About Valley National Bancorp

Valley National Bancorp operates as the bank holding company for Valley National Bank that provides various banking services. The company offers a full suite of national and regional banking solutions through various commercial, private banking, retail, insurance and wealth management financial services products. The company provides personalized service and customized solutions to assist its customers with their financial service needs. The company’s solutions include, but are not limited to, traditional consumer and commercial deposit and lending products, commercial real estate financing, asset-based loans, small business loans, equipment financing, insurance and wealth management solutions, and personal financing solutions, such as residential mortgages, home equity loans and automobile financing. The company also offers niche financial services, including loan and deposit products for homeowners associations, insurance premium financing, cannabis-related business banking and venture banking, which it offers nationally. The company also provides convenient account access to customers through a number of account management services, including access to more than 200 branch locations across New Jersey, New York, Florida, Alabama, California and Illinois; online, mobile and telephone banking; drive-in and night deposit services; ATMs; remote deposit capture; and safe deposit facilities. In addition, certain international banking services are available to customers, including standby letters of credit, documentary letters of credit and related products, and certain ancillary services, such as foreign exchange transactions, documentary collections, and foreign wire transfers. The company’s consolidated subsidiaries include the bank, as well as subsidiaries with the following primary functions: an insurance agency offering property and casualty, life and health insurance; asset management advisers that are registered investment advisers with the Securities and Exchange Commission (SEC); registered securities broker-dealers with the SEC and members of the Financial Industry Regulatory Authority (FINRA); a title insurance agency in New York which also provides services in New Jersey; an advisory firm specializing in the investment and management of tax credits; and a subsidiary which specializes in health care equipment lending and other commercial equipment leases. Acquisitions Bank Leumi Le-Israel Corporation: On April 1, 2022, the company completed its acquisition of Bank Leumi Le-Israel Corporation, the U.S. subsidiary of Bank Leumi Le-Israel B.M., and parent company of Bank Leumi USA, collectively referred to as Bank Leumi USA. Bank Leumi USA maintained its headquarters in New York City with commercial banking offices in Chicago, Los Angeles, Palo Alto, and Aventura, Florida. Segments The company operates through three segments: Commercial Banking, Consumer Banking and Treasury and Corporate Other. Commercial Banking Commercial and Industrial Loans: The company makes commercial loans to small and middle market businesses most often located in New Jersey, New York, and Florida, as well as lending on a national basis within its specialty lines of business. A significant proportion of the company’s commercial and industrial loan portfolio is granted to long-standing customers of proven ability, strong repayment performance, and high character. The company’s loan decisions include consideration of a borrower’s willingness to repay debts, collateral coverage, standing in the community and other forms of support. Strong consideration is given to long-term existing customers that have maintained a favorable relationship with the bank. Whenever possible, the company obtains the personal guarantee of the borrower’s principals to mitigate the risk. Unsecured loans, when made, are generally granted to the bank’s most creditworthy borrowers. In addition, the company provides financing to the health care and industrial equipment leasing market through its leasing subsidiary, Highland Capital Corp. Commercial Real Estate Loans: The company originates commercial real estate loans that are secured by various diversified property types across the New York metropolitan area (New Jersey, New York and Pennsylvania), Florida and its other primary market footprints. Property types in this portfolio range from multi-family residential properties to non-owner occupied commercial, industrial/ warehouse and retail. Loans are generally written on an adjustable basis with rates tied to a specifically identified market rate index. Commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans but generally they involve larger principal balances and longer repayment periods as compared to commercial and industrial loans. Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real property. Repayment of most loans is dependent upon the cash flow generated from the property securing the loan or the business that occupies the property. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy and accordingly, conservative loan to value ratios are required at origination, as well as stress tested to evaluate the impact of market changes relating to key underwriting elements. The properties securing the commercial real estate portfolio represent diverse types, with most properties located within the company’s primary markets. With respect to loans to developers and builders, the company originates and manages construction loans structured on either a revolving or a non-revolving basis, depending on the nature of the underlying development project. The company’s construction loans totaling approximately $3.7 billion at December 31, 2022 are generally secured by the real estate to be developed and may also be secured by additional real estate to mitigate the risk. During 2022, the company acquired $834 million of construction loans from Bank Leumi USA. Within its construction portfolio, the company has a diverse mix of both residential (for sale and rental) and commercial development projects. Non-revolving construction loans often involve the disbursement of substantially all committed funds with repayment substantially dependent on the successful completion and sale, or lease, of the project. Sources of repayment for these types of loans may be from pre-committed permanent loans from other lenders, sales of developed property, or an interim loan commitment from the company until permanent financing is obtained elsewhere. Revolving construction loans (generally relating to single-family residential construction) are controlled with loan advances dependent upon the presale of housing units financed. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Consumer Banking Residential Mortgage Loans: The company’s residential mortgage loans include fixed and variable interest rate loans located mostly in New Jersey, New York and Florida. The company’s ability to be repaid on such loans is closely linked to the economic and real estate market conditions in its lending markets. The company also makes mortgage loans secured by homes beyond this primary geographic area; however, lending outside this primary area is generally made in support of existing customer relationships, as well as targeted purchases of loans guaranteed by third parties. Mortgage loan originations are based on underwriting standards that generally comply with Fannie Mae and/or Freddie Mac requirements. Appraisals and valuations of real estate collateral are contracted through an approved appraisal management company. The appraisal management company adheres to all regulatory requirements. The company’s appraisal management policy and procedure is in accordance with regulatory requirements and guidance issued by the bank’s primary regulator. Credit scoring, using FICO and other proprietary, credit scoring models is employed in the ultimate, judgmental credit decision by the company’s underwriting staff. The company originated first mortgages include both fixed rate and adjustable rate mortgage (ARM) products with 10-year to 30-year maturities. The adjustable rate loans have a fixed-rate, fixed payment, introductory period of 5 to 10 years that is selected by the borrower. Additionally, The company originates jumbo residential mortgage loans, which are mostly fixed-rate with 30-year maturities. The company services certain residential mortgage portfolios, and it is compensated for loan administrative services performed for mortgage servicing rights related primarily to loans originated and sold by it. Other Consumer Loans: The company’s other consumer loan portfolio is primarily consisted of direct and indirect automobile loans, loans secured by the cash surrender value of life insurance, home equity loans and lines of credit, and to a lesser extent, secured and unsecured other consumer loans (including credit card loans). The company is an auto lender in New Jersey, New York, Pennsylvania, Florida, Connecticut, Delaware and Alabama offering indirect auto loans secured by either new or used automobiles. Automobile originations (including light truck and sport utility vehicles) are largely produced via indirect channels, originated through approved automobile dealers. The company’s indirect auto lending model in Florida and Alabama uses New Jersey based underwriting and loan servicing platform. Home equity lending consists of both fixed and variable interest rate products mainly to provide home equity loans to the company’s residential mortgage customers or take a secondary position to another lender’s first lien position within the footprint of its primary lending territories. The company generally will not exceed a combined (i.e., first and second mortgage) loan-to-value ratio of 80 percent when originating a home equity loan. Other consumer loans include direct consumer term loans, both secured and unsecured, but are largely consisted of personal lines of credit secured by cash surrender value of life insurance. The product is mainly originated through the company’s retail branch network and third party financial advisors. Wealth Management: The company’s Wealth Management and Insurance Services Division provides asset management advisory, brokerage, trust, commercial, personal and title insurance, and tax credit advisory services. Asset management advisory services include investment services for individuals and small to medium sized businesses, trusts and custom-tailored investment strategies designed for various types of retirement plans. The company’s brokerage services mainly facilitate the buying and selling of registered securities for banking clients. Trust services include living and testamentary trusts, investment management, custodial and escrow services, and estate administration primarily to individuals. Tax credit advisory services include sourcing, syndication, and structuring federal and state tax credits for commercial customers and development projects. Treasury and Corporate Other Although the company is primarily focused on its lending and wealth management services, a large portion of its income is generated through investments in various types of securities. Treasury and Corporate Other largely consists of the Treasury managed held to maturity and available for sale debt securities portfolios mainly utilized in the liquidity management needs of its lending segments and income and expense items resulting from support functions not directly attributable to a specific segment. Investment Securities Portfolio As of December 31, 2022, the company’s investment securities portfolio consisted of equity and debt securities, with the debt securities classified as either trading, available for sale or held to maturity. The equity securities consisted of two publicly traded mutual funds, CRA investments and several other equity investments the company has made in companies that develop new financial technologies and in a partnership that invests in such companies. The company’s CRA and other equity investments are a mixture of both publicly traded and privately held entities. The company’s trading debt securities portfolio consists of investment grade municipal bonds and U.S. Treasury securities. The available for sale and held to maturity debt securities portfolios, which consists of the majority securities the company owns include the U.S. Treasury securities, U.S. government agency securities, tax-exempt and taxable issuances of state and political subdivisions, residential mortgage-backed securities, single-issuer trust preferred securities principally issued by bank holding companies, and high quality corporate bonds. Among other securities, its available for sale debt securities include securities such as bank issued, corporate, and municipal special revenue bonds which may pose a higher risk of future impairment charges to it as a result of the uncertain economic environment and its potential negative effect on the future performance of the security issuers. Deposits The company’s deposits include non-interest bearing deposits; savings, NOW, and money market accounts; and time deposits. Tradenames The company’s trade names include ‘Valley Bank’ and ‘Valley’. Supervision and Regulation The company is registered as a bank holding company with the Board of Governors of the Federal Reserve System (FRB) under the Bank Holding Company Act of 1956, as amended (Holding Company Act). Acquisitions through the bank require approval of the Office of the Comptroller of the Currency (OCC). The bank is subject to the supervision of, and to regular examination by, the OCC. The bank’s authority to extend credit to its directors, executive officers and 10 percent shareholders, as well as to entities controlled by such persons, is governed by the requirements of the National Bank Act, Sarbanes-Oxley Act and Regulation O of the FRB thereunder. Section 22 of the Federal Reserve Act prohibits the bank from paying to a director, officer, attorney or employee a rate on deposits that is greater than the rate paid to other depositors on similar deposits with the bank. Regulation W governs and limits transactions between the bank and the company. The bank received an overall ‘outstanding’ the Community Reinvestment Act rating in its recent examination. The bank is supervised by the Consumer Financial Protection Bureau for consumer protection purposes. The bank is subject to federal consumer protection statutes and regulations promulgated under those laws, including the Truth-In-Lending Act and Regulation Z, governing disclosures of credit terms to consumer borrowers; the Home Mortgage Disclosure Act and Regulation C, requiring financial institutions to provide certain information about home mortgage and refinanced loans; the Equal Credit Opportunity Act and Regulation B, prohibiting discrimination on the basis of race, creed, or other prohibited factors in extending credit; the Fair Credit Reporting Act and Regulation V, governing the provision of consumer information to credit reporting agencies and the use of consumer information; and the Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies. The bank’s deposit operations are also subject to various federal statutes and regulations, including the Truth in Savings Act and Regulation DD, which requires disclosure of deposit terms to consumers; Regulation CC, which relates to the availability of deposit funds to consumers; the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and the Electronic Funds Transfer Act and Regulation E, governing automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. The bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation. History Valley National Bancorp was founded in 1927. The company was incorporated in 1927.