthis itime, there have been
rela itiv lely few
f
loan conces isions (mostly
tly in hthe for
f
m of l
f loan p y
ayment deferrals up to 90 days) f
) for
f
didistressed b
d borrower i
s impact d
ed
by
by hth h
e hur iricanes. At Dece b
mber 31, 2024, hth h
e hur iricanes didid not have a sigig inififican i
t impact on hth l
e lev lel of reserves or expect d
ed
loan h
charge-offs
i
wi hthin our lallowance for
f
loan losses. As a res lult, our pr
i
ovi ision fo l
r loa l
n losses for
f
hthe four
f
hth quarter 2024 was
net of a $
n $8.0
i
millllion r lelease of qualilita itive reserves for
f
es itimated l
d losses r lelat d
ed to hth h
e hur iricanes in our lallowance at Septe b
mber
30, 2024.
We expect our pr
i
ovi ision for credidi l
t losses t
d
o decrease fro
f
m the
lelevat d
ed level expe irien
d
ced in 2024 and i
d increasinglgly
normalilize throughout
oughout 2025. However, hthere can be no assurance that we will
ill
h
achieve lower pro ivi ision levels due to several o hther
factors, in lcl di
udi g
ng, but not lilimit d
ed to, the impact of future h
change i
s in the overallll performance of our loan portf lol
f io, poten iti lal
dow g
ngr d
ades in hth i
e internal risk cla i
ssifification of commercial l
l loans and the composi i
ition of our loan portf lol
f io i
, includidi g
ng ta g
rgeted
grow hth in loan cat g
egories not secured b
d by r
l
eal estate su h
ch as commercial a d
nd industrial l
l loans.
See Note 5 to the consolidated financial statements for
f
additional infor
f
mation regarding our allowance for
f
credit losses
for loans.
Loan Repu
e
rchase Contin
t
gencies
We engage in hthe o irigigina ition of re isidential mor gtg g
ages for s lal
i
e into the seco d
nda y
ry ma k
rket. Our sales of resididen iti lal
mortgage loans o irigiginated f
d for
f
sale totaled appr
a
i
oximatelyly $203.8
il
millilion, $202.5
il
millilion and $
d $385.5
i
millllion for 2024, 2023 and
2022, respectiv lely.
h
Th
l
e lev lel of loan sale i
s i i
s impact d
ed by
by several f
l fact
f
ors, in lcl di
udi g
ng consumer dema d
nd and preferences for
certain mortgage pr d
oducts and our management of hth i
e interest rate risk a d
nd hthe mix of hth i
e interest ear ini g
ng assets on our balance
h
sheet. Resididen itial mor gtg g
ag l
e loan s lales during the last hthre y
e years were isigni
gnifificantly
tly lower than 2021 la g
rg lely d
y due
d
to a r d
educ
d
ition
in our confor
f
i
mi g
ng new a d
nd refifinanc d
ed loan origiginations caus d
ed by
by hth
h
e higighe l
r lev lel of mortgage interest rates a d
nd reduc d
ed
consumer dema d
nd.
79
2024 Form 10-K
In connection with our loan sales, in lcl di
udi g
ng both resididen itial mor gtg g
ag l
e loans origiginat d
ed for s lale a d
nd less frequent transfer
f s
and s lales from our loan h
s h leld f
d for
f
investment portf lol
f io, we m k
ake representations and warranties,
h
which, ifif br
h
each d
ed, m y
ay re
i
quire
us to repur h
chase such l
h loans, s b
ubstitute othe l
r loans or indemnifify t
f
he pur h
chasers of such l
h loans for actua
t
l l
l losse i
s incurred d
d due
d
to
su h
ch loans. However, hthe performance of our loans s lold h
d has been hihistoric lallyly stro g
ng due to our st irict
d
underw iri iting sta d
nda d
rds and
proc d
edur
d
es. Over the past several y
l years, we have expe irienced a nomin lal amount of repur h
chase requests,
l
only a few of whihi h
ch
have actua
t
lly
lly result d
ed in repur h
chases by
by Valllley (
y ( hthere were no loan repurchases in 2024 and only three loan repurchases in
2023). None of hth l
e loan repur h
chases resulted i
d in material l
l loss. Accordingly, no reserves pertaining to loans sold were established
on our consolidated financial statements at Dece b
mber 31, 2024 and 2023. See Item 1A. Risk Factors —“We may i
y incur future
losse i
s in connection wi h
ith repur h
chases and i
d i d
ndemnifific
f ation p y
ayments r lelat d
ed to mortgages that w h
e have s lold i
d into the seco d
nda y
ry
ma k
rket” for
f
d
addidi itional i
l infor
f
ma ition.
Capi
a ta
i l Adequacy
c
A significant measure of the strength of a financial institution is its shareholders’ equity. At December 31, 2024 and
2023, shareholders’ equity totaled appr
a
oximately $7.4 billion and $6.7 billion, or 11.9 percent and 11.0 percent of total assets,
respectively.
During 2024, total shareholders’ equity increased by $733.7 million, primarily due to the fol
f lowing:
•
net proceeds from the issuance of common stock totaling $448.9 million,
•
net income of $380.3 million,
•
net proceeds from the issuance of Series C preferred stock of $144.7 million, and
•
a $22.4 million increase attributable to the effect of share issuances under our stock incentive plan.
These positive changes were partially offs
f et by:
•
cash dividends declared on common and prefer
f red stock totaling a combined $253.6 million, and
•
other comprehensive loss of $8.9 million.
Valley and the Bank are subj
u ect to the regulatory c
r
apital requirements administered by the Federal Reserve and the OCC.
Quantitative measures establ
a ished by regulation to ensure capital adequacy require Valley and the Bank to maintain minimum
amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to
average assets, as defin
f ed in the regulations.
The fol
f lowing tabl
a e presents the capital guidelines and actua
t
l ratios appl
a
icable to Valley as of December 31, 2024 and
2023:
Actual Ratio
Minimum Ratio
Minimum Ratio plus Capital
Conservation Buffe
f r
2024
2023
Total Risk-based Capital
8.0 %
10.5 %
13.87 %
11.76 %
Common Equity Tier 1 Capi
a tal
4.5
7.0
10.82
9.29
Tier 1 Risk-based Capital
6.0
8.5
11.55
9.72
Tier 1 Leverage Capital
4.0
N/A
9.16
8.16
As of December 31, 2024 and 2023, Valley and the Bank exceeded all capital adequacy requirements. See Note 17 to the
consolidated financial statements for
f
Valley’s and the Bank’s regulatory c
r
apital positions and capital ratios.
The increases in the total risk-based capital, common equity Tier 1 capital, and Tier 1 capital ratios at December 31, 2024
as compared to December 31, 2023 were largely due
d
to several fac
f
tors, including (1) the net proceeds fro
f
m Valley's issuances
of common stock and Series C prefer
f red stock during the third and fourth quarter 2024, respectively, (2) a credit risk transfer
f
transaction executed in the second quarter 2024 related to a portion of the automobile loan portfol
f io and (3) our sales of
commercial real estate and construc
r
tion loans during 2024. See Notes 5, 15 and 18 to the consolidated financial statements for
f
more details on loan sales, the credit risk transfer transaction and the common and prefer
f red stock issuances, respectively.
For regulatory c
r
apital purpos
r
es, in accordance with the Federal Reserve’s fin
f al rule issued on August 26, 2020, we
deferred 100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for
credit losses less net charge-offs) for
f
a two-year period ending January 1, 2022. On January 1, 2022, the defer
f ral amount
totaling $47.3 million after-tax started to be phased-in by 25 percent and will increase 25 percent per year until fully phased-in
on January 1, 2025. As of December 31, 2024, approximately $35.5 million of the $47.3 million defer
f ral amount was
recognized as a reduc
d
tion to regulatory c
r
apital and, as a result, decreased our risk-based capital ratios by appr
a
oximately 9 basis
2024 Form 10-K
80
points. The ful
f l defer
f ral amount of $47.3 million was phased-in on January 1, 2025 and expected to result in an additional 3
basis point reduction in our risk-based capital ratios dur
d
ing the first quarter 2025.
Typically, our primary s
r
ource of capital growth is through retention of earnings. Our rate of earnings retention is derived
by dividing undistributed earnings per common share by earnings (or net income availabl
a e to common shareholders) per
common share. Our retention ratio was 36.2 percent and 53.7 percent for
f
the years ended December 31, 2024 and 2023,
respectively. The decline in the retention ratio for 2024 was largely due to the significant increase in our provision for credit
losses and the resulting decline in our level of earnings before dividends as compared to the year ended December 31, 2023.
Cash dividends declared amounted to $0.44 per common share for both years ended December 31, 2024 and 2023. The
Board is committed to examining and weighing relevant facts and considerations, including its commitment to shareholder
value, each time it makes a cash dividend decision. The Federal Reserve has cautioned all bank holding companies about
a
distributing dividends which may reduce the level of capital or not allow capital to grow considering the increased capital levels
required under the Basel III rules. Prior to the date of this filing, Valley has received no objection or adverse guidance fro
f
m the
Federal Reserve or the OCC regarding the current level of its quarterly common stock dividend. However, the Federal Reserve
has reiterated its long-standing guidance in recent years that banking organizations should consult them befor
f
e declaring
dividends in excess of earnings for the corresponding quarter.
We may fro
f
m time to time offer and sell in one or more offe
f rings, individually or in any combination, our common stock,
prefer
f red stock and other non-equity securities in order to pursue growth opportunities that may become availabl
a e in the future
and comply with any changes in the regulatory e
r
nvironment that call for
f
increased capital requirements. Valley’s abi
a lity, and
any decision to issue and sell securities, is subj
u ect to market conditions and Valley’s capital needs at such time. Additional
equity offe
f rings may dilute the holdings of our existing shareholders or reduce the market price of our common stock, or both.
Such offe
f rings may be necessary in the fut
f ur
t
e due
d
to several reasons beyond management’s control, including numerous
external factors that could negatively impact the strength of the U.S. economy or our ability to maintain or increase the level of
our net income. See Note 18 to the consolidated financial statements for
f
additional infor
f
mation on Valley’s common and
prefer
f red stock, including new issuances during 2024.
Item 7A.
Quantitative and Qualit
l at
t iv
t e Disclos
l
ures About Mar
M
ke
r
t Risk
Information regarding Quantitative and Qualitative Disclosures About Market Risk is discussed in the “Interest Rate
Sensitivity” section contained in Item 7. MD&A and it is incorporated herein by reference.
81
2024 Form 10-K
Item 8.
Fina
i
ncial Sta
S tements a
t
nd Suppl
p em
l
entary Data
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31,
2024
2023
(in thousands except for
f
share data)
Assets
Cash and due
d
from banks
$
411,412
$
284,090
Interest bearing deposits with banks
1,478,713
607,135
Investment securities:
Equity securities
71,513
64,464
Trading debt securities
—
3,973
Availabl
a e for
f
sale debt securities
3,369,724
1,296,576
Held to maturity debt securities (net of allowance for
f
credit losses of $647 at
December 31, 2024 and $1,205 at December 31, 2023)
3,531,573
3,739,208
Total investment securities
6,972,810
5,104,221
Loans held for
f
sale (includes fai
f r value of $16,931 at December 31, 2024 and $20,640 at
December 31, 2023 for loans originated for sale)
25,681
30,640
Loans
48,799,711
50,210,295
Less: Allowance for
f
loan losses
(558,850)
(446,080)
Net loans
48,240,861
49,764,215
Premises and equipment, net
350,796
381,081
Lease right of use assets
328,475
343,461
Bank owned life i
f
nsurance
731,574
723,799
Accrue
r
d interest receivabl
a e
239,941
245,498
Goodwill
1,868,936
1,868,936
Other intangible assets, net
128,661
160,331
Other assets
1,713,831
1,421,567
Total Assets
$
62,491,691
$
60,934,974
Liabilities
Deposits:
Non-interest bearing
$
11,428,674
$
11,539,483
Interest bearing:
Savings, NOW and money market
26,304,639
24,526,622
Time
12,342,544
13,176,724
Total deposits
50,075,857
49,242,829
Short-term borrowings
72,718
917,834
Long-term borrowings
3,174,155
2,328,375
Junior subor
u
dinated debentures issued to capital trusts
57,455
57,108
Lease liabi
a lities
388,303
403,781
Accrue
r
d expenses and other liabilities
1,288,076
1,283,656
Total Liabilities
55,056,564
54,233,583
Shareholders’ Equity
Prefer
f red stock, no par value; authorized 50,000,000 shares:
Series A (4,600,000 shares issued at December 31, 2024 and December 31, 2023)
111,590
111,590
Series B (4,000,000 shares issued at December 31, 2024 and December 31, 2023)
98,101
98,101
Series C (6,000,000 shares issued at December 31, 2024)
144,654
—
Common stock (no par value, authorized 650,000,000 shares; issued 558,786,093 shares at
December 31, 2024 and 507,896,910 shares at December 31, 2023)
195,998
178,187
Surplus
5,442,070
4,989,989
Retained earnings
1,598,048
1,471,371
Accumulated other comprehensive loss
(155,334)
(146,456)
Treasury s
r
tock, at cost (186,983 common shares at December 31, 2023)
—
(1,391)
Total Shareholders’ Equity
7,435,127
6,701,391
Total Liabilities and Shareholders’ Equity
$
62,491,691
$
60,934,974
See accompanying notes to consolidated financial statements.
2024 Form 10-K
82
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31,
2024
2023
2022
(in thousands, except for
f
share data)
Interest Income
Interest and fees
f
on loans
$
3,079,864
$
2,886,930
$
1,828,477
Interest and dividends on investment securities:
Taxabl
a e
181,940
130,708
105,716
Tax-exempt
19,253
20,305
17,958
Dividends
24,958
24,139
11,468
Interest on federal funds
f
sold and other short-term investments
51,482
76,809
13,064
Total interest income
3,357,497
3,138,891
1,976,683
Interest Expense
Interest on deposits:
Savings, NOW and money market
913,963
739,025
186,709
Time
644,964
535,749
69,691
Interest on short-term borrowings
22,047
94,869
17,453
Interest on long-term borrowings and junior subor
u
dinated debentures
147,815
103,770
47,190
Total interest expense
1,728,789
1,473,413
321,043
Net Interest Income
1,628,708
1,665,478
1,655,640
(Credit) provision for credit losses for
f
availabl
a e for
f
sale and held to matur
t
ity
securities
(558)
4,559
481
Provision for credit losses for
f
loans
309,388
45,625
56,336
Net Interest Income After Provision for Credit Losses
1,319,878
1,615,294
1,598,823
Non-Interest Income
Wealth management and trust fees
62,616
44,158
34,709
Insurance commissions
12,794
11,116
11,975
Capi
a tal markets
27,221
41,489
52,362
Service charges on deposit accounts
48,276
41,306
36,930
Gains (losses) on securities transactions, net
100
1,104
(1,230)
Fees from loan servicing
12,393
10,670
11,273
(Losses) gains on sales of loans, net
(5,840)
6,054
6,418
Gains on sales of assets, net
3,727
6,809
897
Bank owned life i
f
nsurance
16,942
11,843
8,040
Other
46,272
51,180
45,419
Total non-interest income
224,501
225,729
206,793
Non-Interest Expense
Salary and employee benefits
f
expense
558,595
563,591
526,737
Net occupa
u
ncy expense
102,124
101,470
94,352
Technology, furniture and equipment expense
135,109
150,708
161,752
FDIC insurance assessment
61,476
88,154
22,836
Amortization of other intangible assets
35,045
39,768
37,825
Profes
f
sional and legal fees
f
70,315
80,567
82,618
Amortization of tax credit investments
18,946
18,009
12,407
Other
124,250
120,424
86,422
Total non-interest expense
1,105,860
1,162,691
1,024,949
Income Before Income Taxes
438,519
678,332
780,667
Income tax expense
58,248
179,821
211,816
Net Income
380,271
498,511
568,851
Dividends on prefer
f red stock
21,369
16,135
13,146
Net Income Available to Common Shareholders
$
358,902
$
482,376
$
555,705
Earnings Per Common Share:
Basic
$
0.70
$
0.95
$
1.14
Diluted
0.69
0.95
1.14
See accompanying notes to consolidated financial statements.
83
2024 Form 10-K
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31,
2024
2023
2022
(in thousands)
Net income
$
380,271
$
498,511
$
568,851
Other comprehensive (loss) income, net of tax:
Unrealized losses and gains on available for
f
sale debt securities
Net (losses) gains arising during the period
(18,397)
12,950
(136,981)
Amounts reclassified to earnings
1
(634)
(23)
Total
(18,396)
12,316
(137,004)
Unrealized gains and losses on derivatives (cash flo
f w hedges)
Net (losses) gains on derivatives arising dur
d
ing the period
—
(757)
3,362
Amounts reclassified to earnings
(869)
638
203
Total
(869)
(119)
3,565
Defined benefit
f
pension and postretirement benefit
f
plans
Net gains (losses) arising dur
d
ing the period
10,609
5,442
(13,175)
Amortization of prior service cost
(97)
(90)
(100)
Amortization of actua
t
rial net (losses) gains
(125)
(3)
644
Total
10,387
5,349
(12,631)
Total other comprehensive (loss) income
(8,878)
17,546
(146,070)
Total comprehensive income
$
371,393
$
516,057
$
422,781
See accompanying notes to consolidated financial statements.
2024 Form 10-K
84
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Common Stock
Accumulated
Preferred
f
Stock
Shares
Amount
Surplus
Retained
Earnings
Other
Comprehensive
Loss
Treasury
Stock
Total
Shareholders’
Equity
($ in thousands)
Balance - December 31, 2021
$ 209,691
421,437
$148,482
$3,883,035
$
883,645
$
(17,932) $ (22,855) $ 5,084,066
Net income
—
—
—
—
568,851
—
—
568,851
Other comprehensive loss,
net of tax
—
—
—
—
—
(146,070)
—
(146,070)
Cash dividends declared:
Prefer
f red stock, Series A, $1.56
per share
—
—
—
—
(7,188)
—
—
(7,188)
Prefer
f red stock, Series B, $1.49
per share
—
—
—
—
(5,958)
—
—
(5,958)
Common Stock, $0.44 per share
—
—
—
—
(215,513)
—
—
(215,513)
Effe
f ct of stock incentive plan, net
—
1,089
1
9,069
(5,392)
—
14,624
18,302
Common stock issued in
acquisition
—
84,863
29,702
1,088,127
—
—
—
1,117,829
Common stock repurchased
—
(1,015)
—
—
—
—
(13,517)
(13,517)
Balance - December 31, 2022
209,691
506,374
178,185
4,980,231
1,218,445
(164,002)
(21,748)
6,400,802
Adju
d stment due to the adoption of
ASU 2022-02
—
—
—
—
990
—
—
990
Balance - January 1, 2023
209,691
506,374
178,185
4,980,231
1,219,435
(164,002)
(21,748)
6,401,792
Net income
—
—
—
—
498,511
—
—
498,511
Other comprehensive income,
net of tax
—
—
—
—
—
17,546
—
17,546
Cash dividends declared:
Prefer
f red stock, Series A, $1.56
per share
—
—
—
—
(7,188)
—
—
(7,188)
Prefer
f red stock, Series B, $2.24
per share
—
—
—
—
(8,947)
—
—
(8,947)
Common Stock, $0.44 per share
—
—
—
—
(225,779)
—
—
(225,779)
Effe
f ct of stock incentive plan, net
—
1,309
2
9,758
(4,011)
—
18,049
23,798
Common stock issued
—
327
—
—
(650)
—
4,400
3,750
Common stock repurchased
—
(300)
—
—
—
—
(2,092)
(2,092)
Balance - December 31, 2023
209,691
507,710
178,187
4,989,989
1,471,371
(146,456)
(1,391)
6,701,391
Net income
—
—
—
—
380,271
—
—
380,271
Other comprehensive loss,
net of tax
—
—
—
—
—
(8,878)
—
(8,878)
Cash dividends declared:
Prefer
f red stock, Series A, $1.56
per share
—
—
—
(7,188)
—
—
(7,188)
Prefer
f red stock, Series B, $2.29
per share
—
—
—
—
(9,163)
—
—
(9,163)
Prefer
f red stock, Series C, $0.84
per share
—
—
—
—
(5,018)
—
—
(5,018)
Common Stock, $0.44 per share
—
—
—
—
(232,225)
—
—
(232,225)
Effe
f ct of stock incentive plan, net
—
1,878
592
20,380
—
—
1,391
22,363
Prefer
f red stock issued
144,654
—
—
—
—
—
—
144,654
Common stock issued
—
49,198
17,219
431,701
—
—
—
448,920
Balance - December 31, 2024
$ 354,345
558,786
$195,998
$5,442,070
$1,598,048
$
(155,334) $
—
$ 7,435,127
See accompanying notes to consolidated financial statements.
85
2024 Form 10-K
—
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
2024
2023
2022
(in thousands)
Cash flows fro
f
m operating activities:
Net income
$
380,271
$
498,511
$
568,851
Adju
d stments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
43,789
43,437
41,620
Stock-based compensation
28,988
33,102
28,788
Provision for credit losses
308,830
50,184
56,817
Net accretion of discounts and amortization of premium on securities and
borrowings
(3,399)
(2,145)
10,653
Amortization of other intangible assets
35,045
39,768
37,825
Losses (gains) on availabl
a e for
f
sale and held to matur
t
ity debt securities, net
15
(401)
(95)
Proceeds fro
f
m sales of loans held for
f
sale
253,749
205,575
389,666
Losses (gains) on sales of loans, net
5,840
(6,054)
(6,418)
Originations of loans held for
f
sale
(244,710)
(204,686)
(267,158)
Gains on sales of assets, net
(3,727)
(6,809)
(897)
Net defer
f red income tax (benefit)
f
expense
(6,139)
(9,359)
7,485
Net change in:
Fair value of fin
f ancial instruments hedged by derivative transactions
13,402
4,810
(28,907)
Trading debt securities
3,973
9,465
24,692
Lease right of use assets
18,467
(37,125)
1,831
Cash surrender value of bank owned life i
f
nsurance
(16,942)
(11,843)
(8,040)
Accrue
r
d interest receivabl
a e
5,557
(48,892)
(74,007)
Other assets
(263,375)
(173,512)
(229,107)
Accrue
r
d expenses and other liabi
a lities
(11,094)
(5,834)
874,880
Net cash provided by operating activities
548,540
378,192
1,428,479
Cash flows fro
f
m investing activities:
Net loan originations and purchases
(137,723)
(3,346,633)
(6,868,735)
Equity securities:
Purchases
(9,950)
(14,011)
(11,209)
Sales
1,910
1,850
3,118
Held to maturity debt securities:
Purchases
(103,256)
(302,774)
(838,569)
Maturities, calls and principal repayments
309,475
379,536
475,327
Availabl
a e for
f
sale debt securities:
Purchases
(2,387,595)
(112,317)
(54,618)
Sales
—
18,779
12,846
Maturities, calls and principal repayments
296,860
78,588
225,942
Death benefit
f
proceeds fro
f
m bank owned life i
f
nsurance
9,121
5,218
4,680
Proceeds fro
f
m sales of real estate property and equipment
3,199
18,308
10,832
Proceeds fro
f
m sales of loans not originated for sale
1,226,759
—
—
Proceeds fro
f
m sale of commercial premium fin
f ance lending division
98,060
—
—
Purchases of real estate property and equipment
(16,144)
(76,046)
(68,935)
Cash and cash equivalents acquired in acquisitions, net
—
—
321,540
Net cash used in investing activities
$
(709,284) $
(3,349,502) $
(6,787,781)
2024 Form 10-K
86
VALLEY NATIONAL BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31,
2024
2023
2022
(in thousands)
Cash flows fro
f
m fin
f
ancing activities:
Net change in deposits
$
830,609
$
1,605,915
$
4,974,505
Net change in short-term borrowings
(845,116)
779,105
(620,791)
Proceeds fro
f
m issuance of long-term borrowings, net
1,001,800
1,251,804
147,508
Repayments of long-term borrowings
(165,000)
(475,000)
—
Proceeds fro
f
m issuance of prefer
f red stock, net
144,654
—
—
Cash dividends paid to prefer
f red shareholders
(21,369)
(14,338)
(13,146)
Cash dividends paid to common shareholders
(228,228)
(225,411)
(205,999)
Purchase of common shares to treasury
r
(8,867)
(11,475)
(24,123)
Common stock issued, net
451,164
4,006
120
Other, net
(3)
(18)
(745)
Net cash provided by fin
f ancing activities
1,159,644
2,914,588
4,257,329
Net change in cash and cash equivalents
998,900
(56,722)
(1,101,973)
Cash and cash equivalents at beginning of year
891,225
947,947
2,049,920
Cash and cash equivalents at end of year
$
1,890,125
$
891,225
$
947,947
Supplemental disclosures of cash flow information:
Cash payments for:
Interest on deposits and borrowings
$
1,737,721
$
1,359,534
$
281,137
Federal and state income taxes
89,701
236,503
172,102
Supplemental schedule of non-cash investing activities:
Transfer
f
of loans to other real estate owned, net
$
12,431
$
974
$
—
Transfer
f
of loans to loans held for sale, net
1,042,725
10,000
—
Lease right of use assets obtained in exchange for operating lease liabi
a lities
21,501
81,727
32,604
Acquisitions:
Non-cash assets acquired:
Equity securities
$
—
$
—
$
6,239
Investment securities availabl
a e for
f
sale
—
—
505,928
Investment securities held to matur
t
ity
—
—
806,627
Loans, net
—
—
5,844,070
Premises and equipment
—
—
38,827
Lease right of use assets
—
—
49,434
Bank owned life i
f
nsurance
—
—
126,861
Accrue
r
d interest receivabl
a e
—
—
25,717
Goodwill
—
—
409,928
Other intangible assets
—
—
159,587
Other assets
—
—
155,945
Total non-cash assets acquired
$
—
$
—
$
8,129,163
Liabilities assumed:
Deposits
$
—
$
—
$
7,029,997
Short-term borrowings
—
—
103,794
Lease liabi
a lities
—
—
79,844
Accrue
r
d expenses and other liabi
a lities
—
—
119,240
Total liabi
a lities assumed
$
—
$
—
$
7,332,875
Net non-cash assets acquired
$
—
$
—
$
796,288
Cash and cash equivalents acquired in acquisitions, net
$
—
$
—
$
321,540
Common stock issued in acquisition
$
—
$
—
$
1,117,829
See accompanying notes to consolidated financial statements.
87
2024 Form 10-K
VALLEY NATIONAL BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Note 1)
Busine
i
ss
Valley National Bancorp, a New Jersey corpor
r
ation, is a fin
f an ici lal h l
holdidi g
ng company that through
ough its commercial b
l bank
subs
u
ididia y
ry, V lalley National Bank a
k
nd its subsidiaries, provides a full range of commercial, retail and trus
r
t and investment
services largely through its offi
f ces and ATM network throughout northern and central New Jersey, the New York City
boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, Alabama, Califor
f
nia and
Illinois.
In addition to the Bank, Valley s’ consolidated subs
u
idiaries include, but are not limited to: an insurance agency offe iri g
ng
property a d
nd casualty
lty l
, lifife a
f
d
nd he lal hth insurance; an asset man g
agement ad i
dviser tha i
t is a regigister d
ed investment d
ad iviser wi h
ith hthe
SEC;
r
a egistered securities broker-dealer with the SEC and member of FINRA, which is also licensed as an insurance agency
to provide life and health insurance; a ti l
itl
i
e insurance
g
agen y
cy in New York,
h
which also pro ivides ser ivices in New Jersey; an
d
ad iviso y
ry fifirm specialili izi g
ng in hth i
e investment and man g
agement of tax cr d
edits; a d
nd a s b
ubsididia y
ry
h
which spe ici lalizes in he lal hth care
eq iuipmen l
t lendidi g
ng and o hther commercial e
i
quipmen l
t leases.
Basis o
i
f P
o
re
P
sentat
t io
t n
The consolidated financial statements of Valley include the accounts of the Bank and all other entities in which Valley
has a controlling financial interest. All inter-company transactions and balances have been eliminated. The accounting and
reporting policies of Valley conform to GAAP and general practices within the fin
f ancial services industry.
r
In accordance with
GAAP, Valley does not consolidate statutory trus
r
ts establ
a ished for
f
the sole purpos
r
e of issuing trust prefer
f red securities and
related trust common securities. See Note 11 for
f
more details. Certain prior period amounts have been reclassified to confor
f
m to
the current presentation.
In hthe o ipi inion of management, allll d
adjuju
d stment (
s ( h
which i
h include
l
only normal recu i
rri g
ng d
adjuju
d stment )s) necessa y
ry to present
fairlyly Valllley’s fin
f an ici lal position, results of opera itions, cha g
nge i
s in shareh l
holders' e
i
qui yty and cash f
h flo
f ws at Dece b
mber 31, 2024
and f
d for
f
lall periods presented h
d hav b
e been made.
Signific
f ant Estimates. In preparing the consolidated financial statements in confor
f
mity with GAAP, management has
made estimates and assumptions that affe
f ct the reported amounts of assets and liabi
a lities as of the date of the consolidated
statements of financial condition and results of operations for the periods indicated. Material estimates that require application
of management’s most difficult, subj
u ective or complex judgment and are particularly susceptible to change include: the
allowance for
f
credit losses, the evaluation of goodwill and other intangible assets for impairment, and income taxes. Estimates
and assumptions are reviewed periodically, and the effec
f
ts of revisions are refle
f cted in the consolidated financial statements in
the period they are deemed necessary. While management uses its best judgment, actua
t
l amounts or results could diffe
f r
significantly from those estimates. The current economic environment can also increase the degree of uncertainty inherent in
these material estimates. Actua
t
l results may diffe
f r fro
f
m those estimates. Also, fut
f ur
t
e amounts and values could diffe
f r materially
from those estimates due to changes in values and circumstances after the balance sheet date.
Cash and Cas
C
h Equivalen
l
ts
For purpos
r
es of reporting cash flows, cash and cash equivalents include cash on hand, amounts due
d
from banks, interest
bearing deposits in other banks (including the Federal Reserve Bank of New York) and, from time to time, overnight federal
funds sold. Federal funds sold essentially represent an uncollateralized loan. Therefor
f
e, Valley regularly evaluates the credit
risk associated with the other financial institutions to ensure that the Bank does not become exposed to any significant credit
risk on these cash equivalents.
Investment Securiti
i es
Debt securities are classified at the time of purchase based on management’s intention, such as securities HTM, securities
AFS or trading securities. Investment securities classified as HTM are those that management has the positive intent and ability
to hold until maturity. Investment securities HTM are carried at amortized cost, adjusted for
f
amortization of premiums and
accretion of discounts using the level-yield method over the contractua
t
l term of the securities, adju
d sted for actua
t
l prepayments,
or to call date if the security was purchased at premium. Investment securities classified as AFS are carried at fair value with
unrealized holding gains and losses reported as a component of other comprehensive income or loss, net of tax. Realized gains
2024 Form 10-K
88
or losses on the AFS securities are recognized by the specific identific
f ation method and are included in net gains and losses on
securities transactions within non-interest income.
Trading debt secu iri ities are reported at f iai
f r v lalue
i
wi hth hthe unr
l
ealiz d
ed gains o l
r losse d
s due
d
to h
change i
s in f iai
f r v lalue reported
i
wi hthin non-interest income. Net tr d
ading g
g g iains and l
d losses are in lcl d
uded i
d in net gains a d
nd losses on secu iri ities transac itions
i
wi hthin
non-interest income.
Eq iui yty secu iri ities are presented on the statements of fifinancial c
di
ondi ition at f iai
f r v lalue
i
wi hth any unr
l
ealiz d
ed and r
d ealized
gains and losses reported in non-interest income. See Notes 3 and 4 for additional infor
f
mation.
Investments in FHLB and FRB stock, which have limited marketability, are carried at cost in other assets. Security
transactions are recorded on a trade-date basis.
Interest income on investments includes amortization of purchase premiums and discounts. Valley discontinues the
recognition of interest on debt securities if the securities meet both of the following criteria: (i) regularly scheduled interest
payments have not been paid or have been deferred by the issuer, and (ii) full collection of all contractua
t
l principal and interest
payments is not deemed to be the most likely outcome.
Allo
l wance for
f
Credit
d
Losses for
f
Held to Maturity
i
Debt Securitie
i
s
Valllley estimates and recogni
ognizes an allllowance for
f
cr d
edit losses for
f
HT
d
M d b
ebt secu iri ities u isi g
ng hthe CECL meth d l
hodol gy
ogy.
Valllley h
y has a zero-loss expectation for
f
certain secu iri ities withihin the HTM portf lol
f io, a d
nd htherefor
f
i
e i i
t is not re
i
quired to estimate an
allowance for
f
credit losses related to these securities under the CECL standard. After an evaluation of qualitative fac
f
tors, Valley
identifie
f d the following securities types which it believes qualify for this exclusion: U.S. Treasury s
r
ecurities, U.S. government
agency securities, residential mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, and
collateralized municipal bonds referred to as TEMS.
To measure the expect d
ed credidi l
t losses on HTM debt secu iri ities hthat have loss expectations, V lalley estimates the expect d
ed
cr d
edit losses u isi g
ng
d
a discount d
ed cash f
h flo
f w m d
odel d
l dev leloped b
d by a hthird-party. Assump itions us d
ed in hthe m d
odel f
l for
f
l
pools of
secu iri ities with common risk characteris itic i
s include hth h
e histo irical l
l lififet
f ime pr b
obabibi
a lity
lity of defa lult a d
nd seve iri yty of loss in hthe event
of defa lult,
i
wi hth hthe m d
odel i
l incorpor
r
ating sever lal economic y
cy lcles of loss hihistory d
y d
r
ata to c lalculate expect d
ed cr d
edit losse g
s given
defa lult at the indidi ividual security
ity level.
h
The m d
odel i
l is adjdjusted f
d for
f
a probabibi
a lity
lity weigight d
ed mul i
lti-scenario economic forecast to
es itimate future cr d
edit losses. Valllley uses a two-year reasonablbl
a e a d
nd suppor
u
tablbl
a e for
f
ecast period, follllowed b
d by a one y
-year pe iri d
od
over whihi h
ch es itimated l
d losses revert t
h
o histo iri
l
cal loss expe irience for the remaining l
g lifife o
f
f i
f investment secu iri yty. The economic
forecast me hth d l
odol gy
ogy and g
d governance fo d
r d b
ebt secu iri itie i
s is aliligned wi h
ith Valllley's economic forecast used f
d for
f
hth l
e loan portf lol
f io.
Accrue
r
d i
d interest rec ieivablbl
a
i
e is excluded f
d fro
f
m the es itimate of cr d
edit losses. See Note 4 for additional infor
f
mation.
Impai
m
rm
i
ent of A
o
vailable f
l
or
f
Sale Debt Securiti
i es
The impairment model for
f
AFS debt securities differ
f s fro
f
m the CECL methodology applied to HTM debt securities
because the AFS debt securities are measured at fair value rather than amortized cost. AF
d
S d b
ebt securitie i
s in unr
l
ealiz d
ed loss
posi i
itions are evaluat d
ed fo i
r imp iairment r lelat d
ed to cr d
edit losses on a quarterlyly ba isis. In performing an assessment of whe hther any
de lclin i
e in f iai
f r v lalue is due to a credidi l
t loss, Vallll y
ey consididers the extent to
h
which the fair valu i
e i l
s less than the amor itiz d
ed cost,
h
change i
s in credidit ratings, a y
ny d
adverse economic co di
ndi itions, as w lell as allll relevant information at the indidi ividual secu iri yty level,
su h
ch as cr d
edit dete irioration of the issuer or collllateral u d
nde lrlyiyi g
ng hthe secu iri yty. In asse i
ssi g
ng hth i
e imp iairment, Valllley compares the
present v lalue of ca h
sh flflows expect d
ed to be collllect d
ed
i
wi hth hthe amortiz d
ed cost ba isis of the secu iri yty. If i
f i i
t i d
s deter i
mined that the
de lclin i
e in f iai
f r v lalue wa d
s due
d
to cr d
edit losses, an lallowance for
f
cr d
edit losse i
s is reco d
rd d
ed l
, li i
imited to the amount hthe f iai
f r v lalue is
less hthan amor itized cos b
t basis. The non-cr d
edit related d
d decreas
i
e in the fair value, su h
ch as
d
a d
l
eclin
d
e due
d
to
h
change i
s in market
interest rates, is reco d
rd d
ed in other compr h
ehen isive income, net of tax. Valllley also assesses the intent to sellll hthe securitie (
s (as wellll
as hth l
e likik lelihih
d
ood of a near-term recove y
ry). If Vallll y
ey inte d
nds to sellll an AF
d
S d b
ebt secu iri yty or it is more lik
lik lely than not hthat Vallll y
ey
i
willll be re
i
quired to s lell the secu iri yty before recove y
ry of its amortiz d
ed cost ba isis, hth d
e d b
ebt secu iri yty is writte d
n down t i
o its fair value
and the write dow i
n is cha g
rg d
ed to hth d
e d b
ebt secu iri yty’s fair value at the repor iting d
g date wi h
ith any i
y increment lal imp iairment reported i
d in
ear ini g
ngs S
.
ee Note 4 for
f
additional infor
f
mation.
Loans H lel
H d f
d f
l
or
f
Sale
Loans held for
f
sale generally consist of residential mortgage loans originated and intended for
f
sale in the secondary
market and are carried at their estimated fai
f r value on an instrument-by-instrument basis as permitted by the fair value option
election under GAAP. Changes in fai
f r value are recognized in non-interest income in the accompanying consolidated
statements of income as a component of net gains on sales of loans. Origination fees
f
and costs related to loans originated for
sale (and carried at fai
f r value) are recognized as earned and as incurred. Loans held for
f
sale are generally sold with loan
89
2024 Form 10-K
servicing rights retained by Valley. Gains recognized on loan sales include the value assigned to the rights to service the loan.
See the “Loan Servicing Rights” section below. Occasionally, Valley may elect to transfer
f
certain loans at the lower of
unamortized cost or fair market value to loans held for sale fro
f
m the held for investment loan portfol
f io. At December 31, 2024,
loan h
s h leld f
d for
f
sale consisted of sever lal re isidential mor gtg g
ag l
e loans origiginat d
ed for s lale a d
nd one non-performing commercial real
estate loan
i
wi hth a car y
rying v lalue of $8.8
i
milli
llio .n
Loans and Loan Fees
Loans are reported at their outstanding principal balance net of any unearned income, charge-offs, unamortized deferred
fees and costs on originated loans and premium or discounts on purchased loans, except for
f
PCD loans recorded at the purchase
price, including non-credit discounts, plus the allowance for
f
credit losses expected at the time of acquisition. Loan origination
and commitment fees, net of related costs are defer
f red and amortized as an adju
d stment of loan yield over the estimated life o
f
f
the loans approximating the effe
f ctive interest method.
Loans are deemed to be past due when the contractua
t
l principal and interest payments have not been received as they
become due. Loans are placed on non-accrua
r
l status generally, when they become 90 days past due and/or the ful
f l and timely
collection of principal and interest becomes uncertain. When a loan is placed on non-accrua
r
l status, interest accrua
r
ls cease, and
uncollected accrue
r
d interest is reversed and charged against current income. Cash collections from non-accrua
r
l loans are
generally credited to the loan balance, and no interest income is recognized on these loans until the principal balance has been
determined to be fully collectible. A loan in which the borrowers’ obligation has not been released in bankrupt
r
cy courts may be
restored to an accrui
r ng basis when it becomes well secured and is in the process of collection, or all past due
d
amounts become
current under the loan agreement and collectability is no longer doubtful.
Loans classifie
f d as PCD loans are acquired loans, mainly through bank acquisitions, where there is evidence of more than
insignificant credit deterioration since their origination. We consider various factors in connection with this determination,
including past due or non-accrua
r
l status, credit risk rating declines, and any write downs recorded based on the collectability of
the asset, among other factors. PCD loans are recorded at their purchase price plus an allowance estimated at the time of
acquisition, which represents the amortized cost basis of the asset. The diffe
f rence between this amortized cost basis and the par
value of the loan is the non-credit discount or premium, which is amortized into interest income over the life of the loan.
Subs
u
equent increases and decreases in the allowance for credit losses related to purchased loans is recorded as provision
expense.
Allo
l wance for
f
Credit
d
Losses for
f
Loans
Valllley uses the CECL me hth d l
odol gy
ogy to es itimate an ACL for
f
loans.
h
Th A
e
CL is a valuation account that is deducted fro
f
m
the amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off a
f
gainst the
allowance when management believes the uncollectibility of a loan balance is confir
f med. Provisions for credit losses for
f
loans
and recoveries on loans previously charged-off b
f
y Valley are added back to the allowance.
The ACL for loans includes the allowance for
f
loan losses and the reserve for unfunde
f
d credit commitments. Under
CECL, Valley's methodology to establ
a ish the allowance for
f
loan losses has two basic components: (i) a collective reserve
component for estimated lifet
f ime expected credit losses for
f
pools of loans that share common risk characteristics and (ii) an
individually evaluated reserve component for loans that do not share common risk characteristics, consisting of collateral
dependent loans. Valley also maintains a separate allowance for unfunde
f
d credit commitments mainly consisting of reserves for
f
credit losses on undisbursed non-cancellabl
a e lines of credit, new loan commitments and commercial standby letters of credit.
Reserves for loans that share common risk characteristics. Vallll y
ey estimates the collective ACL using a current
expected credit losses methodology which is based on relevant information about
a
historical experience, current conditions, and
reasonabl
a e and suppor
u
tabl
a e for
f
ecasts that affe
f ct the collectability of the loan balances. In es itimating the component of hthe
lallowance on a collllec itive ba isis, Valllley uses a tran isi ition mat irix m d
odel whihi h
ch
l
calculates an expect d
ed lif
life o
f
f l
f loa l
n loss percent g
age
for e
h
ach loan
l
pool by
by using probabibi
a lity
lity of defa lult a d
nd loss gigive
d
n defau
f
lt metrics.
h
The probabibi
a lity
lity of defa lult a d
nd loss gigiven
defa lult met irics are adjdjusted u isi g
ng a s
l
caling fact
f
or to incorporate a fullll economic y
cy lcle.
h
The expect d
ed lilife of loan loss percentages are determin d
ed by
by an lalyzing the mig
migra ition of l
f loans from performing t l
o los b
s by
cr d
edit qualility rating o d
r d lelinquency cat g
egories u isi g
ng hihistoric lal lif
life-
f of l-l
f oa
d
n data for
f
h
each loan portf lol
f io
l
pool, a d
nd by
by asse i
ssi g
ng
hthe severity
ity of loss, based on the g
aggr g
egate net lilife itime losse i
s incurred.
h
The expect d
ed cr d
edit losse b
s bas d
ed on loss hihistory a
r
re
d
adjuju
d st d
ed for qualilita itive factors. Am
g
ong other thihi g
ngs, these d
adjuju
d stment i
s include and account fo d
r dififfe
f rences in: (
: i) the impact of
the reasonabl
a e and suppor
u
tabl
a e economic forecast, pr b
obabibi
a lili yty weigightings and economic va iri b
ables u d
nder each scenario and
reversion period, (ii) other asset specific risks to the extent they do not exist in the historical loss information, and (iii) net
expected recoveries of charged off loan balances. These adju
d stments are based on qualitative fact
f
ors not reflected in the
transition matrix but are likely to impact the measurement of estimated credit losses. The expected lifet
f ime loss rate is the lifef
2024 Form 10-K
90
of loan loss percentage from the transition matrix model plus the impact of the adjustments for
f
qualitative fact
f
ors. The expected
credit losses are the product of multiplying the model’s expected lifet
f ime loss rate by the exposure at defau
f
lt at period end on an
undiscounted basis.
Valllley u ili
tilizes a two y
-year reasonablbl
a e a d
nd suppor
u
tablbl
a e for
f
ecast period f
d f lol
f lowed b
d by a one y
-year pe iri d
od over whihi h
ch es itimat d
ed
losses revert t
h
o histo irical l
l loss expe irience on a str iaight
ght l-lin
b
e basis for the remaining l
g lifife o
f
f the loan. The forecast consists of
mul i
lti-scenario economic forecasts to es itimate future cr d
edit losses tha i
t i
g
s govern d
ed by
by a cross-func itional com i
mittee.
h
The
co
i
mmittee meets each quarter to determine whihi h
ch economic scenario d
s dev leloped b
d by Moody'
oody's will
ill be incorporat d
ed into hthe
model, as wellll as hthe r lelative probabibi
a lity
lity weigightings of hthe s lelect d
ed scenarios, based upon
u
lall r
d
eadily
ily av iailablbl
a
i
e inform
f
ation.
h
The
model projeje
o cts economic va iri b
ables u d
nder e
h
ach scenario based o d
n det iailed sta itis itic lal an lalyses. V lalley h
y has ididen if
tifie
f d a d
nd select d
ed
key variablbl
a es hthat most lclos lely correlated t i
o its hihistoric lal cr d
edit performance,
h
which i
h include GDP, unemployment a d
nd hthe Case-
h
Shill
iller Home P irice Index.
The loan credit quality data utilized in the transition matrix model is based on an internal credit risk rating system for
f
the
commercial and industrial loan and commercial real estate loan portfol
f io segments and delinquency aging status
t
for the
residential and consumer loan portfol
f io segments. Loans are risk-rated based on an internal credit risk grading process that
evaluates, among other things: (i) the obligor’s ability to repay; (ii) the underlying collateral, if any; and (iii) the economic
environment and industry i
r
n which the borrower operates. This analysis is performed at the relationship manager level for
f
all
commercial and industrial loans, and commercial real estate loans, which are evaluated by the Loan Review Department on a
test basis. Loans with
g
a grade below a “Pass” gr d
ade are
d
advers lely cla i
ssififi d
ed. Once a loan becomes advers lely cla i
ssififi d
ed i
, it
automa itic lallyly tran isi itions from the “Pass” segment of the model to the corresp
di
ondi g
ng d
advers lely rat d
ed
l
pool segment.
i
Wi hthin hthe
tran isi ition mat irix m d
odel, each adverse cla i
ssifification or s g
egment (Spe ici lal Mention, Subs
u
ta d
nda d
rd, D
b
oubtful, and Los )s) ha i
s its own
lifet
f ime expected credit loss rate de irived f
d fro
f
l
m loan-level h
l histo irical transi i
itions between the didifferent loan iri k
sk ra itings categories.
Reserves for loans that do not share common risk characteristics. Valley measures specific
f
reserves for individual
loans that do not share common risk characteristics with other loans, consisting of collateral dependent loans based on the
amount of lifet
f ime expected credit losses calculated on those loans and charge-offs
f
of those amounts determined to be
uncollectible. Certain individually evaluated loans where substantially all the repayment is expected from the collateral, are
deemed collateral dependent, and the related expected credit losses are determined based on the fair value of the underlying
collateral (less selling costs, if repayment or satisfaction of the loan depends on the sale of the collateral). Any amount deemed
uncollectible related to a collateral dependent loan is immediately charged off t
f
o the allowance.
Valllley elect d
ed to ex lcl d
ude accrue
r
d i
d interest o
l
n loans from the amor itiz d
ed cost of loan h
s h leld f
d for
f
investment. The accrue
r
d
interest is presented separat lely i
y in the cons lolididat d
ed statements of fifinancial c
di
ondi ition.
Allowance for
f
Unfunded Credit Commitments.
h
The lallowance for
f
unf
d
unde
f
d credidit com i
mitments consists of reserves
for credidi l
t losses on u di
ndi b
sbursed non-can
l
cellablbl
a
l
e lines of cr d
edit, ne
l
w loan com i
mitments a d
nd commercial l
l letters of cr d
edit valu d
ed
using a isi il
milar CECL me hth d l
odol gy
ogy as us d
ed fo l
r loans. Man g
agement's estimate of expect d
ed losse i
s i h
nherent in hthese off b
ff-b lalance
h
sheet cr d
edit exposures lalso incorporates es itimated u il
tilization rate over the co
i
mmitment's contractua
t
l period or an expect d
ed
l
pull-
hthrough
ugh rate for new loan commitments.
h
The allllowance for unf
d
unde
f
d credidit com i
mitment i
s i i
s included i
d in accrue
r
d expenses and
othe l
r liabibi
a li i
lities on hthe cons lolididat d
ed statements of fifinancial c
di
ondi ition.
Loan charge-offs. Loans rat d
ed as
l“loss”
i
wi hthin Valllley' i
s internal rating system are
h
charged-off.
f
Commer ici lal loans are
generally
lly assessed f
d for
f
fullll or partial cha g
rge-off t
f
o the net r
l
ealiz b
able value for
f
collllateral d
l dependent loans when a loan is between
90 or 120 days past due or soone i
r if i
f i i
t is probablbl
a e that a loan may not be fully
lly collllect b
able. Resididen itial l
l loans and h
d home e
i
qui yty
loans are generally
lly
h
charged-off t
f
o net re laliz b
able value when the loan is 120 days past due (or sooner when the borrowers’
bl
obligigatio
h
n has been releas d
ed in ba k
nkrupt
r
y
cy). Automobibile loans are fully
lly
h
charged-off w
f
hen the loan is 120 days past due or
partially
lly
h
charged-off t
f
o the net r
l
ealiz b
able value of c lollateral, ifif hthe c lollateral i
l is recovered p irior to su h
ch itime. Unsecur d
ed
consumer loans are generally
lly fully
lly h
charged-off w
f
hen the loan is 150 days past due.
See Note 5 for a discussion of Valley’s loan credit quality and additional allowance for
f
credit losses.
Leases
Lessee Leasing Arrangements. Valley's lessee arrangements predominantly consist of operating leases for premises and
equipment. The majority of the operating leases include one or more options to renew that can significantly extend the lease
terms. Valley’s leases have a wide range of lease expirations through the year 2062.
Operating and finance leases are recognized as ROU assets and lease liabi
a lities in the consolidated statements of financial
position. The ROU assets represent the right to use underlying assets for the lease terms and lease liabi
a lities represent Valley’s
obligations to make lease payments arising from the lease. The ROU assets include any prepaid lease payments and initial
91
2024 Form 10-K
direct costs, less any lease incentives. At the commencement dates of leases, ROU assets and lease liabi
a lities are initially
recognized based on their net present values with the lease terms including options to extend or terminate the lease when Valley
is reasonabl
a y certain that the options will be exercised to extend. ROU assets are amortized into net occupa
u
ncy and equipment
expense over the expected lives of the leases.
Lease liabi
a lities are discounted to their net present values on the balance sheet based on incremental borrowing rates as
determined at the lease commencement dates using quoted interest rates for
f
readily availabl
a e borrowings, such as fix
f ed rate
FHLB borrowings, with similar terms as the lease obligations. Lease liabi
a lities are reduced by actua
t
l lease payments.
Lessor Leasing Arrangements. Valley's lessor arrangements primarily consist of direct fin
f ancing and sales-type leases
for equipment included in the commercial and industrial loan portfol
f io. Direct financing and sales-type leases are carried at the
aggregate of lease payments receivabl
a e plus estimated residual value of the leased assets, net of unearned income, charge-offs
and unamortized deferred costs of origination. Lease agreements may include options to renew and for the lessee to purchase
the leased equipment at the end of the lease term.
See Note 6 for additional infor
f
mation on Valley's lease related assets and obligations.
Premises and Equipment, N
t
et
N
Premises and equipment are stated at cost less accumulated depreciation computed using the straight-line method over the
estimated useful lives of the related assets. Es itimated useful l
l lives ra g
nge from
y
3 years for capit laliz d
ed software to up to 40 years
fo b
r b iuildldings. Leas h
eh lold i
d improvements are amor itiz d
ed over the term of hth l
e lease or estimated useful l
l lifife o
f
f the asset, whichever
is shorter. Majo
a r improvements are capitalized, while repairs and maintenance costs are charged to operations as incurred. Upon
retirement or disposition, any gain or loss is credited or charged to operations. See Note 7 for
f
further details.
Bank Owned Life I
f
ns
I
urance
Valley owns bank owned life insurance to help offse
f
t the cost of employee benefits
f
. Bank owned life i
f
nsurance is
recorded at its cash surrender value. Valley’s bank owned life insurance is invested primarily in U.S. Treasury s
r
ecurities and
residential mortgage-backed securities issued by government sponsored enterprises and Ginnie Mae. The change in the cash
surrender value is included as a component of non-interest income and is exempt fro
f
m fed
f
eral and state income taxes as long as
the policies are held until the death of the insured individuals.
Othe
t
r Real Est
E at
t e O
t
wned
Valley acquires OREO through foreclosure on loans secured by real estate. OREO is reported at the lower of cost or fai
f r
value, as establ
a ished by a current appraisal (less estimated costs to sell) and it is included in other assets. Any write-downs at
the date of for
f
eclosure are charged to the allowance for
f
loan losses. Expenses incurred to maintain these properties, unrealized
losses resulting fro
f
m valuation write-downs afte
f r the date of foreclosure, and realized gains and losses upon
u
sale of the
properties are included in other non-interest expense.
OREO, including residential real estate properties, was not material at December 31, 2024 and 2023. Residential
mortgage and consumer loans secured by residential real estate properties for
f
which for
f
mal for
f
eclosure proceedings are in
process tot lal d
ed $4.6
i
milli
llion and $1.6
i
milli
llion at Dece b
mber 31, 2024 and 2023, respectiv lely.
Goodwill
Intangible assets resulting fro
f
m acquisitions under the acquisition method of accounting consist of goodwill and other
intangible assets (see “Other Intangible Assets” below). Goodwill represents the excess of the cost of businesses acquired over
the fai
f r value of the net assets acquired and is not amortized. The initial recording of goodwill and other intangible assets
requires subjective judgments concerning estimates of the fair value of the acquired assets and assumed liabi
a lities. Go d
odwilill i
l is
not amor itiz d
ed and i
d is subj
ubject, at a minimum, to an annual i
l imp iairment assessment, or more ofte
f n, if events or circumstances
indicate it may be impaired. An impairment loss is recogni
gni
d
zed ifif hthe car y
rying v lalue of hthe net assets as isigned to the repor iting
i
unit exc
d
eeds the fair value of the repor iting u init,
i
wi hth hth i
e imp iairmen l
t loss not to ex
d
ceed hthe amount of goodw
goodwill
ill lallocated to the
i
unit. Go d
odwill
ill is lallocated to V lalley's repor iting u init,
h
which i
h is an opera iting s g
egment or one level b
l b lelow, at the date goodw
goodwill
ill is
reco d
rd d
ed. U d
nder current accounting g
g g iuidance, Vallll y
ey may choose to perform an optional qualilita itive assessment t
d
o deter i
mine
h
whethe i
r i i
t is necessa y
ry to perform hthe quantita itiv g
e g
d
oodwilill i
l imp iairment test for
f
one or more repor iting u inits
h
each annual period.
Valley reviews goodwill for impairment annually dur
d
ing the second quarter using a quantitative test, or more frequently if
a triggering event indicates impairment may have occurred. Valley's determination of whether or not goodwill is impaired
requires it to make judgments and use significant estimates and assumptions regarding estimated fut
f ur
t
e cash flo
f ws. As part of
the annual impairment test, Valley also performs a market capitalization reconciliation to support the appropriateness of its
2024 Form 10-K
92
results. In performing this reconciliation, Valley compares the sum of fai
f r value of its reporting units to Valley’s market
capitalization, adju
d sted for the presented value of estimated synergies which a market participant acquirer could reasonabl
a y
expect to realize fro
f
m a hypothetical acquisition of Valley. If Valley changed its strategy or if market conditions shifte
f d,
Valley's judgments may change, which may result in adjustments to the recorded goodwill balance.
Othe
t
r Int
I
an
t
gible A
l
ssets
Other intangible assets primarily consist of loan servicing rights (largely generated from loan servicing retained by the
Bank on residential mortgage loan originations sold in the secondary market to government sponsored enterprises), core
deposits (the portion of an acquisition purchase price which represents value assigned to the existing deposit base) and, to a
much lesser extent, various other types of intangibles obtained through acquisitions. Other intangible assets are amortized using
various methods over their estimated lives and are periodically evaluated for
f
impairment whenever events or changes in
circumstances indicate the carrying amount of the assets may not be recoverabl
a e fro
f
m fut
f ur
t
e undiscounted cash flo
f ws. If
impairment is deemed to exist, an adjustment is recorded to earnings in the current period for the difference between the fai
f r
value of the asset and its carrying amount. See further details regarding loan servicing rights below.
Loan Servicing Right
g
st
Loan servicing rights are recorded when originated mortgage loans are sold with servicing rights retained, or when
servicing rights are purchased. Valley initially records the loan servicing rights at fai
f r value. Subsequently, the loan servicing
rights are carried at the lower of unamortized cost or market (i.e., fair value). The fair values of the loan servicing rights for
f
each risk-stratifie
f d group of loan servicing rights are calculated using a fair value model fro
f
m a third party vendor that uses
various inputs and assumptions, including but not limited to, prepayment speeds, internal rate of return (discount rate),
servicing cost, ancillary income, flo
f at rate, tax rate, and inflation. The prepayment speed and the discount rate are considered
two of the most significant inputs in the model.
Unamortized costs associated with acquiring loan servicing rights, net of any valuation allowances, are included in other
intangible assets in the consolidated statements of financial condition and are accounted for using the amortization method.
Valley amortizes the loan servicing assets in proportion to and over the period of estimated net servicing revenues. On a
quarterly basis, Valley stratifie
f s its loan servicing assets into groupings based on risk characteristics and assesses each group f
u
or
f
impairment based on fair value. A valuation allowance is established through an impairment charge to earnings to the extent the
unamortized cost of a stratifie
f d group of loan servicing rights exceeds its estimated fai
f r value. Increases in the fai
f r value of
impaired loan servicing rights are recognized as a reduc
d
tion of the valuation allowance, but not in excess of such allowance.
The amortization of loan servicing rights is recorded in non-interest income.
Stoc
t
k-Ba
-
sed Com
C
pe
m
nsatio
t n
Compensation expense for
f
RSUs, restricted stock and stock option awards (i.e., non-vested stock awards) is based on the
fair value of the award on the date of the grant and is recognized ratabl
a y over the service period of the award. Valley's long-
term incentive compensation plan includes a service period requirement for award grantees who are eligible for retirement
pursuant to which an award will vest at one-twelfth
f
per month after the grant date and requires the grantees to continue service
with Valley for
f
one year in order for
f
the award to fully vest. Compensation expense for
f
these awards is amortized monthly over
a one year period afte
f r the grant date. The service period for non-retirement eligible employees is the shorter of the stated
vesting period of the award or the period until the employee’s retirement eligibility date. The fair value of each option granted
is estimated using a binomial option pricing model. The fai
f r value of RSUs and awards is based upon the last sale price reported
for Valley’s common stock on the date of grant or the last sale price reported preceding such date, except for
f
performance-
based stock awards with a market condition. The grant date fair value of a performance-based stock award that vests based on a
market condition is determined by a third-party specialist using a Monte Carlo valuation model. There have been no changes to
any of the key model characteristics, assumptions and parameters. See Note 12 for
f
additional infor
f
mation.
Busine
i
ss Combinatio
t ns
Business combinations are accounted for under the acquisition method of accounting. Acquired assets, including
separately identifia
f bl
a e intangible assets, and assumed liabi
a lities are recorded at their acquisition-date estimated fai
f r values. The
excess of the cost of acquisition over these fair values is recognized as goodwill. During the measurement period, which cannot
exceed one year from the acquisition date, changes to estimated fai
f r values are recognized as an adju
d stment to goodwill. Certain
transaction costs are expensed as incurred. See Note 2 for additional infor
f
mation.
93
2024 Form 10-K
Fair Value Mea
M
surementst
In general, fair values of financial instrum
r
ents are based upon quoted market prices, where availabl
a e. When observabl
a e
market prices and parameters are not fully availabl
a e, management uses valuation techniques based upon internal and third party
models requiring more management judgment to estimate the appropriate fair value measurements. Valuation adjustments may
be made to ensure that financial instrum
r
ents are recorded at fair value, including adju
d stments based on internal cash flow model
projections that utilize assumptions similar to those incorpor
r
ated by market participants. Other adju
d stments may include
amounts to refle
f ct counterpa
r
rty credit quality and Valley’s creditworthiness, among other things, as well as unobservabl
a e
parameters. Any such valuation adjustments are applied consistently over time. See Note 3 for
f
additional infor
f
mation.
Revenue From Contra
t
cts W
t
ith
W
Custom
t
ersr
Certain revenues included in Valley's non-interest income relate to fee-based income fro
f
m contracts with customers.
Revenue from contracts with customers within the scope of ASC Topic 606 is recognized when performance obligations, under
the terms of the contract, are satisfied. This income is measured as the amount of consideration expected to be received in
exchange for providing services. Contracts with customers can include multiple services, which are accounted for as separate
“performance obligations” if they are determined to be distinct.
Valley's revenue contracts generally have a single performance obligation, as the promise to transfer the individual goods
or services is not separately identifia
f bl
a e, or distinct from other obligations within the contracts. Valley does not have a material
amount of long-term customer agreements that include multiple performance obligations requiring price allocation and
differences in the timing of revenue recognition.
The fol
f lowing describes revenue within scope of ASC Topic 606:
Wealth management and trust fees. Wealth management and trust fees include brokerage fees and fee
f
s from
f
investment management, investment advisory, trust, custody and other products. Brokerage fees are commissions related to the
execu ition of market trades. Br k
okerage fee revenue is recogni
gni
d
zed on tr d
ad d
e date, as hthe performance bl
obligigatio i
n is satisfifi d
ed
h
when
hthe trade is execut d
ed. Trust and i
d investment management fe
i
e incom
i
e is r
i
eceived f
d for
f
pr
i
ovididi g
ng we lal hth management and
investment
d
ad iviso y
ry services and i
d is typi
ypi
l
callyly calc lulat d
ed based on a percentage of
lclient assets
d
under man g
agement a d
nd
recogni
gni
d
zed over the term of hth i
e investment management g
agreement as ser ivices are pro ivided to the lclient. Certain investment
d
ad iviso y
ry success fee
f
s are earned when the related performance crite iri h
a hav b
e been sa itisfifi d
ed, a d
nd it is pr b
obablbl
a e that the fees
i
willll
be
be earned.
Insurance commissions. Insurance com i
mi i
ssions are receiv d
ed on insurance product s lales. V lalley act i
s in the cap
i
aci yty of
an g
agen b
t between Vallll y
ey's customer and the insurance car irier. Vallll y
ey's performance bl
obligigatio
i
n is satisfifi d
ed over the term of hthe
insurance p lolicy.
Service cha g
rges on deposit accounts. Service cha g
rges on deposit accounts include maintenance fee
f
s, overdraft fees, and
other account related charges. Deposit account related fee
f
s are typically recognized at the time these services are performed for
the customer, or on a monthly basis.
Other income. Revenue within the other category o
r
f non-interest income that is within the scope of ASC Topic 606
includes credit card and interchange fees, fees
f
from wire transfers, ACH, and various other products and services income. These
fees are either recognized immediately at the transaction date or over the period in which the related service is provided.
Revenue from capital markets transactions (including interest rate swap fees, for
f
eign exchange fees and loan syndication
fees), net gains and losses on securities transactions, fees
f
from loan servicing, net gains on sales of loans, bank owned lifef
insurance income, and certain fees within other income are excluded fro
f
m the scope of ASC Topic 606 and are recognized
under other applicable accounting guidance.
Income Taxe
a
s
Valley uses the asset and liabi
a lity method to provide income taxes on all transactions recorded in the consolidated
financial statements. This method requires that income taxes reflect the expected future tax consequences of temporary
r
differences between the carrying amounts of assets or liabilities for book and tax purpos
r
es. Accordingly, a defer
f red tax asset or
liabi
a lity for each temporary d
r
iffe
f rence is determined based on the enacted tax rates that will be in effe
f ct when the underlying
items of income and expense are expected to be realized.
Valley’s expense for
f
income taxes includes the current and defer
f red portions of that expense. Deferred tax assets are
recognized if, i
f
n management's judgment, their realizability is determined to be more likely than not. A valuation allowance is
establ
a ished to reduc
d
e defer
f red tax assets to the amount we expect to realize. Deferred income tax expense or benefit
f
results from
2024 Form 10-K
94
differences between assets and liabi
a lities measured for fin
f ancial reporting versus income-tax retur
t
n purpos
r
es. The effe
f ct on
deferred taxes of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.
Valley may maintain a reserve related to certain tax positions that management believes contain an element of
uncertainty. An uncertain tax position is measured based on the largest amount of benefit that management believes is more
likely than not to be realized. Periodically, Valley evaluates each of its tax positions and strategies to determine whether a
reserve is appr
a
opriate. See Note 13 for additional infor
f
mation.
Comprehensive Inc
I
ome
Comprehensive income or loss is defin
f ed as the change in equity of a business entity during a period due to transactions
and other events and circumstances, excluding those resulting fro
f
m investments by and distributions to shareholders.
Comprehensive income consists of net income and other comprehensive income or loss. Valley’s components of other
comprehensive income or loss, net of defer
f red tax, include: (1) unrealized gains and losses on AFS debt securities;
(2) unrealized gains and losses on derivatives used in cash flo
f w hedging relationships; and (3) the benefit adjustment for
f
the
unfunde
f
d portion of its various employee, offi
f cer, and director pension plans and other post-employment benefit
f s. Income tax
effe
f cts are released from accumulated other comprehensive income on an individual unit of account basis. Valley presents
comprehensive income and its components in the consolidated statements of comprehensive income for
f
all periods presented.
See Note 19 for
f
additional infor
f
mation.
Earnings Per Com
C
mon Sha
S
re
In Valley's computation of the earnings per common share, the numerator of both the basic and diluted earnings per
common share is net income availabl
a e to common shareholders (which is equal to net income less dividends on prefer
f red
stock). The weighted average number of common shares outstanding is used in the denominator for basic earnings per common
share which is increased to determine the denominator used for diluted earnings per common share by the effect of potentially
dilutive common stock equivalents utilizing the treasury stock method.
The fol
f lowing tabl
a e shows the calculation of both basic and diluted earnings per common share for the years ended
December 31, 2024, 2023 and 2022:
2024
2023
2022
(in thousands, except for
f
share data)
Net income availabl
a e to common shareholders
$
358,902
$
482,376
$
555,705
Basic weighted-average number of common shares outstanding
515,755,365
507,532,365
485,434,918
Plus: Common stock equivalents
2,236,436
1,713,403
2,382,792
Diluted weighted-average number of common shares
outstanding
517,991,801
509,245,768
487,817,710
Earnings per common share:
Basic
$
0.70
$
0.95
$
1.14
Diluted
0.69
0.95
1.14
Common stock equivalents represent the dilutive effect of additional common shares issuable upon the assumed vesting
or exercise, if app
a
licable, of RSUs and common stock options to purchase Valley’s common shares. Common stock options and
RSUs with exercise prices that exceed the average market price of Valley’s common stock during the periods presented may
have an anti-dilutive effect on the diluted earnings per common share calculation and therefor
f
e are excluded fro
f
m the diluted
earnings per share calculation. Potential anti-dilutive weighted common shares totaled approximately 3.5 million, 2.4 million
and 188 thousand for
f
the years ended December 31, 2024, 2023 and 2022, respectively.
Prefer
f
red and Common Stoc
t
k Dividen
d
ds
Valley issued 4.6 million, 4.0 million and 6.0 million shares of non-cumulative perpe
r
tual prefer
f red stock in June 2015,
August 2017 and August 2024 respectively, which were initially recorded at fair value. See Note 18 for
f
additional details on the
prefer
f red stock issuances. The prefer
f red shares are senior to Valley common stock, whereas the current year's dividends must
be paid before Valley can pay dividends to its common shareholders. Preferred dividends declared are deduc
d
ted fro
f
m net
income for computing income availabl
a e to common shareholders and earnings per common share computations.
Cash dividends to both preferred and common shareholders are payable and accrue
r
d when declared by the Board.
95
2024 Form 10-K
Treasury Stoc
t
k
Treasury s
r
tock is recorded using the cost method and accordingly is presented as a reduc
d
tion of shareholders’ equity.
Derivative Ins
I
truments and Hed
H
gi
d ng
i
Activiti
i es
As part of its asset/liabi
a lity management strategies and to accommodate commercial borrowers, Valley has used interest
rate swaps to hedge variability in cash flo
f ws or fair values caused by changes in interest rates. Valley also uses derivatives not
designated as hedges for
f
non-speculative purpos
r
es to (1) manage its exposure to interest rate movements related to a service for
commercial lending customers, (2) share the risk of defau
f
lt on the interest rate swaps
a
related to certain purchased or sold loan
participations through the use of risk participation agreements, (3) manage the interest rate risk of mortgage banking activities
with customer interest rate lock commitments and forward contracts to sell residential mortgage loans, (4) manage the exposure
of foreign currency exchange rate fluctuation with foreign currency for
f
ward and option contracts primarily to accommodate our
customers and (5) manage the credit risk of a select pool of automobile loans to enhance the risk profile
f
of these assets for
regulatory c
r
apital purpos
r
es.
Valley also has hybrid instruments, consisting of market linked certific
f ates of deposit with an embedded swap c
a
ontract.
Valley records all derivatives including embedded derivatives as assets or liabi
a lities at fai
f r value on the consolidated statements
of financial condition. Derivatives used to hedge the exposure to variabi
a lity in expected future cash flo
f ws, or other types of
forecasted transactions, are considered cash flo
f w hedges. Derivatives used to hedge the exposure to changes in the fair value of
an asset, liabi
a lity, or fir
f m commitment attributable to a particular risk, such as interest rate risk, are considered fair value
hedges.
Cash Flow Hedges. For derivatives designated as cash flo
f w hedges, the effective portion of changes in the fair value of
the derivative is initially reported in other comprehensive income or loss and subs
u
equently reclassified to earnings when the
hedged transaction affects earnings, and the ineffec
f
tive portion of changes in the fair value of the derivative is recognized
directly in earnings.
Fair Value Hedges. For derivatives designated as fai
f r value hedges, changes in the fair value of the derivative and the
hedged item related to the hedged risk are recognized in earnings. Valley calculates the credit valuation adjustments to the fai
f r
value of derivatives designated as fai
f r value hedges on a net basis by counterpa
r
rty portfol
f io, as an accounting policy election.
On a quarterly basis, Valley assesses the effe
f ctiveness of each hedging relationship by comparing the changes in cash
flows or fai
f r value of the derivative hedging instrument with the changes in cash flo
f ws or fair value of the designated hedged
item or transaction. If a hedging relationship is terminated due to ineffectiveness, and the derivative instrum
r
ent is not re-
designated to a new hedging relationship, the subsequent change in fair value of such instrum
r
ent is charged directly to earnings.
Interest Rate Contracts and Other Non-designated Hedges. Derivatives not designated as hedges do not meet the
hedge accounting requirements under GAAP. Contracts in an asset position are included in other assets and contracts in a
liabi
a lity position are included in other liabi
a lities. Changes in fai
f r value of derivatives not designated in hedging relationships are
recorded directly in earnings within other non-interest expense.
See Notes 15 and 16 for
f
additional infor
f
mation on our derivative instrum
r
ents.
New Autho
t
rita
i tive Accountin
t
g Guidance
New Accounting Guidance Adopted in 2024. ASU No. 2023-02, “Investments –Eq iui yty Me hth d
od and J ioint Ventur
t
es
(T
i
opic 3
)
23): Accounting for
f
Investment i
s in Tax Cr d
edit Structur
t
es Using the Propor itional Amortization Meth d
hod,” is inte d
nded to
improve hthe accounting a d
nd didisclosures for
f
investment i
s in certain tax credidit struc
r
tures. ASU No. 2023-02 lallows hthe option to
ap lply the propor itional amortization meth d
hod to account fo i
r investments m d
ade p irima irilyly for the purpos
r
e of r
i
ecei ivi g
ng income tax
cr d
edits and o hther income ta
b
x benefits
f
h
when certain re
i
quirements are met. ASU No. 2023-02 became effective on Janua y
ry 1,
2024 and d
d didid not have a sigig inififican i
t impact on Vallll y
ey's cons lolididat d
ed fifinancial statements. Under the ne
g
w g iuidance, Valllley d
y didid
not lelect to ap lply the propor itional amortization meth d
hod as an accounting p lolicy for
f
its leligigibible tax credidi i
t investments a d
nd, as a
result, hthere were no adjdjustments from adoption recogni
ogni
d
zed in ear ini g
ngs on hth
d
e date of adoption. See addi
ddi itional d
l dis lclosures
rega d
rding V lalley's tax cr d
edit investment i
s in Note 14.
ASU No. 2022-03, “F iair V lalue Measurement of E
i
qui yty Secu iri ities subj
ubject to Contractua
t
l S lale Restric itions,”
d
updates
gui
guidanc i
e in ASC To ipic 820, Fair Value Measurement a d
nd lclarififie
f s that a contractua
t
l s lale restric ition sh
l
hould not be considider d
ed in
measuring f iai
f r v lalue. It also req iuires enti i
ities with i
h investment i
s in e
i
qui yty secu iri ities subj
ubject to contractua
t
l s lale restric itions to
didisclose certain qualilita itive and quantita itiv i
e infor
f
ma ition b
about su h
ch secu iri itie i
s includidi g
ng (i(i) the nature and rem iai ini g
ng duration of
hthe restric ition; (i(ii)i) hthe circumstances hthat co luld cause
l
a lapse in rest irictions; a d
nd (i(iii)
ii) hthe f iai
f r v lalue of hthe secu iri ities
i
wi hth
2024 Form 10-K
96
contractua
t
l s lale restric itions. ASU No. 2022-03 became effective on Janua y
ry 1, 2024 and V lalley's adoptio
d
n didid not have a
isigni
gnififican i
t impact on its cons lolididat d
ed fifinancial statements.
ASU No. 2023-07, "S g
egment Repor iting (
g (To ipic 2
)
80): Improvements to Reportablbl
a e S g
egment
i
Disclosures,” req iuires p bl
ublic
en i i
tities to didisclose detaililed i
d infor
f
ma ition about
a
a reportablbl
a e s g
egment’s expenses on both an annual a d
nd inte iri
b
m basis. The
amendments in ASU No. 2023-07 h
sh
l
ould b
d be a
l
ppl
a
ied retrospectiv lely to allll pe iri d
ods presented i
d in the fifinancial statements. Upon
tran isi ition, hthe s g
egment expense cat g
egories a d
nd amount
d
s dis lclos d
ed in hthe p irior pe iri d
ods
h
sh
l
ould b
d b
b
e bas d
ed on hthe sigig inifificant
segment expense cat g
egorie
i
s identififie
f d a d
nd didisclosed i
d in the pe iri d
od of
d
adoption. ASU No. 2023-07 be
became effe
f ctive on
December 31, 2024 and V lalley's adoptio d
n didid not have a sigig inififican i
t impact on its cons lolididat d
ed fifinancial statements, other than
enhanc d
ed didisclosure i
s included i
d in Note 21.
New Accounting Guidance Issued in 2024. ASU No. 2024-03, "Income Statement—R
t
epor iti g
ng Comprehensive Income
Expense
Dis g
aggr g
egation
Dis lclosures
(S b
ubt
i
opic
220-
)
40):
Dis g
aggr g
egation
of
Income
Statement
Expenses,"
re
i
quires
didisagg
ggr g
egation of certain expense cap itions into sp
i
ecififi d
ed categorie
i
s i
d
n dis lclosures
i
wi hthin
hthe foot
f
notes to
hthe fin
f an ici lal
statements. ASU No. 2024-03 does not
h
change hthe expense cap itions an entity
tity presents on hthe face
f
of hth
i
e income statement.
ASU No. 2024-03 can be ap lplied prospectiv lely, and i
d i i
t is effective for
f
annual periods begigi
i
nni g
ng afte
f r December 15, 2026, and
inte irim periods
i
wi hthin fifisc lal year
b
s b g
egin ini g
ng afte
f r December 15, 2027. Ea lrly adoption a d
nd retrospective a
l
ppl
a
ication are
permitted. Valllley i
y is currentlyly ev lalua iting the impact of ASU No. 2024-03 on its cons lolididat d
ed fifinancial statements.
BUSINESS COMBINATIONS (Note 2)
Ac
Acquisi i
itions
Bank Leumi Le-Israel Corporation. On April 1, 2022, Valley completed its acquisition of Bank Leumi Le-Israel
Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively refer
f red
to as (Bank Leumi USA), Bank Leumi USA maintained its headquarters in New York City with commercial banking offi
f ces in
Chicago, Los Angeles, Palo Alto, and Aventura, Florida. The common shareholders of Bank Leumi USA received 3.8025
shares of Valley common stock and $5.08 in cash for
f
each Bank Leumi USA common share that they owned. As a result,
Valley issued approximately 85 million shares of common stock and paid $113.4 million in cash in the transaction. Based on
Valley’s closing stock price on March 31, 2022, the transaction was valued at $1.2 billion, inclusive of the value of options. As
a result of the acquisition, Bank Leumi Le-Israel B.M. owned appr
a
oximately 14 percent of Valley's common stock as of April 1,
2022.
The transaction was accounted for under the acquisition method of accounting and accordingly the results of Bank Leumi
USA's operations have been included in Valley's consolidated financial statements for
f
the year ended December 31, 2022 from
the date of acquisition.
The fol
f lowing tabl
a e summarizes unaudited supplemental pro forma fin
f ancial information giving effect to the Bank Leumi
USA merger as if it had been completed on January 1, 2021:
December 31,
2022
(in thousands)
Net interest income
$
1,729,034
Non-interest income
228,284
Net income
623,052
Landmark Insurance of the Palm Beaches. On February 1
r
, 2022, the Bank's insurance agency subs
u
idiary, Valley
Insurance Services, acquired Landmark Insurance of the Palm Beaches Inc. (“Landmark”) agency. The purchase price included
$8.6 million in cash and $1.0 million in contingent consideration. Goodwill and other intangible assets totaled $4.4 million and
$6.2 million, respectively. The transaction was accounted for under the acquisition method of accounting and accordingly the
results of Landmark's operations have been included in Valley's consolidated financial statements for
f
the year ended
December 31, 2022 from the date of acquisition.
Merger expenses for all acquisition related activities totaled $14.1 million and $
d
71.2 million for
f
the years ended
December 31, 2023 and December 31, 2022, respectively.
h
The merger expenses la g
rg lely consisted of t
h
ech
l
nol gy
ogy costs, sala iries
and employe b
e benefit
f s expense, and profe i
ssional a d
nd legal f
l fees
f
i
wi hthin non-interest expense on the cons lolididat d
ed statements of
income.
97
2024 Form 10-K
FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES (Note 3)
ASC Topic 820, “Fair Value Measurement” establ
a ishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fai
f r value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservabl
a e inputs (Level 3 measurements).
The three levels of the fai
f r value hierarchy are described below:
•
Level 1 - Unadjusted exchange quoted prices in active markets for identical assets or liabi
a lities, or identical liabi
a lities
traded as assets that the reporting entity has the ability to access at the measurement date.
•
Level 2 - Quoted prices in markets that are not active, or inputs that are observabl
a e either directly or indirectly (i.e.,
quoted prices on similar assets) for
f
subs
u
tantially the full term of the asset or liabi
a lity.
•
Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and
unobservabl
a e (i.e., supported by little or no market activity).
Assets and Liabilit
i
ie
t s Mea
M
sured at Fai
F r V
i
al
V ue on a Recurring
i
Basis a
i
nd Non-Re
-
curring
i
Basisi
h
The f lol
f lo i
wi g
ng tablbl
a es present the assets and l
d liabibi
a lilities that are measur d
ed at fair value on a recu i
rri g
ng and non-recu i
rri g
ng
ba
ba isi b
s by l
y lev lel
i
wi hthin hthe f iai
f r v lalue hihierar h
chy as reported on the cons lolididat d
ed statements of fifinancial c
di
ondi ition at December 31,
2024 and 2023. The assets presented u d
nder “non-recu i
rri g
ng fair value measurements” in hthe t b
able below are not measur d
ed at fair
value on an ongoi
ngoi g
ng ba isi b
s but are subj
ubject to fair value adjdjustments
d
under certain icircumstances (e g.g.,
h
when an impairment loss
is recogni
gnized)
d).
Fair Value Measurements at Reporting Date Using:
2024
Quoted Prices
in Active Markets
for Identical Assets
(Level 1)
Signific
f ant Other
Observable
Inputs
(Level 2)
Signific
f ant
Unobservable
Inputs
(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities
$
23,642
$
23,642
$
—
$
—
Equity securities at net asset value (NAV)
11,000
—
—
—
Availabl
a e for
f
sale debt securities:
U.S. Treasury securities
291,549
291,549
—
—
U.S. government agency securities
22,543
—
22,543
—
Obligations of states and political
subdi
u
visions
192,509
—
192,509
—
Residential mortgage-backed securities
2,681,076
—
2,681,076
—
Corporate and other debt securities
182,047
—
182,047
—
Total availabl
a e for
f
sale debt securities
3,369,724
291,549
3,078,175
—
Loans held for
f
sale (1)
16,931
—
16,931
—
Other assets (2)
444,263
—
444,263
—
Total assets
$
3,865,560
$
315,191
$
3,539,369
$
—
Liabilities
Other liabi
a lities (2)
$
454,200
$
—
$
454,200
$
—
Total liabi
a lities
$
454,200
$
—
$
454,200
$
—
Non-recurring fair value measurements:
Non-performing loans held for sale (3)
$
8,750
$
—
$
8,750
$
—
Collateral dependent loans
139,424
—
—
139,424
Foreclosed assets
13,852
—
—
13,852
Total
$
162,026
$
—
$
8,750
$
153,276
2024 Form 10-K
98
Fair Value Measurements at Reporting Date Using:
2023
Quoted Prices
in Active Markets
for Identical Assets
(Level 1)
Signific
f ant Other
Observable
Inputs
(Level 2)
Signific
f ant
Unobservable
Inputs
(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Equity securities
$
23,307
$
23,307
$
—
$
—
Equity securities at net asset value (NAV)
12,126
—
—
—
Trading debt securities
3,973
3,973
—
—
Availabl
a e for
f
sale debt securities:
U.S. Treasury securities
288,157
288,157
—
—
U.S. government agency securities
23,702
—
23,702
—
Obligations of states and political
subdi
u
visions
191,690
—
191,690
—
Residential mortgage-backed securities
626,572
—
626,572
—
Corporate and other debt securities
166,455
—
166,455
—
Total availabl
a e for
f
sale debt securities
1,296,576
288,157
1,008,419
—
Loans held for
f
sale (1)
20,640
—
20,640
—
Other assets (2)
466,227
—
466,227
—
Total assets
$
1,822,849
$
315,437
$
1,495,286
$
—
Liabilities
Other liabi
a lities (2)
$
488,103
$
—
$
488,103
$
—
Total liabi
a lities
$
488,103
$
—
$
488,103
$
—
Non-recurring fair value measurements:
Non-performing loans held for sale (3)
$
10,000
$
—
$
10,000
$
—
Collateral dependent loans
90,580
—
—
90,580
Foreclosed assets
1,444
—
—
1,444
Total
$
102,024
$
—
$
10,000
$
92,024
(1)
Represents residential mortgage loans held for sale that are carried at fair value and had contractua
t
l unpaid principal balances totaling
$16.8
illi
million and $
d 20.1 million at December 31, 2024 and 2023, respectively.
(2)
Derivative fin
f ancial instruments are included in this category.
r
(3)
Reported at lower of cost or fair value.
Assets and Liabilit
i
ie
t s Mea
M
sured at Fai
F r V
i
al
V ue on a Recurring
i
Basisi
h
The f lol
f lo i
wi g
ng valuation t
h
ech iniques were used f
d for
f
fifinancial i
l instrum
r
ents measur d
ed at fair value on a recu i
rri g
ng ba isis.
l
All of
hthe v lalua ition tech i
hnique d
s describib d
ed below a
l
ppl
a
y to the unpaidid prin icipal b
l b lalance, ex lcl di
udi g
ng any accrue
r
d i
d interest o d
r divididends at
hthe measuremen d
t date. Interest income and expense are reco d
rd d
ed
i
wi hthin hthe cons lolididat d
ed statements of income depe di
ndi g
ng on hthe
nature of hth i
e instrum
r
ent u isi g
ng hthe effectiv i
e interest meth d
hod based on acq iuired d
d discount or premium.
Equity securities. The equity securities consisted of two publicly traded mutual funds, CRA investments and a publicly
traded financial technology company. These investments are reported at fai
f r value utilizing Level 1 inputs.
Equity securities at NAV. Valley also has privately held CRA funds and investments in limited liabi
a lity companies and
partnerships at fair value measured at NAV using the most recently availabl
a e fin
f ancial information fro
f
m the investee. Certain
equity investments without readily determinable fair values are measured at NAV per share (or its equivalent) as a practical
expedient, which are excluded fro
f
m fai
f r value hierarchy levels in the tabl
a es above.
99
2024 Form 10-K
Trading debt securities. The fair value of tradidi g
ng debt secu iri ities, consis iti g
ng of U.S. Treasury s
r
ecu iri ities, are reported at
fair value utilizing Level 1 inputs at December 31, 2023. Management reviews the data and assumptions used in pricing the
secu iri itie b
s by i
y its hthird-party pro ivider to ensure the hihighe
ghest level of sigig inififican i
t inputs are de irived f
d fro
f
m market observablbl
a
d
e data.
Available for
f
sale debt securities. U.S. Treasu y
ry secu iri ities are reported at f iai
f r v lalue utili
ili izi g
ng Level 1 inputs.
h
The
majojo
a
iri yty of othe i
r investment secu iri ities are reported at f iai
f r v lalue utili
ilizing Lev lel
i
2 inputs.
h
The p irices for these instruments are
b
obt iained through
ough an indepe d
ndent pricing ser ivice or de laler ma k
rket participants
i
wi hth
h
whom Valllley h
y has hihistoric lallyly transact d
ed
bot
both pur h
chases and s lales of investment secu iri ities. P irices obt iained f
d fro
f
m these sources in lcl d
ude prices de irived f
d from
f
ma k
rket
quotations and mat irix p iri ici g
ng.
h
The f iai
f r v lalue measurements considider
b
observablbl
a
d
e data that m y
ay in lcl d
ude de laler quotes, market
spre d
ads, cash f
h flo
f ws, the U.S. Treasury y
y y
r
ieldld curve, lilive tradidi g
ng levels, trade execu itio
d
n data, ma k
rket consensus prepayment
sp
d
eeds, cr d
edit information a d
nd hth
b
e b
d
ond’s terms and c
di
ondi itions, amo g
ng other thihi g
ngs. Man g
agement reviews hth
d
e data a d
nd
assump itions us d
ed in pricing the secu iri itie b
s by i
y its hthird-party pro ivider to ensure the hihighe
ghest level of sigig inififican i
t inputs are de irived
from market observablbl
a
d
e data. In
d
addidi ition, Valllley reviews hthe v lolume a d
nd level of activity
ity for allll AF
d
S d b
ebt securi i
ities a d
nd
attempts to ididen iti y
fy transactions
h
which m y
ay not be orde lrly or refle
f ctive of a isigni
gnififican l
t lev lel of activity
ity and v lolume.
Loans held for
f
sale. Re isidential mor gtg g
ag l
e loans origiginat d
ed for s lale are reported at f iai
f r v lalue using Lev lel
i
2 inputs.
h
The
fair values were calc lulat d
ed utili
ilizing quot d
ed prices for si i
imilar assets in active markets. The ma k
rket prices represent a delilive y
ry
price,
h
which refle
f cts the
d
unde lrlyiyi g
ng price e
h
ach institu ition wouldld pay V lalley for
f
an immedidiate s lale of an agg
ggr g
egate p
l
ool of
mortgages. Non-performance iri k
sk didid not mate iri lallyly impact hthe f iai
f r v lalue of mortgage loan h
s h leld f
d for
f
sale at December 31, 2024
and 2023 based on the h
shor d
t dur
d
ation these assets were heldld and their cr d
edit quality
lity.
Derivatives. Derivatives are reported at fai
f r value utilizing Level 2 inputs. The fai
f r values of Valley’s derivatives are
determined using third party prices that are based on discounted cash flo
f w analysis using observed market inputs, such as the
SOFR curve a D
t
ecember 31, 2024 and 2023. The fai
f r value of mortgage banking derivatives, consisting of interest rate lock
commitments to fund
f
residential mortgage loans and for
f
ward commitments for
f
the fut
f ur
t
e delivery o
r
f such loans (including
certain loans held for
f
sale at December 31, 2024 and 2023), is determined based on the current market prices for similar
instruments. The fai
f r value of a credit defau
f
lt swap related to a portion of Valley's automobile loan portfol
f io is based on
estimated discounted cash flo
f ws that incorporate market data for
f
auto credit loss forecasts and anticipated cash outflows for
f
the
instrument's premium payments. The fai
f r value of most of the derivatives incorporate credit valuation adjustments, which
consider the impact of any credit enhancements to the contracts, to account for potential nonperformance risk of Valley and its
counterpa
r
rties. The credit valuation adjustments were not significant to the overall valuation of Valley’s derivatives at
December 31, 2024 and 2023. See Note 15 for
f
additional details on Valley's derivatives.
Assets and Liabilit
i
ie
t s Mea
M
sured at Fai
F r V
i
al
V ue on a Non
N
-recurring
i
Basisi
h
The f lol
f lo i
wi g
ng valuation t
h
ech iniques were used f
d for
f
cert iain non-fifinancial assets measur d
ed at fair value on a non-recu i
rri g
ng
ba
ba isis, in lcl di
udi g
ng collllateral d
l dependent loans reported at the fair value of the
d
unde lrlyiyi g
ng collllateral a d
nd fore lclos d
ed assets, whihi h
ch are
reported at f iai
f r v lalue upon ini i
iti lal recogni
gni ition or s b
ubsequent imp iairment a d
s describib d
ed below.
Non-perfor
f
mi g
ng commercial real estate loan held for sale. Du iri g
ng hth
y
e year e d
nded D
d
ecember 31, 2023, V lalley
transfer
f red a non-performing construc
r
itio
l
n loan tot laling $10.0
il
millilion, net of h
charge-offs o
f
f $4.2
il
millilion to hthe allllowance for
f
loan losses, to loan h
s h leld f
d for
f
sale. The fair value of the loan wa d
s deter i
min d
ed using Lev lel
i
2 inputs, in lcl di
udi g
ng bibids from a thihi d
rd
party b
y broker e g
ngaged to s lolicit interest from poten iti lal pur h
chasers.
h
Th
b
e broker coordidinated l
d loa
l
n lev lel due didililigence wi h
ith
interest d
ed parties a d
nd establbl
a ished a formal bidding process in which each participant was required to provide an indicative non-
binding bid. Fair value was determined based on a non-binding sale agreement selected by Valley dur
d
ing the bidding process.
During the year ended D
d
ecember 31, 2024, an additional $1.2 million write-down was recorded to earnings to reflect the loan's
current estimated fai
f r value of $8.8 million at December 31, 2024.
Collateral dependent loans. Collateral dependent loans are loans where foreclosure of the collateral is probable, or
where the borrower is experiencing financial diffi
f culty and substantially all the repayment is expected from the collateral.
Collateral dependent loans are reported at the fair value of the underlying collateral when the fair value is lower than the
recorded investment in the loan. Collateral values are estimated using Level 3 inputs, consisting of individual third-party
appraisals that may be adjusted based on certain discounting criteria. Certain real estate appraisals may be discounted based on
specific market data by location and property type. At Dece b
mber 31, 2024, c lollateral d
l dependent loans wer
i
e i di
ndi ividualllly re-
measur d
ed and reported at f iai
f r v lalue hthrough
ugh didirect loan h
charge-offs to hthe allllowance for
f
loan losse b
s bas d
ed on hthe f iai
f r v lalue of
hthe u d
nde lrlyiyi g
ng collllateral. Collllater lal depe d
ndent loans with a total amortiz d
ed cost of $215.2
il
millilion and $164.8
i
milli
llion at
December 31, 2024 and 2023, respectiv lely, (i(includidi g
ng taxi medallion loans totaling $49.5
i
millllio
a
n
nd $62.3
il
millilion at
December 31, 2024 and 2023, respectiv lely)
y) were reduc d
ed by
by sp
i
ecifific allllowance fo l
r loa
l
n losses allllocations totalili g
ng $75.8
2024 Form 10-K
100
ill
million and $74.2
illi
million to a reported tot lal net car y
rying amount of $139.4
il
millilion and $90.6
i
milli
llion at Dece b
mber 31, 2024 and
2023, respectiv lely.y
Foreclosed assets. Certain for
f
eclosed assets (consisting of other real estate owned and other repossessed assets included
in other assets), upon initial recognition and transfer
f
from loans, are re-measured and reported at fai
f r value using Level 3 inputs,
consisting of a third-party appraisal less estimated cost to sell. When an asset is acquired, the excess of the loan balance over
fair value, less estimated selling costs, is charged to the allowance for loan losses. If further declines in the estimated fair value
of an asset occur, the asset is re-measured and reported at fai
f r value through a write-down recorded in non-interest expense.
There were no adjustments to the appraisals of foreclosed assets at December 31, 2024 and 2023.
Othe
t
r Fai
F r V
i
al
V ue Disc
i
losures
ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of fin
f ancial assets and fin
f ancial liabi
a lities,
including those fin
f ancial assets and fin
f ancial liabi
a lities that are not measured and reported at fai
f r value on a recurring basis or
non-recurring basis.
The fai
f r value estimates presented in the fol
f lowing tabl
a e were based on pertinent market data and relevant information on
the fin
f ancial instruments availabl
a e as of the valuation date. These estimates do not reflect any premium or discount that could
result from offering for sale at one time the entire portfol
f io of financial instrum
r
ents. Because no market exists for a portion of
the fin
f ancial instruments, fair value estimates may be based on judgments regarding fut
f ur
t
e expected loss experience, current
economic conditions, risk characteristics of various financial instrum
r
ents and other factors. These estimates are subj
u ective in
nature and involve uncertainties and matters of significant judgment and therefor
f
e cannot be determined with precision.
Changes in assumptions could significantly affe
f ct the estimates.
Fair value estimates are based on existing balance sheet financial instrum
r
ents without attempting to estimate the value of
anticipated future business and the value of assets and liabi
a lities that are not considered financial instrum
r
ents. For instance,
Valley has certain fee
f
-generating business lines (e.g., its mortgage servicing operations or Wealth Management reporting unit)
that were not considered in these estimates since these activities are not financial instrum
r
ents. In addition, the tax implications
related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not
been considered in any of the estimates.
101
2024 Form 10-K
The carrying amounts and estimated fai
f r values of fin
f ancial instruments not measured and not reported at fai
f r value on
the consolidated statements of financial condition at December 31, 2024 and 2023 were as follows:
2024
2023
Fair Value
Hierarchy
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
(in thousands)
Financial assets
Cash and due
d
from banks
Level 1
$
411,412
$
411,412
$
284,090
$
284,090
Interest bearing deposits with banks
Level 1
1,478,713
1,478,713
607,135
607,135
Equity securities (1)
Level 3
36,871
36,871
29,031
29,031
Held to maturity debt securities:
U.S. Treasury s
r
ecurities
Level 1
25,480
25,461
26,232
25,978
U.S. government agency securities
Level 2
301,315
252,302
305,996
261,555
Obligations of states and political subdi
u
visions
Level 2
372,489
346,361
405,470
387,527
Residential mortgage-backed securities
Level 2
2,710,642
2,292,148
2,885,303
2,521,926
Trus
r
t prefer
f red securities
Level 2
36,081
29,145
37,062
30,650
Corporate and other debt securities
Level 2
86,213
82,867
80,350
74,676
Total held to matur
t
ity debt securities (2)
3,532,220
3,028,284
3,740,413
3,302,312
Net loans
Level 3
48,240,861
46,634,654
49,764,215
47,981,499
Accrue
r
d interest receivabl
a e
Level 1
239,941
239,941
245,498
245,498
FRB and FHLB stock (3)
Level 2
328,497
328,497
320,727
320,727
Financial liabilities
Deposits without stated maturities
Level 1
37,733,313
37,733,313
36,066,105
36,066,105
Deposits with stated maturities
Level 2
12,342,544
12,363,365
13,176,724
13,103,381
Short-term borrowings
Level 2
72,718
68,032
917,834
901,617
Long-term borrowings
Level 2
3,174,155
3,109,622
2,328,375
2,256,997
Junior subor
u
dinated debentures issued to capital
trus
r
ts
Level 2
57,455
54,957
57,108
47,374
Accrue
r
d interest payable (4)
Level 1
150,564
150,564
159,496
159,496
(1)
Represents equity securities without a readily determinable fair value, which are measured based on the price at which the investment
was acquired plus or minus changes resulting fro
f
m observabl
a e price changes in orderly transactions for identical or similar investments.
Total changes in the valuation of equity securities for
f
the year ended December 31, 2024 and 2023, respectively, were immaterial.
(2)
The carrying amount is presented gross without the allowance for
f
credit losses.
(3)
Included in other assets.
(4)
Included in accrue
r
d expenses and other liabi
a lities.
INVESTMENT SECURITIES (Note 4)
Equity
i
Securiti
i es
Equity securities totaled $71.5 million and $64.5 million at December 31, 2024 and 2023, respectively. See Note 3 for
further details on equity securities.
Trading
i
Debt Securitie
i
s
Valley had no trading debt securities at December 31, 2024. The fai
f r value of trading debt securities totaled $4.0 million
at December 31, 2023. Net trading gains are included in net gains and losses on securities transactions within non-interest
income. See the “Realized Gains and Losses” section below.
2024 Form 10-K
102
Availa
i ble f
l
or
f
Sale Debt Securiti
i es
The amortized cost, gross unrealized gains and losses and fair value of AFS debt securities at December 31, 2024 and
2023 were as follows:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(in thousands)
December 31, 2024
U.S. Treasury s
r
ecurities
$
319,551
$
—
$
(28,002) $
291,549
U.S. government agency securities
24,636
20
(2,113)
22,543
Obligations of states and political subdivisions:
Obligations of states and state agencies
46,211
—
(682)
45,529
Municipal bonds
179,284
—
(32,304)
146,980
Total obligations of states and political subdi
u
visions
225,495
—
(32,986)
192,509
Residential mortgage-backed securities
2,784,895
3,796
(107,615)
2,681,076
Corporate and other debt securities
197,696
247
(15,896)
182,047
Total
$
3,552,273
$
4,063
$
(186,612) $
3,369,724
December 31, 2023
U.S. Treasury s
r
ecurities
$
313,772
$
—
$
(25,615) $
288,157
U.S. government agency securities
25,967
19
(2,284)
23,702
Obligations of states and political subdivisions:
Obligations of states and state agencies
48,283
—
(588)
47,695
Municipal bonds
170,260
—
(26,265)
143,995
Total obligations of states and political subdi
u
visions
218,543
—
(26,853)
191,690
Residential mortgage-backed securities
703,875
728
(78,031)
626,572
Corporate and other debt securities
192,282
—
(25,827)
166,455
Total
$
1,454,439
$
747
$
(158,610) $
1,296,576
Accrue
r
d interest on investments, which is excluded fro
f
m the amortized cost of AFS debt securities, totaled $13.1 million
and $5.9 million at December 31, 2024 and 2023, respectively, and is presented within total accrue
r
d interest receivabl
a e on the
consolidated statements of financial condition.
103
2024 Form 10-K
The age of unrealized losses and fair value of related AFS debt securities at December 31, 2024 and 2023 were as
follows:
Less than
Twelve Months
More than
Twelve Months
Total
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
(in thousands)
December 31, 2024
U.S. Treasury s
r
ecurities
$
—
$
—
$
291,549
$
(28,002) $
291,549
$
(28,002)
U.S. government agency securities
—
—
21,281
(2,113)
21,281
(2,113)
Obligations of states and political
subdi
u
visions:
Obligations of states and state
agencies
—
—
6,208
(682)
6,208
(682)
Municipal bonds
—
—
139,216
(32,304)
139,216
(32,304)
Total obligations of states and
political subdi
u
visions
—
—
145,424
(32,986)
145,424
(32,986)
Residential mortgage-backed
securities
1,483,442
(22,242)
501,858
(85,373)
1,985,300
(107,615)
Corporate and other debt securities
—
—
166,800
(15,896)
166,800
(15,896)
Total
$ 1,483,442
$
(22,242) $ 1,126,912
$
(164,370) $ 2,610,354
$
(186,612)
December 31, 2023
U.S. Treasury s
r
ecurities
$
—
$
—
$
288,156
$
(25,615) $
288,156
$
(25,615)
U.S. government agency securities
—
—
22,364
(2,284)
22,364
(2,284)
Obligations of states and political
subdi
u
visions:
Obligations of states and state
agencies
—
—
8,276
(588)
8,276
(588)
Municipal bonds
1,019
(4)
142,976
(26,261)
143,995
(26,265)
Total obligations of states and
political subdi
u
visions
1,019
(4)
151,252
(26,849)
152,271
(26,853)
Residential mortgage-backed
securities
9,010
(3)
569,629
(78,028)
578,639
(78,031)
Corporate and other debt securities
4,977
(23)
161,478
(25,804)
166,455
(25,827)
Total
$
15,006
$
(30) $ 1,192,879
$
(158,580) $ 1,207,885
$
(158,610)
Within the AFS debt securities portfol
f io, the total number of security positions in an unrealized loss position was 726 and
687 at December 31, 2024 and 2023, respectively.
As of December 31, 2024, the fai
f r value of securities AFS that were pledged to secure public deposits, repurchase
agreements, lines of credit, and for
f
other purpos
r
es required by law, was $1.8 billion.
Contra
t
ctual Mat
M uritie
t s
The contractua
t
l matur
t
ities of AFS debt securities at December 31, 2024 are set forth in the following table. Contractua
t
l
maturities may differ fro
f
m actua
t
l matur
t
ities as borrowers may have the right to call or repay obligations with or without call or
prepayment penalties. Residential mortgage-backed securities are not included in the maturity categories in the following
maturity summary a
r
s actua
t
l matur
t
ities may differ fro
f
m contractua
t
l matur
t
ities because the underlying mortgages may be called
or prepaid without penalties.
2024 Form 10-K
104
December 31, 2024
Amortized Cost
Fair Value
(in thousands)
Due in one year
$
177,290
$
174,474
Due after one year through five years
123,053
117,533
Due after five years through ten years
174,490
157,526
Due after ten years
292,545
239,115
Residential mortgage-backed securities
2,784,895
2,681,076
Total
$
3,552,273
$
3,369,724
The weighted-average remaining expected life f
f
or
f
residential mortgage-backed securities AFS was 8.23 years at
December 31, 2024.
Im
i
pai
m
rm
i
en A
t Analyly isis o
i
f A
f A
o
vaililablble f
e f
l
or
f
Sale Debt Secu iri iti
i es
Valley’s AFS debt securities portfol
f io includes corpo
r
rate bonds and revenue bonds, among other securities. These types
of securities may pose a higher risk of fut
f ur
t
e impairment charges by Valley as a result of the unpredictabl
a e natur
t
e of the U.S.
economy, and their potential negative effect on the fut
f ur
t
e performance of the security issuers.
AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis.
See Note 1 for fur
f
ther information regarding Valley's accounting policy. Valley also evaluated AFS debt securities that were in
an unrealized loss position as of December 31, 2024 included in the tabl
a es above and has determined that the declines in fai
f r
value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or
other fact
f
ors. During the fir
f st quarter 2023, Valley recognized a credit-related impairment of one corporate bond issued by
Signature Bank resulting in both a provision for credit losses and full charge-off security totaling $5.0 million. The credit-
related impairment was based on a comparison of the present value of expected cash flo
f ws to the amortized cost. The bond was
subs
u
equently sold and the sale resulted in a $869 thousand gain dur
d
ing the fourth quarter 2023. There was no impairment
recognized during years ended December 31, 2024 and 2022.
Valley does not intend to sell any of its AFS debt securities in an unrealized loss position prior to recovery of their
amortized cost basis, and it is more likely than not that Valley will not be required to sell any of its securities prior to recovery
of their amortized cost basis. None of the AFS debt securities were past due as of December 31, 2024. As a result, there was no
allowance for
f
credit losses for
f
AFS debt securities at December 31, 2024 and 2023.
105
2024 Form 10-K
Held to Maturity
i
Debt Securiti
i es
The amortized cost, gross unrealized gains and losses and fair value of HTM debt securities at December 31, 2024 and
2023 were as follows:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Allowance
for Credit
Losses
Net
Carrying
Value
(in thousands)
December 31, 2024
U.S. Treasury s
r
ecurities
$
25,480
$
—
$
(19) $
25,461
$
—
$
25,480
U.S. government agency securities
301,315
—
(49,013)
252,302
—
301,315
Obligations of states and political
subdi
u
visions:
Obligations of states and state
agencies
68,025
—
(5,335)
62,690
2
68,023
Municipal bonds
304,464
9
(20,802)
283,671
48
304,416
Total obligations of states and political
subdi
u
visions
372,489
9
(26,137)
346,361
50
372,439
Residential mortgage-backed securities
2,710,642
2,088
(420,582)
2,292,148
—
2,710,642
Trus
r
t preferred securities
36,081
—
(6,936)
29,145
414
35,667
Corporate and other debt securities
86,213
10
(3,356)
82,867
183
86,030
Total
$ 3,532,220
$
2,107
$ (506,043) $ 3,028,284
$
647
$ 3,531,573
December 31, 2023
U.S. Treasury s
r
ecurities
$
26,232
$
—
$
(254) $
25,978
$
—
$
26,232
U.S. government agency securities
305,996
—
(44,441)
261,555
—
305,996
Obligations of states and political
subdi
u
visions:
Obligations of states and state
agencies
88,556
552
(4,155)
84,953
395
88,161
Municipal bonds
316,914
40
(14,380)
302,574
49
316,865
Total obligations of states and political
subdi
u
visions
405,470
592
(18,535)
387,527
444
405,026
Residential mortgage-backed securities
2,885,303
6,059
(369,436)
2,521,926
—
2,885,303
Trus
r
t preferred securities
37,062
—
(6,412)
30,650
506
36,556
Corporate and other debt securities
80,350
—
(5,674)
74,676
255
80,095
Total
$ 3,740,413
$
6,651
$ (444,752) $ 3,302,312
$
1,205
$ 3,739,208
Accrue
r
d interest on investments, which is excluded fro
f
m the amortized cost of HTM debt securities, totaled $13.0 million
and $13.9 million at December 31, 2024 and 2023, respectively, and is presented within total accrue
r
d interest receivabl
a e on the
consolidated statements of financial condition. HTM debt securities are carried net of an allowance for
f
credit losses (as shown
in the table above).
2024 Form 10-K
106
The age of unrealized losses and fair value of related HTM debt securities at December 31, 2024 and 2023 were as
follows:
Less than
Twelve Months
More than
Twelve Months
Total
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
(in thousands)
December 31, 2024
U.S. Treasury s
r
ecurities
$
25,461
$
(19) $
—
$
—
$
25,461
$
(19)
U.S. government agency securities
22,621
(75)
229,143
(48,938)
251,764
(49,013)
Obligations of states and political
subdi
u
visions:
Obligations of states and state
agencies
20,632
(517)
42,058
(4,818)
62,690
(5,335)
Municipal bonds
36,766
(440)
210,723
(20,362)
247,489
(20,802)
Total obligations of states and
political subdi
u
visions
57,398
(957)
252,781
(25,180)
310,179
(26,137)
Residential mortgage-backed
securities
216,651
(2,687)
1,917,644
(417,895)
2,134,295
(420,582)
Trus
r
t preferred securities
—
—
29,145
(6,936)
29,145
(6,936)
Corporate and other debt securities
5,977
(23)
63,879
(3,333)
69,856
(3,356)
Total
$
328,108
$
(3,761) $ 2,492,592
$
(502,282) $ 2,820,700
$
(506,043)
December 31, 2023
U.S. Treasury s
r
ecurities
$
—
$
—
$
25,978
$
(254) $
25,978
$
(254)
U.S. government agency securities
43,664
(151)
216,759
(44,290)
260,423
(44,441)
Obligations of states and political
subdi
u
visions:
Obligations of states and state
agencies
10,700
(102)
48,149
(4,053)
58,849
(4,155)
Municipal bonds
11,958
(121)
207,520
(14,259)
219,478
(14,380)
Total obligations of states and
political subdi
u
visions
22,658
(223)
255,669
(18,312)
278,327
(18,535)
Residential mortgage-backed
securities
57,085
(505)
2,164,704
(368,931)
2,221,789
(369,436)
Trus
r
t preferred securities
938
(63)
29,712
(6,349)
30,650
(6,412)
Corporate and other debt securities
12,575
(426)
59,102
(5,248)
71,677
(5,674)
Total
$
136,920
$
(1,368) $ 2,751,924
$
(443,384) $ 2,888,844
$
(444,752)
Within the HTM securities portfol
f io, the total number of security positions in an unrealized loss position was 798 and 762
at December 31, 2024 and 2023, respectively.
As of December 31, 2024, the fai
f r value of debt securities HTM that were pledged to secure public deposits, repurchase
agreements, lines of credit, and for
f
other purpos
r
es required by law was $1.2 billion.
Contra
t
ctual Mat
M uritie
t s
The contractual maturities of investments in HTM debt securities at December 31, 2024 are set forth in the tabl
a e below.
Contractua
t
l matur
t
ities may differ fro
f
m actua
t
l matur
t
ities as borrowers may have the right to call or repay obligations with or
without call or prepayment penalties. Residential mortgage-backed securities are not included in the maturity categories in the
following maturity summary a
r
s actua
t
l matur
t
ities may differ fro
f
m contractua
t
l matur
t
ities because the underlying mortgages may
be called or prepaid without penalties.
107
2024 Form 10-K
December 31, 2024
Amortized Cost
Fair Value
(in thousands)
Due in one year
$
59,345
$
59,271
Due after one year through five years
65,022
63,861
Due after five years through ten years
173,753
163,055
Due after ten years
523,458
449,949
Residential mortgage-backed securities
2,710,642
2,292,148
Total
$
3,532,220
$
3,028,284
The weighted-average remaining expected life for residential mortgage-backed securities HTM was 9.41 years at
December 31, 2024.
Credit
d
Quality
l
Indicators
Valley monitors the credit quality of the HTM debt securities utilizing the most current credit ratings from external rating
agencies. The following tabl
a e summarizes the amortized cost of HTM debt securities by external credit rating at December 31,
2024 and 2023.
AAA/AA/A
Rated
BBB rated
Non-
investment
grade rated
Non-rated
Total
(in thousands)
December 31, 2024
U.S. Treasury s
r
ecurities
$
25,480
$
—
$
—
$
—
$
25,480
U.S. government agency securities
301,315
—
—
—
301,315
Obligations of states and political subdivisions:
Obligations of states and state agencies
52,770
—
—
15,255
68,025
Municipal bonds
277,921
—
—
26,543
304,464
Total obligations of states and political subdi
u
visions
330,691
—
—
41,798
372,489
Residential mortgage-backed securities
2,710,642
—
—
—
2,710,642
Trus
r
t preferred securities
—
—
36,081
36,081
Corporate and other debt securities
—
6,000
—
80,213
86,213
Total
$ 3,368,128
$
6,000
$
—
$
158,092
$ 3,532,220
December 31, 2023
U.S. Treasury s
r
ecurities
$
26,232
$
—
$
—
$
—
$
26,232
U.S. government agency securities
305,996
—
—
—
305,996
Obligations of states and political subdivisions:
Obligations of states and state agencies
66,502
—
5,330
16,724
88,556
Municipal bonds
283,441
—
—
33,473
316,914
Total obligations of states and political subdi
u
visions
349,943
—
5,330
50,197
405,470
Residential mortgage-backed securities
2,885,303
—
—
—
2,885,303
Trus
r
t preferred securities
—
—
—
37,062
37,062
Corporate and other debt securities
—
6,000
—
74,350
80,350
Total
$ 3,567,474
$
6,000
$
5,330
$
161,609
$ 3,740,413
Obligations of states and political subdi
u
visions include municipal bonds and revenue bonds issued by various municipal
corporations. At December 31, 2024, most of the obligations of states and political subdi
u
visions were rated investment grade
and a large portion of the “non-rated” category i
r
ncluded municipal bonds secured by Ginnie Mae securities. Trus
r
t preferred
securities consist of non-rated single-issuer securities issued by bank holding companies. Corporate bonds consist of debt
primarily issued by banks.
2024 Form 10-K
108
Al
Allo
l wance f
e for
f
Cr d
edit
d
Losses f
s for
f
Heldld to Matu iri yty
i
Debt Secu iri itie
i
s
Valllley h
y has zero loss expectation for
f
certain secu iri ities
i
wi hthin hthe HTM portf lol
f io, a d
nd htherefor
f
i
e i i
t is not re
i
quired to
es itimate an lallowance for
f
cr d
edit losses r lelat d
ed to hthese secu iri ities
d
under the CECL standa d
rd. After an ev lalua ition of qualilitative
factors, Valllley i
y identififie
f d the follllo i
wi g
ng secu iri yty ytypes whihi h
ch it belilieves qualif
lify f
f
or
f
hthis ex lclusion: U.S. Treasury s
r
ecu iri ities, U.S.
government g
agen y
cy secu iri ities, re isidential mor gtg g
age-ba k
ck d
ed secu iri itie i
s issu d
ed by
by
i
Gi
i
nnie Mae, Fa
i
nnie Mae and Freddi
ddie Mac, a d
nd
collllateraliliz d
ed mu ini icipal b
l b
d
onds. To measure the expect d
ed cr d
edit losses on HTM debt secu iri ities tha h
t hav
l
e loss expectations,
Valllley estimates hthe expect d
ed cr d
edit losses u isi g
ng
d
a discount d
ed cash f
h flo
f w m d
odel d
l dev leloped b
d by a hthird-party. See Note 1 for
furthe d
r det iails.
HTM debt securities are carried net of an allowance for
f
credit losses. The fol
f lowing tabl
a e details the activity in the
allowance for
f
credit losses for
f
the years ended December 31, 2024, 2023 and 2022:
2024
2023
2022
(in thousands)
Beginning balance
$
1,205
$
1,646
$
1,165
(Credit) provision for credit losses
(558)
(441)
481
Ending balance
$
647
$
1,205
$
1,646
h
There were no net cha g
rge-offs
f
of HT
d
M d b
ebt secu iri ities in hthe respective periods presented i
d in the tablbl
a e above
a
.
Re laliz
l
d
ed Gains a d
nd Losses
Gross gains and losses realized on sales, matur
t
ities and other securities transactions related to AFS securities and net
gains and losses on trading debt securities included in earnings for the years ended December 31, 2024, 2023 and 2022 were as
follows:
2024
2023
2022
(in thousands)
Sales transactions:
Gross gains
$
—
$
869
$
—
Total
—
869
—
Maturities and other securities transactions:
Gross gains
3
21
171
Gross losses
(18)
(488)
(76)
Total
(15)
(467)
95
Net gains (losses) on trading debt securities
115
702
(1,325)
Gains (losses) on securities transactions, net
$
100
$
1,104
$
(1,230)
The gross gains on sales transactions for the year ended December 31, 2023 resulted fro
f
m the sale of a previously
impaired and fully charged-off c
f
orpor
r
ate bond issued by Signature Bank.
109
2024 Form 10-K
LOANS AND ALLOWANCE FOR CREDIT LOSSES FOR LOANS (Note 5)
The detail of the loan portfol
f io as of December 31, 2024 and 2023 was as fol
f lows:
2024
2023
(in thousands)
Loans:
Commercial and industrial
$
9,931,400
$
9,230,543
Commercial real estate:
Commercial real estate
26,530,225
28,243,239
Construc
r
tion
3,114,733
3,726,808
Total commercial real estate loans
29,644,958
31,970,047
Residential mortgage
5,632,516
5,569,010
Consumer:
Home equity
604,433
559,152
Automobile
1,901,065
1,620,389
Other consumer
1,085,339
1,261,154
Total consumer loans
3,590,837
3,440,695
Total loans
$
48,799,711
$
50,210,295
Total loans include net unearned discounts and deferred loan fees
f
of $45.3 million and $85.4 million at December 31,
2024 and 2023, respectively.
Accrue
r
d interest on loans, which is excluded fro
f
m the amortized cost of loans held for investment, totaled $208.9 million
and $222.2 million at December 31, 2024 and 2023, respectively, and is presented within total accrued interest receivabl
a e on
the consolidated statements of financial condition.
Loans Por
P
tfol
f io
l
Sales and Transfer
f
s t
r
o L
t
oans Hel
H d f
l
or
f
Sale
Valley sells residential mortgage loans originated for sale (at fair value) primarily to Fannie Mae and Freddie Mac in the
normal course of business. Under certain circumstances, Valley may decide to sell loans that were not originated with the intent
to sell. During 2024, Valley sold $75.5 million of performing residential mortgage loans not originated for sale resulting in a
modest net gain.
In Februa
r
ry 2024, Valley completed the sale of its commercial premium fin
f ance lending business for
f
$96.8 million. This
asset sale included $95.5 million of assets, mainly consisting of $93.6 million of loans, and $2.8 million of related liabilities.
The transaction generated a $3.6 million net gain for the year ended December 31, 2024.
During 2024, Valley transferred fro
f
m the held for investment portfol
f io $151.0 million and $79.7 million of performing
commercial real estate and construc
r
tion loans, respectively, and sold them at par value through loan participation agreements
with a related party, Bank Leumi Le-Israel B.M. Valley also transfer
f red another pool of performing commercial real estate
loans totaling $933.0 million, net of unearned fee
f
s, to loans held for
f
sale in 2024. These performing loans were sold to an
unrelated party dur
d
ing the fourth quarter 2024 and resulted in a $13.7 million net loss (due
d
to transaction costs and a net market
discount) for
f
the year ended December 31, 2024.
During the year ended December 31, 2023, Valley transfer
f red fro
f
m the held for investment loan portfol
f io a non-
performing construc
r
tion loan totaling $10.0 million, net of $4.2 million in charge-offs a
f
t the transfer
f
date. The non-performing
loan held for sale had a carrying value of $8.8 million, net of a $1.2 million valuation allowance, at December 31, 2024. See
Note 3 for
f
further details.
Related Par
P
ty Loans
In the ordinary c
r
ourse of business, Valley has granted loans to certain directors, executive officers and their affil
f iates
(collectively refer
f red to as “related parties”). These loans were made on subs
u
tantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparabl
a e transactions with other unaffiliated persons and do not involve
more than normal risk of collectibility. All loans to related parties are performing as of December 31, 2024.
2024 Form 10-K
110
The fol
f lowing tabl
a e summarizes the changes in the total outstanding balances of loans and advances to the related parties dur
d
ing
the year ended December 31, 2024:
2024
(in thousands)
December 31, 2023
$
216,303
New loans and advances
30,420
Repayments
(22,029)
December 31, 2024
$
224,694
Loan Portfo
t
lio Risk
i
Elem
l
ents and Cre
C
dit R
i
isk Man
M
agement
Credit risk management. Valley adheres to a credit policy designed to minimize credit risk while generating the
maximum income given the level of risk appetite. Management reviews and appr
a
oves these policies and procedur
d
es on a regular
basis with subs
u
equent approval by the Board annually. Credit authority relating to a significant dollar percentage of the overall
portfol
f io is centralized and controlled by the Credit Risk Management Division and by the Credit Committee. Loan portfol
f io
diversific
f ation is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic
circumstances. Additionally, Valley does not accept crypt
r
o assets as loan collateral for
f
any of its loan portfol
f io classes
discussed fur
f
ther below.
Commercial and industrial loans. While a foc
f
used area for growth in the percentage mix of our total loan portfol
f io, a
significant portion of Valley’s commercial and industrial loan portfol
f io consists of loans to long standing customers of proven
ability, strong repayment performance, and high character. Underwriting standards for
f
both existing and new customers are
ba
based on cash f
h flo
f w fro
f
m the opera itions of hth
b
e business. While such recurring cash flow serves as the primary source of
repayment, a significant number of the loans are secured b
d by c lollateral such a b
s business e
i
quipment, inventory,
r
and r
l
eal estate.
Short-term loans may be made on an unsecured basis based on a borrower’s financial strength and past performance. Whenever
possible, Valley will obtain the personal guarantee of the borrower’s principals to potentially help mitigate the risk.
Commercial real estate loans. Commercial real estate loans are subject to underwriting standards and processes similar
to commercial and industrial loans but generally they involve larger principal balances and longer repayment periods as
compared to commercial and industrial loans. Commercial real estate loans are viewed primarily as cash flo
f w loans and
secondarily as loans secured by real property. Repayment of most loans is dependent upon the cash flo
f w generated from the
property securing the loan or the business that occupi
u es the property. Commercial real estate loans may be more adversely
affe
f cted by conditions in the real estate markets or in the general economy and accordingly, conservative loan to value ratios are
required at origination, as well as stress tested to evaluate the impact of market changes relating to key underwriting elements.
The properties securing the commercial real estate portfol
f io represent diverse types, with most properties located within
Valley’s primary markets.
Construction loans. Valley originates and manages construc
r
tion loans to developers and builders struc
r
tured on either a
revolving or non-revolving basis, depending on the natur
t
e of the underlying development proje
o ct. These loans are generally
secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk. Non-revolving
construc
r
tion loans ofte
f n involve the disbursement of subs
u
tantially all committed funds
f
with repayment substantially dependent
on the successful
f
completion and sale, or lease, of the proje
o ct. Sources of repayment for
f
these types of loans may be fro
f
m pre-
committed permanent loans fro
f
m other lenders, sales of developed property, or an interim loan commitment from Valley until
permanent fin
f ancing is obtained elsewhere. Revolving construc
r
tion loans (generally relating to single-family residential
construc
r
tion) are controlled with loan advances dependent upon the presale of housing units financed. These loans are closely
monitored by on-site inspections and are considered to have higher risks than other real estate loans due
d
to their ultimate
repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and
the availabi
a lity of long-term financing.
Residential mortgages. Valley originates residential, first mortgage loans based on underwriting standards that generally
comply with Fannie Mae and/or Freddie Mac requirements. In deciding whether to originate each residential mortgage, Valley
considers the qualific
f ations of the borrower as well as the value of the underlying property. Appraisals and valuations of real
estate collateral are contracted directly with independent appraisers or from valuation services and not through appraisal
management companies. Credit scoring, using FICO® and other proprietary credit scoring models are employed in the ultimate,
judgmental credit decision by Valley’s underwriting staff. Residential mortgage loans include fixed and variable interest rate
loans secured by one to four family homes.
111
2024 Form 10-K
Consumer loans. The consumer loan portfol
f io consists of a home equity, automobile and other consumer loans. Home
equity lending consists of both fix
f ed and variabl
a e interest rate products. Valley mainly provides home equity loans to its
residential mortgage customers within the foot
f
pr
t
int of its primary lending territory. Valley generally will not exceed a
combined (i.e., first and second mortgage) loan-to-value ratio of 80 percent
h
when origiginating a home e
i
qui yty loan A
.
utomobile
originations (including light truc
r
k and sport utility vehicles) are largely produced via indirect channels, originated through
approved automobile dealers. Automotive collateral is generally a depreciating asset and there are times in the life o
f
f an
automobile loan where the amount owed on a vehicle may exceed its collateral value. Additionally, automobile charge-offs w
f
ill
vary based on the strength or weakness of the used vehicle market, original advance rate, when in the life c
f
ycle of a loan a
default occurs, and the condition of the collateral being liquidated. Where permitted by law, and subj
u ect to the limitations of the
bankrupt
r
cy code, defic
f iency judgments are sought and acted upon to ultimately collect all money owed, even when a defau
f
lt
resulted in a loss at collateral liquidation. Valley uses a third party to actively track collision and comprehensive risk insurance
required of the borrower on the automobile and this third party provides coverage to Valley in the event of an uninsured
collateral loss. Valley’s other consumer loan portfolio includes direct consumer term loans, both secured and unsecured. The
other consumer loan portfol
f io includes exposures in personal lines of credit (mainly those secured by cash surrender value of
life i
f
nsurance), credit card loans and personal loans.
Credit
d
Quality
l
The fol
f lowing tabl
a e presents past due
d
, current and non-accrual loans without an allowance for
f
loan losses by loan
portfol
f io class at December 31, 2024 and 2023:
Past Due and Non-Accrual Loans
30-59 Days
Past Due
Loans
60-89 Days
Past Due
Loans
90 Days or
More
Past Due
Loans
Non-
Accrual
Loans
Total
Past Due
Loans
Current
Loans
Total
Loans
Non-Accrual
Loans
Without
Allowance
for Loan
Losses
(in thousands)
December 31, 2024
Commercial and
industrial
$
2,389
$
1,007
$
1,307
$136,675
$141,378
$ 9,790,022
$ 9,931,400
$
15,947
Commercial real
estate:
Commercial real
estate
20,902
24,903
—
157,231
203,036
26,327,189
26,530,225
91,095
Construc
r
tion
—
—
—
24,591
24,591
3,090,142
3,114,733
5,002
Total commercial
real estate loans
20,902
24,903
—
181,822
227,627
29,417,331
29,644,958
96,097
Residential mortgage
21,295
5,773
3,533
36,786
67,387
5,565,129
5,632,516
23,543
Consumer loans:
Home equity
1,651
181
—
3,961
5,793
598,640
604,433
1,341
Automobile
8,583
1,346
407
230
10,566
1,890,499
1,901,065
—
Other consumer
2,318
2,957
642
24
5,941
1,079,398
1,085,339
—
Total consumer
loans
12,552
4,484
1,049
4,215
22,300
3,568,537
3,590,837
1,341
Total
$
57,138
$
36,167
$
5,889
$359,498
$458,692
$48,341,019
$48,799,711
$
136,928
2024 Form 10-K
112
Past Due and Non-Accrual Loans
30-59 Days
Past Due
Loans
60-89 Days
Past Due
Loans
90 Days
or More
Past Due
Loans
Non-
Accrual
Loans
Total
Past Due
Loans
Current
Loans
Total Loans
Non-Accrual
Loans
Without
Allowance
for Loan
Losses
(in thousands)
December 31, 2023
Commercial and
industrial
$
9,307
$
5,095
$ 5,579
$ 99,912
$ 119,893
$ 9,110,650
$ 9,230,543
$
6,594
Commercial real
estate:
Commercial real
estate
3,008
1,257
—
99,739
104,004
28,139,235
28,243,239
81,282
Construc
r
tion
—
—
3,990
60,851
64,841
3,661,967
3,726,808
12,007
Total commercial
real estate loans
3,008
1,257
3,990
160,590
168,845
31,801,202
31,970,047
93,289
Residential mortgage
26,345
8,200
2,488
26,986
64,019
5,504,991
5,569,010
14,654
Consumer loans:
Home equity
1,687
613
—
3,539
5,839
553,313
559,152
—
Automobile
11,850
1,855
576
212
14,493
1,605,896
1,620,389
—
Other consumer
7,017
2,247
512
632
10,408
1,250,746
1,261,154
589
Total consumer
loans
20,554
4,715
1,088
4,383
30,740
3,409,955
3,440,695
589
Total
$
59,214
$
19,267
$ 13,145
$291,871
$ 383,497
$49,826,798
$50,210,295
$
115,126
If interest on non-accrua
r
l l
l loans had b
d been accrue
r
d i
d in acco d
rdance
i
wi hth hthe o irigiginal contractua
t
l terms, such i
h interes i
t income
wo luld h
d have amount d
ed to approximatelyly $32.5 million, $28.8
i
millllion, a d
nd $21.7
i
millllion for the years e d
nded Dece b
mber 31, 2024,
2023 and 2022, respectiv lely; none of hthese amounts wer i
e included i
d i i
n interes i
t incom d
e dur
d
ing these pe iri d
ods.
Credit quality indicators. Valley utilizes an internal loan classification system as a means of reporting problem loans
within commercial and industrial, commercial real estate, and construc
r
tion loan portfol
f io classes. Under Valley’s internal risk
rating system, loan relationships could be classified as “Pass,” “Special Mention,” “Substandard,” “Doubtful,” and “Loss.”
Subs
u
tandard loans include loans that exhibit well-defined weakness and are characterized by the distinct possibility that Valley
will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in
those classified as Subs
u
tandard with the added characteristic that the weaknesses present make collection or liquidation in ful
f l,
based on currently existing facts, conditions and values, highly questionabl
a e and improbabl
a e. Loans classified as Loss are those
considered uncollectible with insignificant value and are charged-off i
f
mmediately to the allowance for
f
loan losses and,
therefor
f
e, not presented in the tabl
a e below. Loans that do not currently pose a suffi
f cient risk to warrant classification in one of
the aforementioned categories but pose weaknesses that deserve management’s close attention are deemed Special Mention.
Pass rated loans do not currently pose any identified risk and can range from the highest to average quality, depending on the
degree of potential risk. Risk ratings are upda
u
ted any time the situation warrants.
113
2024 Form 10-K
The fol
f lowing tabl
a e presents the internal loan classification risk by loan portfol
f io class by origination year based on the
most recent analysis performed at December 31, 2024 and 2023, as well as the gross loan charge-offs b
f
y year of origination for
f
the years ended December 31, 2024 and 2023:
Term Loans
Amortized Cost Basis by Origination Year
December 31,
2024
2024
2023
2022
2021
2020
Prior to
2020
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Total
(in thousands)
Commercial
and
industrial
Risk Rating:
Pass
$1,769,585
$
828,087
$
703,962
$ 476,091
$
246,992
$
392,834
$ 4,804,095
$
6,006
$ 9,227,652
Special
Mention
30,755
3,553
59,434
11,646
270
72,514
147,254
10,762
336,188
Subs
u
tandard
24,613
13,479
9,415
4,296
2,813
7,382
201,053
39,011
302,062
Doubtful
—
8,911
4
928
—
52,064
3,591
—
65,498
Total
commercial
and
industrial
$1,824,953
$
854,030
$
772,815
$ 492,961
$
250,075
$
524,794
$ 5,155,993
$
55,779
$ 9,931,400
Commercial
real estate
Risk Rating:
Pass
$2,097,314
$2,941,270
$5,310,807
$3,883,333
$2,302,480
$6,086,608
$
597,266
$
78,621
$23,297,699
Special
Mention
156,394
380,852
289,669
192,614
55,739
327,732
141,164
—
1,544,164
Subs
u
tandard
84,410
107,944
387,638
288,906
236,927
520,858
11,167
—
1,637,850
Doubtful
—
3,060
—
35,756
9,813
1,883
—
—
50,512
Total
commercial
real estate
$2,338,118
$3,433,126
$5,988,114
$4,400,609
$2,604,959
$6,937,081
$
749,597
$
78,621
$26,530,225
Construction
Risk Rating:
Pass
$
545,597
$
680,260
$
334,899
$
92,765
$
17,955
$
45,161
$ 1,224,698
$
58,644
$ 2,999,979
Special
Mention
13,278
—
664
5,069
—
2,504
16,691
—
38,206
Subs
u
tandard
9,835
—
8,950
4,942
—
—
43,474
—
67,201
Doubtful
—
—
2,074
—
7,273
—
—
—
9,347
Total
construction
$
568,710
$
680,260
$
346,587
$ 102,776
$
25,228
$
47,665
$ 1,284,863
$
58,644
$ 3,114,733
Gross loan
charge-offs
$
706
$
31,809
$
7,523
$
44,610
$
66,632
$
49,436
$
3,930
$
2,148
$
206,794
2024 Form 10-K
114
Term Loans
Amortized Cost Basis by Origination Year
December 31,
2023
2023
2022
2021
2020
2019
Prior to
2019
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Total
(in thousands)
Commercial
and industrial
Risk Rating:
Pass
$ 1,494,417
$ 1,047,513
$
765,335
$ 377,047
$ 211,504
$ 523,430
$ 4,382,361
$
29,798
$ 8,831,405
Special
Mention
70,807
73,423
15,296
358
1,870
915
99,981
139
262,789
Subs
u
tandard
3,100
1,837
2,629
1,714
1,221
5,900
29,569
4,225
50,195
Doubtful
11,658
595
1,166
(22)
2,653
57,817
12,287
—
86,154
Total
commercial
and industrial
$ 1,579,982
$ 1,123,368
$
784,426
$ 379,097
$ 217,248
$ 588,062
$ 4,524,198
$
34,162
$ 9,230,543
Commercial
real estate
Risk Rating:
Pass
$ 4,088,835
$ 6,630,322
$4,791,190
$2,789,275
$2,329,385
$5,385,809
$
618,056
$ 104,839
$26,737,711
Special
Mention
125,296
82,917
248,900
184,720
69,949
358,059
26
183
1,070,050
Subs
u
tandard
58,115
25,709
12,122
48,506
70,439
214,095
4,415
2,077
435,478
Total
commercial
real estate
$ 4,272,246
$ 6,738,948
$5,052,212
$3,022,501
$2,469,773
$5,957,963
$
622,497
$ 107,099
$28,243,239
Construction
Risk Rating:
Pass
$
753,759
$
655,198
$
267,336
$
10,318
$
40,584
$
43,560
$ 1,762,890
$ 139,599
$ 3,673,244
Subs
u
tandard
6,721
—
9,276
—
—
17,668
—
—
33,665
Doubtful
—
19,899
—
—
—
—
—
—
19,899
Total
construction
$
760,480
$
675,097
$
276,612
$
10,318
$
40,584
$
61,228
$ 1,762,890
$ 139,599
$ 3,726,808
Gross loan
charge-offs
$
307
$
12,919
$
28,438
$
6,946
$
5,031
$
13,446
$
3,729
$
145
$
70,961
115
2024 Form 10-K
For residential mortgages, home equity, automobile and other consumer loan portfol
f io classes, Valley evaluates credit
quality based on the aging status
t
of the loan and by payment activity. The following table presents the amortized cost in those
loan classes based on payment activity by origination year as of December 31, 2024 and 2023, as well as the gross loan charge-
offs
f
by year of origination for
f
the years ended December 31, 2024 and 2023:
Term Loans
Amortized Cost Basis by Origination Year
December 31,
2024
2024
2023
2022
2021
2020
Prior to
2020
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Total
(in thousands)
Residential
mortgage
Performing
$ 428,138
$ 413,528
$1,282,524
$1,420,835
$494,430
$1,490,512
$
75,479
$
954
$5,606,400
90 days or more
past due
530
771
1,030
1,533
5,286
16,285
—
681
26,116
Total residential
mortgage
$ 428,668
$ 414,299
$1,283,554
$1,422,368
$499,716
$1,506,797
$
75,479
$
1,635
$5,632,516
Consumer loans
Home equity
Performing
$
22,947
$ 29,445
$
38,774
$
10,302
$
3,340
$
50,613
$ 438,817
$
9,061
$ 603,299
90 days or more
past due
—
48
51
1
—
855
—
179
1,134
Total home
equity
22,947
29,493
38,825
10,303
3,340
51,468
438,817
9,240
604,433
Automobile
Performing
$ 863,281
$ 343,203
$ 363,901
$ 211,294
$ 59,288
$
59,512
$
—
$
—
$1,900,479
90 days or more
past due
71
122
140
70
2
181
—
—
586
Total
automobile
863,352
343,325
364,041
211,364
59,290
59,693
—
—
1,901,065
Other consumer
Performing
$
15,164
$ 25,884
$
15,787
$
1,588
$
337
$
53,917
$ 956,339
$
15,917
$1,084,933
90 days or more
past due
—
59
61
—
—
38
—
248
406
Total other
consumer
15,164
25,943
15,848
1,588
337
53,955
956,339
16,165
1,085,339
Total consumer
$ 901,463
$ 398,761
$ 418,714
$ 223,255
$ 62,967
$ 165,116
$1,395,156
$
25,405
$3,590,837
Gross loan
charge-offs
$
1,014
$
1,883
$
1,511
$
1,015
$
519
$
2,245
$
—
$
131
$
8,318
2024 Form 10-K
116
Term Loans
Amortized Cost Basis by Origination Year
December 31,
2023
2023
2022
2021
2020
2019
Prior to
2019
Revolving
Loans
Amortized
Cost Basis
Revolving
Loans
Converted
to Term
Loans
Total
(in thousands)
Residential
mortgage
Performing
$ 467,178
$1,304,026
$1,505,133
$538,853
$ 435,669
$1,244,986
$
57,052
$
1,771
$5,554,668
90 days or more
past due
—
1,968
1,681
1,357
3,391
5,945
—
—
14,342
Total residential
mortgage
$ 467,178
$1,305,994
$1,506,814
$540,210
$ 439,060
$1,250,931
$
57,052
$
1,771
$5,569,010
Consumer loans
Home equity
Performing
$
40,599
$
44,893
$
14,948
$
4,096
$
4,850
$
46,274
$ 396,960
$
4,608
$ 557,228
90 days or more
past due
—
51
13
—
—
1,132
—
728
1,924
Total home
equity
40,599
44,944
14,961
4,096
4,850
47,406
396,960
5,336
559,152
Automobile
Performing
$ 468,152
$ 531,728
$ 356,144
$121,658
$ 86,147
$
34,504
$
20,227
$
763
$1,619,323
90 days or more
past due
90
284
54
92
237
309
—
—
1,066
Total
automobile
468,242
532,012
356,198
121,750
86,384
34,813
20,227
763
1,620,389
Other consumer
Performing
$
32,662
$
20,376
$
2,986
$
1,722
$ 10,381
$
52,659
$1,120,863
$
18,655
$1,260,304
90 days or more
past due
10
79
—
—
—
628
—
133
850
Total other
consumer
32,672
20,455
2,986
1,722
10,381
53,287
1,120,863
18,788
1,261,154
Total consumer
$ 541,513
$ 597,411
$ 374,145
$127,568
$ 101,615
$ 135,506
$1,538,050
$
24,887
$3,440,695
Gross loan
charge-offs
$
296
$
903
$
357
$
232
$
752
$
1,921
$
31
$
—
$
4,492
Loan modifications to borrowers experiencing financial diffi
f culty. From time to time, Valley may extend, restructur
t
e,
or otherwise modify t
f
he terms of existing loans, on a case-by-case basis, to remain competitive and retain certain customers, as
well as assist other customers who may be experiencing financial diffi
f culties.
117
2024 Form 10-K
The fol
f lowing tabl
a e shows the amortized cost basis of loans to borrowers experiencing financial diffi
f culty at
December 31, 2024 and 2023 that were modified during the years ended December 31, 2024 and 2023, disaggregated by class
of financing receivable and type of modification. Each of the types of modifications was less than one percent of their
respective loan categories.
Interest Rate
Reduction
Term
Extension
Term Extension
and Interest
Rate Reduction
Other Than
Insignific
f ant
Payment
Delay
Total
% of Total
Loan Class
($ in thousands)
2024
Commercial and industrial
$
825
$
111,998
$
—
$
—
$
112,823
1.14 %
Commercial real estate
3,223
82,206
16,198
173,780
275,407
1.04
Construc
r
tion
—
—
—
2,505
2,505
0.08
Residential mortgage
—
1,041
—
1,136
2,177
0.04
Home equity
—
—
—
44
44
0.01
Total
$
4,048
$
195,245
$
16,198
$
177,465
$
392,956
0.81
2023
Commercial and industrial
$
2,967
$
58,287
$
2,500
$
—
$
63,754
0.69 %
Commercial real estate
—
123,838
3,690
—
127,528
0.45
Residential mortgage
—
568
—
—
568
0.01
Home equity
—
31
—
—
31
0.01
Consumer
—
43
—
—
43
—
Total
$
2,967
$
182,767
$
6,190
$
—
$
191,924
0.17
The fol
f lowing tabl
a e describes the types of modifications made to borrowers experiencing financial diffi
f culty dur
d
ing the
years ended December 31, 2024 and 2023:
Weighted Average
Interest Rate
Reduction
Weighted Average
Term Extension
(in months)
Weighted Average
Payment Deferra
f
l
(in months)
2024
Commercial and industrial
3.10 %
10
—
Commercial real estate
0.91
12
10
Construc
r
tion
—
—
43
Residential mortgage
—
145
7
Home equity
—
120
5
2023
Commercial and industrial
2.16 %
12
—
Commercial real estate
2.75
17
—
Residential mortgage
—
43
—
Home equity
—
120
—
Consumer
—
60
—
2024 Form 10-K
118
Valley closely monitors the performance of modified loans to borrowers experiencing financial diffi
f culty to understand
the effectiveness of modification efforts. The fol
f lowing tabl
a e presents the aging analysis of loans that have been modified
within the previous 12 months at December 31, 2024 and 2023.
Current
30-89 Days Past
Due
90 Days Or
More Past Due
Total
($ in thousands)
December 31, 2024
Commercial and industrial
$
110,761
$
2,062
$
—
$
112,823
Commercial real estate
275,361
—
46
275,407
Construc
r
tion
2,505
—
—
2,505
Residential mortgage
1,898
184
95 *
2,177
Home equity
—
44
—
44
Total
$
390,525
$
2,290
$
141
$
392,956
December 31, 2023
Commercial and industrial
$
45,169
$
3,697
$
14,888 * $
63,754
Commercial real estate
124,958
2,570
—
127,528
Residential mortgage
207
361
—
568
Home equity
31
—
—
31
Consumer
43
—
—
43
Total
$
170,408
$
6,628
$
14,888
$
191,924
* Indicates non-accrua
r
l loans.
h
The f lol
f lo i
wi g
ng tablbl
a e pro ivides the amor itiz d
ed cost ba isis of fin
f an ici g
ng re
i
ceivablbl
a es hthat had a paymen d
t defau
f
lt during t
g he years
ended December 31, 2024 and 2023 and were m di
odififi d
ed in hthe 12 months before defa lult t
b
o borrowers expe irien ici g
ng fifinancial
didiffi
fficulty
lty.
Term Extension
Other than
Insignific
f ant
Payment Delay
($ in thousands)
2024
Commercial real estate
$
46
$
—
Residential mortgage
868
95
Total
$
914
$
95
2023
Commercial and industrial
$
14,888
$
—
Total
$
14,888
$
—
Valley did not extend any commitments to lend additional funds
f
to borrowers experiencing financial diffi
f culty whose
loans had been modified during the year ended December 31, 2024 and 2023.
Collateral dependent loans. Loans are collateral dependent when the debtor is experiencing financial diffi
f culty and
repayment is expected to be provided substantially through the sale or operation of the collateral. When Valley determines that
repayment or satisfaction of the loan depends on the sale of the collateral, the collateral dependent loan balances are written
down to the estimated current fair value (less estimated selling costs) resulting in an immediate charge-off t
f
o the allowance,
excluding any consideration for
f
personal guarantees that may be pursued in the Bank’s collection process.
119
2024 Form 10-K
The fol
f lowing tabl
a e presents collateral dependent loans by class as of December 31, 2024 and 2023:
2024
2023
(in thousands)
Collateral dependent loans:
Commercial and industrial *
$
131,898
$
96,827
Commercial real estate
156,825
98,785
Construc
r
tion
15,841
46,634
Total commercial real estate loans
172,666
145,419
Residential mortgage
23,797
21,843
Home equity
1,341
—
Consumer
—
589
Total
$
329,702
$
264,678
*
Includes non-accrua
r
l loans collateralized by taxi medallions totaling $49.5 million and $62.3 million at December 31, 2024 and 2023,
respectively.
Allo
l wance for
f
Credit
d
Losses for
f
Loans
The fol
f lowing tabl
a e summarizes the allowance for
f
credit losses for
f
loans at December 31, 2024 and 2023:
2024
2023
(in thousands)
Components of allowance for
f
credit losses for
f
loans:
Allowance for
f
loan losses
$
558,850
$
446,080
Allowance for
f
unfunde
f
d credit commitments
14,478
19,470
Total allowance for
f
credit losses for
f
loans
$
573,328
$
465,550
The fol
f lowing tabl
a e summarizes the provision for credit losses for
f
loans for
f
the years ended December 31, 2024, 2023 and
2022:
2024
2023
2022
(in thousands)
Components of provision for credit losses for
f
loans:
Provision for loan losses
$
314,380
$
50,755
$
48,236
(Credit) provision for unfunde
f
d credit commitments
(4,992)
(5,130)
8,100
Total provision for credit losses for
f
loans
$
309,388
$
45,625
$
56,336
2024 Form 10-K
120
The fol
f lowing tabl
a e details the activity in the allowance for
f
loan losses by portfol
f io segment for
f
the years ended
December 31, 2024 and 2023:
Commercial
and Industrial
Commercial
Real Estate
Residential
Mortgage
Consumer
Total
(in thousands)
December 31, 2024
Allowance for
f
loan losses:
Beginning balance
$
133,359
$
249,598
$
42,957
$
20,166
$
446,080
Loans charged-off
(68,299)
(138,495)
(29)
(8,289)
(215,112)
Charged-off l
f
oans recovered
6,038
5,130
140
2,194
13,502
Net (charge-offs) recoveries
(62,261)
(133,365)
111
(6,095)
(201,610)
Provision for loan losses
101,904
187,915
15,827
8,734
314,380
Ending balance
$
173,002
$
304,148
$
58,895
$
22,805
$
558,850
December 31, 2023
Allowance for
f
loan losses:
Beginning balance
$
139,941
$
259,408
$
39,020
$
20,286
$
458,655
Impact of the adoption of ASU No. 2022-02
(739)
(589)
(12)
(28)
(1,368)
Beginning balance, adju
d sted
139,202
258,819
39,008
20,258
457,287
Loans charged-off
(48,015)
(22,946)
(194)
(4,298)
(75,453)
Charged-off l
f
oans recovered
11,270
34
201
1,986
13,491
Net (charge-offs) recoveries
(36,745)
(22,912)
7
(2,312)
(61,962)
Provision for loan losses
30,902
13,691
3,942
2,220
50,755
Ending balance
$
133,359
$
249,598
$
42,957
$
20,166
$
446,080
The fol
f lowing tabl
a e represents the allocation of the allowance for
f
loan losses and the related loans by loan portfol
f io
segment disaggregated based on the allowance measurement methodology for the years ended December 31, 2024 and 2023.
Commercial
and Industrial
Commercial
Real Estate
Residential
Mortgage
Consumer
Total
(in thousands)
December 31, 2024
Allowance for
f
loan losses:
Individually evaluated for
f
credit losses
$
59,603
$
16,225
$
27
$
—
$
75,855
Collectively evaluated for credit losses
113,399
287,923
58,868
22,805
482,995
Total
$
173,002
$
304,148
$
58,895
$
22,805
$
558,850
Loans:
Individually evaluated for
f
credit losses
$
131,898
$
172,666
$
23,797
$
1,341
$
329,702
Collectively evaluated for credit losses
9,799,502
29,472,292
5,608,719
3,589,496
48,470,009
Total
$
9,931,400
$29,644,958
$ 5,632,516
$ 3,590,837
$ 48,799,711
December 31, 2023
Allowance for
f
loan losses:
Individually evaluated for
f
credit losses
$
55,993
$
17,987
$
235
$
—
$
74,215
Collectively evaluated for credit losses
77,366
231,611
42,722
20,166
371,865
Total
$
133,359
$
249,598
$
42,957
$
20,166
$
446,080
Loans:
Individually evaluated for
f
credit losses
$
96,827
$
145,419
$
21,843
$
589
$
264,678
Collectively evaluated for credit losses
9,133,716
31,824,628
5,547,167
3,440,106
49,945,617
Total
$
9,230,543
$31,970,047
$ 5,569,010
$ 3,440,695
$ 50,210,295
121
2024 Form 10-K
LEASES (Note 6)
The fol
f lowing tabl
a e presents the components of the ROU assets and lease liabi
a lities in the consolidated statements of
financial condition by lease type at December 31, 2024 and 2023.
2024
2023
(in thousands)
ROU assets:
Operating leases
$
324,975
$
343,442
Finance leases
3,500
19
Total
$
328,475
$
343,461
Lease liabilities:
Operating leases
$
384,745
$
403,766
Finance leases
3,558
15
Total
$
388,303
$
403,781
During 2023, Valley recognized an operating lease ROU asset and related lease liabi
a lity totaling $58.3 million and
$66.4 million, respectively, related to its new headquarters located in Morristown, New Jersey. The ROU asset was reduced by
construc
r
tion allowance incentives totaling $8.2 million, which are amortized over the lease term.
The fol
f lowing tabl
a e presents the components by lease type, of total lease cost recognized in the consolidated statements of
income for the years ended December 31, 2024, 2023, and 2022:
2024
2023
2022
(in thousands)
Finance lease cost:
Amortization of ROU assets
$
53
$
16
$
379
Interest on lease liabi
a lities
12
—
30
Operating lease cost
49,875
48,241
42,268
Short-term lease cost
1,498
1,930
874
Variable lease cost
201
177
4,647
Subl
u ease income
(3,316)
(3,303)
(2,982)
Total lease cost (primarily included in net occupa
u
ncy expense)
$
48,323
$
47,061
$
45,216
The fol
f lowing tabl
a e presents supplemental cash flo
f w infor
f
mation related to leases for the years ended December 31,
2024, 2023, and 2022:
2024
2023
2022
(in thousands)
Cash paid for amounts included in the measurement of lease liabi
a lities:
Operating cash flo
f ws from operating leases
$
51,581
$
49,007
$
43,768
Operating cash flo
f ws from fin
f ance leases
—
—
30
Financing cash flo
f ws from fin
f ance leases
3
18
745
2024 Form 10-K
122
The fol
f lowing tabl
a e presents supplemental infor
f
mation related to leases at December 31, 2024 and 2023:
2024
2023
Weighted-average remaining lease term
Operating leases
11.9 years
12.5 years
Finance leases
5.1 years
2.6 years
Weighted-average discount rate
Operating leases
3.88 %
3.76 %
Finance leases
4.33 %
1.49 %
The fol
f lowing tabl
a e presents a maturity analysis of lessor and lessee arrangements outstanding as of December 31, 2024:
Lessor
Lessee
Direct Financing
and Sales-Type
Leases
Operating Leases
Finance Leases
(in thousands)
2025
$
268,502
$
51,338
$
728
2026
223,569
50,392
794
2027
160,288
47,327
792
2028
99,590
45,561
792
2029
55,076
44,207
791
Thereafte
f r
19,661
255,136
66
Total lease payments
826,686
493,961
3,963
Less: present value discount
(80,226)
(109,216)
(405)
Total
$
746,460
$
384,745
$
3,558
The total net investment in direct financing and sales-type leases was $746.5 million and $797.4 million at December 31,
2024 and 2023, respectively, comprised of $741.0 million and $793.3 million in lease receivabl
a es and $5.5 million and $4.1
million in non-guaranteed residua
d
ls, respectively. Total lease income was $39.8 million, $40.1 million and $34.4 million for
f
the
years ended December 31, 2024, 2023, and 2022, respectively.
PREMISES AND
Q
EQUIPMENT,
E
N T (Note 7)
At December 31, 2024 and 2023, premises and equipment, net consisted of:
2024
2023
(in thousands)
Land
$
79,919
$
80,349
Buildings
196,801
197,961
Leasehold improvements
170,500
165,878
Furniture and equipment
174,035
172,414
Total premises and equipment
621,255
616,602
Accumulated depreciation and amortization
(270,459)
(235,521)
Total premises and equipment, net
$
350,796
$
381,081
Depreciation and amortization of premises and equipment included in net occupa
u
ncy expense for
f
the years ended
December 31, 2024, 2023 and 2022 was appr
a
oximately $43.7 million, $43.4 million, and $41.2 million, respectively.
123
2024 Form 10-K
GOODWILL AND OTHER INTANGIBLE ASSETS (Note 8)
The fol
f lowing tabl
a e presents carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2024 and
2023.
Reporting Unit (*)
Wealth
Management
Consumer
Banking
Commercial
Banking
Total
(in thousands)
Goodwill
$
78,142
$
349,646
$
1,441,148
$
1,868,936
*
The Wealth Management and Consumer Banking reporting units are both components of the overall Consumer Banking operating
segment, which is fur
f
ther described in Note 21.
Du iri g
ng hth
s
e econd quarter 2024, V lalley perform d
ed hthe annual g
l g
d
oodwilill i
l imp iairment test a i
t its normal assessmen d
t date.
During the year ended December 31, 2024, there were no triggering events that would more likely than not reduce the fair value
of any reporting unit below its carrying amount.
h
There was no impairment of goodw
goodwilill recogni
ogni
d
zed during the years e d
nded
December 31, 2024, 2023 and 2022.
h
The f lol
f lo i
wi g
ng tablbl
a es summa irize othe i
r intangigiblble assets at Dece b
mber 31, 2024 and 2023:
Gross
Intangible
Assets
Accumulated
Amortization
Net
Intangible
Assets
(in thousands)
December 31, 2024
Loan servicing rights
$
125,961
$
(104,833) $
21,128
Core deposits
215,620
(138,080)
77,540
Other
50,393
(20,400)
29,993
Total other intangible assets
$
391,974
$
(263,313) $
128,661
December 31, 2023
Loan servicing rights
$
122,586
$
(100,636) $
21,950
Core deposits
215,620
(113,183)
102,437
Other
50,393
(14,449)
35,944
Total other intangible assets
$
388,599
$
(228,268) $
160,331
Core deposits are amortized using an accelerated method over a period of 10.0 years.
The line item labeled “Other” included in the tabl
a e above
a
primarily consists of customer lists, certain financial asset
servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line
method and have a weighted average amortization period of 13.5 years.
Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No
impairment was recognized during the years ended December 31, 2024, 2023 and 2022.
The fol
f lowing tabl
a e summarizes the change in loan servicing rights dur
d
ing the years ended December 31, 2024, 2023 and
2022:
2024
2023
2022
(in thousands)
Beginning balance
$
21,950
$
23,807
$
23,685
Origination of loan servicing rights
3,375
2,643
5,307
Amortization expense
(4,197)
(4,500)
(5,185)
Ending balance
$
21,128
$
21,950
$
23,807
Loan servicing rigights are account d
ed for u isi g
ng
hthe amortization meth d
hod.
h
There was no valuation allllowance at
December 31, 2024 2
,
023 and 2022 and no ne i
t imp iairment recogni
gnized d
d dur
d
ing t
g he years ended December 31, 2024, 2023 and
2022.
2024 Form 10-K
124
The Bank services residential mortgage loan portfol
f ios and it is compensated for
f
loan administrative services performed
for mortgage servicing rights of loans originated and sold by the Bank, and to a lesser extent, purchased mortgage servicing
rights. The aggregate principal balances of residential mortgage loans serviced by the Bank for
f
others approximated $3.3 billion
at both December 31, 2024 and 2023 and $3.5 billion at December 31, 2022. The outstanding balance of loans serviced for
others is not included in the consolidated statements of financial condition.
Valley recognized amortization expense on other intangible assets of $35.0 million, $39.8 million and $37.8 million for
f
the years ended December 31, 2024, 2023 and 2022, respectively.
The fol
f lowing tabl
a e presents the estimated amortization expense of other intangible assets over the next five-year period:
Year
Loan Servicing
Rights
Core
Deposits
Other
(in thousands)
2025
$
2,584
$
21,048
$
5,380
2026
2,322
17,223
4,805
2027
2,051
13,544
4,205
2028
1,805
10,117
3,633
2029
1,596
7,500
3,081
DEPOSITS (Note 9)
The schedul
d ed maturities of time deposits as of December 31, 2024 were as follows:
Year
Amount
(in thousands)
2025
$
9,240,979
2026
1,781,725
2027
1,257,252
2028
22,548
2029
28,710
Thereafte
f r
11,330
Total time deposits
$
12,342,544
The fol
f lowing tabl
a e presents additional infor
f
mation about deposits at Dece b
mber 31, 2024 and 2
d 023:
2024
2023
(in thousands)
Certific
f ates of deposits in excess of the FDIC limit included in time deposits
$
2,366,648
$
2,587,535
Deposits from certain directors, executives, and other affil
f iates
67,835
81,902
BORROWED FUNDS (Note 10)
Short-T
t
er
T
m B
r
orrowing
i
s
g
Short-term borrowings at December 31, 2024 and 2023 consisted of the following:
2024
2023
(in thousands)
FHLB advances
$
—
$
850,000
Securities sold under agreements to repurchase
72,718
67,834
Total short-term borrowings
$
72,718
$
917,834
The weighted average interest rate for
f
short-term FHLB advances was 5.62 percent for
f
the year ended December 31,
2023.
125
2024 Form 10-K
Long-T
g
er
T
m B
r
orrowing
i
s
g
Long-term borrowings at December 31, 2024 and 2023 consisted of the following:
2024
2023
(in thousands)
FHLB advances, net *
$
2,526,608
$
1,690,013
Subor
u
dinated debt, net *
647,547
638,362
Total long-term borrowings
$
3,174,155
$
2,328,375
*
FHLB advances and subordinated debt are reported net of unamortized premiums and debt issuance costs, respectively, that were
immaterial at both December 31, 2024 and 2023.
FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 4.20 percent and 3.75 percent at
December 31, 2024 and 2023, respectively. FHLB advances are secured by pledges of certain eligible collateral, including but
not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifyi
f ng first lien
mortgage loans, consisting of both residential mortgage and commercial real estate loans.
Long-T
g
er
T
m B
r
orrowing
i
s
g
h
Th l
e l
g
ong-term FHLB d
advances at Dece b
mber 31, 2024 are s h
ch d
ed lul
d
d
ed for contractua
t
l b
l b lalance repayments as follllows:
Year
Amount
(in thousands)
2025
$
273,000
2026
601,804
2027
926,800
2028
475,000
2029
250,000
Total long-term FHLB advances
$
2,526,604
The FHLB advances reported in the tabl
a e above
a
are not callable for early redemption.
Subordinated Debt. At December 31, 2024, Valley had the following subor
u
dinated debt outstanding by its matur
t
ity date:
•
$100 million of 4.55 percent subordinated debentures (notes) issued in June 2015 and due
d
June 30, 2025 with no call
dates or prepayments allowed unless certain conditions exist. Interest on the subordinated notes is payabl
a e semi-
annually in arrears on June 30 and December 30 of each year. The subordinated notes had a net carrying value of $99.9
million and $99.8 million at December 31, 2024 and 2023, respectively.
•
$115 million of 5.25 percent Fixed-to-Floating Rate subor
u
dinated notes issued in June 2020 and due
d
June 15, 2030
callabl
a e in whole or in part on or after June 15, 2025 or upon the occurrence of certain events. Interest on the
subor
u
dinated notes during the initial fiv
f e-year term through June 15, 2025 is payabl
a e semi-annually on June 15 and
December 15. Thereafter, interest is expected to be set based on three-month Term SOFR plus 514 ba isis p ioi tn s and
paid quarterly through maturity of the notes. The subor
u
dinated notes had a net carrying value of $114.0 million and
$113.8 million at December 31, 2024 and 2023, respectively.
•
$300 million of 3.00 percent Fixed-to-Floating Rate subor
u
dinated notes issued in May 2021 and due
d
June 15, 2031.
The subordinated notes are callabl
a e in whole or in part on or after June 15, 2026 or upon the occurrence of certain
events. Interest on the subor
u
dinated notes during the initial fiv
f e-year term through June 15, 2026 is payabl
a e semi-
annually on June 15 and December 15. Thereafter, interest is expected to be set based on three-month Term SOFR plus
236 ba isis p ioints and p iaid quarterlyly hthrough
ugh matu iri yty of hthe notes. The subor
u
didinated notes had a carryi
ryi g
ng value of
$285.0 million and $276.6 million, net of unamortized debt issuance costs and fair value of hedging adju
d stment at
December 31, 2024 and 2023, respectively. In June 2021, Vallll y
ey execut d
ed an interest rate swap to hedge
dge hthe cha g
nge in
hthe f iai
f r v lalue of hthe $300
il
millilion in subor
u
didinated notes. See Note 15 for addi
ddi itional d
l det iails.
•
$
•
150 million of 6.25 percent fix
f ed-to-floating rate subordinated notes issued on September 20, 2022 and due
d
September 30, 2032. Interest on the subordinated notes during the initial fiv
f e year term through September 30, 2027, is
payabl
a e semi-annually in arrears on March 30 and September 30, commencing on March 30, 2023. Thereafter, interest
2024 Form 10-K
126
will be set based on three-month Term SOFR plus 278 ba
b sis points and paid quarterly through maturity of the notes.
The subordinated notes had a net carrying value of $148.6
i
millllion and $148.2
il
millilion at December 31, 2024 and 2023,
respectively.
Pledged Securities. The fai
f r value of securities pledged to secure public deposits, repurchase agreements, lines of credit,
FHLB advances and for
f
other purpos
r
es required by law approximated $3.0 bibillllion and $3.5 bibillllion for Dece b
mber 31, 2024 and
2023, respectiv lely.
JUNIOR SUBORDINATED DEBENTURES ISSUED TO CAPITAL TRUSTS (Note 11)
All of the statut
t ory t
r
rusts presented in the table below were acquired in bank acquisitions. These trus
r
ts were establ
a ished
for the sole purpos
r
e of issuing trust prefer
f red securities and related trus
r
t common securities. The proceeds fro
f
m such issuances
were used by the trust to purchase an equivalent amount of junior subor
u
dinated debentures issued by the acquired bank, and
assumed by Valley. The junior subor
u
dinated debentures, the sole assets of the trusts, are unsecured obligations of Valley, and
are subordinate and junior in right of payment to all present and future senior and subordinated indebtedness and certain other
financial obligations of Valley. Valley does not consolidate its capital trusts based on GAAP but wholly owns all of the
common securities of each trust.
The table below summarizes the outstanding callable junior subor
u
dinated debentures and the related trus
r
t preferred
securities issued by each trus
r
t as of December 31, 2024 and 2023:
GCB
Capital Trust III
State Bancorp
Capital Trust I
State Bancorp
Capital Trust II
Aliant
Statutory Trust II
($ in thousands)
Junior Subordinated Debentures:
December 31, 2024
Carrying value (1)
$
24,743
$
9,525
$
9,122
$
14,065
Contractua
t
l principal balance
24,743
10,310
10,310
15,464
Annual interest rate (2)
3-mo. SOFR+spread
adj.
d +1.4%
3-mo. SOFR+spread
adj.
d + 3.45%
3-mo. SOFR+ spread
adj.
d +2.85%
3-mo.SOFR+spread
adj.
d +1.8%
December 31, 2023
Carrying value (1)
$
24,743
$
9,425
$
8,991
$
13,949
Contractua
t
l principal balance
24,743
10,310
10,310
15,464
Annual interest rate
3-mo. SOFR+spread
adj.
d +1.4%
3-mo. SOFR+spread
adj.
d +3.45%
3-mo. SOFR+spread
adj.
d +2.85%
3-mo. SOFR+spread
adj.
d +1.8%
Stated maturity date
July 30, 2037
November 7, 2032
January 23, 2034
December 15, 2036
Trust Preferred
f
Securities:
December 31, 2024 and 2023
Face value
$
24,000
$
10,000
$
10,000
$
15,000
Annual distribution rate(2)
3-mo. SOFR+spread
adj.
d + 1.4%
3-mo. SOFR+ spread
adj.
d + 3.45%
3-mo. SOFR+ spread
adj.
d +2.85%
3-mo. SOFR+ spread
adj.
d +1.8%
Issuance date
July 2, 2007
October 29, 2002
December 19, 2003
December 14, 2006
Distribution dates (3)
Quarterly
Quarterly
Quarterly
Quarterly
(1)
The carrying values include unamortized purchase accounting adjustments at December 31, 2024 and 2023.
(2)
The 3-month Term SOFR rate is adjusted for
f
the 0.26161 percent spread.
(3)
All cash distributions are cumulative.
The trust prefer
f red securities are subj
u ect to mandatory redemption, in whole or in part, upon repayment of the junior
subor
u
dinated debentures at the stated maturity date or upon early redemption. The trusts’ ability to pay amounts due
d
on the trust
prefer
f red securities is solely dependent upon Valley making payments on the related junior subor
u
dinated debentures. Valley’s
obligation under the junior subor
u
dinated debentures and other relevant trust agreements, in aggregate, constitutes a full and
unconditional guarantee by Valley of the trus
r
ts’ obligations under the trus
r
t preferred securities issued. Under the junior
subor
u
dinated debenture agreements, Valley has the right to defer payment of interest on the debentures and, therefor
f
e,
distributions on the trust prefer
f red securities, for up t
u
o fiv
f e years, but not beyond the stated matur
t
ity dates in the table above.
Currently, Valley has no intention to exercise its right to defer interest payments on the debentur
t
es.
The trust prefer
f red securities are included in Valley’s total risk-based capital (as Tier 2 capital) for regulatory p
r
urpos
r
es at
December 31, 2024 and 2023.
127
2024 Form 10-K
BENEFIT PLANS (Note 12)
Defi
e ne
i
d Benefit
f
Pension and Postre
t
tirement Benefit
f
Plan
l
s
The Bank had offe
f red a qualified non-contributory d
r
efin
f ed benefit plan and a non-qualifie
f d supplemental retirement plan
to eligible employees and key executives who met certain age and service requirements, as well as a non-qualifie
f d directors'
retirement plan. The qualifie
f d and non-qualifie
f d plans were frozen effe
f ctive December 31, 2013. Consequently, participants in
each plan will not accrue fur
f
ther benefits and their pension benefits
f
were immediately vested and determined based on their
compensation and service as of December 31, 2013.
On April 1, 2022, Valley assumed a qualified non-contributory d
r
efin
f ed benefit pension plan (frozen to both benefits
f
and
new participants) covering certain former employees of Bank Leumi USA. Valley also assumed Other post-employment
medical and life i
f
nsurance benefit ("OPEB") plans from Bank Leumi USA mostly covering retired former employees. The
OPEB plans are active, but closed to new participants.
Collectively, all qualified and non-qualifie
f d plans are refer
f red to as the “Pension” in the tables below unless indicated
otherwise.
The fol
f lowing tabl
a e sets for
f
th the change in the proje
o cted benefit obligation, the change in fair value of plan assets and
the funde
f
d status and amounts recognized in Valley’s consolidated financial statements for
f
the Pension and OPEB plans at
December 31, 2024 and 2023, if applicable:
Pension
OPEB
2024
2023
2024
2023
(in thousands)
Change in projected benefit
f
obligation:
Projected benefit obligation at beginning of year
$
179,918
$
175,496
$
5,451
$
5,981
Interest cost
8,542
8,923
245
279
Actuarial (loss) gain
(6,017)
7,604
178
(161)
Benefits paid
(11,920)
(12,105)
(721)
(648)
Projected benefit obligation at end of year
$
170,523
$
179,918
$
5,153
$
5,451
Change in fair value of plan assets:
Fair value of plan assets at beginning of year
$
302,860
$
275,406
$
—
$
—
Actual return on plan assets
30,595
37,993
—
—
Employer contributions
30,188
1,566
721
648
Benefits paid
(11,920)
(12,105)
(721)
(648)
Fair value of plan assets at end of year *
$
351,723
$
302,860
$
—
$
—
Funded status of the plan
Assets (liabi
a lities) recognized
$
181,200
$
122,942
$
(5,153) $
(5,451)
Accumulated benefit
f
obligation
170,523
179,918
$
5,153
$
5,451
*
Pension assets include accrue
r
d interest receivabl
a es of $986 thousand and $826 thousand as of December 31, 2024 and 2023,
respectively.
2024 Form 10-K
128
Amounts recognized as a component of accumulated other comprehensive loss at end of year that have not been
recognized as a component of the net periodic pension expense for
f
Valley’s Pension and OPEB plans are presented in the
following tabl
a e:
Pension
OPEB
2024
2023
2024
2023
(in thousands)
Net actua
t
rial loss (gain)
$
31,227
$
45,746
$
(749) $
(988)
Prior service cost
180
216
—
—
Deferred tax (benefit
f ) expense
(8,630)
(12,697)
206
273
Total
$
22,777
$
33,265
$
(543) $
(715)
The non-qualifie
f d plans presented within Pension in the tabl
a es above had a projected benefit obligation, accumulated
benefit obligation, and fai
f r value of plan assets at December 31, 2024 and 2023 as follows:
2024
2023
(in thousands)
Projected benefit obligation
$
13,418
$
14,571
Accumulated benefit
f
obligation
13,418
14,571
Fair value of plan assets
—
—
In determining the discount rate assumptions, management looks to current rates on fix
f ed-income corpor
r
ate debt
securities that receive a rating of AA or higher fro
f
m either Moody’s or S&P with durations equal to the expected benefit
payments streams required of each plan. The weighted average discount rate used in determining the actua
t
rial present value of
benefit obligations for the Pension plans was 5.57 percent and 5.00 percent as of December 31, 2024 and 2023, respectively,
and 5.51 percent and 4.97 percent for
f
the OPEB plans as of December 31, 2024 and 2023, respectively.
The net periodic benefit
f
(income) cost for the Pension and OPEB plans were reported within other non-interest expense
included the following components for
f
the years ended December 31, 2024, 2023 and 2022:
Pension
OPEB
2024
2023
2022
2024
2023
2022
(in thousands)
Interest cost
$
8,542
$
8,923
$
5,373
$
245
$
279
$
174
Expected return on plan assets
(22,327)
(22,792)
(20,858)
—
—
—
Amortization of net loss (gain)
234
58
1,000
(60)
(54)
(95)
Amortization of prior service cost
135
135
135
—
—
—
Net periodic benefit
f
(income) cost
$
(13,416) $
(13,676) $
(14,350) $
185
$
225
$
79
Valley estimated the interest cost component of net periodic benefit
f
(income) cost (as shown in the tabl
a e above
a
) using a
spot rate approach for the plans by appl
a
ying the specific spot rates along the yield curve to the relevant projected cash flo
f ws.
Valley believes this provides a better estimate of interest costs than a single weighted average discount rate derived fro
f
m the
yield curve used to measure the benefit obligation at the beginning of the appl
a
icable period.
Other changes in plan assets and benefit
f
obligations recognized in other comprehensive (income) loss for
f
the years ended
December 31, 2024 and 2023 were as follows:
Pension
OPEB
2024
2023
2024
2023
(in thousands)
Net actua
t
rial (gain) loss
$
(14,285) $
(7,596) $
178
$
(161)
Amortization of prior service cost
(135)
(135)
—
—
Amortization of actua
t
rial (loss) gain
(234)
(58)
60
54
Total recognized in other comprehensive loss
$
(14,654) $
(7,789) $
238
$
(107)
Total recognized in net periodic benefit
f
(income) cost and
other comprehensive (income) loss (befor
f
e tax)
$
(28,070) $
(21,465) $
423
$
118
129
2024 Form 10-K
The benefit
f
payments, which reflect expected future service, (as appr
a
opriate) expected to be paid in future years, are
presented in the following table:
Year
Pension
OPEB
(in thousands)
2025
$
12,868
$
342
2026
12,801
337
2027
13,074
339
2028
13,306
340
2029
13,391
328
Thereafte
f r
64,991
1,618
The weighted average assumptions used to determine net periodic benefit
f
(income) cost for the years ended
December 31, 2024, 2023 and 2022 were as follows:
Pension
OPEB
2024
2023
2022
2024
2023
2022
Discount rate - proje
o cted benefit obligation
5.00 %
5.31 %
2.85 %
4.96 %
5.29 %
2.85 %
Discount rate - interest cost
4.92 %
5.23 %
2.49 %
4.96 %
5.29 %
2.85 %
Expected long-term return on plan assets
7.25 %
7.50 %
6.79 %
N/A
N/A
N/A
Assumed healthcare cost trend rate *
N/A
N/A
N/A
7.00 %
5.50 %
5.75 %
*
The assumed healthcare cost trend rate used to measure the expected cost of benefits covered by the OPEB plans for
f
2025 is 7 percent.
The rate to which the healthcare cost trend rate is assumed to decline (ultimate trend rate) along with the year that the ultimate trend rate
will be reached is 4.5 percent in 2035.
h
The expect d
ed lo g
ng-term rate of return on qualif
lifie
f d plan assets is hthe average rate of return expect d
ed to be re laliz d
ed on
fu d
nds invest d
ed or expect d
ed to be invest d
ed to pr
i
ovide for the benefifits in lcl d
uded i
d in the benefifit oblbligigation.
h
The expect d
ed lo g
ng-term
rate of return on lplan assets is establbl
a ished at the begigi
i
nni g
ng of hth y
e year based upon
u
hihistoric lal and projeje
o ct d
ed returns for
f
h
each asset
cat g
egory.
r
h
The expect d
ed rate of return on
lplan assets assump ition is based on the concept tha i
t i i
t is a lo g
ng-term assump ition
indepe d
ndent of hthe current economic en ivironment a d
nd
h
changes w
l
ould b
d be m d
ad
i
e in the expect d
ed return
l
only whe
l
n l
g
ong-term
inflflation expectations
h
change, asset allllocations
h
change
g
materially or when asset class returns are expected to change for the
long-term.
The Bank Retirement Plans Committee, assisted by an independent non-discretionary investment consulting fir
f m, (1)
determines the qualifie
f d plans’ investment goals, objectives and risk parameters, (2) directs the diversific
f ation of the
investments into various suitable investment options and asset types, and (3) regularly monitors the performance of the assets.
Individual asset managers are granted ful
f l discretion to buy, sell, invest and reinvest the portions of the asset portfol
f io assigned
to them consistent with the Bank Retirement Plans Committee’s policy and guidelines.
The long-term strategic assets allocation targets reflect investment return requirements and risk tolerances specific to each
plan. The asset allocation targets are generally divided into appr
a
oximately equal weightings (50 percent) of growth assets,
including U.S. and International marketabl
a e equity securities, and fixed income assets, largely comprised of high-quality U.S.
bonds of both intermediate and long duration plus cash equivalents. The plans’ investments are well-diversifie
f d in terms of
industry,
r
economic sector, market capitalization and asset type.
Although much depends upon market conditions, the absolute investment objective for
f
the equity portion is to earn at
least a mid-to-high single digit return, after adju
d stment by the CPI, over rolling fiv
f e-year periods. Relative performance should
be above the median of a suitable grouping of other equity portfol
f ios and a suitabl
a e index over rolling three-year periods. For
the fix
f ed income portion of the plan assets, the absolute objective is to earn a positive annual real return, after adju
d stment by the
CPI, over rolling fiv
f e-year periods.
2024 Form 10-K
130
The fol
f lowing tabl
a es present the weighted-average asset allocations by asset category f
r
or
f
the defin
f ed benefit pension
plans that are measured at fair value by level within the fai
f r value hierarchy at December 31, 2024 and 2023. See Note 3 for
further details regarding the fair value hierarchy.
Fair Value Measurements at Reporting Date Using:
% of Total
Investments
December 31,
2024
Quoted Prices
in Active Markets
for Identical
Assets (Level 1)
Signific
f ant
Other
Observable Inputs
(Level 2)
Signific
f ant
Unobservable
Inputs
(Level 3)
($ in thousands)
Assets:
Investments:
Mutual funds
31 % $
109,951
$
109,951
$
—
$
—
Corporate bonds
21
73,599
—
73,599
—
Equity securities
17
58,474
58,474
—
—
U.S. Treasury s
r
ecurities
14
50,573
50,573
—
—
Commingled fund
12
41,277
—
41,277
—
U.S. government agency securities
3
9,780
—
9,780
—
Cash and money market funds
f
2
7,083
7,083
—
—
Total investments
100 % $
350,737
$
226,081
$
124,656
$
—
Fair Value Measurements at Reporting Date Using:
% of Total
Investments
December 31,
2023
Quoted Prices
in Active Markets
for Identical
Assets (Level 1)
Signific
f ant
Other
Observable Inputs
(Level 2)
Signific
f ant
Unobservable
Inputs
(Level 3)
($ in thousands)
Assets:
Investments:
Mutual funds
30 % $
91,000
$
91,000
$
—
$
—
Equity securities
20
60,918
60,918
—
—
Corporate bonds
19
56,267
—
56,267
—
U.S. Treasury s
r
ecurities
18
54,234
54,234
—
—
Commingled fund
8
25,115
—
25,115
—
U.S. government agency securities
4
10,580
—
10,580
—
Cash and money market funds
f
1
3,920
3,920
—
—
Total investments
100 % $
302,034
$
210,072
$
91,962
$
—
The fol
f lowing is a description of the valuation methodologies used for assets measured at fair value:
Equity securities, U.S. Treasury s
r
ecurities and cash and money market funds
f
are valued at fai
f r value in the tables above
a
utilizing Level 1 inputs. Mutual funds are measured at their respective net asset values, which represent fair values of the
securities held in the funds based on Level 1 inputs.
Corporate bonds and U.S. government agency securities are reported at fai
f r value utilizing Level 2 inputs. The prices for
f
these investments are derived fro
f
m market quotations and matrix pricing obtained through an independent pricing service. Such
fair value measurements consider observabl
a e data that may include dealer quotes, market spreads, cash flo
f ws, the U.S. Treasury
yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s
terms and conditions, among other things.
Commingled funds are valued based on the NAV as reported by the trus
r
tee of the funds. The funds' underlying
investments, which primarily comprise fixed-income debt securities and open-end mutua
t
l funds
f
, are valued using quoted
market prices in active markets or unobservabl
a e inputs for
f
similar assets. Therefore, commingled funds are classified as Level 2
within the fai
f r value hierarchy. Transactions may occur daily within the fund.
f
Based upon
u
actuarial estimates, Valley does not expect to make any contributions to the defin
f ed benefit pension plans.
Funding requirements for
f
subs
u
equent years are uncertain and will significantly depend on whether the plans' actua
t
ry changes
131
2024 Form 10-K
any assumptions used to calculate plan funding levels, the actual return on plan assets, changes in the employee groups covered
by the plans, and any legislative or regulatory c
r
hanges affec
f
ting plan fundi
f
ng requirements. For tax planning, financial
planning, cash flow management or cost reduction purpos
r
es, Valley may increase, accelerate, decrease or delay contributions to
the plans to the extent permitted by law.
Othe
t
r Non
N
-Qualifie
f d Pla
P ns
Valley maintains separate non-qualifie
f d plans for for
f
mer directors and senior management of Merchants Bank of New
York acquired in January of 2001. At December 31, 2024 and 2023, the remaining obligations under these plans were $811
thousand and $962 thousand, respectively. Valley's accrue
r
d expense related to these plans totaled $195 thousand and $246
thousand at December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, all of the obligations were
included in other liabi
a lities and $447 thousand (net of a $170 thousand tax benefit) and $519 thousand (net of a $198 thousand
tax benefit)
f
, respectively, were recorded in accumulated other comprehensive loss. The $617 thousand pre-tax in accumulated
other comprehensive loss will be reclassified to expense on a straight-line basis over the remaining benefit
f
periods of these non-
qualifie
f d plans.
Valley assumed, in the Oritani acquisition on December 1, 2019, certain obligations under non-qualifie
f d retirement plans,
including a SERP for
f
the for
f
mer Chief Executive Officer of Oritani. The SERP is a retirement benefit
f
with a minimum payment
period of 20 years upon
u
death, disabi
a lity, normal retirement, early retirement or separation fro
f
m service afte
f r a change in
control. Distributions from the plan began on July 1, 2020. The funde
f
d obligation under the SERP totaled $10.8 million and
$11.6 million at December 31, 2024 and 2023, respectively. The SERP is secured by investments in money market mutua
t
l
funds which are held in a trust and classified as equity securities on the consolidated statements of financial condition at both
December 31, 2024 and 2023. Valley recorded net benefit income of $1.3 million, $1.5 million and $1.8 million related to the
valuation of the SERP for the years ended December 31, 2024, 2023 and 2022, respectively.
Bonus Plan
l
Valley National Bank and its subs
u
idiaries may award cash incentive and merit bonuses to its offi
f cers and employees
based upon
u
a percentage of the covered employees’ compensation as determined by the achievement of certain perform
f
ance
objectives. Amounts charged to salary expense for
f
cash incentive awards were $54.5 million, $57.4 million and $54.6 million
during 2024, 2023 and 2022, respectively.
Saving
i
s a
g
nd Investme
t
nt Plan
l
Valley National Bank maintains a 401(k) plan that covers eligible employees of the Bank and its subs
u
idiaries and allows
employees to contribute a percentage of their salary, with the Bank matching a certain percentage of the employee contribution
in cash invested in accordance with each participant’s investment elections. The Bank recorded $15.7 million, $16.0 million and
$14.0 million in expense for
f
contributions to the plan for
f
the years ended December 31, 2024, 2023 and 2022, respectively.
Defe
e rred Com
C
pe
m
nsatio
t n Pla
P n
Valley has a non-qualified, unfunde
f
d defer
f red compensation plan maintained for
f
the purpos
r
e of providing deferred
compensation for
f
selected employees participating in the 401(k) plan whose contributions are limited as a result of the
limitations under Section 401(a)(17) of the Internal Revenue Code. Each participant in the plan is permitted to defer
f
per
calendar year, up t
u
o fiv
f e percent of the portion of the participant’s salary and cash bonus above the limit in effe
f ct under the
Company's 401(k) plan and receive employer matching contributions that become fully vested afte
f r two years of participation
in the plan. Plan participants also receive an annual interest crediting on their balances held as of December 31 each year.
Benefits are generally paid to a participant in a single lump sum following the participant’s separation fro
f
m service with Valley.
Valley recorded plan expenses of $770 thousand, $747 thousand and $447 thousand for
f
the years ended December 31, 2024,
2023 and 2022, respectively. As of December 31, 2024 and 2023, Valley had an unsecured general liabi
a lity of $4.8 million and
$3.6 million, respectively, included in accrued expenses and other liabilities in connection with this plan.
Stoc
t
k Based Compensation
Valllley m iaint iains an incentive compensation plan to pro ivide d
addidi itional l
l l
g
ong-term incen itives to offifi
f cers, em lpl y
oyees and
non-em lpl y
oye d
e directors
h
whose cont iributions are essential to the continued g
d growth a d
nd success of V lalley. Under the lplan, V lalley
may i
y issue awa d
rd i
s in amounts up t
u
o 14.5
ill
million h
shares, subj
ubject to certain d
adjuju
d stments. As of December 31, 2024, 9.6 million
shares of common stock were availabl
a e for
f
issuance under the plan.
Valley recorded total stock-based compensation expense of $29.0 million, $33.1 million and $28.8 million for
f
the years
ended December 31, 2024, 2023 and 2022, respectively. The stock-based compensation expense included $3.0 million for
f
2024
2024 Form 10-K
132
and $2.3 million for
f
both 2023 and 2022 related to stock awards granted to retirement eligible employees. Compensation
expense for
f
awards to retirement eligible employees is amortized monthly over a one year required service period afte
f r the grant
date. The fair values of all other stock awards are expensed over the shorter of the vesting or required service period. As of
December 31, 2024, the unrecognized amortization expense for
f
all stock-based compensation totaled approximately $29.1
million and will be recognized over an average remaining vesting period of appr
a
oximately 1.8 years.
RSUs. RSUs are awarded as performance-based RSUs and time-based RSUs. Performance based RSUs vest based on (i)
growth in tangible book value per share plus dividends and (ii) total shareholder retur
t
n as compared to our peer group. The
performance based RSUs “cliff”
f
vest afte
f r three years based on the cumulative performance of Valley dur
d
ing that time period.
Generally, time-based RSUs vest ratabl
a y in one-third increments each year over a three-year vesting period. The RSUs earn
dividend equivalents (equal to cash dividends paid on Valley's common shares) over the applicable performance or service
period. Dividend equivalents, per the terms of the agreements, are accumulated and paid to the grantee at the vesting date, or
forfeited if the applicable performance or service conditions are not met.
The table below summarizes average grant date fair values of RSUs for the years ended December 31, 2024, 2023, and
2022:
Restricted Stock Units Average Grant Date Fair Values
2024
2023
2022
Average grant date fai
f r value per share:
Performance-based RSUs
$
7.88
$
12.80
$
14.72
Time-based RSUs
$
8.46
$
11.25
$
13.22
The fol
f lowing tabl
a e sets for
f
th the changes in RSUs outstanding for the years ended December 31, 2024, 2023 and 2022:
Restricted Stock Units Outstanding
2024
2023
2022
Outstanding at beginning of year
5,694,330
5,196,609
3,889,756
Granted
4,573,601
2,944,837
3,426,181
Vested
(2,616,787)
(2,110,120)
(1,833,739)
Forfeited
(828,589)
(336,996)
(285,589)
Outstanding at end of year
6,822,555
5,694,330
5,196,609
Restricted Stock. A restricted stock award is a grant of shares of Valley common stock subj
u ect to certain vesting and
other restrictions. Compensation expense is measured based on the grant-date fai
f r value of the shares.
The fol
f lowing tabl
a e sets for
f
th the changes in restricted stock awards outstanding for the years ended December 31, 2023
and 2022. There were no restricted stock awards outstanding during the year ended December 31, 2024.
Restricted Stock Awards Outstanding
2023
2022
Outstanding at beginning of year
5,245
213,908
Vested
(5,245)
(208,663)
Outstanding at end of year
—
5,245
Stock Options. The fair value of each option granted on the date of grant is estimated using a binomial option pricing
model. The fai
f r values are estimated using assumptions for dividend yield based on the annual dividend rate; the stock
volatility, based on Valley’s historical and implied stock price volatility; the risk-free interest rates, based on the U.S. Treasury
r
constant maturity bonds, in effect on the actua
t
l grant dates, with a remaining term approximating the expected term of the
options; and expected exercise term calculated based on Valley’s historical exercise experience.
On April 1, 2022, Valley issued replacement options for the pre-existing and fully vested stock option awards of Bank
Leumi USA for 2.7 million shares of Valley common stock at a weighted average exercise price of $8.47. The stock plan under
which the original Bank Leumi stock awards were issued is no longer active at the acquisition date.
133
2024 Form 10-K
The fol
f lowing tabl
a e summarizes stock option activity as of December 31, 2024, 2023 and 2022 and changes dur
d
ing the
years ended on those dates:
2024
2023
2022
Weighted
Average
Exercise
Weighted
Average
Exercise
Weighted
Average
Exercise
Stock options
Shares
Price
Shares
Price
Shares
Price
Outstanding at beginning of year
2,914,829
$
8
2,927,031
$
8
217,555
$
7
Acquired in business combinations
—
—
—
—
2,726,113
8
Exercised
(259,709)
8
(12,202)
6
(16,637)
6
Forfeited or expired
(32,000)
10
—
—
—
—
Outstanding at end of year
2,623,120
8
2,914,829
8
2,927,031
8
Exercisabl
a e at year-end
2,623,120
8
2,914,829
8
2,927,031
8
The fol
f lowing tabl
a e summarizes information about
a
stock options outstanding and exercisable at December 31, 2024:
Options Outstanding and Exercisable
Range of Exercise Prices
Number of Options
Weighted Average
Remaining Contractual
Life in Years
Weighted Average
Exercise Price
$4-6
42,352
1.2
$
6
6-8
84,767
2.2
7
8-10
2,470,401
0.9
8
10-12
25,600
3.7
10
2,623,120
1.0
8
INCOME TAXES (Note 13)
Income tax expense for
f
the years ended December 31, 2024, 2023 and 2022 consisted of the following:
2024
2023
2022
(in thousands)
Current expense:
Federal
$
26,308
$
123,569
$
132,060
State
38,079
65,611
72,271
64,387
189,180
204,331
Deferred (benefit) expense:
Federal
(6,966)
(8,035)
7,263
State
827
(1,324)
222
(6,139)
(9,359)
7,485
Total income tax expense
$
58,248
$
179,821
$
211,816
2024 Form 10-K
134
The tax effe
f cts of temporary d
r
iffe
f rences that gave rise to the significant portions of the defer
f red tax assets and liabi
a lities
as of December 31, 2024 and 2023 were as follows:
2024
2023
(in thousands)
Deferred tax assets:
Allowance for
f
credit losses
$
157,629
$
128,717
Employee benefit
f s
41,808
41,190
Investment securities
48,652
42,361
Net operating loss carryforwards
9,078
11,037
Purchase accounting
42,637
53,980
FDIC special assessment
10,673
13,894
Other
23,744
24,362
Total defer
f red tax assets
334,221
315,541
Deferred tax liabilities:
Pension plans
52,783
37,194
Depreciation
12,314
20,963
Other investments
17,088
11,175
Core deposit intangibles
21,287
28,237
Other
25,876
22,319
Total defer
f red tax liabi
a lities
129,348
119,888
Valuation allowance
1,263
424
Net defer
f red tax asset (included in other assets)
$
203,610
$
195,229
Valley's fed
f
eral net operating loss carryforwards totaled $31.8 million at December 31, 2024, and expire during the
period from 2029 through 2034. State net operating loss carryforwards totaled $55.3 million at December 31, 2024, and expire
during the period from 2029 through 2038.
Valley's capital loss carryforwards totaled $4.8 million, net of a valuation allowance of $1.3 million at December 31,
2024, and expire during the period from 2028 to 2029.
Based upon
u
taxes paid and projections of future taxabl
a e income over the periods in which the net defer
f red tax assets are
deductible, management believes that it is more likely than not that Valley will realize the benefits of these deduc
d
tible
differences and loss carryforwards.
Reconciliation between the reported income tax expense and the amount computed by multiplying consolidated income
before taxes by the statut
t ory f
r
ed
f
eral income tax rate of 21 percent for the years ended December 31, 2024, 2023, and 2022 were
as follows:
2024
2023
2022
Amount
Percent
Amount
Percent
Amount
Percent
(in thousands)
U.S. federal statutory tax rate
$
92,089
21.0 % $
142,450
21.0 % $
163,940
21.0 %
Increase (decrease) due to:
State income tax expense, net of fed
f
eral
tax effect *
30,736
7.0 %
50,787
7.5 %
57,276
7.3 %
Tax credits
(32,104)
(7.3)%
(23,008)
(3.4)%
(12,872)
(1.6)%
Nontaxable or non-deductible items
Disallowed FDIC Insurance Premiums
11,071
2.5 %
7,950
1.2 %
4,796
0.6 %
Other nontaxable or non-deductible
(1,075)
(0.2)%
(1,291)
(0.2)%
156
— %
Changes in unrecognized tax benefits
(46,431)
(10.6)%
—
— %
—
— %
Other adjustments
3,962
0.9 %
2,933
0.4 %
(1,480)
(0.2)%
Income tax expense
$
58,248
13.3 % $
179,821
26.5 % $
211,816
27.1 %
*
State taxes in New York, New York City, and New Jersey made up t
u
he majo
a rity (greater than 50 percent) of the tax effe
f ct in this
category.
r
135
2024 Form 10-K
Valley had $30.4 million in reserve for tax liability positions at December 31, 2023 and 2022 related to certain tax credits
and other tax benefit
f s previously recognized by Valley, where, subs
u
equently, a third-party fra
f ud was uncovered by the U.S.
Department of Justice in 2018. During the four
f
th quarter 2024, the statute of limitations with respect to the matter expired and
the tax authority closed its examination resulting in no changes to the originally filed tax returns. Based on the timing of the
events and expiration of the statut
t e of limitations during the fourth quarter 2024, Valley reassessed its positions and ful
f ly
reduced its previous balance of unrecognized tax benefits
f
.
A reconciliation of Valley’s gross unrecognized tax benefit
f s for
f
the years ended December 31, 2024, 2023 and 2022 is
presented in the tabl
a e below:
2024
2023
2022
(in thousands)
Beginning balance
$
30,359
$
30,359
$
30,359
Reductions due to expiration of statute of limitations
(30,359)
—
—
Ending balance
$
—
$
30,359
$
30,359
The entire balance of unrecognized tax benefits
f
was recognized and had a favorable effe
f ct on Valley's effect
f
ive income
tax rate for
f
the year ended December 31, 2024.
Valley’s policy is to report interest and penalties, if any, related to unrecognized tax benefits
f
in income tax expense.
Valley accrue
r
d appr
a
oximately $13.4 million and $10.5 million of interest expense associated with Valley's uncertain tax
positions at December 31, 2023 and 2022, respectively.
Valley monitors its tax positions for the underlying facts, circumstances, and information availabl
a e including changes in
tax laws, case law, and regulations that may necessitate subs
u
equent de-recognition of previous tax benefits
f
.
The fol
f lowing tabl
a e presents income taxes paid for the years ended December 31, 2024, 2023 and 2022:
2024
2023
2022
(in thousands)
Federal taxes paid
$
54,227
$
162,502
$
121,000
State and city taxes paid:
New York
12,447
25,718
18,626
New Jersey
7,475
19,006
12,010
New York City
8,407
13,307
12,141
Other
7,145
15,970
8,325
Total state and city taxes paid
35,474
74,001
51,102
Total income taxes paid
$
89,701
$
236,503
$
172,102
Valley file
f
s income tax returns in U.S. fed
f
eral and various state jurisdictions. With few exceptions, Valley is no longer
subj
u ect to U.S. federal and state income tax examinations by tax authorities for
f
years befor
f
e 2018. Valley is under examination
by the IRS and also under routine examination by various state jurisdictions, and we expect the examinations to be completed
within the next 12 months. Valley has considered, for
f
all open audits, any potential adjustments in establishing our reserve for
f
unrecognized tax benefit
f s as of December 31, 2024.
TAX CREDIT INVESTMENTS (Note 14)
Valley’s tax credit investments are primarily related to investments promoting qualifie
f d affordable housing proje
o cts, and
other investments related to community development and renewabl
a e energy sources. Some of these tax-advantaged investments
suppor
u
t Valley’s regulatory c
r
ompliance with the CRA. Valley’s investments in these entities generate a retur
t
n primarily through
the realization of fed
f
eral income tax credits, and other tax benefits, such as tax deductions from operating losses of the
investments, over specified time periods. These tax credits and deduc
d
tions are recognized as a reduc
d
tion of income tax expense.
Valley’s tax credit investments are carried in other assets on the consolidated statements of financial condition. Valley’s
unfunde
f
d capital and other commitments related to the tax credit investments are carried in accrue
r
d expenses and other
liabi
a lities on the consolidated statements of financial condition. Valley recognizes amortization of tax credit investments,
including impairment losses, within non-interest expense in the consolidated statements of income using the equity method of
accounting. Afte
f r initial measurement, the carrying amounts of tax credit investments with non-readily determinable fair values
2024 Form 10-K
136
are increased to reflect Valley's share of income of the investee and are reduced to reflect its share of losses of the investee,
dividends received and impairments, if applicable. See the “Impairment Analysis” section below.
The fol
f lowing tabl
a e presents the balances of Valley’s affo
f
rdable housing tax credit investments, other tax credit
investments, and related unfunde
f
d commitments at December 31, 2024 and 2023:
2024
2023
(in thousands)
Other assets:
Affo
f
rdable housing tax credit investments, net
$
22,742
$
22,158
Other tax credit investments, net
278,468
117,659
Total tax credit investments, net
$
301,210
$
139,817
Other liabilities:
Unfunded affordable housing tax credit commitments
$
—
$
1,305
Total unfunde
f
d tax credit commitments
$
—
$
1,305
The fol
f lowing tabl
a e presents other information relating to Valley’s affordable housing tax credit investments and other
tax credit investments for
f
the years ended December 31, 2024, 2023 and 2022:
2024
2023
2022
(in thousands)
Components of income tax expense:
Affo
f
rdable housing tax credits and other tax benefits
$
5,319
$
5,872
$
4,748
Other tax credit investment credits and tax benefits
f
32,091
20,069
11,617
Total reduc
d
tion in income tax expense
$
37,410
$
25,941
$
16,365
Amortization of tax credit investments:
Affo
f
rdable housing tax credit investment losses
$
3,501
$
3,198
$
2,311
Affo
f
rdable housing tax credit investment impairment losses
983
2,466
1,187
Other tax credit investment losses
5,143
1,266
1,254
Other tax credit investment impairment losses
9,319
11,079
7,655
Total amortization of tax credit investments recorded in non-
interest expense
$
18,946
$
18,009
$
12,407
Im
i
pai
m
rm
i
en A
t Analyly isisi
An impairment loss is recognized when the fai
f r value of the tax credit investment is less than its carrying value. The
determination of whether a decline in value of a tax credit investment is other-than-temporary r
r
equires significant judgment and
is performed separately for each investment. The tax credit investments are reviewed for impairment quarterly, or whenever
events or changes in circumstances indicate that the carryi
r ng amount of the investment might not be recoverabl
a e. These
circumstances can include, but are not limited to, the fol
f lowing factors:
• Evidence that Valley does not have the abi
a lity to recover the carrying amount of the investment;
• The inability of the investee to sustain earnings;
• A current fair value of the investment based upon
u
cash flo
f w proje
o ctions that is less than the carrying amount; and
• Change in the economic or technological environment that could adversely affect the investee’s operations.
On a periodic basis, Valley obtains financial reporting on its underlying tax credit investment assets for each fund. The
financial reporting is reviewed for
f
deterioration in the financial condition of the fund, the level of cash flo
f ws and any significant
losses or impairment charges. Valley also regularly reviews the condition and continuing prospects of the underlying operations
of the investment with the fund
f
manager, including any observations from site visits and communications with the Fund
Sponsor, if available. Annually, Valley obtains the audited fin
f ancial statements prepared by an independent accounting fir
f m for
f
each investment, as well as the annual tax returns. Generally, none of the aforementioned review fact
f
ors are individually
conclusive and the relative importance of each factor varies based on fact
f
s and circumstances. However, the longer the expected
period of recovery, the stronger and more objective the positive evidence needs to be in order to overcome the presumption that
137
2024 Form 10-K
the impairment is other than temporary.
r
If management determines that a decline in value is other than temporary a
r
s a result of
its quarterly and annual reviews, including current probabl
a e cash flo
f w proje
o ctions, the applicable tax credit investment is
written down to its estimated fai
f r value through an impairment charge to earnings, which establ
a ishes the new cost basis of the
investment.
COMMITMENTS AND CONTINGENCIES (Note 15)
Fina
i
ncial Ins
I
truments with
i
Off-b
f
alan
l
ce Sheet Risk
i
In the ordinary c
r
ourse of business, meeting the financial needs of its customers, Valley, through its subs
u
idiary Valley
National Bank, is a party to various financial instrum
r
ents, which are not reflected in the consolidated financial statements.
These fin
f ancial instruments include standby and commercial letters of credit, unused portions of lines of credit and
commitments to extend various types of credit. These instrum
r
ents involve, to varyi
r ng degrees, elements of credit risk in excess
of the amounts recognized in the consolidated financial statements. The commitment or contract amount of these instrum
r
ents is
an indicator of the Bank’s level of involvement in each type of instrument as well as the exposure to credit loss in the event of
non-performance by the other party to the financial instrum
r
ent. The Bank seeks to limit any exposure of credit loss by appl
a
ying
the same credit policies in making commitments as it does for
f
on-balance sheet lending facilities.
The fol
f lowing tabl
a e provides a summary of financial instrum
r
ents with off-b
f
alance sheet risk at December 31, 2024 and
2023:
2024
2023
(in thousands)
Commitments under commercial loans and lines of credit
$
10,303,607
$
10,727,162
Home equity and other revolving lines of credit
1,913,626
1,681,431
Standby letters of credit
524,108
478,954
Outstanding residential mortgage loan commitments
111,696
175,269
Commitments under unused lines of credit - credit card
146,832
138,564
Commitments to sell loans
28,561
24,418
Commercial letters of credit
26,639
28,817
Total
$
13,055,069
$
13,254,615
Obligations to advance funds
f
under commitments to extend credit, including commitments under unused lines of credit,
are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments
generally have specifie
f d expiration dates, which may be extended upon
u
request, or other termination clauses and generally
require payment of a fee. These commitments do not necessarily represent fut
f ur
t
e cash requirements, as it is anticipated that
many of these commitments will expire without being ful
f ly drawn upon.
u
The Bank’s lending activity for outstanding loan
commitments is primarily to customers within the states of New Jersey, New York, and Florida.
Standby letters of credit represent the guarantee by the Bank of the obligations or performance of the bank customer in
the event of the defau
f
lt of payment or nonperformance to a third party benefic
f iary.
Loan sale commitments represent contracts for
f
the sale of residential mortgage loans to third parties in the ordinary
course of the Bank’s business. These commitments require the Bank to deliver loans within a specific period to the third party.
The risk to the Bank is its non-delivery o
r
f loans required by the commitment, which could lead to financial penalties. The Bank
has not defaulted on its loan sale commitments.
Derivative Ins
I
truments and Hed
H
gi
d ng
i
Activitie
t s
Valley is exposed to certain risks arising fro
f
m both its business operations and economic conditions. Valley principally
manages its exposure to a wide variety of business and operational risks through management of its core business activities.
Valley manages economic risks, including interest rate and liquidity risks, primarily by managing the amount, sources, and
duration of its assets and liabi
a lities and, from time to time, the use of derivative fin
f ancial instruments. Specific
f ally, Valley
enters into derivative fin
f ancial instruments to manage exposures that arise fro
f
m business activities that result in the payment of
future known and uncertain cash amounts, the value of which are determined by interest rates. Valley’s derivative fin
f ancial
instruments are used to manage differences in the amount, timing, and dur
d
ation of Valley’s known or expected cash receipts
and its known or expected cash payments related to assets and liabi
a lities as outlined below.
Cash Flow Hedges of Interest Rate Risk. Valley’s objectives in using interest rate derivatives are to add stability to
interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, Valley has used
2024 Form 10-K
138
interest rate swaps, from time to time, as part of its interest rate risk management strategy. Interest rate swaps designated as
cash flo
f w hedges involve the payment of either fixed or variabl
a e-rate amounts in exchange for the receipt of variable or fixed-
rate amounts from a counterpa
r
rty, respectively.
During the second quarter 2023, Valley terminated six interest rate swaps with a total notional amount of $600 million.
The terminated swaps, originally maturing from November 2024 to November 2026, were used to hedge the changes in cash
flows associated with certain variabl
a e rate loans. The transaction resulted in a pre-tax gain totaling $3.6 million reported in
accumulated other comprehensive loss within shareholders' equity that will be amortized to interest income over the life of the
previously hedged loans.
Fair Value Hedges of Fixed Rate Assets and Liabilities. Valley is exposed to changes in the fair value of certain fixed-
rate assets and liabi
a lities due to changes in interest rates and interest rate swaps
a
to manage its exposure to changes in fai
f r value.
For derivatives that are designated and qualify a
f
s fai
f r value hedges, the gain or loss on the derivative as well as the loss or gain
on the hedged item attributable to the hedged risk are recognized in earnings.
During the third quarter 2024, Valley terminated interest rate swaps
a
with a total notional amount of $500 million used to
hedge the fai
f r value of certain fix
f ed rate residential loans. The terminated swaps had original maturity dates in the fourth quarter
2025. The carrying amount of the hedged assets included an immaterial cumulative loss adjustment at the date of termination
that will be amortized to earnings through the fourt
f
h quarter 2025.
During 2024, Valley entered into 11 forward-starting interest rate swap agreements with notional amounts totaling
$480.3 million to hedge the changes in fai
f r value of certain fix
f ed rate brokered time deposits. Commencing in fir
f st quarter of
2025, Valley will receive fixed rate amounts ranging from appr
a
oximately 4.12 percent to 4.65 percent, in exchange for variabl
a e-
rate payments based on the Floating SOFR Overnight Indexed Swap c
a
ompound rate. The swaps have expiration dates ranging
from April 2026 to June 2027.
During 2021, Valley entered into a $300 million forward-starting interest rate swap agreement with a notional amount of
$300 million, maturing in June 2026, to hedge the change in the fai
f r value of the 3 percent subordinated debt issued on May 28,
2021. Under the swap agreement, beginning in January 2022, Valley receives fix
f ed rate payments and pays variabl
a e rate
amounts based on SOFR plus 2.187 percent.
Non-designated Hedges. Derivatives not designated as hedges may be used to manage Valley’s exposure to interest rate
movements or to provide a service to customers but do not meet the requirements for
f
hedge accounting under GAAP.
Derivatives not designated as hedges are not entered into for
f
speculative purpos
r
es. Valley executes interest rate swaps
a
with
commercial lending customers to faci
f
litate their respective risk management strategies. These interest rate swaps
a
with
customers are simultaneously offs
f et by interest rate swaps that Valley executes with a third- party, such that Valley minimizes
its net risk exposure resulting fro
f
m such transactions. As these interest rate swaps do not meet the strict hedge accounting
requirements, changes in the fair value of both the customer swaps and the offsetting swaps
a
are recognized directly in earnings.
Valley sometimes enters into risk participation agreements with external lenders where the banks are sharing their risk of
default on the interest rate swaps on participated loans. Valley either pays or receives a fee depending on the type of
participation. Risk participation agreements are credit derivatives not designated as hedges. Credit derivatives are not
speculative and are not used to manage interest rate risk in assets or liabi
a lities. Changes in the fair value in credit derivatives are
recognized directly in earnings. At December 31, 2024, Valley had 58 credit swaps with an aggregate notional amount of
$822.0 million related to risk par iti icipa ition agreements.
At December 31, 2024, Valley had
a
two “steepener” swaps
a
, each with a current notional amount of $10.4 million where
the receive rate on the swap m
a
irrors the pay rate on the brokered deposits and the rates paid on these types of hybrid
instruments are based on a formula derived from the spread between the long and short ends of the Constant Maturity Swap rate
curve. Although these types of instrum
r
ents do not meet the hedge accounting requirements, the change in fair value of both the
bifurcated derivative and the stand alone swap tend to move in opposite directions with changes in the three-month Term SOFR
rate and, therefor
f
e, provide an effe
f ctive economic hedge.
Valley regularly enters into mortgage banking derivatives which are non-designated hedges. These derivatives include
interest rate lock commitments provided to customers to fund certain residential mortgage loans to be sold into the secondary
market and for
f
ward commitments for the future delivery o
r
f such loans. Valley enters into for
f
ward commitments for
f
the fut
f ur
t
e
delivery o
r
f residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the
effe
f ct of future changes in interest rates on Valley's commitments to fund
f
the loans as well as on its portfol
f io of mortgage loans
held for sale.
139
2024 Form 10-K
Valley enters into for
f
eign currency for
f
ward and option contracts, primarily to accommodate our customers, that are not
designated as hedging instruments. Upon the origination of certain foreign currency denominated transactions (including
foreign currency holdings and non-U.S. dollar denominated loans) with a client, we enter into a respective hedging contract
with a third party fin
f ancial institut
t ion to mitigate the economic impact of foreign currency exchange rate fluctuation.
During June 2024, Valley entered into a credit defau
f
lt swap related to $1.5 billion in automobile loans primarily to
enhance the risk profil
f e of these assets for regulatory c
r
apital purpos
r
es. The covered loans have a total remaining balance of
approximately $1.1 billion within Valley's $1.9 billion automobile loan portfol
f io at December 31, 2024. The credit defau
f
lt swap
is a fre
f estanding contract measured at fair value with resulting gains or losses recognized in non-interest expense. The premium
amortization expense and other transaction costs associated with the credit protection totaled $6.8 million for
f
the year ended
December 31, 2024 and were recorded in other expense reported in non-interest expense.
Amounts included in the consolidated statements of financial condition related to the fai
f r value of Valley’s derivative
financial instrum
r
ents were as follows at December 31, 2024 and 2023:
2024
2023
Fair Value
Fair Value
Other
Assets
Other
Liabilities
Notional
Amount
Other
Assets
Other
Liabilities
Notional
Amount
(in thousands)
Derivatives designated as hedging
instruments:
Fair value hedge interest rate swaps
$
2,419
$
13,993
$
780,322
$
—
$
21,460
$
800,000
Total derivatives designated as hedging
instruments
$
2,419
$
13,993
$
780,322
$
—
$
21,460
$
800,000
Derivatives not designated as hedging
instruments:
Interest rate swaps and other
contracts *
$ 423,683
$
423,492
$ 16,209,499
$ 458,129
$ 457,885
$16,282,279
Foreign currency derivatives
18,011
16,488
1,688,338
8,024
8,286
1,557,167
Mortgage banking derivatives
150
192
45,752
74
472
38,797
Credit default swap
a
—
35
1,142,026
—
—
—
Total derivatives not designated as
hedging instruments
$ 441,844
$
440,207
$ 19,085,615
$ 466,227
$ 466,643
$17,878,243
Total derivative fin
f ancial
instruments
$ 444,263
$
454,200
$ 19,865,937
$ 466,227
$ 488,103
$18,678,243
*
Other derivative contracts include risk participation agreements.
Gains (losses) included in the consolidated statements of income and in other comprehensive income (loss), on a pre-tax
basis, related to interest rate derivatives designated as hedges of cash flo
f ws for the years ended December 31, 2024, 2023, and
2022 were as follows:
2024
2023
2022
(in thousands)
Amount of gain (loss) reclassified from accumulated other comprehensive
loss to interest expense
$
1,204
$
(891) $
(274)
Amount of (loss) gain recognized in other comprehensive income (loss)
—
(1,093)
4,683
The accumulated net afte
f r-tax gains and losses related to effe
f ctive cash flo
f w hedges included in accumulated other
comprehensive loss were $1.2 million and $2.1 million at December 31, 2024 and 2023, respectively.
Amounts reported in accumulated other comprehensive loss related to cash flo
f w interest rate derivatives are reclassified
to interest income and expense as interest payments are received and paid on the hedged variabl
a e interest rate assets and
liabi
a lities. The reclassification amount for the year ended December 31, 2024 represents amortization of a gain recognized from
the termination of isix i
x nterest rate swaps
a
during the second quarter 2023. Valley estimates that $1.1 million (before tax) will be
reclassified as an increase to interest income in 2025.
2024 Form 10-K
140
Gains (losses) included in the consolidated statements of income related to interest rate derivatives designated as hedges
of fair value for
f
the years ended December 31, 2024, 2023, and 2022 were as follows:
2024
2023
2022
(in thousands)
Derivative—interest rate swaps:
Interest income
$
3,170
$
(3,877) $
—
Interest expense
9,765
8,473
(466)
Hedged items - loans, time deposits and subordinated debt:
Interest income
$
(3,396) $
3,877
$
—
Interest expense
(10,005)
(8,687)
741
The changes in the fair value of the hedged item designated as a qualifyi
f ng hedge are captured as an adjustment to the
carrying amount of the hedged item (basis adjustment). The fol
f lowing tabl
a e presents the hedged items related to interest rate
derivatives designated as fai
f r value hedges and the cumulative basis fair value adjustment included in the net carrying amount
of the hedged items at December 31, 2024 and 2023:
Line Item in the Statement of Financial Condition in
Which the Hedged Item is Included
Net Carrying Amount of the
Hedged Asset/Liability
Cumulative Amount of Fair Value
Hedging Adjustment Included in the
Carrying Amount of the Hedged
Asset/Liability
2024
2024
(in thousands)
December 31, 2024
Time deposits
$
482,723
$
2,419
Long-term borrowings *
284,966
(13,859)
December 31, 2023
Loans
$
503,877
$
3,877
Long-term borrowings *
276,572
(21,445)
*
Net carrying amount includes unamortized debt issuance costs of $1.2 million and $2.0 million at December 31, 2024 and 2023,
respectively.
The net (losses) gains included in the consolidated statements of income related to derivative instrum
r
ents not designated
as hedging instruments for
f
the years ended December 31, 2024, 2023, and 2022 were as follows:
2024
2023
2022
(in thousands)
Non-designated hedge interest rate and credit derivatives
Other non-interest expense
$
(4,796) $
(1,590) $
1,392
Capi
a tal markets income reported in non-interest income included fee
f
income related to non-designated hedge derivative
interest rate swaps executed with commercial loan customers and for
f
eign exchange contracts (not designated as hedging
instruments) with a combined total of $23.5 million, $35.7 million and $48.8 million for the years ended December 31, 2024,
2023 and 2022, respectively.
Collateral Requirements and Credit Risk Related Contingency Features. By using derivatives, Valley is exposed to
credit risk if counterpa
r
rties to the derivative contracts do not perform as expected. Management attempts to minimize
counterpa
r
rty credit risk through credit approvals, limits, monitoring procedur
d
es and obtaining collateral where appropriate.
Credit risk exposure associated with derivative contracts is managed at Valley in conjunction with Valley’s consolidated
counterpa
r
rty risk management process. Valley’s counterpa
r
rties and the risk limits monitored by management are periodically
reviewed and appr
a
oved by the Board.
Valley has agreements with its derivative counterpa
r
rties providing that if Valley defau
f
lts on any of its indebtedness,
including default where repayment of the indebtedness has not been accelerated by the lender, then Valley could also be
declared in default on its derivative counterpa
r
rty agreements. Additionally, Valley has an agreement with several of its
derivative counterpa
r
rties that contains provisions that require Valley’s debt to maintain an investment grade credit rating fro
f
m
each of the major credit rating agencies from which it receives a credit rating. If Valley’s credit rating is reduc
d
ed below
141
2024 Form 10-K
investment grade, or such rating is withdrawn or suspended, then the counterpa
r
rties could terminate the derivative positions,
and Valley would be required to settle its obligations under the agreements. As of December 31, 2024, Valley was in
compliance with all of the provisions of its derivative counterpa
r
rty agreements.
h
The agg
g regate fair value of all derivative
financial instrum
r
ents with credit risk-related contingent featur
t
es was in a net asset position at December 31, 2024. Valley has
derivative counterpa
r
rty agreements that require minimum collateral posting thresholds for certain counterpa
r
rties.
BALANCE SHEET OFFSETTING (Note 16)
Certain fin
f ancial instruments, including certain OTC derivatives (mostly interest rate swaps) and repurchase agreements
(accounted for as secured long-term borrowings), may be eligible for offset in the consolidated statements of financial condition
and/or subj
u ect to master netting arrangements or similar agreements. OTC derivatives include interest rate swaps executed and
settled bilaterally with counterpa
r
rties without the use of an organized exchange or central clearing house (presented in the tabl
a e
below). The credit risk associated with bilateral OTC derivatives is managed through obtaining collateral and enforceabl
a e
master netting agreements.
Valley is party to master netting arrangements with its financial institution counterpa
r
rties; however, Valley does not
offs
f et assets and liabi
a lities under these arrangements for
f
financial statement presentation purpos
r
es. The master netting
arrangements provide for a single net settlement of all swap a
a
greements, as well as collateral, in the event of default on, or
termination of, any one contract. Collateral, usually in the form of cash or marketabl
a e investment securities, is posted by or
received fro
f
m the counterpa
r
rty with net liabi
a lity or asset positions, respectively, in accordance with contract thresholds. Master
repurchase agreements which include “right of set-off”
f
provisions generally have a legally enforceable right to offs
f et
recognized amounts. In such cases, the collateral would be used to settle the fai
f r value of the swap o
a
r repurchase agreement
should Valley be in defau
f
lt. Total amount of collateral held or pledged cannot exceed the net derivative fair values with the
counterpa
r
rty.
The table below presents infor
f
mation abo
a
ut Valley’s financial instrum
r
ents that are eligible for offset in the consolidated
statements of financial condition as of December 31, 2024 and 2023.
Gross Amounts Not Offs
f et
Gross Amounts
Recognized
Gross Amounts
Offs
f et
Net Amounts
Presented
Financial
Instruments
Cash
Collateral *
Net
Amount
(in thousands)
December 31, 2024
Assets:
Interest rate swaps and other
contracts
$
426,102
$
—
$
426,102
$
32,571
$
(358,520) $
100,153
Liabilities:
Interest rate swaps and other
contracts
$
437,485
$
—
$
437,485
$
(32,571) $
—
$
404,914
Total liabi
a lities
$
437,485
$
—
$
437,485
$
(32,571) $
—
$
404,914
December 31, 2023
Assets:
Interest rate swaps and other
contracts
$
458,129
$
—
$
458,129
$
53,780
$
(302,180) $
209,729
Liabilities:
Interest rate swaps and other
contracts
$
479,345
$
—
$
479,345
$
(53,780) $
—
$
425,565
Total liabi
a lities
$
479,345
$
—
$
479,345
$
(53,780) $
—
$
425,565
*
Cash collateral received fro
f
m or pledged to our counterpa
r
rties in relation to market value exposures of OTC derivative contracts in an
asset/liabi
a lity position.
2024 Form 10-K
142
REGULATORY AND CAPITAL REQUIREMENTS (Note 17)
Valley’s primary source of cash is dividends from the Bank. Valley National Bank, a national banking association, is
subj
u ect to certain restrictions on the amount of dividends that it may declare without prior regulatory a
r
ppr
a
oval. In addition, the
dividends declared cannot be in excess of the amount which would cause the subsidiary bank to fall below the minimum
required for
f
capital adequacy purpos
r
es.
Valley and Valley National Bank are subj
u ect to the regulatory c
r
apital requirements administered by the Federal Reserve
and the OCC. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional
discretionary actions by regulators that, if undertaken, could have a direct significant impact on Valley’s consolidated financial
statements. Under capital adequacy guidelines Valley and Valley National Bank must meet specific capital guidelines that
involve quantitative measures of Valley’s assets, liabi
a lities and certain off-b
f
alance sheet items as calculated under regulatory
r
accounting practices. Capital amounts and classification are also subj
u ect to qualitative judgments by the regulators about
a
components, risk weightings and other factors.
Quantitative measures establ
a ished by regulation to ensure capital adequacy require Valley and Valley National Bank to
maintain minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and
Tier 1 capital to average assets, as defin
f ed in the regulations.
Valley is required to maintain a common equity Tier 1 capital to risk-weighted assets ratio of 4.5 percent, Tier 1 capital to
risk-weighted assets of 6.0 percent, ratio of total capital to risk-weighted assets of 8.0 percent, and minimum leverage ratio of
4.0 percent, plus a 2.5 percent capital conservation buffe
f r added to the minimum requirements for
f
capital adequacy purpos
r
es.
As of December 31, 2024 and 2023, Valley and Valley National Bank exc
d
eed d
ed lall capit lal d
adequa y
cy re
i
quirement (
s (see t b
able
be
belo )
w).
For r g
eg lulatory c
r
apital purpos
r
es i
, in acco d
rdance
i
wi hth hthe F d
eder lal Reserve’s fin
f
lal rule issu d
ed August 26, 2020,
e
w deferred
100 percent of the CECL Day 1 impact to shareholders' equity plus 25 percent of the reserve build (i.e., provision for credit
losses less net charge-offs
f ) for
f
a two-year period ending January 1, 2022. On January 1, 2022, the defer
f ral amount totaling
$47.3 million after-tax started to be phased-in by 25 percent and will increase by 25 percent per year until fully phased-in on
January 1, 2025. As of Dece b
mber 31, 2024, appr
a
i
oximatelyly $35.5
i
millllion of hthe $47.3
i
millllion deferral amount was recogni
gni
d
zed
as a r d
educ
d
ition to r g
eg lulatory c
r
apital a d
nd, as a res lult, decreas d
ed our iri k
sk based capital ratio b
s by appr
a
i
oximatelyly 9 ba isis p ioints.
143
2024 Form 10-K
The fol
f lowing tabl
a e presents Valley’s and Valley National Bank’s actua
t
l capital positions and ratios under the Basel III
risk-based capital guidelines at December 31, 2024 and 2023:
Actual
Minimum Capital
Requirements
To Be Well
Capitalized Under
Prompt Corrective
Action Provision
Amount
Ratio
Amount
Ratio
Amount
Ratio
($ in thousands)
As of December 31, 2024
Total Risk-based Capital
Valley
$
6,703,186
13.87 % $
5,076,004
10.50 %
N/A
N/A
Valley National Bank
6,535,892
13.53
5,071,696
10.50
$
4,830,187
10.00 %
Common Equity Tier 1 Capi
a tal
Valley
5,230,632
10.82
3,384,002
7.00
N/A
N/A
Valley National Bank
6,041,434
12.51
3,381,131
7.00
3,139,621
6.50
Tier 1 Risk-based Capital
Valley
5,584,699
11.55
4,109,146
8.50
N/A
N/A
Valley National Bank
6,041,434
12.51
4,105,659
8.50
3,864,149
8.00
Tier 1 Leverage Capital
Valley
5,584,699
9.16
2,438,649
4.00
N/A
N/A
Valley National Bank
6,041,434
9.91
2,438,511
4.00
3,048,139
5.00
As of December 31, 2023
Total Risk-based Capital
Valley
$
5,855,633
11.76 % $
5,228,447
10.50 %
N/A
N/A
Valley National Bank
5,794,213
11.64
5,228,403
10.50
$
4,979,431
10.00 %
Common Equity Tier 1 Capi
a tal
Valley
4,623,473
9.29
3,485,631
7.00
N/A
N/A
Valley National Bank
5,420,894
10.89
3,485,602
7.00
3,236,630
6.50
Tier 1 Risk-based Capital
Valley
4,838,314
9.72
4,232,552
8.50
N/A
N/A
Valley National Bank
5,420,894
10.89
4,232,517
8.50
3,983,545
8.00
Tier 1 Leverage Capital
Valley
4,838,314
8.16
2,372,129
4.00
N/A
N/A
Valley National Bank
5,420,894
9.14
2,372,322
4.00
2,965,403
5.00
COMMON AND PREFERRED STOCK (Note 18)
Repurchase Plan. Purchases of Valley’s common shares may be made fro
f
m time to time in the open market or in
privately negotiated transactions generally not exceeding prevailing market prices. Repurchased shares are held in treasury a
r
nd
are expected to be used for
f
general corpor
r
ate purpos
r
es. In February 2
r
024, Valley publicly announced its current stock
repurchase program for up t
u
o 25 million shares of Valley common stock. The authorization to repurchase shares under the
repurchase program became effe
f ctive on April 26, 2024 and will expire on April 26, 2026. There were no repurchases of
Valley's common shares under the plan during the year ended December 31, 2024. During 2023 and 2022, Valley repurchased
300 thousand and 1.0 million common shares, respectively, on the open market at average prices of $6.97 and $13.32 per share,
respectively, under previously announced stock repurchase plans that are now terminated.
Other Stock Repurchases. Valley purchases shares directly from its employees in connection with employee elections
to withhold taxes related to the vesting of stock awards. During the years ended December 31, 2024, 2023 and 2022, Valley
purchased approximately 998 thousand, 814 thousand and 761 thousand shares, respectively, of its outstanding common stock
at an average price of $8.88, $11.53 and $13.93, respectively, for
f
such purpos
r
e.
2024 Form 10-K
144
Common Sto
S ck
Common Stock Issuance. On November 12, 2024, Valley issued and sold 49,197,860 shares of its common stock in a
registered public offe
f ring, including 6,417,112 shares purchased under an over-allotment option exercised in full by the
underwriters at the public offe
f ring price of $9.35 per share. The net proceeds of the offe
f ring, afte
f r deduc
d
ting underwriting
discounts and commissions and offering expenses payabl
a e by Valley, were $448.9 million and were used for additional
investment in the Bank as regulatory c
r
apital dur
d
ing the fourth quarter 2024.
Prefer
f
red Sto
S ck
Series A Issuance. On June 19, 2015, Valley issued 4.6 million shares of its Fixed-to-Floating Rate Non-Cumulative
Perpetua
t
l Preferred Stock, Series A, no par value per share, with a liquidation preference of $25 per share. Dividends on the
prefer
f red stock accrue and are payable quarterly in arrears, at a fix
f ed rate per annum equal to 6.25 percent fro
f
m the original
issue date to, but excluding, June 30, 2025, and thereafte
f r at a floating rate per annum equal to three-month SOFR plus an
adju
d stment of 0.26161 percent plus a spread of 3.85 percent. The net proceeds fro
f
m the prefer
f red stock offe
f ring totaled $111.6
million. Commencing June 30, 2025, Valley may redeem the prefer
f red shares at the liquidation preference plus accrue
r
d and
unpaid dividends, subject to certain conditions.
Series B Issuance. On August 3, 2017, Valley issued 4.0 million shares of its Fixed-to-Floating Rate Non-Cumulative
Perpetua
t
l Preferred Stock, Series B, no par value per share, with a liquidation prefer
f ence of $25 per share. Dividends on the
prefer
f red stock will accrue
r
and be payable quarterly in arrears, at a fix
f ed rate per annum equal to 5.50 percent fro
f
m the original
issuance date to, but excluding, September 30, 2022, and thereafte
f r at a floating rate per annum equal to three-month SOFR
plus an adju
d stment of 0.26161 percent plus a spread of 3.578 percent. The net proceeds from the prefer
f red stock offe
f ring totaled
$98.1 million. Valley may redeem the preferred shares at the liquidation preference plus accrue
r
d and unpaid dividends, subject
to certain conditions.
Series C Issuance. On August 5, 2024, Valley issued 6.0 million shares of its Fixed Rate Reset Non-Cumulative
Perpetua
t
l Preferred Stock, Series C, no par value per share, with a liquidation preference of $25 per share. Dividends on the
prefer
f red stock will accrue
r
and be payable quarterly in arrears, at a fix
f ed rate per annum equal to 8.25 percent fro
f
m the date of
original issue to, but excluding September 30, 2029, and thereafte
f r at a rate per annum equal to the five-year U.S. treasury r
r
ate
as of the most recent dividend payment date plus a spread of 4.182 percent. Net proceeds fro
f
m the prefer
f red stock offe
f ring
totaled $144.7 million. Commencing September 30, 2029, Valley may redeem the preferred shares at the liquidation prefer
f ence
plus accrue
r
d and unpaid dividends, subject to certain conditions.
Prefer
f red stock is included in Valley's (additional) Tier 1 capital and total risk-based capital at December 31, 2024 and
2023.
145
2024 Form 10-K
OTHER COMPREHENSIVE INCOME (Note 19)
The fol
f lowing tabl
a e presents the tax effects allocated to each component of other comprehensive income (loss) for the
years ended December 31, 2024, 2023 and 2022. Components of other comprehensive income (loss) include changes in net
unrealized gains and losses on debt securities AFS; unrealized gains and losses on derivatives used in cash flo
f w hedging
relationships; and the defin
f ed benefit pension and postretirement benefit
f
plan adju
d stments for
f
the unfunde
f
d portion of various
employee, offi
f cer and director benefit
f
plans.
2024
2023
2022
Before
Tax
Tax
Effe
f ct
Afte
f r
Tax
Before
Tax
Tax
Effe
f ct
Afte
f r
Tax
Before
Tax
Tax
Effe
f ct
Afte
f r
Tax
(in thousands)
Unrealized gains and losses on
available for
f
sale debt
securities
Net (losses) gains arising
during the period
$(24,687) $ 6,290
$(18,397) $
19,514
$(6,564) $ 12,950
$(189,201) $52,220
$(136,981)
Amounts reclassified to
earnings (1)
1
—
1
(863)
229
(634)
(31)
8
(23)
Net change
(24,686)
6,290
(18,396)
18,651
(6,335)
12,316
(189,232)
52,228
(137,004)
Unrealized gains and losses on
derivatives (cash flo
f w hedges)
Net (losses) gains arising
during the period
—
—
—
(1,093)
336
(757)
4,683
(1,321)
3,362
Amounts reclassified to
earnings (2)
(1,204)
335
(869)
891
(253)
638
274
(71)
203
Net change
(1,204)
335
(869)
(202)
83
(119)
4,957
(1,392)
3,565
Defined benefit
f
pension and
postretirement benefit
f
plans
Net gains (losses) arising
during the period
14,725
(4,116)
10,609
8,035
(2,593)
5,442
(18,531)
5,356
(13,175)
Amortization of prior service
(cost) credit (3)p
(135)
38
(97)
(135)
45
(90)
(135)
35
(100)
Amortization of net loss (3)
(174)
49
(125)
(4)
1
(3)
905
(261)
644
Net change
14,416
(4,029)
10,387
7,896
(2,547)
5,349
(17,761)
5,130
(12,631)
Total other comprehensive
(loss) income
$(11,474) $ 2,596
$ (8,878) $
26,345
$(8,799) $ 17,546
$(202,036) $55,966
$(146,070)
(1)
Included in gains (losses) on securities transactions, net.
(2)
Included in interest expense or interest income depending on hedged item.
(3)
Included in the computation of net periodic pension cost. See Note 12 for details.
2024 Form 10-K
146
The fol
f lowing tabl
a e presents the afte
f r-tax changes in the balances of each component of accumulated other
comprehensive (loss) income for the years ended December 31, 2024, 2023 and 2022:
Components of Accumulated Other Comprehensive Loss
Total
Accumulated
Other
Comprehensive
Loss
Unrealized Gains
and Losses on
AFS Securities
Unrealized Gains
and Losses on
Derivatives
Defined benefit
f
pension and
postretirement
benefit plans
(in thousands)
Balance-December 31, 2021
$
9,186
$
(1,332) $
(25,786) $
(17,932)
Other comprehensive (loss) income before
reclassifications
(136,981)
3,362
(13,175)
(146,794)
Amounts reclassified to earnings
(23)
203
544
724
Other comprehensive (loss) income, net
(137,004)
3,565
(12,631)
(146,070)
Balance-December 31, 2022
(127,818)
2,233
(38,417)
(164,002)
Other comprehensive income (loss) before
reclassifications
12,950
(757)
5,442
17,635
Amounts reclassified to earnings
(634)
638
(93)
(89)
Other comprehensive income (loss), net
12,316
(119)
5,349
17,546
Balance-December 31, 2023
(115,502)
2,114
(33,068)
(146,456)
Other comprehensive (loss) income before
reclassifications
(18,397)
—
10,609
(7,788)
Amounts reclassified to earnings
1
(869)
(222)
(1,090)
Other comprehensive (loss) income, net
(18,396)
(869)
10,387
(8,878)
Balance-December 31, 2024
$
(133,898) $
1,245
$
(22,681) $
(155,334)
PARENT COMPANY INFORMATION (Note 20)
Conden
d
sed Sta
S tements o
t
f F
o
in
F
ancial Conditio
d
n
December 31,
2024
2023
(in thousands)
Assets
Cash
$
277,072
$
193,248
Equity securities
37,076
29,404
Investments in and receivables due
d
from subsidiaries
7,905,565
7,290,923
Other assets
8,306
12,473
Total Assets
$
8,228,019
$
7,526,048
Liabilities and Shareholders’ Equity
Dividends payabl
a e to shareholders
$
64,917
$
60,918
Long-term borrowings
647,547
638,362
Junior subor
u
dinated debentures issued to capital trusts
57,455
57,108
Accrue
r
d expenses and other liabilities
22,973
68,269
Shareholders’ equity
7,435,127
6,701,391
Total Liabilities and Shareholders’ Equity
$
8,228,019
$
7,526,048
147
2024 Form 10-K
Conden
d
sed Sta
S tements o
t
f I
o
nc
I
ome
Years Ended December 31,
2024
2023
2022
(in thousands)
Income
Dividends from subs
u
idiary
$
300,000
$
425,000
$
420,000
Net (losses) gains on equity securities
(1,581)
1,036
(1,136)
Other income and interest
7,360
5,730
82
Total Income
305,779
431,766
418,946
Total Expenses
53,147
56,072
48,104
Income before income tax and equity in undistributed earnings of
subs
u
idiary
252,632
375,694
370,842
Income tax benefit
f
(54,017)
(10,961)
(13,098)
Income before equity in undistributed earnings of subs
u
idiary
306,649
386,655
383,940
Equity in undistributed earnings of subs
u
idiary
73,622
111,856
184,911
Net Income
380,271
498,511
568,851
Dividends on prefer
f red stock
21,369
16,135
13,146
Net Income Available to Common Shareholders
$
358,902
$
482,376
$
555,705
2024 Form 10-K
148
Conden
d
sed Sta
S tements o
t
f C
o
as
C
h Flo
F ws
Years Ended December 31,
2024
2023
2022
(in thousands)
Cash flows fro
f
m operating activities:
Net Income
$
380,271
$
498,511
$
568,851
Adju
d stments to reconcile net income to net cash provided by operating
activities:
Equity in undistributed earnings of subs
u
idiaries
(73,622)
(111,856)
(184,911)
Stock-based compensation
28,988
33,104
28,788
Net amortization of premiums and accretion of discounts on
borrowings
1,947
2,058
1,741
Losses (gains) on equity securities, net
1,581
(1,036)
1,136
Net change in:
Other assets
4,167
13,472
(9,206)
Accrue
r
d expenses and other liabilities
(37,661)
(8,501)
5,851
Net cash provided by operating activities
305,671
425,752
412,250
Cash flows fro
f
m investing activities:
Purchases of equity securities
(9,253)
(11,261)
(10,424)
Cash and cash equivalents paid in acquisitions, net
—
—
(113,244)
Capi
a tal contributions to subs
u
idiary
(550,000)
(20)
(125,055)
Other, net
52
5,098
—
Net cash used in investing activities
(559,201)
(6,183)
(248,723)
Cash flows fro
f
m fin
f
ancing activities:
Proceeds fro
f
m issuance of long-term borrowings, net
—
—
147,508
Repayment of long-term borrowings
—
(125,000)
—
Proceeds fro
f
m issuance of prefer
f red stock, net
144,654
—
—
Dividends paid to prefer
f red shareholders
(21,369)
(14,338)
(13,146)
Dividends paid to common shareholders
(228,228)
(225,411)
(205,999)
Purchase of common shares to treasury
r
(8,867)
(11,475)
(24,123)
Common stock issued, net
451,164
4,006
120
Net cash provided by (used in) fin
f ancing activities
337,354
(372,218)
(95,640)
Net change in cash and cash equivalents
83,824
47,351
67,887
Cash and cash equivalents at beginning of year
193,248
145,897
78,010
Cash and cash equivalents at end of year
$
277,072
$
193,248
$
145,897
OPERAT
R
ING SEGMENTS (Note 21)
Valley manages its business operations under operating segments consisting of Consumer Banking and Commercial
Banking. Activities not assigned to the operating segments are included in Treasury a
r
nd Corporate Other.
The CEO of Valley is the CODM who assesses performance of each operating segment to better understand their cost,
opportunity value and impact to Valley's consolidated earnings. Each operating segment is reviewed routinely for
f
its asset
growth, contribution to our income before income taxes, return on average interest earning assets and impairment (if events or
circumstances indicate a possible inabi
a lity to realize the carrying amount). Valley regularly assesses its strategic plans,
operations, and reporting structur
t
es to identify i
f
ts reportabl
a e segments.
h
The Consumer Ba ki
nki g
ng segmen i
t is m iai lnly compris d
ed of re isidential mor gtg g
ages and autom bi
obile loans, and to a lesser
extent, secured personal l
l lines of cr d
edit, home e
i
qui yty loans a d
nd other consumer loans.
h
Th d
e dur
d
ation of the re isidential mor gtg g
age
loan portf lol
f io is subjbj
u ect to movement i
s in the ma k
rket level of i
f interest rates and f
d for
f
ecasted prepayment spe d
eds.
h
The average
weigight d
ed lilife of hthe autom bi
obile loans wi h
ithin hthe portf lol
f io is rela itiv lely unaffect d
ed by
by movement i
s in the ma k
rket level of i
f interest
rates. However, hthe average lilife may b
y b i
e impact d
ed by
by ne
l
w loans as a res lult of the av iailabibi
a lity
lity of cr d
edit
i
wi hthin hthe autom bi
obile
ma k
rket lpl
t ace and consumer dema d
nd for pur h
chasing new or us d
ed automobibiles. Consumer Banking also includes the Wealth
149
2024 Form 10-K
Management and Insurance Services Division, comprised of asset management advisory, brokerage, trust, personal and title
insurance, tax credit advisory services, and international and domestic private banking businesses.
h
The Commercial Bankiki g
ng segmen i
t is compris d
ed of flfloa iting rate a d
nd d
adjuju
d st b
able rate commercial and industrial loans a d
nd
construc
r
itio l
n loans, as w lell as adjdjustablbl
a e a d
nd fifixed rate owner occu ipi
u
d
ed and commercial r
l
eal estate loans. Due to the portf lol
f io’s
interest rate h
characte iristics, Commer ici lal Ba ki
nki g
ng is Vallll y
ey’s opera iting s g
egment hthat is most sensi i
itive to movement i
s in market
interest rates.
Treasury a
r
d
nd Corporate O hther la g
rg lely consists of hthe Treasury m
r
an g
ag d
ed HT
d
M d b
ebt secu iri ities a d
nd AF
d
S d b
ebt securi i
ities
portf lol
f ios m iai lnly u il
tiliz d
ed in hth l
e liq iuididi yty management ne d
eds of our le di
ndi g
ng segments and i
d income a d
nd expens i
e items resulting
from support fun
f
ctions not didirectlyly attribibut b
able to a spe icifific s g
egment. Interest income is generated through
ough investment
i
s in
va irious ytypes of securitie (
s (mainlyly comp irised of fix
f
d
ed rate secu iri itie )s) and i
d interest-bearing d
g deposits
i
wi hth othe b
r banks (p irima irilyly
hthe F d
eder lal Reserve Bank of New Yo k
rk). Expenses related to the bran h
ch network, lall o hther components of ret iail b
l bankiki g
ng, lal
g
ong
i
wi hth hth b
e b
k
ack offifi
f ce departments of the Ba k
nk are allllocat d
ed from Treasury a
r
d
nd Corporate O hther to opera iting s g
egments. Other
non-interest income items a d
nd general expenses are allllocat d
ed from Treasury a
r
d
nd Corporate O hther to
h
each opera iti g
ng segment
utili
ilizing a me hth d l
odol gy
ogy hthat in
l
volves an allllocation of opera iting a d
nd fu di
ndi g
ng cost b
s bas d
ed on
h
each segment's respective mix of
aver g
ag i
e interest ear ini g
ng assets outstandidi g
ng for the pe iri d
od, number of d
f deposits, o d
r direct lallocation to the segments based on the
nature of income and expense.
n
U allocated items included in Treasury a
r
nd Corporate Other consist of net gains and losses on
AFS and HTM securities transactions, amortization of tax credit investments, as well as other non-core items, including merger,
restructur
t
ing and FDIC special assessment charges and income fro
f
m litigation settlements.
h
The accounting for
f
ea h
ch opera iting s g
egment and Treasury a
r
d
nd Corporate O hther in lcl d
ude
i
s internal accounting p lolicies
de isigned to measure consistent and reasonablbl
a e fin
f an ici lal repor iting a d
nd may res lul i
t i
i
n income a d
nd expense measurements hthat
didiffer fro
f
m amounts u d
nder GAAP. The fifinancial repor iting for
f
h
each segment cont iains
lallocations and repor iting i
g i
l
n line wi h
ith
Valllley’s opera itions, whihi h
ch may not necessa irilyly be compar b
able to any o hther fifinancial i
l ins ititu ition. Furthermore,
h
change
i
s in
management structur
t
e or allllocation meth d l
hodologi
ogies and pro
d
cedur
d
es may res lul i
t in cha g
nge i
s in reported s g
egment fifinancial d
l data.
Cert iain p irior pe iri d
od amount h
s hav
b
e been re lclas isififi d
ed to conform to the current presenta ition for
f
ea h
ch opera iting s g
egment and
Treasury a
r
d
nd Corporate O hther.
h
The f lol
f lol wing tabl
a es represent the financial data for
f
Valley’s operating segments, and Treasu y
ry and Corpor
r
ate O hth rer for
the years ended December 31, 2024, 2023 and 2022:
2024
Consumer
Banking
Commercial
Banking
Treasury and
Corporate
Other
Total
($ in thousands)
Average interest earning assets (unaudited)
$ 9,914,917
$40,115,669
$ 7,287,340
$57,317,926
Interest income
$
478,680
$ 2,596,066
$
282,751
$ 3,357,497
Interest expense
299,048
1,209,945
219,796
1,728,789
Net interest income
179,632
1,386,121
62,955
1,628,708
Provision for credit losses
24,561
284,827
(558)
308,830
Net interest income after provision for credit losses
155,071
1,101,294
63,513
1,319,878
Non-interest income
135,331
77,690
11,480
224,501
Non-interest expense
Salary and employee benefit
f s expense
118,953
389,622
50,020
558,595
Net occupa
u
ncy expense
18,003
71,360
12,761
102,124
Technology, furnitur
t
e, and equipment expense
25,681
93,811
15,617
135,109
FDIC insurance assessment
10,448
42,271
8,757
61,476
Profes
f
sional and legal fee
f
s
11,254
52,666
6,395
70,315
Other segment items *
58,282
54,007
65,952
178,241
Total non-interest expense
$
242,621
$
703,737
$
159,502
$ 1,105,860
Income (loss) before income taxes
$
47,781
$
475,247
$
(84,509)
$
438,519
Return on average interest earning assets (pre-tax)
(unaudited)
0.48 %
1.18 %
(1.16)%
0.77 %
Net interest margin
1.81 %
3.45 %
0.86 %
2.84 %
2024 Form 10-K
150
2023
Consumer
Banking
Commercial
Banking
Treasury and
Corporate
Other
Total
($ in thousands)
Average interest earning assets (unaudited)
$ 9,620,508
$39,731,353
$ 7,148,667
$56,500,528
Interest income
$
415,585
$ 2,471,345
$
251,961
$ 3,138,891
Interest expense
250,882
1,036,109
186,422
1,473,413
Net interest income
164,703
1,435,236
65,539
1,665,478
Provision for credit losses
6,162
39,463
4,559
50,184
Net interest income after provision for credit losses
158,541
1,395,773
60,980
1,615,294
Non-interest income
105,282
93,618
26,829
225,729
Non-interest expense
Salary and employee benefit
f s expense
111,748
389,666
62,177
563,591
Net occupa
u
ncy expense
19,313
69,780
12,377
101,470
Technology, furnitur
t
e, and equipment expense
25,661
98,716
26,331
150,708
FDIC insurance assessment
7,380
30,477
50,297
88,154
Profes
f
sional and legal fee
f
s
13,016
56,755
10,796
80,567
Other segment items *
48,650
56,188
73,363
178,201
Total non-interest expense
$
225,768
$
701,582
$
235,341
$ 1,162,691
Income (loss) before income taxes
$
38,055
$
787,809
$
(147,532)
$
678,332
Return on average interest earning assets (pre-tax)
(unaudited)
0.40 %
1.98 %
(2.06)%
1.20 %
Net interest margin
1.71 %
3.61 %
0.91 %
2.95 %
2022
Consumer
Banking
Commercial
Banking
Treasury and
Corporate
Other
Total
($ in thousands)
Average interest earning assets (unaudited)
$ 8,615,542
$33,314,811
$ 6,137,028
$48,067,381
Interest income
$
290,289
$ 1,533,458
$
152,936
$ 1,976,683
Interest expense
57,543
222,511
40,989
321,043
Net interest income
232,746
1,310,947
111,947
1,655,640
Provision for credit losses
20,880
35,456
481
56,817
Net interest income after provision for credit losses
211,866
1,275,491
111,466
1,598,823
Non-interest income
98,678
102,530
5,585
206,793
Non-interest expense
Salary and employee benefit
f s expense
104,405
344,689
77,643
526,737
Net occupa
u
ncy expense
18,948
62,829
12,575
94,352
Technology, furnitur
t
e, and equipment expense
26,796
94,671
40,285
161,752
FDIC insurance assessment
4,692
18,144
—
22,836
Profes
f
sional and legal fee
f
s
12,441
50,314
19,863
82,618
Other segment items *
47,919
43,534
45,201
136,654
Total non-interest expense
$
215,201
$
614,181
$
195,567
$ 1,024,949
Income (loss) before income taxes
$
95,343
$
763,840
$
(78,516)
$
780,667
Return on average interest earning assets (pre-tax)
(unaudited)
1.11 %
2.29 %
(1.28)%
1.62 %
Net interest margin
2.70 %
3.93 %
1.82 %
3.44 %
*
Other segment items include amortization of intangible assets, amortization of tax credit investments and other general operating expenses.
151
2024 Form 10-K
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors
Valley National Bancorp:
Opinion on the
t
Consolidat
d ed Financial Sta
S tementst
We have audited the accompanying consolidated statements of financial condition of Valley National Bancorp and subsidiaries
(the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income,
changes in shareholders’ equity, and cash flo
f ws for each of the years in the three-year period ended December 31, 2023, and the
related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its
operations and its cash flows for
f
each of the years in the three-year period ended December 31, 2024, in confor
f
mity with U.S.
generally accepted accounting principles.
We also have audited, in accordance with the standards of the Publ
u ic Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over fin
f ancial reporting as of December 31, 2024, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated Februa
r
ry 27, 2025 expressed an unqualifie
f d opinion on the effectiveness of the Company’s
internal control over fin
f ancial reporting.
Basis f
i
or
f
Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting fir
f m registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonabl
a e assurance about
a
whether the consolidated financial statements are free of material misstatement,
whether due
d
to error or fra
f ud. Our audits included performing procedur
d
es to assess the risks of material misstatement of the
consolidated financial statements, whether due
d
to error or fra
f ud, and performing procedur
d
es that respond to those risks. Such
procedur
d
es included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonabl
a e basis for our opinion.
Critical Audit Mat
M ters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subj
u ective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Allowance for
f
loan losses
As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s total allowance for
f
loan losses (the ALL)
as of December 31, 2024 was $558.9 million, of which $483.0 million related to the loans collectively evaluated for credit
losses (the collective ALL) and $75.9 million related to individually evaluated loans (individually evaluated ALL). The
collective ALL includes the measure of expected credit losses on a collective basis for those loans that share similar risk
characteristics. In estimating the collective ALL, the Company uses a transition matrix model which calculates an expected life
of loan loss percentage for each loan pool by using probabi
a lity of default (PD) and loss given defau
f
lt (LGD) metrics. The PD
and LGD metrics are adju
d sted using a scaling fac
f
tor to incorpor
r
ate a ful
f l economic cycle. The expected life of loan loss
percentages are determined by analyzing the migration of loans from performing to loss by credit quality rating or delinquency
categories using historical life-of-loan data for
f
each loan portfol
f io pool, and by assessing the severity of loss, based on the
aggregate net lifetime losses incurred. The expected credit losses are adju
d sted for qualitative fact
f
ors not reflected in the
transition matrix model but are likely to impact the measurement of estimated credit losses. The qualitative fac
f
tors include a
two-year reasonabl
a e and suppo
u
rtable forecast period fol
f lowed by a one-year period over which estimated losses revert to
historical loss experience on a straight-line basis for the remaining life o
f
f the loan. The forecast consists of multi-scenario
economic forecasts which are assigned relative probabi
a lity weightings and proje
o cts economic variables under each scenario.
2024 Form 10-K
152
The expected lifetime loss rates are the life o
f
f loan loss percentages fro
f
m the transition matrix model plus the impact of the
adju
d stments for
f
the qualitative factors. The expected credit losses are the product of multiplying the model’s lifet
f ime loss rates
by the exposure at defau
f
lt at period end. In addition, certain individua
d
lly evaluated loans, where subs
u
tantially all the repayment
is expected from the collateral, are deemed collateral dependent and the related expected credit losses are determined based on
the fai
f r value of the underlying collateral.
We identifie
f d the assessment of the ALL as a critical audit matter. A high degree of audit effort, including specialized skills and
knowledge, and subj
u ective and complex auditor judgment was involved in the assessment of the ALL due
d
to estimation
uncertainty. Specifically, the assessment of the collective ALL encompassed the evaluation of the collective ALL methodology
and the transition matrix model used to estimate the expected life o
f
f loan loss percentages and its significant assumptions,
including credit quality ratings and scaling fac
f
tor. The assessment of the collective ALL also included an evaluation of the
conceptual soundness and performance of the transition matrix model utilized to derive the expected life o
f
f loan loss
percentages. In addition, the assessment also encompassed the conceptual soundness of the methodology utilized to estimate the
qualitative fact
f
ors and their related significant assumptions, including the selection of the multi-scenario economic forecasts
and economic variables and related weightings. For the individually evaluated ALL, the assessment included an evaluation of
the fai
f r value of the underlying collateral for
f
those loans deemed collateral dependent. In addition, auditor judgment was
required to evaluate the sufficiency of audit evidence obtained.
The fol
f lowing are the primary p
r
rocedur
d
es we performed to address this critical audit matter. We evaluated the design and tested
the operating effec
f
tiveness of certain internal controls related to the Company’s measurement of the ALL estimate, including
controls over the:
•
development of the ALL methodology
•
continued use and appr
a
opriateness of the transition matrix model
•
performance monitoring of the transition matrix model
•
identific
f ation and determination of the significant assumptions used in the transition matrix model
•
identific
f ation of qualitative fac
f
tors and development of the qualitative fra
f mework, including the significant
assumptions used in the measurement of the qualitative factors
•
appr
a
opriateness of third-party appr
a
aisals
•
analysis of the collective ALL results, trends and ratios.
We evaluated the Company’s process to develop the ALL estimate by testing certain sources of data, fact
f
ors, and assumptions
that the Company used, and considered the relevance and reliabi
a lity of such data, fact
f
ors and assumptions. In addition, we
involved credit risk professionals with specialized skills and knowledge, who assisted in:
For the collective ALL:
•
evaluating the Company’s collective ALL methodology for compliance with U.S. generally accepted accounting
principles
•
evaluating the judgments made by the Company relative to the assessment and performance monitoring of the
transition matrix model used to calculate the expected life o
f
f loan loss percentages by comparing them to
Company-specific
f
metrics and trends and the applicable industry a
r
nd regulatory p
r
ractices
•
testing the conceptual soundness and performance of the transition matrix model by inspecting the model
documentation to determine whether the model is suitabl
a e for
f
the intended use
•
testing individual credit quality ratings for a selection of commercial loans by evaluating the financial
performance of the borrower, sources of repayment and any relevant guarantees or underlying collateral
•
evaluating the judgments made by management relative to the Company’s scaling fact
f
or by inspecting
documentation to determine whether the assumption is suitabl
a e to incorpor
r
ate a ful
f l economic cycle
•
evaluating the selection of the multi-scenario economic forecasts and economic variables and related weightings
by comparing them to the Company’s business environment and relevant industry p
r
ractices
•
evaluating the methodology used to develop the qualitative fact
f
ors and their significant assumptions and the
effe
f ct of those fac
f
tors on the collective ALL by comparing to the specific portfol
f io risk characteristics, trends and
relevant industry p
r
ractices and identifie
f d limitations of the underlying quantitative models.
153
2024 Form 10-K
For the individually evaluated ALL:
•
testing of individual fai
f r value of collateral for a selection of borrower relationships by evaluating methods and
assumptions used by the third-party appraiser.
We also assessed the sufficiency of the audit evidence obtained related to the ALL estimate by evaluating the cumulative results
of the audit procedures, qualitative aspects of the Company’s accounting practices and potential bias in the accounting estimate.
Goodwill impai
m
rment assessment of t
o
he
t
Company’s repor
e
ting units
As discussed in Notes 1 and 8 to the consolidated financial statements, the carrying value of the Company’s goodwill balance is
$1.9 billion as of December 31, 2024. The Company’s goodwill is not amortized but is subj
u ect to annual testing for
f
impairment
in the second quarter, or more often, if events or circumstances indicate it may be impaired. The Company elected to perform a
quantitative impairment test for
f
its annual assessment in the second quarter which compared the fair value of each of the
reporting units with their respective carrying amounts, including goodwill. If the fai
f r value of each of the reporting units
exceeded its carrying amounts, the goodwill of the reporting unit was not impaired. An impairment loss is recognized if the
carrying value of the net assets, including goodwill, assigned to the reporting units exceeds the fair value, with the impairment
charge not to exceed the amount of goodwill recorded. Fair value is determined using market multiples and certain discounted
cash flo
f w methods. Factors that may materially affe
f ct the fai
f r value estimate include, among others, changes in discount rates,
terminal value growth rates, and specific industry o
r
r market sector conditions. Additionally, the Company performed a market
capitalization reconciliation to support the appropriateness of the reporting units’ fai
f r values and impairment test results, which
included comparing the sum of the fai
f r value of the reporting units to the Company’s market capitalization, adju
d sted for the
present value of estimated synergies which a market participant acquirer could reasonabl
a y expect to realize fro
f
m a hypothetical
acquisition the Company.
We identifie
f d the Company’s annual goodwill impairment assessment as a critical audit matter. A high degree of audit effort
f
,
including specialized skills and knowledge, and subj
u ective and complex auditor judgement was involved in performing
procedur
d
es over 1) the individual reporting unit estimated cash flows and related key assumptions, which included the discount
rate used in the discounted cash flow methods and 2) the present value of estimated synergies used in the market capitalization
reconciliation and resulting control premium. The key assumptions were challenging to test as they represented subjective
determinations of future market and economic conditions that were also more sensitive to variation. Minor changes in these
assumptions could have had a significant effect on the Company’s measurement of the fair value of the reporting units and the
impairment assessment of the carrying value of the goodwill.
The fol
f lowing are the primary p
r
rocedur
d
es we performed to address this critical audit matter. We evaluated the design and tested
the operating effectiveness of certain internal controls related to the Company’s determination of the estimated fai
f r value of the
reporting units in the annual goodwill impairment assessment, including controls over the selection and development of key
assumptions used in the discounted cash flo
f w analyses and market capitalization reconciliation. We involved valuation
profes
f
sionals with specialized skill and knowledge, who assisted in:
•
evaluating the Company’s fai
f r value methodology for the reporting units for compliance with U.S. generally accepted
accounting principles
•
evaluating the Company’s discount rate by comparing it against a discount rate range that was independently developed
using publicly availabl
a e data for
f
comparable entities
•
evaluating the total fai
f r value of the Company’s reporting units through comparison to the Company’s market
capitalization adjusted for
f
expected synergies as of the measurement date by evaluating the reasonabl
a eness of the
estimated synergies and resulting control premium for alignment with industry c
r
omparabl
a es, standards and market
conditions.
/s/ KPMG LLP
We have served as the Company’s auditor since 2008.
Short Hills, New Jersey
Februa
r
ry 27, 2025
2024 Form 10-K
154
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.
Controls and Procedures
Evaluation of D
o
isclos
l
ure Con
C
trols a
l
nd Procedures
Valley maintains disclosure controls and procedures which, consistent with Rule 13a-15(e) under the Exchange Act, are
defined to mean controls and other procedur
d
es that are designed to ensure that infor
f
mation required to be disclosed in the
reports that Valley files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms, and to ensure that such infor
f
mation is accumulated and communicated to
Valley’s management, including its Chief Executive Offi
f cer (CEO) and Chief Financial Offi
f cer (CFO), as appropriate, to allow
timely decisions regarding required disclosure.
Valley’s management, with the participation of the CEO and CFO, has evaluated the effectiveness of Valley’s disclosure
controls and procedures. Based on such evaluation, Valley’s CEO and CFO have concluded that such disclosure controls and
procedur
d
es were effe
f ctive as of December 31, 2024 (the end of the period covered by this Report).
Valley’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our
internal control over fin
f ancial reporting will prevent all errors and all fraud. A system of internal control, no matter how well
conceived and operated, provides reasonabl
a e, not absolute, assurance that the objectives of the system of internal control are
met. The design of a system of internal control refle
f cts resource constraints and the benefits
f
of controls must be considered
relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any, within Valley have been or will be detected. These
inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of
a simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of internal control is based in part upon certain
assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated
goals under all future conditions; over time, controls may become inadequate because of changes in conditions or deterioration
in the degree of compliance with the policies or procedur
d
es. Because of the inherent limitations in a cost-effe
f ctive control
system, misstatements due to error or fra
f ud may occur and not be detected.
Manage
a
ment’s Repor
e
t on Int
I
er
t
nal Con
C
trol over Fina
i
ncial Reporting
Valley’s management is responsible for establishing and maintaining adequate internal control over fin
f ancial reporting as
defined in Rul
R es 13a-15(f) and 15d-15(f) under the Exchange Act. Valley’s internal control over fin
f ancial reporting is a process
designed by, or under the supe
u
rvision of, Valley's CEO and CFO to provide reasonabl
a e assurance regarding the reliabi
a lity of
financial reporting and the preparation of fin
f ancial statements for external purpos
r
es in accordance with U.S. generally accepted
accounting principles and includes those policies and procedur
d
es that (1) pertain to the maintenance of records that, in
reasonabl
a e detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide
reasonabl
a e assurance that transactions are recorded as necessary to permit preparation of fin
f ancial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and (3) provide reasonabl
a e assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a
material effe
f ct on the fin
f ancial statements.
Because of its inherent limitations, internal control over fin
f ancial reporting may not prevent or detect misstatements.
Therefor
f
e, even those systems determined to be effe
f ctive can provide only reasonabl
a e assurance with respect to financial
statement preparation and presentation. In addition, projections of any evaluation of effectiveness to fut
f ur
t
e periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
As of December 31, 2024, management assessed the effe
f ctiveness of Valley’s internal control over fin
f ancial reporting
based on the criteria for effective internal control over fin
f ancial reporting established in Internal Control-Integrated Framework
(2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment
included an evaluation of the design of Valley’s internal control over fin
f ancial reporting and testing of the operating
effe
f ctiveness of its internal control over fin
f ancial reporting. Management reviewed the results of its assessment with the Audit
Committee.
155
2024 Form 10-K
Based on this assessment, management determined that, as of December 31, 2024, Valley’s internal control over fin
f ancial
reporting was effe
f ctive to provide reasonabl
a e assurance regarding the reliabi
a lity of financial reporting and the preparation of
financial statements for
f
external purpos
r
es in accordance with U.S. generally accepted accounting principles.
KPMG LLP, the independent registered public accounting fir
f m that audited Valley’s December 31, 2024 consolidated
financial statements included in this Report, has issued an audit report expressing an opinion on the effectiveness of Valley’s
internal control over fin
f ancial reporting as of December 31, 2024. The report is included in this item under the heading “Report
of Independent Registered Publ
u ic Accounting Firm.”
Changes in I
i
nt
I
er
t
nal Con
C
trol over Fina
i
ncial Reporting
There have been no changes in Valley’s intern lal control over fin
f an ici lal repor iti g
ng (as such ter
i
m i
d
s defin
f
d
ed in Rules
13a-1 (
5(f)f) and 1 d
5d-
(
15(f)f)
d
under the Ex h
change Ac )t) during the year ended D
d
ecember 31, 2024 hthat have mate iri lallyly affe
f ct d
ed, or are
reasonablbl
a y l
y likik lely to materially
lly affe
f ct, V lalley’ i
s internal control over fin
f an ici lal repor iting.
2024 Form 10-K
156
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors
Valley National Bancorp:
Opinion on Int
I ernal Contro
t
l Over Fin
F ancial Reporting
We have audited Valley National Bancorp and subsidiaries' (the Company) internal control over fin
f ancial reporting as of
December 31, 2024, based on criteria established in Internal Contro
t
l – Integr
e
ated Framework (
r
2013)
(
issued by the Committee
of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,
effe
f ctive internal control over fin
f ancial reporting as of December 31, 2024, based on criteria established in Internal Contro
t
l –
Integr
e
ated Framework (
r
2013)
(
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Publ
u ic Company Accounting Oversight Board (United States)
(PCAOB), the consolidated statements of financial condition of the Company as of December 31, 2024 and 2023, the related
consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flo
f ws for each of the
years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial
statements), and our report dated Februa
r
ry 27, 2025 expressed an unqualifie
f d opinion on those consolidated financial
statements.
Basis f
i
or
f
Opinion
The Company’s management is responsible for maintaining effe
f ctive internal control over fin
f ancial reporting and for its
assessment of the effe
f ctiveness of internal control over fin
f ancial reporting, included in the accompanying Management's
Report. Our responsibility is to express an opinion on the Company’s internal control over fin
f ancial reporting based on our
audit. We are a public accounting fir
f m registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. fed
f
eral securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonabl
a e assurance about
a
whether effective internal control over fin
f ancial reporting was maintained in all
material respects. Our audit of internal control over fin
f ancial reporting included obtaining an understanding of internal control
over fin
f ancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effe
f ctiveness of internal control based on the assessed risk. Our audit also included performing such other procedur
d
es as we
considered necessary in the circumstances. We believe that our audit provides a reasonabl
a e basis for our opinion.
Defin
e
ition and Limitations of Internal Contro
t
l Over Fin
F ancial Reporting
A company’s internal control over fin
f ancial reporting is a process designed to provide reasonabl
a e assurance regarding the
reliabi
a lity of financial reporting and the preparation of fin
f ancial statements for external purpos
r
es in accordance with generally
accepted accounting principles. A company’s internal control over fin
f ancial reporting includes those policies and procedur
d
es
that (1) pertain to the maintenance of records that, in reasonabl
a e detail, accurately and fai
f rly refle
f ct the transactions and
dispositions of the assets of the company; (2) provide reasonabl
a e assurance that transactions are recorded as necessary to permit
preparation of fin
f ancial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the fin
f ancial statements.
Because of its inherent limitations, internal control over fin
f ancial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to fut
f ur
t
e periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedur
d
es may deteriorate.
/s/ KPMG LLP
Short Hills, New Jersey
Februa
r
ry 27, 2025
157
2024 Form 10-K
Item 9B.
Othe
t
r Inf
I
or
f
ma
r
tion
a.
None
b.
None
c.
During the four
f
th quarter 2024, no director or offi
f cer of the Company adopted or terminated a “Rule 10b5-1
trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of
Regulation S-K.
Item 9C.
Disc
i
losure Regar
e
ding
i
Foreign J
g
ur
J
isdictio
t ns that Prevent Ins
I
pe
s
ctio
t ns
Not appl
a
icable.
PART III
Item 10.
Dire
i
ctor
t
s,
r
Executiv
t e Offi
O
cers a
r
nd Corporate G
t
ov
G
ernance
Certain infor
f
mation regarding executive offic
f ers is included under the section captioned “Information about
a
our
Executive Officers” in Item 1. Business of this Report. The infor
f
mation set for
f
th under the captions “Director Information,”
“Delinquent Section 16(a) Reports,” “Code of Conduct and Ethics and Corpor
r
ate Governance Guidelines,” “Nomination of
Directors,” and “Committees of the Board of Directors; Board of Directors Meetings” and “Our Securities Trading Policy” in
the 2025 Proxy Statement is incorpor
r
ated herein by reference.
Item 11.
Executiv
t e Com
C
pe
m
nsatio
t n
The infor
f
mation set for
f
th under the captions “Compensation of Directors,” “Compensation Committee Interlocks and
Insider Participation,” “Equity Grant Procedures” and “Advisory Vote on Our Named Executive Officer Compensation” in the
2025 Proxy Statement is incorporated herein by reference.
Item 12.
Security
i
Ownership of Certai
t n B
i
enefic
f ial Owners a
r
nd Manage
a
ment and Relat
l ed
t
Shareholder
d
Matters
The infor
f
mation set for
f
th under the capt
a ions “Equity Compensation Plan Infor
f
mation” and “Stock Ownership of
Management and Principal Shareholders” in the 2025 Proxy Statement is incorpo
r
rated herein by refer
f ence.
Item 13.
Certai
t n R
i
elat
l io
t nships
i
and Relat
l ed
t
Transactio
t ns, a
s
nd Dire
i
ctor
t
Indepe
e
nden
d
ce
The infor
f
mation set for
f
th under the captions “Certain Transactions with Management” and “Director Independence” in
the 2025 Proxy Statement is incorpor
r
ated herein by reference.
Item 14.
Principal
i
Accountant Fees and Ser
S
vices
Our independent registered public accounting fir
f m is KPMG LLP, Short Hills, NJ, Auditor Firm ID: 185.
The infor
f
mation set for
f
th under the caption “Ratific
f ation of the Selection of Independent Registered Publ
u ic Accounting
Firm” in the 2025 Proxy Statement is incorpor
r
ated herein by reference.
2024 Form 10-K
158
PART IV
Item 15.
Exhibits
i
and Fin
F
ancial Stat
t em
t
ent Sch
S
edules
l
(a) Financial Statements and Schedul
d es:
The fol
f lowing financial statements and suppl
u
ementary data are file
f
d as part of this Report:
Page
Consolidated Statements of Financial Condition
82
Consolidated Statements of Income
83
Consolidated Statements of Comprehensive Income
84
Consolidated Statements of Changes in Shareholders’ Equity
85
Consolidated Statements of Cash Flows
86
Notes to Consolidated Financial Statements
88
Report of Independent Registered Publ
u ic Accounting Firm
152
All fin
f ancial statement schedul
d es are omitted because they are either not applicable or not required, or because the
required infor
f
mation is included in the consolidated financial statements or notes thereto.
(b) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession:
A.
Agreement and Plan of Merger, dated as of September 22, 2021, by and among Valley National
Bancorp,
r
Bank Leumi Le-Israel Corporation, a New York corporation and Volcano Merger Sub
Corporation, a New York corporation and subs
u
idiary of Valley, incorpor
r
ated herein by reference to
Exhibit 2.1 to the Registrant’s Form 8-K Current Report file
f
d on September 27, 2021.
(3) Articles of Incorpor
r
ation and By-laws:
A.
Restated Certific
f ate of Incorpo
r
ration of the Registrant, incorpor
r
ated herein by reference to Exhibit 3.1
to the Registrant's Form 10-Q Quarterly Report file
f
d on August 7, 2020.
B.
Certific
f ate of Amendment to the Restated Certific
f ate of Incorpor
r
ation of the Company, incorporated
herein by reference to Exhibit 3.1 to the Company’s Form 8-K Current Report file
f
d on August 5, 2024.
C.
By-laws of the Registrant, as amended and restated, incorpo
r
rated herein by refer
f ence to Exhibit 3.1 to
the Registrant’s Form 8-K Current Report fil
f ed on October 24, 2018.
(4) Instrum
r
ents Defining the Rights of Security Holders:
A.
Indentur
t
e, dated as of June 19, 2015, by and between Valley and The Bank of New York Mellon Trust
Company, N.A., as Trustee, incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-
K Current Report fil
f ed on June 19, 2015. (Valley 4.55% sub d
u
ebt due
d
July 30, 2025).
B.
First Supplemental Indentur
t
e, dated as of June 19, 2015, by and between Valley and The Bank of New
York Mellon Trus
r
t Company, N.A., as Trustee, including the for
f
m of the Notes attached as Exhibit A
thereto, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K Current Report
filed on June 19, 2015 (Valley 4.55% sub d
u
ebt due
d
July 30, 2025).
C.
Agreement to provide SEC with Indentur
t
es not filed. (Item 601(b)(4)(iii)(A)), incorporated herein by
reference to Exhibit 4G to the Registrant's Form 10-K Annual Report file
f
d on February 2
r
8, 2017.
D.
Description of Valley Securities*
E.
Indentur
t
e, dated as of June 5, 2020, between Valley and The Bank of New York Mellon Trust
Company, N.A., as Trustee, incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-
K Current Report fil
f ed on June 5, 2020.
F.
First Supplemental Indentur
t
e, dated as of June 5, 2020, between Valley and The Bank of New York
Mellon Trus
r
t Company, N.A., as Trustee, including the for
f
m of Notes attached as Exhibit A thereto,
incorporated herein by reference to Exhibit 4.2 to the Registrant’s Form 8-K Current Report fil
f ed on
June 5, 2020 (Valley 5.25% sub d
u
ebt due
d
June 15, 2030).
G.
Indentur
t
e, dated as of May 28, 2021, between Valley and U. S. Bank, N.A., as Trustee, incorporated
herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K Current Report file
f
d on May 28, 2021.
159
2024 Form 10-K
H.
First Supplemental Indentur
t
e, dated as of May 28, 2021, between Valley and U. S. Bank, N.A., as
Trus
r
tee, including the for
f
m of Notes attached thereto, incorporated by reference to Exhibit 4.2 to the
Registrant’s Form 8-K Current Report fil
f ed on May 28, 2021 (Valley 3.00% sub d
u
ebt due
d
June 15,
2031).
I.
Second Suppl
u
emental Indentur
t
e, dated as of September 20, 2022, between Valley and U.S. Bank Trus
r
t
Company, National Association, as Trus
r
tee, including the for
f
m of Notes attached thereto, incorporated
by reference to Exhibit 4.2 to the Registrant's Form 8-K Current Report file
f
d on September 20, 2022
(Valley 6.25% sub d
u
ebt due
d
September 30, 2032).
(10) Material Contracts:
A.
The Valley National Bancorp Benefit Equalization Plan, as Amended and Restated, incorpo
r
rated
herein by reference to Exhibit 10 to the Registrant’s Form 10-Q Quarterly Report file
f
d on November 6,
2015.+
B.
Form of Participant Agreement for
f
the Benefit
f
Equalization Plan, incorpor
r
ated herein by reference to
Exhibit 10.J to the Registrant's Form 10-K Annual Report for
f
the year ended December 31, 2011 (No.
001-11277).+
C.
Valley National Bancorp Deferred Compensation Plan, dated as of January 1, 2017, incorporated
herein by reference to Exhibit 10.S to the Registrant’s Form 10-K Annual Report for
f
the year ended
December 31, 2016.+
D.
Severance Letter Agreement, dated as of September 21, 2016, between Valley National Bank, Valley
and Ira Robbins, incorpor
r
ated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K Current
Report fil
f ed on September 27, 2016.+
E.
Severance Letter Agreement, dated as of September 21, 2016, between Valley National Bank, Valley
and Thomas A. Iadanza, incorporated herein by reference to Exhibit 10.3 to the Registrant’s Form 8-K
Current Report file
f
d on September 27, 2016.+
F.
Consulting Agreement, dated as of May 1, 2022, by and between Valley National Bancorp and Alrem
LLC, incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 10-Q Quarterly Report
filed on August 9, 2022.+
G.
First Amendment to Consulting Agreement, effe
f ctive as of May 1, 2023, by and between Valley
National Bancorp and Alrem LLC, incorporated herein by reference to Exhibit 10.1 to the Registrant’s
Form 10-Q Quarterly Report fil
f ed on May 8, 2024. +
H.
Second Amendment to Consulting Agreement, effective as of May 1, 2024, by and between Valley
National Bank and Alrem LLC. +*
I.
Bank Leumi Le-Israel Corporation 2018 Stock Option Plan, incorporated herein by reference to
Exhibit 4.1 to the Registrant's Form S-8 Registration Statement filed on April 1, 2022.+
J.
Restricted Stock Unit Agreement, effective as of January 6, 2022, between Bank Leumi Le-Israel
Corporation and Avner Mendelson, incorporated herein by reference to Exhibit 4.2 to the Registrant's
Form S-8 Registration Statement filed April 1, 2022.+
K.
Form of Change in Control Agreement for Executive Vice President, dated January 16, 2019,
incorporated herein by reference to Exhibit CC to the Registrant's Form 10-K file
f
d on February 2
r
8,
2019. +
L.
Form of Change in Control Agreement for Senior Executive Vice President, dated January 16, 2019,
incorporated herein by reference to Exhibit DD to the Registrant's Form 10-K file
f
d on February 2
r
8,
2019. +
M.
Form of Agreement to Reduc
d
e Change in Control Severance, effective January 1, 2023 (appl
a
icable to
Ira Robbins and Thomas A. Iadanza), incorpo
r
rated herein by refer
f ence to Exhibit EE to the
Registrant's Form 10-K file
f
d on February 2
r
8, 2019. +
N.
Form of Change in Control Agreement for President and Chief Executive Officer, dated January 16,
2019 and effective January 1, 2023 (appl
a
icable to Ira Robbins), incorporated herein by reference to
Exhibit FF to the Registrant's Form 10-K file
f
d on February 2
r
8, 2019. +
O.
Form of Change in Control Agreement for
f
Senior Executive Vice President, effective January 1, 2023
(covering Thomas A. Iadanza), incorpo
r
rated herein by refer
f ence to Exhibit II to the Registrant's Form
10-K fil
f ed on Februa
r
ry 28, 2019. +
2024 Form 10-K
160
P.
Oritani Financial Corp. 2011 Equity Incentive Plan, incorporated by reference to Appendix A of the
proxy statement for
f
the Special Meeting of Oritani Stockholders (Commission File No. 001-34786)
filed by Oritani under the Securities Exchange Act of 1934, as amended, on June 27, 2011.+
Q.
Employment Agreement, dated as of July 25, 2017, by and among Joseph V. Chillura, Valley National
Bancorp a
r
nd Valley National Bank, incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Form 10-Q file
f
d on August 7, 2020. +
R.
Valley National Bancorp 2021 Incentive Compensation Plan, incorporated herein by reference to
Exhibit 10.1 of the Registrant’s Form 10-Q fil
f ed on May 7, 2021. +
S.
Form of Valley National Bancorp Director Restricted Stock Unit Award Agreement, in connection
with Valley National Bancorp 2021 Incentive Compensation Plan, incorporated herein by reference to
Exhibit 10.4 of the Registrant’s Form 10-Q fil
f ed on May 7, 2021. +
T.
Form of Valley National Bancorp Time-Based Restricted Stock Unit Award Agreement, in connection
with Valley National Bancorp 2021 Incentive Compensation Plan, incorporated herein by reference to
Exhibit 10.DD to the Registrant's Form 10-K Annual Report fil
f ed on Februa
r
ry 28, 2022. +
U.
Form of Valley National Bancorp Performance-Based Restricted Stock Unit Award Agreement, in
connection with Valley National Bancorp 2021 Incentive Compensation Plan, incorporated herein by
reference to Exhibit 10.EE to the Registrant's Form 10-K Annual Report file
f
d on February 2
r
8, 2022. +
V.
Investor Rights Agreement, dated as of April 1, 2022, between Valley National Bancorp and Bank
Leumi Le-Israel B.M., incorpo
r
rated herein by refer
f ence to Exhibit 10.1 to the Registrant's Form 8-K
Current Report file
f
d on April 1, 2022.
W.
Valley National Bancorp 2023 Incentive Compensation Plan, incorporated herein by reference to
Exhibit 10.1 of the Registrant’s Form 10-Q fil
f ed on August 7, 2023. +
X.
Form of Valley National Bancorp Time-Based Restricted Stock Unit Award Agreement, in connection
with Valley National Bancorp 2023 Incentive Compensation Plan (approved February 2
r
024),
incorporated herein by reference to Exhibit 10.AA to the Registrant’s Form 10-K Annual Report fil
f ed
on Februa
r
ry 29, 2024.+
Y.
Form of Valley National Bancorp Performance-Based Restricted Stock Unit Award Agreement, in
connection with Valley National Bancorp 2023 Incentive Compensation Plan (approved February
r
2024), incorpor
r
ated herein by reference to Exhibit 10.BB to the Registrant’s Form 10-K Annual
Report fil
f ed on Februa
r
ry 29, 2024.+
Z.
Underwriting Agreement, dated July 29, 2024, by and among the Company, Valley National Bank,
and Morgan Stanley & Co. LLC, BofA S
f
ecurities, Inc., J.P. Morgan Securities LLC, UBS Securities
LLC, Wells Fargo Securities, LLC and Keefe,
f
Bruy
r
ette & Woods, Inc., as representatives of the
underwriters named therein, incorpor
r
ated herein by reference to Exhibit 1.1 to the Company’s Form 8-
K Current Report fil
f ed on July 31, 2024. +
AA.
Underwriting Agreement, dated November 7, 2024, by and among the Company, the Bank and J.P.
Morgan Securities LLC, as representative of the Underwriters listed on Schedul
d e A thereto,
incorporated herein by reference to Exhibit 1.1 to the Company's Form 8-K Current Report fil
f ed on
November 12, 2024.+
BB.
Separation Agreement and General Release, dated October 30, 2024, between Valley National Bank
and Michael Hagedorn.+*
CC.
Executive Severance Plan, effective as of January 1, 2025, covering Russell Barrett, Mitchell L.
Crandell, John P. Regan, Mark Saeger and Yvonne M. Surowiec.+*
DD.
Form of Valley National Bancorp Time-Based Restricted Stock Unit Award Agreement, in connection
with Valley National Bancorp 2023 Incentive Compensation Plan, approved December 2024.+*
EE.
Form of Valley National Bancorp Performance-Based Restricted Stock Unit Award Agreement, in
connection with Valley National Bancorp 2023 Incentive Compensation Plan, approved December
2024.+*
(19)Valley National Bancorp Securities Trading Policy.*
161
2024 Form 10-K
(21)
List of Subs
u
idiaries as of December 31, 2024:
Name
Jurisdiction of
Incorporation
Percentage of Voting
Securities Owned by the Parent
Directly or Indirectly
(a)
Subs
u
idiaries of Valley:
Valley National Bank
United States
100%
Aliant Statut
t ory T
r
rust II
Delaware
100%
GCB Capital Trust III
Delaware
100%
State Bancorp Capi
a tal Trust I
Delaware
100%
State Bancorp Capi
a tal Trust II
Delaware
100%
Dudley Ventur
t
es, LLC
Delaware
100%
Valley Growth Capital LLC
Delaware
100%
(b)
Subs
u
idiaries of Valley National Bank:
Valley Wealth Managers, Inc.
New Jersey
100%
Highland Capital Corp.
New Jersey
100%
Valley Insurance Services, Inc.
New York
90%
Metro Title and Settlement Agency, Inc.
New York
100%
Valley Securities Holdings (NY) LLC
New York
100%
VNB New York, LLC
New York
100%
DV Community Investment, LLC
Delaware
100%
Valley Financial Management, Inc.
New York
100%
(c)
Subs
u
idiaries of Valley Securities Holdings (NY) LLC:
SAR II (NY) LLC
New Jersey
100%
Shrewsbury C
r
apital Corporation
New Jersey
100%
Valley Investments, Inc.
New Jersey
100%
Oritani Investment Corp.
New Jersey
100%
(d)
Subs
u
idiary of Oritani Investment Corp.:
Oritani Asset Corp.
r
New Jersey
100%
(e)
Subs
u
idiary of SAR II (NY) LLC:
VNB Realty, Inc.
New Jersey
100%
(f)
Subs
u
idiary of VNB Realty, Inc.:
VNB Capi
a tal Corp.
r
New York
100%
Excluded fro
f
m the list are certain subsidiaries that, if considered in the aggregate, would not constitute a significant subsidiary
under SEC rules as of December 31, 2024.
(23)
Consent of KPMG LLP.*
(24)
Power of Attorney of Certain Directors and Officers of the Company.*
(31.1) Certific
f ation of Ira Robbins, Chairman of the Board and Chief Executive Officer of the Company, pursuant to
Securities Exchange Rule 13a-14(a).*
(31.2) Certific
f ation of Travis Lan, Senior Executive Vice President and Interim Chief Financial Offi
f cer of the Company,
pursuant to Securities Exchange Rule 13a-14(a).*
(32)
Certific
f ation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarba
r
nes-Oxley Act of
2002, signed by Ira Robbins, Chairman of the Board and Chief Executive Officer of the Company and Travis Lan,
Senior Executive Vice President and Interim Chief Financial Offi
f cer of the Company.*
(97)
Valley National Bancorp Clawback Policy in the Event of a Financial Restatement, incorporated herein by
reference to Exhibit 97 to the Registrant’s Form 10-K Annual Report file
f
d on February 2
r
9, 2024.+
(101)
Interactive Data File (XBRL Instance Document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document) *
(104)
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *
*
Filed herewith.
+
Management contract and compensatory p
r
lan or arrangement.
Item 16.
Form 10-K S
-
ummary
Not appl
a
icable.
2024 Form 10-K
162
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto dul
d y authorized.
VALLEY NATIONAL BANCORP
By:
/s/
IRA R
R
OBBINS
Ira Robbins, Chairm
i
an of the Board
and Chi
C
ef Executive Offi
O
cer
By:
/s/
TRAVI
R
S LAN
Travis Lan,
Executive Vic
V e Pre
P
sident
and Int
I
er
t
im Chief F
e
in
F
ancial Offi
f cer
(Principal Financial Officer)
Dated: Februa
r
ry 27, 2025
Pursuant to the requirements of the Exchange Act, this Report has been signed below by the fol
f lowing persons on behalf
of the Registrant and in the capacities indicated:
Signature
g
Title
Date
/S/ IRA ROBBINS
Chairman of the Board and Chief
Executive Offi
f cer and Director (Principal
Executive Offi
f cer)
Februa
r
ry 27, 2025
Ira Robbins
/S/
TRAVIS LAN
Executive Vice President and
Interim Chief Financial Officer
(Principal Financial Officer)
Februa
r
ry 27, 2025
Travis Lan
/S/
MITCHELL L. CRANDE
A
LL
Executive Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
Februa
r
ry 27, 2025
Mitchell L. Crandell
ANDREW B. ABRAMSON*
Director
Februa
r
ry 27, 2025
Andrew B. Abramson
PETER J. BAUM*
Director
Februa
r
ry 27, 2025
Peter J. Baum
ERIC P. EDELSTEIN*
Director
Februa
r
ry 27, 2025
Eric P. Edelstein
MARC J. LENNER*
Director
Februa
r
ry 27, 2025
Marc J. Lenner
PETER V. MAIO*
Director
Februa
r
ry 27, 2025
Peter V. Maio
KAT
K
HLEEN C. PERROTT*
Director
Februa
r
ry 27, 2025
Kathleen C. Perrott
163
2024 Form 10-K
Signature
g
Title
Date
NITZAN
A
SANDOR*
Director
Februa
r
ry 27, 2025
Nitzan Sandor
SURESH L. SANI*
Director
Februa
r
ry 27, 2025
Suresh L. Sani
LISA J. SCHULTZ*
Director
Februa
r
ry 27, 2025
Lisa J. Schultz
JENNIFER W. STEANS*
Director
Februa
r
ry 27, 2025
Jennifer W. Steans
JEFFREY S. WILKS*
Director
Februa
r
ry 27, 2025
Jeffrey S. Wilks
DR. SIDNEY S. WILLIAMS, JR.*
Director
Februa
r
ry 27, 2025
Dr. Sidney S. Williams, Jr.
*
By:
/s/
TRAVIS LAN
Februa
r
ry 27, 2025
Travis Lan, attorney-in fac
f
t
2024 Form 10-K
164
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Morristown NJ 07960
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