VLY 10-K & 10-Q changes, risk factors and insider trading

Financial institutions are affected by changes in the economic environment, which may be impacted by changing interest rates, changing leadership and policy at the Federal Reserve, volatility in financial markets, and geopolitical instability or conflict. Economic conditions, financial and labor markets and monetary policies may be adversely affected by the impact of inflationary pressures, the impact of current or anticipated fiscal and monetary policies or changes thereto, policies of the newcurrent U.S. presidential administration (including trade policiespolicies, tariffs/import fees and tariffsimmigration), the potential for an economic recession, uncertainty regarding the U.S. debt ceiling, government shutdowns, or default by the U.S. government on its obligations, and actual or perceived instability in the U.S. banking system. Changes in global economic conditions and geopolitical matters, including U.S. foreign policy and potential military actions and the conflicts between Russia and Ukraine and in the Middle East, foreign currency exchange volatility, volatility in global capital markets, inflationary pressures, and higher interest rates may meaningfully impact loan production, net interest margin, the value of our securities portfolio, and the measurement of certain significant estimates such as the allowance for 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 resultsmay result in significant write-downs of asset values by financial institutions. The majority 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 portfolio, results of operations and future growth potential.

A downturn in the real estate market in our primary market areas could result in an increase in the number of borrowers who default on their loans and a reduction in the value of the collateral securing their loans, which in turn could have an adverse effect on our profitability 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 struggled in recent years,market, may increase the likelihood of default on these loans, which could negatively impact our loan portfolio’s performance 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 unpredictable long-term path of the economy, may result in increases in delinquencies and losses in our loan portfolios. 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 in our allowance for loan losses. We also may incur losses on commercial real estate loans due to declines in occupancy rates and rental rates, which may decrease property values and may decrease the likelihood that a borrower may find permanent financing 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 efforts to reduce commercial real estate loan concentration and expand other areas of commercial lending activity will be successful in eliminating or mitigating these effects.

In 2020, we implemented specialized deposit services intended for state licensed cannabis business customers. Businesses engaged in the cultivation, manufacture, distribution, and sale of cannabis are legal in numerous states and the District of Columbia, including our primary markets of New Jersey, New York, and Florida. However,On suchDecember businesses18, are2025, notPresident legalTrump atsigned an executive order directing the federalU.S. levelDepartment andof Justice to reclassify marijuana remainsas a Schedule IIII drug under the Controlled Substances Act of 1970. Even once such reclassification occurs, cannabis and cannabis businesses under their existing distribution models generally would not be legal at the federal level absent additional action by federal officials, and as such, we continue to incur anti-money laundering risk when serving customers in the cannabis business. In 2014, FinCEN published guidelines for financial institutions servicing state legal cannabis businesses. We have implemented a comprehensive control framework that includes written policies and procedures related to the on-boarding of such businesses and the ongoing monitoring and maintenance of such business accounts that conforms with the FinCEN guidance. Additionally, our policies call for due diligence review of the cannabis business before the business is on-boarded, including confirmation that the business is properly licensed and maintains the license in good standing in the applicable state. Throughout the relationship, our policies call for continued monitoring of the business, including site visits where appropriate, to determine if the business continues to meet our requirements, including maintenance of required licenses and calls for undertaking periodic financial reviews of the business. In the latter half of 2021, the Bank expanded its cannabis-related business offerings to some limited real estate and other secured lending. The Bank may offer additional banking products and services to such customers in the future.

Valley faces substantial competition in all areas of its operations from a variety of different competitors, many of which are larger and may have more financial resources than Valley to deal with the potential negative changes in the financial markets and regulatory landscape.landscape, including the rapid technological changes in the industry. Many of these competitors may have fewer regulatory constraints, broader geographic service areas, greater capital, and, in some cases, lower cost structures. 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 financial services.

Additionally, the financial services industry is facing a wave of digital disruption from fintech companies and other large financial services providers.providers and technology companies. These competitors provide innovative web-based solutions to traditional retail banking services and products and tend to have stronger operating efficiencies and fewer regulatory burdens than their traditional bank counterparts, including Valley. TheFor financialexample, servicesthe industryadoption isand continuallyexpansion undergoingof rapidblockchain technologicaltechnologies and digital currencies, including the potential creation and adoption of central bank digital currencies and stablecoins, as well as the increasing use and mainstream acceptance of such digital currencies, may fundamentally change withthe frequent introductionsbusiness of new, technology-driven productsbanking and servicesmaterially which increase efficiency and enable financial institutions to better serve customers and to reduce costs and with the use of artificial intelligence, including generative artificial 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 inimpact our products and services.business.

Our future 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 effectively implement new, technology-driven products and services or be successful in marketing these products and services to our customerscustomers. and serviceService interruptions, transaction processing errors and system conversion delays and may cause us to fail to comply with applicable laws.laws Manyand fall short of Valley’scustomer competitors have substantially greater resources to invest in technological improvements. Valley may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers.expectations. Failure to successfully keep pace with technological change affecting the financial services industry could 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 successfully implement our growth strategies or strategic initiatives could cause us to incur substantial costs and expenses which may not be recouped and adversely affect our future profitability.

From time to time, Valley may implement new lines of business or offer new products and services within existing lines of business. There are substantial 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 timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives, and shifting customer preferences, may also impact the successful implementation of a new line of business or a new product or service. Additionally, any new line of business and/or new product or service could have a significant impact on the effectiveness of Valley’s system of internal controls. We also may not be able to successfully implement strategic initiatives in accordance with our expectations with respect to timing, anticipated operational improvements or returns, or otherwise, which could result in an adverse impact on our business and financial results. We have in the past and may in the future undertake restructuring in connection with strategic initiatives, which may result in significant costs and our ability to achieve the anticipated cost savings other benefits from these actions is subject to many estimates, assumptions and uncertainties, may be disruptive both internally and to our customers, and may result loss of continuity or accumulated knowledge. Strategic initiatives and restructuring can also require a significant amount of time and focus, which may divert attention from operating the business and growth initiatives. Failure to successfully manage theseany of the foregoing risks could have a material adverse effect on Valley’s business, results of operations and financial condition.

Valley executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. Interest rate swap fees reported within capital markets income totaled approximately$21.1 million, or 8 percent, and $13.3 million, or 6 percent, and $28.4 million, or 13 percent, of total non-interest income for the years ended December 31, 20242025 and 2023,2024, respectively. Several factors, including, but not limited to, the actual and expected level of market interest rates, can impact the decisions of commercial loan customers to use such interest rate swap products. As a result, we can provide no assurance that our interest rate swap fees will remain at the level reported for the year ended December 31, 2024.2025.

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 market.them. We have been impacted by an extremely competitive labor market, including increased competition for talent across all aspects of our business, as well as increased competition with non-traditional competitors, such as fintech 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 skilled professionals remains intense, we may have to devote significant resources to attract and retain qualified 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 experience and may have difficulty promptly finding qualified replacement personnel.

We are subject to risks relating to ESGcorporate social responsibility matters that could adversely affect our reputation, business, financial condition and results of operations, as well as the price of our common and preferred stock.

We are subject to a variety of risks, including reputational risk, associated with ESGcorporate social responsibility matters. The public holds diverse and often conflicting views on these matters. We have multiple stakeholders, including our shareholders, clients, associates, federal and state regulatory authorities, and the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESGthese issues. If we take action in conflict 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-ESGnegative sentiment among certain stakeholders and government institutions,institutions against certain corporate social responsibility practices, and we may face 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 scrutiny. We could also face negative publicity or reputational harm based on the identity of those with whom we choose to do business. If we do not successfully 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 ESGany corporate social responsibility issues could damage our reputation, ability to attract and retain clients and associates, compete effectively, and grow our business.

In addition, proxy advisory firms and certain institutional investors who manage investments in public companies may take ESGcorporate social responsibility factors into their investment analysis. The consideration of ESGthese factors in making investment and voting decisions is relatively new. Accordingly, the frameworks and methods for assessing ESGthese policies are not fully developed, vary considerably among the investment community, and will likely continue to evolve over time. Moreover, the subjective nature 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 ESGsocial responsibility matters may also assign unfavorable ratings to us. Certain of our clients might also require that we implement additional ESG procedures 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,standards in this area, or to provide the disclosure relating to ESGsocial responsibility and governance issues that any third parties may believe isare 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 preferred stock could be negatively impacted.

The process for determining the amount of the allowance for credit losses is critical to our financial results and conditions. It requires difficult, subjective and complex judgments about the future, including the impact of national and regional economic conditions on the ability of our borrowers to repay their loans. If our judgment proves to be incorrect, our allowance for credit losses may not be sufficient to cover the lifetime credit losses inherent in our loan and HTM debt securities portfolios, as well as unfunded credit commitments. Deterioration in economic conditions affecting borrowers, including as a result of inflationary pressures or other macroeconomic factors, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require an increase in the allowance for 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 classification on certain loans, which may require us to increase our provision for credit losses or loan charge-offs. If actual net charge-offs were to exceed Valley’s allowance, its earnings would be negatively impacted by additional provisions for credit losses. Any increase in our allowance for credit losses or loan charge-offs as required by theour OCCregulators or otherwise could have an adverse effect on our results of operations or financial condition.

Non-performing assets (including non-accrual loans, OREO, and other repossessed assets) totaled $373.3$439.8 million at December 31, 2024.2025. Our non-accrual loans represented 0.740.87 percent of total loans at December 31, 2024.2025. These non-performing assets can adversely affect our net income mainly through decreased interest income and increased operating expenses incurred to maintain such assets or loss charges related to subsequent declines in the estimated fair 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 financial condition. Potential further stress in the commercial real estate markets, primarily in New York City,City metropolitan area, or other factors could also negatively impact the future performance of this portfolio. 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 financial returns in the future.

Federal Reserve supervisory guidance sets forth an expectation that a bank holding company such as Valley will consult with the Federal Reserve in advance of declaring and paying a dividend that exceeds earnings for the period in which the dividend is being paid. In July 2020, the Federal Reserve updated its supervisory guidance to provide greater clarity regarding the situations in which bank holding companies, like Valley,companies may expect an expedited consultation in connection with the declaration of dividends that exceed quarterly earnings.consultation. To qualify, amongst other criteria, total commercial real estate loan concentrations cannot represent 300 percent or more of total capital andif the outstanding balance of the commercial real estate loan portfolio cannothas increaseincreased 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. AsHowever, aif result,we did not qualify for an expedited consultation in the future, 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 information regarding our quarterly cash dividend and the current rate of earnings retention in the “Capital Adequacy” section of the MD&A.

Our access to funding sources, including the FHLB and brokered deposits, in amounts adequate to finance our activities could be impaired by factors that affect us specifically or the financial services industry in general. Unexpected changes to the FHLB’s underwriting guidelines for wholesale borrowings or lending policies may limit or restrict our ability to borrow, and therefore 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 downturn, in the economy or adverse regulatory action against us. Our ability to borrow could also be impaired by factors that are not necessarily specific to us, such as a severe disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole.whole, including as a result of any future bank failures. In the event of future turmoil in the banking industry or other 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 stabilize the banking industry or provide liquidity.

Additionally, ourany inability by Valley 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’sAny inability by Valley to monetize liquid assets or to access short-term funding or capital markets could constrain Valley’s ability 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.

OurWe rely on our systems of controls and proceduresprocedures, mayand if our systems fail or are circumvented, our operations could be circumvented,disrupted, which may result in a material adverse effect on our business, results of operations and financial condition.

WeAdditionally, maywe alsorely be subject to disruptions 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 liability. We are further exposed to the risk that our externalon vendors whose operations may be unabledisrupted toby fulfillevents such as system failures, outages, downtime or other adverse circumstances, whether within or outside of their contractual obligations (or will be subject to the same risk of fraud or operational errors by their respective employees as us)control, and toany thesuch riskdisruption thatcould materially harm our (or our vendors’) business continuity and data security systems prove to be inadequate.operations. We maintain a system of comprehensive policies and a control framework designed to monitor vendor risks including, among other things, (i) changes in the vendor’s organizational structure or internal controls, (ii) changes in the vendor’s financial condition, (iii) changes in the vendor’s support for existing products and services and (iv) changes in the vendor’s strategic focus. While we believe these policies and procedures help to mitigate risk, the failure of an external vendor to perform in accordance with the contracted arrangements under service level agreements could be disruptive to our operations, which could have a material adverse impact on our business and, in turn, our financial condition and results of operations.

The occurrence of natural disasters, extreme weather events, acts of terrorism, health crises, the occurrence or worsening of disease outbreaks 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, disruptions to supply chains, and overall economic instability. Additionally, New York City and New Jersey remain central targets for potential acts of terrorism againstmay occur in any of the Unitedmarkets States.in which we operate. Such events could affect the stability 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.

Valley, primarily through its principal subsidiary and certain non-bank subsidiaries, is subject to extensive federal and state regulation, supervision and examination. Banking laws, regulations, and rules are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole. Many laws and regulations affect Valley’s lending practices, capital structure, investment practices, dividend policy and growth, among other things. They encourage Valley to ensure a satisfactory level of lending in defined areas and establish and maintain comprehensive programs relating to anti-money laundering and customer identification. Congress, state legislatures, and federal and state regulatory agencies continually review banking laws, regulations and policies for possible changes. We expect the newcurrent U.S. presidential administration will seekcontinue to implementimplementing a regulatory reform agenda that is significantly different than that of the prior administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies. Any such changes, including with respect to statutes, regulations or regulatory policies and changes in interpretation or implementation thereof, could affect Valley in substantial and unpredictable ways. Such changes could subject Valley to additional costs, limit the types of financial services and products it may offer and/or increase the ability of non-banks to offer competing financial services and products, or may impact consumer trust in financial institutions, among other things. Failure to comply with laws, regulations or policies could result in sanctions by regulatory agencies, civil money penalties and/or reputational damage, which could have a material adverse effect on Valley’s business, financial condition and results of operations.

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 continuecontinue, andincluding mayin accelerateconnection dependentwith uponthe efforts of the FASB and International Accounting Standards Board commitments to achievingachieve 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 apply new or revised guidance retroactively or apply existing guidance differently (also retroactively) which may result in Valley restating prior period financial 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.

ClaimsLegal and litigationproceedings could result in significant expenses, losses and damage to our reputation.

Cybersecurity incidents and other disruptions to our information systemsystems, as well as those of our third-party service providers, could expose us to liability, losseslosses, operational disruption and escalating operating costs.

Valley regularly collects, transmits, stores and otherwise processes personal, confidential, proprietary or sensitive information regarding its customers, employees and others for whom it services loans. In some cases, this personal, confidential, proprietary or sensitive information is collected, compiled, transmitted, stored or otherwise processed by third parties on Valley’s behalf. Cybersecurity risks have increased because of the proliferation of new technologies, including artificial 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, confidential, proprietary or sensitive information, destroy data, denial-of-service,deny service, or sabotage 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 their computer network and services. Globally, cybersecurity attacks are increasing in number and the attackers are increasingly organized and well-financed, or at times supported by state actors. In addition, geopolitical tensions or conflicts, such as Russia’s invasion of Ukraine, increasing tension with ChinaChina, U.S. foreign policy and potential military actions, or the unfolding events in the Middle East, may create a heightened risk of cybersecurity attacks. Cybersecurity risks also may derive from fraudfraud, malice, or malicenegligence on the part of our employees or third parties, or may result from human error, mistakes in connection with over-the-air updates, software bugs, server malfunctions, software or hardware failure or other technological failure. Such threats may be difficult to detect for long periods of time and also may bebecome furthermore enhanced in frequencyfrequent or effectivenesseffective through threat actors’ use of artificial intelligence.

ValleyWe, frequentlyentities experiencesthat attemptedwe cybersecurityhave attacks against its systemsacquired, and certain attacksof our third-party service providers have been successful. Valley has also been impacted byexperienced cybersecurity breachesincidents ofin itsthe vendors’past, systems.and There canmay be novulnerable assurances that Valley will not incurto future breachessecurity breaches. Breaches of our systems or be impacted by breaches of our vendors’ systems, which in either casesystems may expose thecustomer data ofor ourconfidential customersinformation or disrupt our services, exposing us to significant damage, operational disruption, ongoing operational costsand forensic investigation costs, litigation, regulatory inquiries or enforcement actions, fines, penalties, 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 failure 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 efforts will be successful. A vulnerability in our vendors’ software or systems, a failure of our vendors’ safeguards, policies or procedures, or a cyber-attack or other cybersecurity incident affecting any of these third parties could harm our business. WeOur haveability experiencedto monitor cybersecurity incidentspractices inof theour past,vendors includingmay thebe unauthorizedlimited, accessand we may not be able to prevent a failure or cybersecurity incident by a vendor that may impact us or our customers. In 2023, a third party ofgained unauthorized access to certain Bank customer data resulting fromthrough our third partythird-party service providers’ use of the MOVEit file transfer software in 2023.software. While our business has not been materially impacted by anythis suchor other cybersecurity incidents, similar incidents could have a material adverse effect 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 financial services industry, our expansion of internet and mobile banking tools and new products based on customer needs, use of new tools like artificial intelligence, and the system and customer account conversions associated with the integration of merger targets. Successful 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, confidential, proprietary or sensitive information 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 enforcement, investigations, fines, sanctions or other penalties, or reputational harm.

We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacyprivacy, cybersecurity, and cybersecurity,artificial intelligence, which could increase the cost of doing business, compliance risks and potential liability.

We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations relating to cybersecurity, data privacy and(including relating to the use and security of the personal information of clients, employees or others,others), and artificial intelligence, and any failure to comply with these laws, regulations, rules, standards and contractual obligations could expose us to liabilityliability, regulatory action, fines, and/or reputational damage. The regulatory frameworkframeworks for data privacyprivacy, cybersecurity, and cybersecurityartificial isintelligence are in considerable flux and evolving rapidly, and these laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction.jurisdiction, and federal law may conflict with some state and local laws. As new cybersecurity, data privacyprivacy, and security-relatedartificial intelligence laws, regulations, rulesrules, and standards are implemented, the time and resources needed for us to comply with such laws, regulations, rules and standards, as well as our potential liability 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, rulesrules, and standards may require us to change our policies, procedures and technologytechnology, including for information security, which could, among other things, make us more vulnerable to operational failures and to monetary penalties for breach of such laws, regulations, rules and standards.

In addition to various data privacy and cybersecurity laws and regulations already in place, U.S. states and local governments are increasingly adopting cybersecurity, data privacy, and artificial intelligence laws and regulations imposing comprehensive data privacy and cybersecurity obligations, whichthat may be more stringent, broader in scope, or offer greater individual rights, with respect to personal information than federal or other state laws and regulations, and such laws and regulations may differ from each other, which may complicate compliance efforts and increase compliance costs. Aspects of federalfederal, state, and statelocal laws and regulations relating to cybersecurity, data privacy and cybersecurity,artificial intelligence, as well as their enforcement, remain unclear, and we may be required to modify our practices in an effort to comply with them. See Item 1. Business—"Supervision and Regulation"—"Data Privacy and Cybersecurity Regulation" for more information regarding applicable data privacy and cybersecurity laws and regulations.

Further, we cannot ensure that our privacy policies and other disclosures or statements regarding our practices will be sufficient to protect us from claims, proceedings, liability or adverse publicity relating to data privacy and security. Although we endeavor to comply with our privacy policies, we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policies and other documentation that provide promises and assurances about data privacy and cybersecurity can subject us to potential government or legal action if they are found to be deceptive, unfair, or misrepresentativemisrepresentations of our actual practices. Any concerns about our data privacy and cybersecurity practices, even if unfounded, could damage our reputation and adversely affect our business.

Any failure or perceived failure by us to comply with our privacy policies, or applicable data privacy and cybersecurity laws, regulations, rules, standards or contractual 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 information, may result in requirements to modify or cease certain operations or practices, the expenditure of substantial costs, time and other resources, proceedings or actions against us, legal liability, costs for notification to affected individuals, governmental investigations, enforcement actions, claims, fines, 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 the demand for our products and services, and ultimately result in the imposition of liability, any of which could have a material adverse effect on our business, financial condition and results of operations.

Our adoptionAdoption of artificial intelligence tools by us and adoption by our third-party vendors and service providers may increase the risk of errors, omissions, bias, unfair treatment or fraudulent behavior by our employees, clients, or counterparties, or other third parties.parties which may result in reputational harm, liability, or impact our results of operations.

We have made, and expect to continue to make investments to integrate artificial intelligence tools into our solutions, including generative artificial intelligence, machine learning, agentic artificial intelligence and similar tools and technologies that collect, aggregate, analyze or generate data or other contentscontents, or that can initiate or execute actions or workflows based on such data (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 incorporate AI into their product offerings and services faster than we are able 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 financial services, fair treatment to customers, inaccuracy of results broadly known as "hallucinations" and compliance with applicable laws and regulations. These risks can result from models being poorly designed or faulty and/or biased data being used for 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.

WeIn an effort to adopt such tools responsibility and appropriately, we have implemented an AI governance, oversight, and strategic facilitation function that includes a risk assessment of internal and vendor AI solutions, due diligence, model validation, and controls, andas strictwell as detailed guidelines and policies designed to maintainpromote safety,responsible, security,secure, and ethical use of AI. However,Our controls, testing and auditing processes may not prevent all errors, bias, unfair treatment or fraud in the use of AI in our services Also, given the rapid pace of rapid 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 forms of bias, unauthorized access to sensitive, confidential, proprietary or personal information, and violations of applicable laws and regulations, leading to operational inefficiencies, competitive harm, reputational harm, ethical challenges, legal liability, regulatory findings or enforcement, losses, fines, and other adverse impacts on our businessbusiness, operations and financial results. IfAlso, 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 outputs of such AI tools, we also may incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party.

WeTo comply with the rapidly evolving legal and regulatory requirements governing the use of AI, we may be required to expend significant resources to comply with an uncertain legal and regulatory environment governing the use of AI,resources, and we may have to change our product offerings or business practices, or prevent or limit our use of AI.

Future acquisitions may dilute shareholder value, especially tangible book value per share.value.

This Report, both in MD&A and elsewhere, contains forward-looking statements within the meaning 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, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology such as “intend,” “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statementsFactors, in addition to those risk factors listed under Item 1A. Risk Factors of this ReportReport, that may differ materially from those contemplated in these forward-looking statements include, but are not limited to:

•the impact of unfavorable macroeconomic conditions or downturns, including an actual or threatened U.S. government shutdown, debt default or rating downgrade, instability or volatility in financial markets,markets resulting from the impact of tariffs/import fees and other trade policies and practices, any retaliatory actions, related market uncertainty, or other factors; U.S. government debt default or rating downgrade; unanticipated loan delinquencies,delinquencies; loss of collateral,collateral; decreased service revenues,revenues; increased business disruptions or failures,failures; reductions in employment,employment; and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as futurenew legislation and policy changes under the newcurrent U.S. presidential administration, any shutdown of the U.S federal government, geopolitical instabilities or events;events, natural and other disasters, including severe weather events,events and other climate-related risks, health emergencies, acts of terrorism;terrorism, or other external events;

•the impact of any potential instability within the U.S. financial sector inor thefuture aftermathbank of the banking failures in 2023 and continued volatility thereafter,failures, including the possibility of a run on deposits by a coordinated deposit base, and the impact of theany actual or perceived concerns regarding the soundness, or concerns about the creditworthinesscreditworthiness, of other financial institutions, including any resulting disruption within the financial markets, increased expenses, including Federal Deposit Insurance CorporationFDIC insurance assessments, or adverse impact on our stock price, deposits or our ability to borrow or raise capital;

•changes in the statutes, regulations, policy,policies, enforcement priorities, or enforcement prioritiescomposition of the federal bank regulatory agencies;

•investigations, damage verdicts orverdicts, settlements or restrictions related to existing or potential class action litigation or individual litigation arising from claims of violations of laws or regulations, contractual claims, breach of fiduciary responsibility, negligence, fraud, environmental laws, patent, trademark or other intellectual property infringement, misappropriation or other violation, employment relatedemployment-related claims, and other matters;

•a prolonged downturn and contraction in the economy, as well as an unexpectedany decline in commercial real estate values collateralizing a significant portion of our loan portfolio;

•the inability to grow customer deposits to keep pace with the level of loan growth;

•a material change in our allowance for credit losses under CECL due to forecasted economic conditions and/or unexpected credit deterioration in our loan and investment portfolios;

•greater than expected technology relatedtechnology-related costs due to, among other factors, prolonged or failed implementations, additional project staffing and obsolescence caused by continuous and rapid market innovations;

•cyberattacks, ransomware attacks, computer viruses, malware or other cybersecurity incidents that may breach the security of our or our third-party service providers’ websites or other systems or networks to obtain unauthorized access to personal, confidential, proprietary or sensitive information, destroy data, disable or degrade service, or sabotage our systems or networks, and the increasing sophistication of such attacks and use of targeted tactics against the financial services industry;

•results of examinations by the OCC,Office of the FRB,Comptroller of the CFPBCurrency (OCC), the Federal Reserve Bank, the Consumer Financial Protection Bureau and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;

•application of the OCC heightened regulatory standards for certain large insured national banks, and the expenses we will incur to develop policies, programs, and systems that comply with the enhanced standards applicable to us;

•unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather,weather and other climate-related risks, pandemics or other public health crises, acts of terrorism or other external events;

As discussed further in the “Allowance for Credit Losses” section in this MD&A, we incorporated a multi-scenario economic forecast for estimating lifetime expected credit losses at December 31, 20242025 and 2023.2024. The qualitative economic component of our reserves at December 31, 20242025 decreasedincreased by $43.8$17.6 million to approximately 810 percent of total allowance for credit losses for loans at December 31, 20242025 as compared to 198 percent at December 31, 20232024 largelypartly due to gradualmoderate improvementsdeterioration in mostsome forecasted economic indicators, including inflation,lower duringGDP 2024growth and higher unemployment, and a higherlower level of previously expected losses transitioning as realized losses (i.e., charge-offs) through our ACL model in 2024.2025. Other qualitative non-economic reserves, largely based upon management judgementsjudgments about certain inherent factors in acquiredthe loan portfolios not reflected in our quantitative reserves, also decreasedincreased $48.0$12.2 million toand approximatelyrepresented 46 percent of total allowance for credit losses for loans at December 31, 20242025 as compared to 164 percent at December 31, 2023.2024. The declineincrease was mostly due to higher reserves related to an increase in qualitative factor scaling adjustments to account for the passagedifference ofin timeincurred and betterexpected thanlifetime expected performancelosses ofat theseDecember portfolios.31, 2025. The nettotal positive developmentsincrease in these significant judgmental qualitative factors during 20242025 were more thanpartially offset by increasesa decline in the quantitative portion of our allowance based upon a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by generating probability of default and loss given default metrics.

The allowance for credit losses for loans also included specific reserves totaling $75.9$82.0 million and $74.2$75.9 million, respectively, at December 31, 20242025 and 2023.2024. These reserves are largely based upon management's valuation of collateralcollateral, and, less often, the expected cash flows for collateral dependent loans. These specific reserves include $25.8 million and $37.7 million at December 31, 2024 and 2023, respectively, related to New York City taxi medallion loan valuations based on the estimated value of the underlying medallions. See additional details regarding our non-performing taxi medallion loan portfolio under the “Non-performing Assets” section of this MD&A.

An impairment loss is recognized if the carrying value of the net assets assigned to the reporting unit exceeds the fair 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 often if events or circumstances warrant. In addition to the annual impairment test, we assessed the immediate and long-term impact of significant market and bank regulatory changes, if applicable, on the macroeconomic variables and economic forecasts and how those might impact the fair value of our reporting units each quarter end. After consideration of these variables and otherevaluating possiblerelevant triggeringevents, eventschanges orin circumstances, as well as our operating results, weand determinedother potential triggering factors, management concluded that no event or change had occurred that would make it wasmore more-likely-than-notlikely than not that the fair values of our three reporting units, Wealth Management, Consumer Banking, and Commercial Banking, were in excess ofbelow their respective carrying values during 2024.amounts. Therefore, we concluded there were no triggering events that would require additional goodwill impairment test of the reporting units during 2024.2025.

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 reflected a decrease of $46.4 million in 2024 and increasesan increase of $3.0 million and $1.8 million in 2023 and 2022, respectively, to our tax provision related to reserve for uncertain tax liability positions and/or accrued interest related to such positions atduring the years ended December 31, 2024, 20232024 and 2022,2023, respectively. We had no reserve for uncertain tax liability positions at both December 31, 2025 and 2024.

Company Overview. At December 31, 2024,2025, Valley had consolidated total assets of $62.5$64.1 billion, total net loans of $48.2$49.6 billion, total deposits of $50.1$52.2 billion and total shareholders’ equity of $7.4$7.8 billion. Our commercial bank operations include branch office locations in northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, California, Alabama and Illinois. Of our current 229230 branch network, 5655 percent, 18 percent, and 18 percent of the branches are located in New Jersey, New York, and Florida, respectively, with the remaining 89 percent of the branches in Alabama, California and Illinois combined. Over the past several years, we have grown significantly through organic efforts and our bank acquisition of Bank Leumi USA on April 1, 2022.

Financial Condition. During 2024,2025, we continued to strengthen the position of our balance sheet to best perform in the current economic environment, while also prudently managing and reducing the overall risk of our loan portfolio. The following items, including key balance sheet initiatives, are highlights at December 31, 2024.2025.

•Commercial Real Estate Loan Concentration: Total commercial real estate loans (including construction loans) totaled $29.2 billion, or 58.3 percent of total loans at December 31, 2025 as compared to $29.6 billion, or 60.7 percent of total loans at December 31, 2024 as compared to $32.0 billion, or 63.7 percent of total loans at December 31, 2023.2024. 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 portfolio by reducing new originations of certain types of transactional commercial real estate lending, such as non-owner occupied and multifamily loans to single-product borrowers. We remain focused on growing our commercial and industrial, owner occupied commercial real estate, and consumer loan portfolios. As a result, we have a current balance sheet goal to reduce our CRE loan concentration ratio to below 350 percent by December 31, 2025. At December 31, 2024,2025, our CRE loan concentration ratio declined to 362333 percent as compared to 421362 percent and 474 percent at SeptemberDecember 30,31, 2024 and December 31, 2023, respectively. TheBased declineon inour current loan growth targets for 2026, we expect a continued, but more gradual reduction of the CRE loan concentration ratio was largely due to (1) bulk sales of commercial real estate and construction loans completed inover the firstnext half12 of 2024 and the fourth quarter 2024, (2) our preferred and common stock issuances in the second half of 2024, and (3) loan repayment activity in 2024, which outpaced new and refinanced loan volumes due to the planned lower production within the non-owner occupied and multifamily loan categories.months. See further details of our loan activities under the “Loan Portfolio” section below.

•Allowance for Credit Losses: The ACL for loans totaled $573.3$596.1 million and $465.6$573.3 million at December 31, 20242025 and December 31, 2023,2024, respectively, representing 1.171.19 percent and 0.931.17 percent of total loans at each respective date. The increase reflects, among other factors, an increase in quantitative reserves across most of our commercial loan categories driven by higher net loan charge-offs and nearly 8 percent loan growth in our commercial and industrial loan portfoliogrowth of 10.4 percent in 2025, increases in both the economic forecast and non-economic qualitative reserve components of the ACL for loans and moderately higher specific reserves associated with collateral dependent loans, partially offset by a decline in quantitative reserves as compared to December 31, 2024. Given our current projections for continuedloan growth in our commercial and industrial loan portfolio and credit trends within our loan portfolio, we anticipate the ACL will migraterange towardsbetween approximately1.15 1.25and 1.20 percent of total loans atthrough December 31, 2025.2026. However, we can provide no assurance that our actual future ACL for loans required under our CECL methodology will not exceed this current projection due to the uncertain nature of our assumptions. See the “Allowance for Credit Losses" section for additional information.

•Liquid Assets: Our liquid assets totaled $5.5$6.1 billion at December 31, 2024,2025, representing 9.610.3 percent of interest earning assets as compared with $2.4$5.5 billion, or 4.39.6 percent of interest earning assets at December 31, 2023.2024. We continue to maintain significant access to readily available, diverse funding sources to fulfill 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 December 31, 2024. See the “Bank Liquidity” section for additional information.

•Deposits: Total deposits increased $833.0$2.1 millionbillion to $52.2 billion at December 31, 2025 as compared to $50.1 billion at December 31, 20242024. asMeaningful comparedgrowth in non-maturity interest bearing and non-interest bearing direct customer deposits throughout 2025 allowed us to $49.2reduce billionour atreliance Decemberon 31,high-cost 2023 mainly due to higher direct commercialindirect customer money market and NOW deposits, partially offset by a decrease in both brokered and retail time deposits. Total indirect customer deposits (including both brokered money market and time deposits) totaleddeclined $7.1$1.7 billion to $5.4 billion at December 31, 2024 and declined $397.2 million2025 as compared with December 31, 2023. During the fourth quarter 2024, we used a significant portion of the net proceeds from the sale of commercial real estate loans held for sale to repay maturing indirect customer deposits.2024. See the “Deposits and Other Borrowings” section for more details.

•Investment Securities: Total investment securities increased $1.9$808.0 billionmillion to $7.0$7.8 billion, or 11.212.1 percent of total assets, at December 31, 20242025 as compared to December 31, 20232024 mainly due to targeted purchases of residential mortgage backed securities primarilyand, issued by Ginnie Mae (withto a risk-weightinglesser ofextent, zerocorporate fordebt regulatory capital purposes) in the second half of 2024securities that were classified as AFS.AFS during the year ended December 31, 2025. See the “Investment Securities Portfolio” section for more details.

Annual Results. Net income for the year ended December 31, 20242025 was $598.0 million, or $1.01 per diluted common share as compared to $380.3 million, or $0.69 per diluted common share as compared to $498.5 million, or $0.95 per diluted common share for 2023.2024. The $118.2$217.7 million decreaseincrease in net income as compared to 20232024 was mainly due to the following changes:

•a $258.6$169.1 million increasedecrease in our provision for credit losses drivenwas bymainly higherdue to the impact of lower net loan charge-offs in 2025 and lower quantitative reserves forin commercialcertain loansloan categories; and

Which waswere partially offset by:

Operating Environment. Real gross domestic product (GDP) increased atby 2.2 percent in 2025 as compared to 2.4 percent in 2024. The increase in real GDP in 2025 primarily reflected increases in consumer spending and investment. In the fourth quarter 2025, real GDP slowed to an annualannualized rateincrease of 2.81.4 percent as compared to 2.94.4 percent duringin 2023.the Thethird increasequarter 2025 largely due to the negative impact of the federal government shutdown in 2024 was primarily driven by gross private domestic investmentOctober and personalNovember consumption. The gains were partly offset by decreases in government consumption expenditures and net exports.2025. Inflation continueddecreased to modestly improveslightly with the change in the consumer price index on a year over year basis deceleratingdeclining from 3.3 percent at December 31, 2023 to 2.9 percent at December 31, 2024.2024 to 2.7 percent at December 31, 2025.

The 10-year U.S. Treasury note yield increaseddecreased to 4.584.18 at December 31, 20242025 from 3.884.58 percent one year ago, and the 2-year U.S. Treasury note yield endeddecreased 2024 increased 278 basis points to 4.253.47 percent at December 31, 20242025 as compared to 2023.December 31, 2024.

After yield curve inversion of more than two years, the normalization of interest rates in(i.e., latea 2024positively sloped yield curve) during 2025 and into 2026 should setbe thea stagecatalyst for a more benignstronger operating environment for banksbanks. Expectations of moderating inflation and continued resilience in 2025.key The outlook for economic growth, and general optimism around easing bank regulation in the wakesectors of the U.S. presidentialeconomy electionhave furtheralso supportscontributed theto expectationour positive outlook for an improved operating environment.2026. However, severalheightened othergeopolitical factors,risks, fiscal policy uncertainty, and evolving monetary policy considerations, including those recently noted by the Federal Reserve, havecontinue madeto create uncertainty regarding the future direction of the economyeconomy. uncertain, and shouldShould economic conditions deteriorate, causing business activity, spending and investment to decline, these and other factors may adversely impact our financial results, as highlighted in the remaining MD&A discussion below.

Deposits and Other Borrowings. We define cumulative deposit beta as the change in our cost of total deposits relative to the change in the average Fed Funds (upper bound) rate. We differentiate between the cumulative deposit beta during the rate increase cycle, which began in the first quarter of 2022 and ended in the second quarter of 2024, and the cumulative deposit beta during the rate decrease cycle which started in the third quarter of 2024. Our cumulative deposit beta in the interest rate increase cycle (between December 31, 2021 and June 30, 2024) was approximately 58 percent. The Federal Reserve started an interest rate decrease cycle during the third quarter 2024. Our cumulative deposit beta in this current interest rate decrease cycle (between June 30, 2024 and December 31, 20242025) was 3449 percent. Our cumulative deposit beta for the fourth quarter 20242025 was 5155 percent. During the fourth quarter 2025, the Federal Reserve cut its target federal funds rate twice, each time by 25 basis points. The beta in the fourth quarter 2025 was mainly driven by a full quarter’s impact of the Federal Reserve's initial rate cut,cut in September 2025 and our ability to broadly reduce costs of interest bearing deposit products coupled with anthe overall increasechanges in non-interest bearing deposit balances fromdiscussed customersfurther and a reduction of higher cost, indirect customer CDs.below. See the "Net Interest Income" section for additional details on the changes in our cost of deposits during the fourth quarter 2024.2025.

Total average deposits increased by $1.3$626.3 billionmillion to $49.8$50.4 billion for the year ended December 31, 20242025 as compared to 2023.2024. Average savings, NOW and money market deposit balances increased $1.9$1.8 billion largely due to ouradditional strongdeposits focus on deposit generationgenerated from both direct commercial customerscustomer and nationalgovernmental specializeddeposit deposits,accounts. as well as continuing to benefit from some inflows from theAverage non-interest bearing deposit category. Average time deposits balances increased $716.5$298.0 million primarily due to our$11.5 increasedbillion usefor ofthe fullyyear insuredended indirectDecember customer31, (i.e., brokered) CDs2025 as an alternate and attractively priced funding source (mainly compared to similar2024 termand FHLBthe borrowings)increase startingwas mainly the result of our relationship-driven commercial banking efforts, and, to a much lesser extent, higher retail customer balances in the second quarter 2024.2025. These increases were partially offset by a $1.4$1.5 billion decrease in average non-interest bearingtime deposits causedbalances bydue theto levelour repayment of markethigh-cost interestmaturing rates and a continued shift inindirect customer preference to interest bearing deposit products and other attractive investment alternatives to depositsCDs during most of 2024.2025. Average non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 23 percent, 53 percent and 24 percent of total deposits at December 31, 2025, respectively, as compared to 22 percent, 51 percent and 27 percent of total deposits at December 31, 2024, respectively, as compared to 26 percent, 48 percent and 26 percent of total deposits at December 31, 2023, respectively.

Actual ending balances for deposits increased $833.0$2.1 millionbillion to $50.1$52.2 billion at December 31, 20242025 as compared to 2023 mostly2024 due to ana $2.3 billion increase of $1.8 billion in savings, NOW and money market deposits and a $726.8 million increase in non-interest bearing deposits, partially offset by decreasesa of $834.2$918.4 million and $110.8 milliondecrease in time and non-interest bearing deposits, respectively.deposits. The increase in savings, NOW and money market deposits was largely due to broad-baseddeposit directinflows from commercial depositscustomer and government deposit accounts and, to a lesser extent, consumerincreases customerin inflows,national specialized deposit accounts. The increase in non-interest bearing deposits was generated from the aforementioned holistic commercial relationship banking strategy of the Bank, as well as increases in digital and national specializedimproved deposit accountsinflows atfrom Decemberour 31,retail 2024.customers. The decrease in time deposits was mostly due to maturity and repayment of both indirect andcustomer CDs, partially offset by net positive inflows from new direct customer CDs,CD as we elected to pay down these higher cost funding sources with excess cash liquidityofferings during the fourth quarter 2024.2025. As a result, total indirect customer deposits (primarilyconsisting of brokered CDs and, to a lesser extent,and money market deposits) decreased $1.7 billion to $5.4 billion at December 31, 2025 as compared 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 aforementioned changes in customer behavior during most of 2024, we did experience solid non-interest bearing deposit inflows from both commercial and consumer customers during 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 approximately 23 percent, 5355 percent and 2522 percent of total deposits as of December 31, 2024,2025, respectively, as compared to 23 percent, 5052 percent and 2725 percent as of December 31, 2023,2024, respectively.

We currently expect to grow our total deposits by 5 to 7 percent during 2026 across our retail, commercial and other specialized deposit niches. While we maintained a diversified commercial and consumer deposit base at December 31, 2024,2025, deposit gathering initiatives and our current deposit base could be unexpectedly challenged due to increased market competition, changes in customer behavior, including attractive non-deposit investment alternatives in the financial marketsalternatives, and other factors. As a result, we cannot guarantee that we will be able to increase or maintain deposit levels at or near those reported at December 31, 2024.2025. Management continuously monitors liquidity and all available funding sources including non-deposit borrowings discussed below. See the "“Liquidity and Cash Requirements"” section of this MD&A for additional information.

Average short-term borrowings decreased $274.2 million at December 31, 2025 as compared to 2024 mostly due to a reduction in the amount of short-term FHLB advances utilized for excess overnight liquidity and funding needs during 2025 that was driven, in part, by the growth in average deposits. Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) increasedmoderately $899.3decreased $107.5 million at December 31, 20242025 as compared to 2023.2024. The increasedecline was mainlymostly due to thea new FHLB advances totaling $1.0 billion issueddecrease in early March 2024. The new long-term FHLB borrowings have a weighted average ratesubordinated debt balances driven by our full redemption of 4.54$215.0 percent and a weighted average remaining contractual termmillion of 2.8subordinated yearsnotes atin DecemberJune 31, 2024.2025.

Actual ending balances for short-term borrowings decreasedincreased $845.1$18.8 million to $72.7$91.5 million at December 31, 20242025 as compared to 20232024 mainly due to a moderate declineincrease in securities sold under repurchase agreements. Long-term borrowings increaseddecreased $845.8$265.6 million to $2.9 billion at December 31, 2025 as compared to $3.2 billion at December 31, 2024 as compared to $2.3 billion at December 31, 2023 primarily due to the newaforementioned subordinated notes redeemed in June 2025 and the net decrease from repayments and purchases of certain FHLB advances issued during the first half of 2024.advances. See the “Net Interest Income” section below and Note 109 to the consolidated financial statements for additional details on our borrowed funds.

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 supplemental information to both management and investors in understanding Valley’sValley'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, on a consolidated basis,measures for internal planning, forecastingforecasting, 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 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 differently from similar measures disclosed by other companies.

This Quarterly Report on Form 10-Q, both in the MD&A and elsewhere, contains forward-looking statements within the meaning 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, new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by forward-looking terminology such as “intend,” “should,” “expect,” “believe,” "position",“position,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “would,” “could,” “typically,” “usually,” “anticipate,” “may,” “estimate,” “outlook,” “project” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated in these forward-looking statements include, but are not limited to:

•the impact of unfavorable macroeconomic conditions or downturns, including instability or volatility in financial markets resulting from the impact of tariffs/import fees and other trade policies and practices, any retaliatory actions, changes in energy commodity prices, related market uncertainty, or other factors; U.S. government debt default or rating downgrade; unanticipated loan delinquencies; loss of collateral; decreased service revenues; increased business disruptions or failures; reductions in employment; and other potential negative effects on our business, employees or clients caused by factors outside of our control, such as new legislation and policy changes under the current U.S. presidential administration, any shutdown of the U.SU.S. federal government, geopolitical instabilities or events, including ongoing conflicts in the Middle East, natural and other disasters, including severe weather events and other climate-related risks, health emergencies, acts of terrorism, or other external events;

•results of examinations by the OCC, the FRB, the CFPB and other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our allowance for credit losses, write-downwrite down assets, reimburse customers, change the way we do business, or limit or eliminate certain other banking activities;

Valley’s accounting policies are fundamental to understanding management’s discussion and analysis of its financial condition and results of operations. In preparing the consolidated financial statements, management has made estimates, judgments and assumptions in accordance with these policies that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and results of operations for the periods indicated. At MarchJune 31,30, 2026, we identified our policies on the allowance for credit losses, goodwill and other intangible assets, and income taxes to be critical accounting policies because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. Management has reviewed the application of these policies and estimates with the Audit Committee of Valley’s Board. Our critical accounting policies and estimates are described in detail in Part II, Item 7 in Valley’s Annual Report, and there have been no material changes in such policies and estimates since the date of Valley’s Annual Report.

Company Overview. At MarchJune 31,30, 2026, Valley had consolidated total assets of approximately $64.5$66.3 billion, total net loans of $50.2$51.9 billion, total deposits of $52.9$54.1 billion and total shareholders’ equity of $7.8$7.9 billion. Valley operates many convenient branch office locations and commercial banking officesoffice inlocations northernnationwide and centralserves clients across New Jersey, the New York City boroughs of Manhattan, Brooklyn and Queens, Long Island, Westchester County, New York, Florida, Alabama, California, Alabama,Illinois, Pennsylvania and Illinois.Arizona. Of our current 230network branchof network,228 branches, 55 percent, 18 percent, and 1819 percent of the branches are located in New Jersey, New York, and Florida, respectively, with the remaining 98 percent of the branches in Alabama, California, and Illinois combined.

Financial Condition. During the firstsecond quarter 2026, we continued to expand our business and grow the balance sheet in a responsible manner to best perform in the current uncertain economic environment, while also prudently managing the overall risk of our loan portfolio. The following items are highlights at MarchJune 31,30, 2026.

•Deposits: Total deposit balances increased $676.5$1.3 millionbillion to $54.1 billion at June 30, 2026 as compared to $52.9 billion at March 31, 20262026. as compared to $52.2 billion at December 31, 2025. During the quarter, our directDirect customer deposits increased $955.0$1.1 million,billion which enabledduring the netsecond reductionquarter of2026 $278.5mainly milliondue ofto indirectinflows (brokered)from retail CD offerings and growth in our commercial customer deposits. Direct customer deposit growth was driven by strength in the savings, NOW and money market deposit category primarily as a result of new commercial and online customer deposits. Non-InterestNon-interest bearing deposits also increased $95.5$298.6 million reflecting inflowscontinued fromexpansion bothof relationships with commercial and retailbanking customers during the firstsecond quarter 2026. See the "“Deposits and Other Borrowings"” section for more details.

•Loans: Total loans increased $692.1$1.6 million,billion, or 5.512.9 percent on an annualized basis, to $50.8$52.5 billion at June 30, 2026 from March 31, 2026 from December 31, 2025 mostly due to increases of $466.0$857.2 million and $142.6$638.9 million in commercial and industrial loans and total commercial real estate loans and commercial and industrial loans, respectively. New owner occupied loans continued to drive a disproportionate amount of growth within the commercial real estate loan portfolio during the first quarter 2026 while loanLoan originations from a range of relationship-driven small to midsize clients contributedcontinued to drive the increasegrowth in commercial and industrial loans during the second quarter 2026, while new owner occupied and select multifamily loan originations were the primary contributors to the growth in the commercial real estate loan portfolio at MarchJune 31,30, 2026. Our CRE loan concentration ratio (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) modestly declinedcontinued to decline to 317 percent at June 30, 2026 from 329 percent at March 31, 2026 fromlargely 333due percentto atorganic Decembercapital 31,accretion 2025.and a $200 million increase in (Tier 2) total risk-based capital related to our issuance of subordinated notes during the second quarter 2026. Based on our current loan growth and regulatory capital targets, we expect a continued gradual reduction of the CRE loan concentration ratio over the remaindersecond half of 2026. See further details of our loan activities under the “Loan Portfolio” section below.

•Allowance for Credit Losses for Loans: The ACL for loans totaled $599.8$606.9 million and $596.1$599.8 million at MarchJune 31,30, 2026 and DecemberMarch 31, 2025,2026, respectively, representing 1.181.16 percent and 1.191.18 percent of total loans at each respective date. GivenDuring ourthe currentsecond projectionsquarter 2026, we recorded a provision for loan growth and credit trends within our loan portfolio, we do not anticipate a material change in the ACLlosses for loans of $29.2 million as acompared percentageto of$21.2 totalmillion loansand during$37.8 million for the remainderfirst ofquarter 2026.2026 However,and wesecond canquarter provide2025, no assurance that our actual future ACL for loans required under our CECL methodology will not increase as a percent of total loans due to the uncertain nature of our assumptions or other factors.respectively. See the “Allowance for Credit Losses for Loans"” section for additional information.

•Credit Quality: Net loan charge-offs totaled $22.0 million for the second quarter 2026 as compared to $17.5 million and $37.8 million for the first quarter 2026 as compared to $22.6 million and $41.9 million for the fourth quarter 2025 and firstsecond quarter 2025, respectively. Total accruing past due loans (i.e., loans past due 30 days or more and still accruing interest) decreasedincreased $13.4$52.3 million to $180.2 million, or 0.34 percent of total loans, at June 30, 2026 as compared to $127.9 million, or 0.25 percent of total loans, at March 31, 20262026. asThe comparedincrease was mainly due to $141.3a few larger CRE loans within the 30 to 59 days past due delinquency category. Non-accrual loans totaled $462.6 million, or 0.280.88 percent of total loans, at DecemberJune 31,30, 2025.2026 Non-accrualas loanscompared totaledto $432.6 million, or 0.85 percent of total loans, at March 31, 2026 as compared to $433.9 million, or 0.87 percent of total loans, at December 31, 2025.2026. See the “Non-Performing Assets” section for additional information.

•Liquid Assets: Our liquid assets totaled $5.6 billion at both June 30, 2026 and March 31, 2026, representing 9.49.1 percent ofand interest earning assets, as compared with $6.1 billion, or 10.39.4 percent of interest earning assets at Decembereach 31,respective 2025.period end. We continue to maintain significant access to readily available, diverse funding sources to fulfill both short-term and long-term funding needs. See the “Bank Liquidity” section for additional information.

•Regulatory Capital and Shareholders' Equity: Total shareholders' equity increased $20.7$88.7 million to $7.8$7.9 billion at MarchJune 31,30, 2026 as compared to DecemberMarch 31, 2025.2026. Valley's total risk-based capital, CET1 (common equity Tier 1) capital, Tier 1 capital and Tier 1 leverage capital ratios were 13.77 percent, 10.71 percent, 11.37 percent, and 9.49 percent, respectively, at June 30, 2026 as compared to 13.66 percent, 10.91 percent, 11.60 percent,percent and 9.56 percent, respectively, at March 31, 2026 as compared to 13.77 percent, 10.99 percent, 11.69 percent and 9.63 percent, respectively, at December 31, 2025.2026. During the firstsecond quarter 2026, we repurchased a total of 4.01.5 million shares of our common stock at an average price of $12.95$13.40 under our current stock repurchase plan. Currently, we expect that Valley's CET1 capital ratio will remain atnear the mid to high endmidpoint of the 10.50 to 11.00 percent range previously disclosed in Valley's Annual Report through December 31, 2026. See the "“Capital Adequacy"” section below for more information.

Quarterly Results. Net income for the firstsecond quarter 2026 was $163.9$170.9 million, or $0.28$0.29 per diluted common share, as compared to $106.1$133.2 million, or $0.18$0.22 per diluted common share, for the firstsecond quarter 2025. The $57.8$37.7 million increase in quarterly net income as compared to the same quarter one year ago was mainly due to the following changes:

•a $51.4$54.6 million increase in net interest income mainly driven by lower interest rates on most interest bearing deposit products and higher average loan and investment securities balances for the firstsecond quarter 2026, partially offset by lower yields largely on adjustable-rate loans;

•aan $10.5$11.1 million increase in non-interest income that was mainlylargely drivengenerated by increasesstrong intransactional income from the capital markets income andmarkets, service charges on deposit accounts.accounts, and wealth management and trust fee categories; and

•a $33.3$27.0 million increase in non-interest expense primarily due to increased investments in talent (largely focused in the commercial and consumer banking and technology areas) and transformationenhancements ofin our business operationsmodel and technology,technology transformation efforts, as well as higher tax credit amortization; and

See the “Net Interest Income,” “Non-Interest Income,” “Non-Interest Expense” and “Income Taxes” sections below for more details on the impact of the items above and other infrequent non-core items impacting our firstsecond quarter 2026 results.

U.S. Economic Conditions. During the firstsecond quarter 2026, real GDP increased at an estimated annual rate of 1.21.5 percent as compared to an increase of 0.52.1 percent during the fourthfirst quarter 2025.2026. The decrease from the first quarter 2026 increasewas from the fourth quarter 2025 wasmainly driven by severala factors,decline includingin butgovernment notspending, limitedexports, and gross private domestic investment, partly offset by an increase in consumer spending. Imports increased more in the second quarter than in the first quarter. Inflation increased to consumer spending, decreased imports, and technology related business investment. Overall, the rate of inflation has decreased to 2.74.2 percent in the firstsecond quarter 2026 as compared to 2.82.7 percent for the fourth quarter 2025. While core inflation moderately increased during the first quarter 2026, itprimarily stilldriven cameby inhigher slightlyenergy belowand mostgasoline forecasts.prices associated with ongoing geopolitical tensions.

In MarchJune and July 2026, the FOMC maintained the target range for the federal funds rate at 3.50 - 3.75 percent, unchanged fromsince December 2025,2025. citingHowever, elevatedthe prolonged high level of inflation remains a central focus and ancould uncertainresult economicin outlookfuture relatedmonetary topolicy actions by the conflict in the Middle East. The Committee did not indicate that additional rate cuts are expected in 2026.FOMC.

The 10-year U.S. Treasury note yield ended the firstsecond quarter 2026 at 4.304.42 percent, or 12 basis points higher as compared to the fourthfirst quarter 2025,2026, and the 2-year U.S. Treasury note yield ended the firstsecond quarter 2026 at 3.794.14 percent, or 3235 basis points higher as compared to the fourthfirst quarter 2025.2026.

Total loans and leases for U.S. commercial banks increased 2.22.0 percent in the second quarter 2026 compared to 2.1 percent in the first quarter 2026 compared to 1.6 percent in the fourth quarter 2025.2026. Commercial and industrial loans increased by 3.03.6 percent, while commercial real estate loans increased 0.70.8 percent from the fourthfirst quarter 20252026 to firstsecond quarter 2026. Overall, most banks reported easingtightening of underwriting standards on commercial real estate loans and a tightening of standards on commercial and industrial loans.

We define cumulative deposit beta as the change in our cost of total deposits relative to the change in the average Fed Funds (upper bound) rate. We differentiate between the cumulative deposit beta during the "rate increase cycle," which began in the first quarter of 2022 and ended in the second quarter of 2024, and the cumulative deposit beta during the "rate decrease cycle," which started in the third quarter of 2024. Our cumulative deposit beta in the interest rate increase cycle (between December 31, 2021 and June 30, 2024) was approximately 58 percent. The Federal Reserve started an interest rate decrease cycle during the third quarter 2024. Our cumulative deposit beta in this current interest rate decrease cycle (between June 30, 2024 and MarchJune 31,30, 2026) was 52 percent. Our cumulative deposit beta for the first quarter 2026 was 6751 percent. The deposit beta in the firstsecond quarter 2026 was mainly driven by a full quarter’s impact of the Federal Reserve's rate cuts in October and November 2025 and our ability to broadly reduce costs of interest bearing deposit products coupled with the changes in the mix shift of our deposit balances discussed further below. See the "“Net Interest Income"” section for additional details on the changes in our cost of deposits during the firstsecond quarter 2026.

Actual ending balances for deposits increased $676.5$1.3 millionbillion to $52.9$54.1 billion at June 30, 2026 from March 31, 2026 from December 31, 2025 mainly due to additionalincreases commercialof $1.5 billion and online$298.6 customermillion depositin balancestime withinand non-interest bearing deposits, respectively, partially offset by a $506.1 million decline in the savings, NOW and money market deposit category. Non-interestThe increase in time deposits was largely driven by our targeted retail CD offerings and higher indirect customer CD balances at June 30, 2026. The increase in non-interest bearing deposits increasedwas $95.5mainly milliondue to $12.3continued billiondeposit atinflows from commercial banking customers during the second quarter 2026. The decrease in savings, NOW and money market deposits from March 31, 2026 aswas compared to December 31, 2025 largelymainly driven by depositlower inflowsbrokered from a blend of commercialsweep and retailgovernmental customersaccount duringbalances theat firstJune quarter30, 2026. Total indirect customer deposits (mainly consisting of brokered time and money market deposits) totaled $5.1$5.3 billion and $5.4$5.1 billion at MarchJune 31,30, 2026 and December 31, 2025, respectively. The decrease in indirect customer deposits from December 31, 2025 was mainly related to lower brokered money market deposit balances at March 31, 20262026, andrespectively. increasedDuring inflowsthe fromsecond directquarter customer2026, deposits.we entered into fair value interest rate swap transactions with a combined notional value of $204.3 million that effectively converted a portion of our fixed rate brokered time deposits to variable interest rates through their contractual maturity dates. See Note 12 to the consolidated financial statements for additional information. Non-interest bearing deposits; savings, NOW and money market deposits; and time deposits represented approximately 23 percent, 5553 percent and 2224 percent of total deposits at bothJune 30, 2026 as compared to 23 percent, 55 percent and 22 percent at March 31, 2026 and December 31, 2025.2026.

The following table summarizes CDs included in time deposits in excess of the FDIC insurance limit by maturity at MarchJune 31,30, 2026:

Total estimated uninsured deposits, excluding collateralized government deposits and intercompany deposits (i.e., deposits eliminated in consolidation), totaled approximately $15.0 billion, or 28 percent of total deposits, at both June 30, 2026 and March 31, 2026 as compared to $14.6 billion, or 28 percent of total deposits, at December 31, 2025.2026.

We currently expect our total depositsdeposit to growgrowth for the full year offull-year 2026 to be near the high end of the 5 to 7 percent range previously disclosed in Valley's Annual Report. While we maintained a diversified commercial and consumer deposit base at MarchJune 31,30, 2026, deposit gathering initiatives and our current deposit base could be unexpectedly challenged due to increased market competition, changes in customer behavior, including attractive non-deposit investment alternatives, and other factors. As a result, we cannot guarantee that we will be able to increase or maintain deposit levels at or near those reported at MarchJune 31,30, 2026. Management continuously monitors liquidity and all available funding sources, including non-deposit borrowings discussed below. See the “Liquidity and Cash Requirements” section of this MD&A for additional information.

Average short-term borrowings for the firstsecond quarter 2026 decreasedincreased $22.5 million from the fourth quarter 2025 and decreased $235.8$602.3 million from the first quarter 2025.2026 Theand decreasesincreased $477.6 million from the fourthsecond quarter 20252025. andThe first quarter 2025increases were mainly driven by the maturity and repaymentissuance of new FHLB advances andprimarily used as a declineshort-term infunding averagesource federalfor fundsloan purchased balancesoriginations during the firstsecond quarter 2026.

Average long-term borrowings (including junior subordinated debentures issued to capital trusts which are presented separately on the consolidated statements of financial condition) decreased $115.1$164.7 million and $156.9$461.7 million as compared to the fourthfirst quarter 20252026 and firstsecond quarter 2025, respectively. The decrease from the fourthfirst quarter 20252026 was mainly due to thecontractual maturitymaturities and repaymentrepayments of the FHLB advances.advances The decrease as comparedand, to the first quarter 2025 was primarily driven by a lesser extent, Valley's full early redemption of $215.0$300 million of ourits 3.00 percent fixed-to-floating rate subordinated notes on June 15, 2026, partially offset by Valley's issuance of $500 million of 6.219 percent fixed-to-floating rate subordinated notes in JuneMay 2025.2026.

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 capital markets fees,income, wealth management and trust fees, and net gains on sales of loans. These amounts can vary widely from period to period due to, among other factors, commercial loan customer demand for certain interest rate swap products, brokerage and tax credit investment advisory activities and the amount and timing of residential mortgage loans originated for sale. See the “Non-Interest Income” section below for more details.

Adjusted annualized return on average shareholders' equity is computed by dividing adjusted net income by average shareholders' equity,equity as follows:

ROATCE and adjusted ROATCE are computed by dividing net income and adjusted net income (excluding intangible amortization, net of tax), respectively, by average tangible common shareholders’ equity calculated,calculated as follows:

Net interest income on a tax equivalent basis of $472.8$488.4 million for the second quarter 2026 increased $15.6 million and $54.7 million compared to the first quarter 2026 increased $6.7 million and $51.4 million compared to the fourth quarter 2025 and the firstsecond quarter 2025, respectively, largely resulting from a decline in the cost of average deposits and, to a lesser extent, lower average long-term borrowings and additional interest income from higher average overnight interest bearing cash balances.respectively. Interest income on a tax equivalent basis decreasedincreased $13.0$26.7 million to $804.0$830.7 million for the firstsecond quarter 2026 as compared to the fourthfirst quarter 2025.2026. The decreaseincrease was mostly thedue resultto of(i) twoincreased feweraverage daysloan balances largely driven by growth in commercial and industrial loans and owner occupied commercial real estate loans during the first quarter 2026 and downward repricinghalf of adjustable2026, rate loans, partially offset by the(ii) additional interest income from interestpurchases bearingof cashhigher-yielding balancestaxable investments and (iii) one additional day in the firstsecond quarter 2026. Total interest expense decreasedincreased $19.7$11.2 million to $331.2$342.4 million for the firstsecond quarter 2026 as compared to the fourthfirst quarter 2025.2026. The decreaseincrease was mainly the result of lower(i) costshigher onaverage mosttime interestdeposits bearingand short-term borrowings balances during the second quarter 2026, (ii) the higher cost of certain non-maturity deposit products and short-term borrowings, (iii) the maturity and repaymentcost of higher-costcarrying timeexcess depositssubordinated debt for a portion of the quarter, as well as certain(iv) long-termthe borrowingsaforementioned duringincrease in day count as compared to the first quarter 2026.

Average interest earning assets increased $2.8$3.5 billion to $59.7$61.1 billion for the firstsecond quarter 2026 as compared to the firstsecond quarter 2025 largely due to growth in our loan and investment securities portfolios over the last 12 month period. Compared to the fourthfirst quarter 2025,2026, average interest earning assets increased by $1.0$1.3 billion during the firstsecond quarter 2026. The increase was primarily driven by the commercial loan growth and higher average taxable investments balances, partially offset by lower levels of excess overnight interest bearing cash balances during the firstsecond quarter 2026 supported by funding from solid growth in direct customer deposits.2026.

Average interest bearing liabilities increased $2.1$2.2 billion and $848.6 million to $43.4$44.2 billion for the firstsecond quarter 2026 as compared to the firstsecond andquarter fourth quarters 2025, respectively. These increases were2025 primarily due to higherstrong averagedeposit inflows from commercial customers over the last 12 months within the savings, NOW and money market deposits driven by strong deposit inflows from commercial customers,category, partially offset by lower indirect customer deposit balances. Compared to the first quarter 2026, average interest bearing liabilities increased by $808.1 million during the second quarter 2026, mostly due to increases within time deposit balances and average FHLB advances within both long-deposits and short-term borrowings. See additional information under “Deposits and Other Borrowings” in the Executive Summary section above.

Net interest margin on a tax equivalent basis of 3.20 percent for the second quarter 2026 increased 3 basis points from 3.17 percent for the first quarter 2026 remained unchanged as compared to the fourth quarter 2025 and increased 2119 basis points from 2.963.01 percent for the firstsecond quarter 2025. The yield on average interest earning assets decreasedincreased by 175 basis points to 5.395.44 percent on a linked quarter basis largely due to downward repricing of our adjustable rate loans and the lower yield on overnight interest bearing cash balances, partially offset by the higher level of yields on new loansloan originations and investment securities purchased during the firstsecond quarter 2026. The overall cost of average interest bearing liabilities decreasedincreased by 244 basis points to 3.063.10 percent for the firstsecond quarter 2026 as compared to the fourthfirst quarter 20252026 largely due to disciplinedthe managementhigher cost of ournon-maturity depositdeposits pricingand inshort-term borrowings, as well as carrying excess subordinated debt for a portion of the current market environment and rotation towards lower-cost core customer deposits.quarter. Our cost of total average deposits was 2.28 percent for the second quarter 2026 as compared to 2.27 percent and 2.67 percent for the first quarter 2026 as compared to 2.45 percent and 2.65 percent for the fourth quarter 2025 and firstsecond quarter 2025, respectively.

We currently anticipate net interest income growth for the full year of 2026 to be at the high end of the 11 to 13 percent range previously disclosed in Valley's Annual Report. The net interest margin is expected to exceed 3.30 percent by the end of 2026 as we continue to benefit from loan growth and repricing. While we are optimistic about the projected net interest income for the remainder of 2026, our forecasts include several uncertain assumptions, including projected loan growth and our ability to decrease funding costs over the next ninesix months. Therefore, we cannot provide any assurances that our future net interest income or margin will meet our current estimates or remain near the levels reported for the firstsecond quarter 2026. For a detailed discussion on the risks related to interest rates please refer to Part I, Item 1A. “Risk Factors” in Valley's Annual Report.

The following table reflects the components of net interest income for the three months ended MarchJune 31,30, 2026, December 31, 2025 and March 31, 2026 and June 30, 2025:

_____________ (1)Interest income is presented on a tax equivalent basis using a 21 percent federal tax rate.

Non-interest income represented 12.713.1 percent and 12.212.6 percent of total net interest income plus non-interest income for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 12.9 percent and 12.4 percent of total net interest income plus non-interest income for the six months ended June 30, 2026 and 2025, respectively. For the three and six months ended MarchJune 31,30, 2026, non-interest income increased $10.5$11.1 million and $21.6 million, respectively, as compared to the firstsame quarterperiods in 2025. See further details below.

The following table presents the components of non-interest income for the three and six months ended MarchJune 31,30, 2026 and 2025:

CapitalWealth marketsmanagement and trust fees income increased $3.4$3.6 million and $4.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the firstsame quarterperiods in 2025. The increaseincreases wasin mostlyboth dueperiods towere feemainly incomedriven growthby higher asset management fees and increased brokerage commissions from higherstronger volumestrading ofvolume. interestBrokerage ratefees swapincreased transactions related to commercial lending activities. Swap fee income totaled $6.4$1.6 million and $3.0$3.3 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the firstsame quarterperiods in 2025.

Service charges on deposit accounts increased $5.5$4.0 million and $9.5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the firstsame quarterperiods in 2025 mainly due to additional treasury management service related fees generated from commercial deposit accounts.

Non-interest expense increased $33.3$27.0 million and $60.3 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the firstsame quarterperiods ofin 2025 mainly due to increases in salary and employee benefits expense, professional and legal fees, amortization of tax credit investments and net occupancy expense. See further details below.

The following table presents the components of non-interest expense for the three and six months ended MarchJune 31,30, 2026 and 2025:

Salary and employee benefits expense increased $13.1$5.0 million and $18.1 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The increase for the three months ended MarchJune 31,30, 2026 aswas compared to the first quarter 2025 largelymainly due to strategic investmentsincreases in experiencedseverance, commercialstock-based bankerscompensation, and specializedmedical technologyinsurance resourcesexpenses. andThe increasedincrease for the six months ended June 30, 2026 was mostly due to increases in severance, cash incentive compensationand stock-based compensation, and medical insurance relatedexpenses, expenses.as well as annual salary increases. Severance expense related to workforce reductions totaled $5.7$2.5 million threeand months$8.2 ended March 31, 2026. There was no severance expense related to workforce reductionsmillion for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to $800 thousand for both the three and six months ended June 30, 2025.

Net occupancy expense increased $1.3$1.7 million and $3.0 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025 mainly due to incrementally higher cleaningproperty and maintenance,tax, building repairs and utilities expenses, partially offset by lower rent expense.