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Investment Securities

12 Months Ended

Dec. 31, 2025

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES (Note 3)

Equity Securities

Equity securities totaled $82.8 million and $71.5 million at December 31, 2025 and 2024, respectively. See Note 2 for further details on equity securities.

Available for Sale Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of AFS debt securities at December 31, 2025 and 2024 were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
December 31, 2025
U.S. Treasury securities	$	250,494	$	226	$	(22,233)	$	228,487
U.S. government agency securities	41,026		35		(1,117)		39,944
Obligations of states and political subdivisions:
Obligations of states and state agencies	44,079		—		(646)		43,433
Municipal bonds	181,883		1		(31,937)		149,947
Total obligations of states and political subdivisions	225,962		1		(32,583)		193,380
Residential mortgage-backed securities	3,541,284		36,238		(63,444)		3,514,078
Corporate and other debt securities	231,876		1,781		(7,328)		226,329
Total	$	4,290,642	$	38,281	$	(126,705)	$	4,202,218
December 31, 2024
U.S. Treasury securities	$	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 subdivisions	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

Accrued interest on investments, which is excluded from the amortized cost of AFS debt securities, totaled $18.2 million and $13.1 million at December 31, 2025 and 2024, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition.

The age of unrealized losses and fair value of related AFS debt securities at December 31, 2025 and 2024 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, 2025
U.S. Treasury securities	$	—	$	—	$	128,232	$	(22,233)	$	128,232	$	(22,233)
U.S. government agency securities	—		—		20,754		(1,117)		20,754		(1,117)
Obligations of states and political subdivisions:
Obligations of states and state agencies	—		—		5,453		(646)		5,453		(646)
Municipal bonds	—		—		141,083		(31,937)		141,083		(31,937)
Total obligations of states and political subdivisions	—		—		146,536		(32,583)		146,536		(32,583)
Residential mortgage-backed securities	118,263		(234)		650,985		(63,210)		769,248		(63,444)

Corporate and other debt securities	12,741		(9)		132,307		(7,319)		145,048		(7,328)
Total	$	131,004	$	(243)	$	1,078,814	$	(126,462)	$	1,209,818	$	(126,705)
December 31, 2024
U.S. Treasury securities	$	—	$	—	$	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 subdivisions:
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 subdivisions	—		—		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)

Within the AFS debt securities portfolio, the total number of security positions in an unrealized loss position was 602 and 726 at December 31, 2025 and 2024, respectively.

As of December 31, 2025, the fair value of securities AFS that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law, was $1.3 billion.

Contractual Maturities

The contractual maturities of AFS debt securities at December 31, 2025 are set forth in the following table. Contractual maturities may differ from actual maturities 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 as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties.


	December 31, 2025
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	987	$	981
Due after one year through five years	224,894		222,934
Due after five years through ten years	235,455		228,609
Due after ten years	288,022		235,616
Residential mortgage-backed securities	3,541,284		3,514,078

Total	$	4,290,642	$	4,202,218

The weighted average remaining expected life for AFS residential mortgage-backed securities was 6.60 years at December 31, 2025.

Impairment Analysis of Available for Sale Debt Securities

Valley’s AFS debt securities portfolio includes corporate bonds and revenue bonds, among other securities. These securities may pose a higher risk of future impairment due to economic uncertainty and potential adverse effects on issuers’ performance.

AFS debt securities in unrealized loss positions are evaluated for impairment related to credit losses on a quarterly basis. See Note 1 for further information regarding Valley's accounting policy. Valley also evaluated AFS debt securities that were in an unrealized loss position as of December 31, 2025 included in the tables above and has determined that the declines in fair value are mainly attributable to interest rates, credit spreads, market volatility and liquidity conditions, not credit quality or other factors. During 2023, Valley recognized a credit-related impairment of one corporate bond issued by a failed 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 flows 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 impairment recognized during the years ended December 31, 2025 and 2024.

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 these securities prior to recovery of their amortized cost basis. None of the AFS debt securities were past due as of December 31, 2025. As a result, there was no allowance for credit losses for AFS debt securities at December 31, 2025 and 2024.

Held to Maturity Debt Securities

The amortized cost, gross unrealized gains and losses and fair value of HTM debt securities at December 31, 2025 and 2024 were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses		Net Carrying Value
	(in thousands)
December 31, 2025

U.S. government agency securities	$	292,269	$	19	$	(39,226)	$	253,062	$	—	$	292,269
Obligations of states and political subdivisions:
Obligations of states and state agencies	60,801		504		(3,293)		58,012		2		60,799
Municipal bonds	293,074		43		(17,295)		275,822		134		292,940
Total obligations of states and political subdivisions	353,875		547		(20,588)		333,834		136		353,739
Residential mortgage-backed securities	2,732,752		11,050		(311,815)		2,431,987		—		2,732,752
Trust preferred securities	36,103		—		(5,414)		30,689		425		35,678
Corporate and other debt securities	81,572		—		(1,541)		80,031		173		81,399
Total	$	3,496,571	$	11,616	$	(378,584)	$	3,129,603	$	734	$	3,495,837
December 31, 2024
U.S. Treasury securities	$	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 subdivisions:
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 subdivisions	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
Trust 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

Accrued interest on investments, which is excluded from the amortized cost of HTM debt securities, totaled $12.3 million and $13.0 million at December 31, 2025 and 2024, respectively, and is presented within total accrued interest receivable on the consolidated statements of financial condition. HTM debt securities are carried net of an allowance for credit losses (as shown in the table above).

The age of unrealized losses and fair value of related HTM debt securities at December 31, 2025 and 2024 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, 2025

U.S. government agency securities	$	—	$	—	$	235,027	$	(39,226)	$	235,027	$	(39,226)
Obligations of states and political subdivisions:
Obligations of states and state agencies	8,974		(161)		32,537		(3,132)		41,511		(3,293)
Municipal bonds	18,237		(1,777)		176,687		(15,518)		194,924		(17,295)
Total obligations of states and political subdivisions	27,211		(1,938)		209,224		(18,650)		236,435		(20,588)
Residential mortgage-backed securities	23,866		(152)		1,837,989		(311,663)		1,861,855		(311,815)
Trust preferred securities	—		—		30,689		(5,414)		30,689		(5,414)
Corporate and other debt securities	10,471		(29)		64,560		(1,512)		75,031		(1,541)
Total	$	61,548	$	(2,119)	$	2,377,489	$	(376,465)	$	2,439,037	$	(378,584)
December 31, 2024
U.S. Treasury securities	$	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 subdivisions:
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 subdivisions	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)
Trust 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)

Within the HTM securities portfolio, the total number of security positions in an unrealized loss position was 667 and 798 at December 31, 2025 and 2024, respectively.

As of December 31, 2025, the fair value of HTM debt securities that were pledged to secure public deposits, repurchase agreements, lines of credit, and for other purposes required by law was $1.4 billion.

Contractual Maturities

The contractual maturities of investments in HTM debt securities at December 31, 2025 are set forth in the table below. Contractual maturities may differ from actual maturities 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 as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties.


	December 31, 2025
	Amortized Cost		Fair Value
	(in thousands)
Due in one year	$	49,575	$	49,361
Due after one year through five years	33,202		33,124
Due after five years through ten years	156,014		150,240
Due after ten years	525,028		464,891
Residential mortgage-backed securities	2,732,752		2,431,987
Total	$	3,496,571	$	3,129,603

The weighted-average remaining expected life for HTM residential mortgage-backed securities was 9.06 years at December 31, 2025.

Credit Quality Indicators

Valley monitors the credit quality of the HTM debt securities utilizing the most current credit ratings from external rating agencies. The following table summarizes the amortized cost of HTM debt securities by external credit rating at December 31, 2025 and 2024.


	AAA/AA/A Rated		BBB rated		Non-rated		Total
	(in thousands)
December 31, 2025

U.S. government agency securities	$	292,269	$	—	$	—	$	292,269
Obligations of states and political subdivisions:
Obligations of states and state agencies	47,458		—		13,343		60,801
Municipal bonds	239,905		—		53,169		293,074
Total obligations of states and political subdivisions	287,363		—		66,512		353,875
Residential mortgage-backed securities	2,732,752		—		—		2,732,752
Trust preferred securities	—		—		36,103		36,103
Corporate and other debt securities	—		3,000		78,572		81,572
Total	$	3,312,384	$	3,000	$	181,187	$	3,496,571
December 31, 2024
U.S. Treasury securities	$	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 subdivisions	330,691		—		41,798		372,489
Residential mortgage-backed securities	2,710,642		—		—		2,710,642
Trust 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

Obligations of states and political subdivisions include municipal bonds and revenue bonds issued by various municipal corporations. At December 31, 2025, most of the obligations of states and political subdivisions were rated investment grade and a large portion of the “non-rated” category included municipal bonds secured by Ginnie Mae securities. Trust preferred securities consist of non-rated single-issuer securities issued by bank holding companies. Corporate bonds consist of debt primarily issued by banks.

Allowance for Credit Losses for Held to Maturity Debt Securities

Valley has a zero loss expectation for certain securities within the HTM portfolio, and therefore it is not required to estimate an allowance for credit losses related to these securities under the CECL standard. After an evaluation of qualitative factors, Valley identified the following security types which it believes qualify for this exclusion: U.S. Treasury securities, U.S. government 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 expectations, Valley estimates the expected credit losses using a discounted cash flow model developed by a third-party. See Note 1 for further details.

HTM debt securities are carried net of an allowance for credit losses. The following table details the activity in the allowance for credit losses for the years ended December 31, 2025, 2024 and 2023:


	2025		2024		2023
	(in thousands)
Beginning balance	$	647	$	1,205	$	1,646

Provision (credit) for credit losses	87		(558)		(441)
Ending balance	$	734	$	647	$	1,205

There were no net charge-offs of HTM debt securities in the respective periods presented in the table above.

Realized Gains and Losses

Gross gains and losses realized on sales, maturities 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, 2025, 2024 and 2023 were as follows:


	2025		2024		2023
	(in thousands)
Sales transactions:
Gross gains	$	—	$	—	$	869

Total	—		—		869
Maturities and other securities transactions:
Gross gains	29		3		21
Gross losses	(12)		(18)		(488)
Total	17		(15)		(467)
Net gains on trading debt securities	57		115		702
Gains on securities transactions, net	$	74	$	100	$	1,104

The gross gains on sales transactions for the year ended December 31, 2023 resulted from the sale of a previously impaired and fully charged-off corporate bond issued by a bank that failed in 2023.