Valley National Bancorp : 1Q26 Basel III Regulatory Capital Disclosures Report

About this update from Valley National Bancorp

VALLEY NATIONAL BANCORP BASEL III REGULATORY CAPITAL DISCLOSURES REPORT March 31, 2026 800-522-4100 • Valley.com © 2026 Valley National Bank. Member FDIC. All Rights Reserved. For Internal Use Only. ‌CONTENTS Contents 2 Introduction 3 Background 3 Forward-Looking Statements 3 Scope of Appl ication 4 General 4 Basis of Consolidation 4 Restrictions on the Transfer of Funds or Total Capital 4 Capital Requirements 4 Capital Str ucture 4 Summary of Capital 4 Regulatory Capital Tiers 5 Capital Ade quacy 5 Internal Capital Adequacy Process 5 Components of Risk-Weighted Assets 6 Capital Conservation Buffer and Capital Ratios 6 Capital Conservation Buffer 6 Regulatory Capital Ratios 7 Credit Risk: General Discl osures 7 Credit Risk Management 7 Credit Risk Exposures 8 General Disclosures for Counterparty Credit Risk-Related Exposures 12 Counterparty Credit Risk Management 12 Derivative Financial Instruments 14 Credit Risk Mitigation 15 General Credit Risk Mitigation 15 Credit Concentrations 15 Securitization 16 Equities Not Subject to Market Risk Rule 17 Equity Risk 17 Book Value and Fair Value of Equity Exposures Not Subject to the Market Risk Rule 17 Capital Requirements of Equity Investment Exposures by Risk-Weighting 18 Interest Rate Risk for Non-Trading Activities 18 Appendix 22 ‌INTRODUCTION ‌Background Valley National Bancorp, headquartered in Morristown, New Jersey, is a New Jersey corporation organized in 1983 and is registered as a bank holding company and a financial holding company with the Board of Governors of the Federal Reserve System under the Bank Holding Company Act of 1956, as amended (Holding Company Act). As of March 31, 2026, Valley had consolidated total assets of $64.5 billion, total net loans of $50.2 billion, total deposits of $52.9 billion and total shareholders' equity of $7.8 billion. Valley's principal subsidiary, Valley National Bank (commonly referred to as the "Bank" in this Report), has been chartered as a national banking association under the laws of the United States since 1927. Valley delivers a full range of consumer, commercial, and wealth management solutions designed to support everything from homeownership and business growth to long-term financial planning. Big enough to support complex financial needs and small enough to stay deeply connected, Valley is grounded in a relationship-led approach focused on understanding people first. That same relationship-led approach guides Valley's commitment to community investment and responsible corporate citizenship. The Bank also provides convenient account access to customers through a number of account management services, including access to more than 200 offices nationwide and serves clients across New Jersey, New York, Florida, Alabama, California, Illinois, Pennsylvania and Arizona; 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. In addition to the Bank, Valley's consolidated subsidiaries include, but are not limited to: an insurance agency offering property and casualty, life and health insurance; an asset management adviser that is a registered investment adviser with the SEC; a registered securities broker-dealer with the SEC and member of FINRA, which is also licensed as an insurance agency to provide life and health insurance; a 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. This document, along with Valley's public filings, present the Regulatory Capital Disclosures in compliance with Basel III 1 as set forth in 12 CFR 217.63 - Disclosures (Pillar III) by institutions regulated by the Federal Reserve Board (Federal Reserve). The information presented in this document should be read jointly with Valley's Annual Report, Quarterly Report for the quarter ending March 31, 2026 and the FR Y-9C for March 31, 2026. ‌Forward-Looking Statements The foregoing 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 as "intend," "should," "expect," "believe," "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 by such forward-looking statements include but are not limited to those risk factors disclosed under the "Risk Factors" section in Part I, Item 1A on Valley's Annual Report. 1 Basel III or "the Capital Rule" ‌SCOPE OF APPLICATION ‌General The Capital Rule applies to Valley, the Bank and all other entities in which Valley has controlling interest. Valley's consolidated subsidiaries include the Bank, as well as subsidiaries with the following primary functions: insurance agencies offering property and casualty, life and health insurance; an asset management adviser that is a registered investment adviser with the SEC; a registered securities broker-dealer with the SEC and member of the 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. Valley Financial Management, Inc. and Valley Insurance Services, Inc. are subsidiaries for which the total capital requirement is deducted. ‌Basis of Consolidation The consolidated financial statements of Valley include the accounts of the Bank and all other entities in which Valley has a controlling financial interest. The accounting and reporting policies of Valley conform to GAAP and general practices within the financial services industry. In accordance with applicable accounting standards, Valley does not consolidate statutory trusts established for the sole purpose of issuing trust preferred securities and related trust common securities. ‌Restrictions on the Transfer of Funds or Total Capital This section does not apply to Valley, as it does not have restrictions on the transfer of funds or capital as of March 31, 2026. ‌Capital Requirements Regulatory capital ratios for Valley and the Bank were above the regulatory requirement ratios under the Capital Rule at March 31, 2026. For more information see Note 16 to the consolidated financial statements of Valley's Annual Report and the "Capital Adequacy" section in Part I, Item 2 of its Quarterly Report for the quarter ended March 31, 2026. ‌CAPITAL STRUCTURE ‌Summary of Capital Valley and the Bank are subject to the regulatory capital requirements administered by the Federal Reserve Bank and the OCC. Valley manages its capital to meet its internal capital targets with the objective of maintaining capital levels that exceed the regulatory requirements and are sufficient to support the Bank's business activities, growth objectives, and risk appetite. Valley's capital structure includes the following elements: (1) Common Equity Tier 1 (CET1) capital, which primarily includes common shareholders' equity, subject to certain regulatory adjustments and deductions; (2) Additional Tier 1 capital, which includes perpetual preferred stock and certain other qualifying capital instruments; and (3) Tier 2 capital, includes primarily qualifying subordinated debt and qualifying ACL, as well as, among other things, certain trust preferred securities. ‌Regulatory Capital Tiers The following table presents Valley's and Valley National Bank's total risk-based capital and the components of capital used in calculating CET1 capital, Additional Tier 1 capital, and Tier 2 capital at March 31, 2026. Table 1: Regulatory Capital Components (in thousands) Regulatory Capital Components Valley Valley National Bank Common Equity Tier 1 Capital Common stock and surplus (net of treasury stock) $ 5,568,653 $ 5,892,422 Retained earnings 2,003,048 2,436,559 Accumulated other comprehensive loss, net (97,603) (97,156) Regulatory adjustments and deductions made to CET1 (1,868,840) (1,861,640) Total Common Equity Tier 1 Capital 5,605,258 6,370,185 Additional Tier 1 Capital Preferred Stock 354,345 - Total Additional Tier 1 Capital (103) - Tier 1 Capital 5,959,500 6,370,185 Total Tier 2 Capital Qualifying subordinated debt 450,000 - Qualifying allowance for loan and lease losses 550,114 549,835 Non-qualifying capital instruments subject to phase out from Tier 2 59,000 - Capital Total Risk-based Capital $ 7,018,614 $ 6,920,020 ‌CAPITAL ADEQUACY ‌Internal Capital Adequacy Process Valley exercises prudent capital management to maintain capital levels that adequately support its strategic initiatives and business activities. Valley's Board performs its risk oversight function through several standing committees, including the Board Risk Committee. The Board Risk Committee supports the Board's oversight of management's enterprise-wide risk management framework and risk culture, which are each intended to align with Valley's strategic plan. The Board Risk Committee also determines the appropriateness of Valley's capital levels in consideration of its business activities, growth objectives, and risk appetite. Management utilizes the enterprise-wide risk management framework to holistically manage and monitor risks across the organization and to aggregate and manage the risk appetite approved by the Board. The Board Risk Committee also recommends to the Board acceptable risk tolerances related to strategic, credit, interest rate, price, liquidity, compliance, operational (including cybersecurity risk), and reputation risks, oversees risk management within those tolerances and monitors compliance with applicable laws and regulations. With guidance from and oversight by the Board Risk Committee, management continually refines and enhances its risk management policies, procedures, and monitoring programs to adapt to changing risks. While Valley is no longer required to publish Company-run annual stress tests under the Dodd-Frank Act, it continues to internally run stress tests of its capital position that are subject to review by Valley's primary regulators in efforts to appropriately monitor capital adequacy under stressful environments. Further, Valley makes every effort to ensure that its capital ratios will remain in excess of required minimums and at levels that adequately protect Valley during times of potential stress. ‌Components of Risk-Weighted Assets The following table presents Valley's standardized approach risk-weighted assets as of March 31, 2026, using the categorization based on the standardized definitions and per the Pillar III requirements. Currently, Valley has no risk-weighted assets exposure for supranational entities and multilateral development banks, default fund contributions, unsettled transactions, and securitization exposures. Table 2: Standardized Approach Risk-Weighted Assets (in thousands) Standardized Approach Risk-Weighted Assets Valley Exposures to sovereign entities $ 685,089 Exposures to depository institutions, foreign banks, and credit unions 291,905 Exposures to public sector entities 149,665 Corporate exposures 34,533,091 Residential mortgage exposures 3,825,845 Statutory multifamily mortgages and pre-sold construction loans 6,476,276 High volatility commercial real estate loans 24,545 Past due loans 578,153 Other assets 4,533,447 Securitization exposures 196,926 Equity exposures 67,949 Total Risk-Weighted Assets $ 51,362,891 ‌CAPITAL CONSERVATION BUFFER AND CAPITAL RATIOS ‌Capital Conservation Buffer The Basel III rules require Valley and the Bank to have a minimum Capital Conservation Buffer (CCB) of 2.5% in addition to the minimum required risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of (i) CET1 to risk-weighted assets, (ii) Tier 1 capital to risk-weighted assets or (iii) Total capital to risk-weighted assets above the respective minimum but below the capital conservation buffer will face constraints on dividends, equity repurchases and discretionary bonus payments to executive officers based on the amount of the shortfall. Basel III also requires deductions from and adjustments to its various capital components. The CCB is calculated as the lowest of the (i) CET1 ratio less the CET1 stated minimum ratio requirement, (ii) Tier 1 ratio less the Tier 1 stated minimum ratio requirement, and (iii) Total capital ratio less the Total capital stated minimum ratio requirement. Valley and the Bank both surpass the CCB requirements. Valley's capital ratios were all above the minimum levels required to be considered a "well-capitalized" financial institution as of March 31, 2026, under the "prompt corrective action" regulations. For reference see Note 17 to the consolidated financial statements of Valley's Annual Report and the "Capital Adequacy" section in Part I, Item 2 of to its Quarterly Report for the quarter ended March 31, 2026. The maximum dollar amount that a banking organization can pay in the form of discretionary bonus payments or capital distributions during the current quarter is equal to the maximum payout ratio multiplied by the banking organization's eligible retained income. Eligible retained income is defined for Basel III as the greater of a banking organization's net income (as reported in the banking organization's quarterly regulatory reports) for the four quarters preceding the current quarter, net of any capital distributions and associated tax effects not already reflected in net income or the average of the most recent four quarters' net income. Valley had $378 million of eligible retained income as of March 31, 2026. Valley is not subject to any limitations on its capital distributions or discretionary bonus payments to executive officers, as its capital levels exceeded defined minimums, inclusive of the CCB, at March 31, 2026. ‌Regulatory Capital Ratios The following table presents the regulatory capital ratios and related capital requirements for Valley and the Bank at March 31, 2026. Table 3: Regulatory Capital Ratios Actual Ratio Minimum Capital Ratio Capital Conservation Buffer Minimum Capital Conservation Buffer Valley CET1 Capital 10.91% 7.00% 6.41% 2.50% Tier 1 Risk-based Capital 11.60 8.50 5.60 * 2.50 Total Risk-based Capital 13.66 10.50 5.66 2.50 Valley National Bank CET1 Capital 12.42% 7.00% 7.92% 2.50% Tier 1 Risk-based Capital 12.42 8.50 6.42 2.50 Total Risk-based Capital 13.49 10.50 5.49 * 2.50 * The CCBs for Valley and the Bank are 5.60% and 5.49%, respectively, at March 31, 2026. ‌CREDIT RISK: GENERAL DISCLOSURES ‌Credit Risk Management For all of its loan types, Valley adheres to a credit policy designed to minimize credit risk while generating the maximum income given the level of risk appetite. Management reviews and approves these policies and procedures on a regular basis with subsequent approval by the Board annually. Credit authority relating to a significant dollar percentage of the overall portfolio is centralized and controlled by the Credit Risk Management Division and by the Credit Committee. Loan portfolio diversification is an important factor utilized by Valley to manage its risk across business sectors and through cyclical economic circumstances. Additionally, Valley does not accept crypto assets as loan collateral for any of its loan portfolio classes Valley's historical and current loan underwriting practice prohibits the origination of payment option adjustable residential mortgages which allow for negative interest amortization and subprime loans. Virtually all of our residential mortgage loan originations in recent years have conformed to rules requiring documentation of income, assets sufficient to close the transactions and debt to income ratios that support the borrower's ability to repay under the loan's proposed terms and conditions. These rules are applied to all loans originated for retention in our portfolio or for sale in the secondary market. See Item 1 "Business" and Note 4 to the consolidated financial statements of Valley's Annual Report and Note 7 to its Quarterly Report for the quarter ended March 31, 2026, respectively, for additional information. The ACL for loans includes the allowance for loan losses and the reserve for unfunded credit commitments. Under CECL, our methodology to establish the allowance for loan losses has two basic components: (i) a collective reserve component for estimated expected credit losses for pools of loans that share common risk characteristics and (ii) an individually evaluated reserve component for loans that do not share risk characteristics, consisting of collateral dependent loans. Valley also maintains a separate allowance for unfunded credit commitments mainly consisting of undisbursed non-cancellable lines of credit, new loan commitments and commercial standby letters of credit. Valley estimates the collective ACL using a current expected credit losses methodology which is based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the loan balances. In estimating the component of the allowance on a collective basis, we use a transition matrix model which calculates an expected life of loan loss percentage for each loan pool by using probability of default and loss given default metrics. The probability of default and loss given default metrics are adjusted using a scaling factor to incorporate a full economic cycle. The expected life of loan loss percentages are determined by analyzing the migration of loans within the commercial and industrial loan categories from performing to loss by credit quality rating or delinquency categories using historical life-of-loan data for each loan portfolio pool, and by assessing the severity of loss based on the aggregate net lifetime losses incurred. The expected credit losses based on loss history are adjusted for qualitative factors. Among other things, these adjustments include and account for differences in: (i) the impact of the reasonable and supportable economic forecast, relative probability weightings and economic variables under each scenario and reversion period, (ii) other asset specific risks to the extent that they do not exist in the historical loss information, and (iii) net expected recoveries of charged-off loan balances. These adjustments are based on qualitative factors not reflected in the transition matrix but are likely to impact the measurement of estimated credit losses. The expected lifetime loss rate is the life of loan loss percentage from the transition matrix model plus the impact of the adjustments for qualitative factors. The expected credit losses are the product of multiplying the model's expected lifetime loss rate by the exposure at default at period end on an undiscounted basis. For further discussion regarding CECL methodology and information regarding Valley's policy for determining past due or delinquency status, placing loans on non-accrual, returning loans to accrual status, and charging-off uncollectible amounts, refer to "Allowance for Credit Losses for Loans" section in Note 1 to the consolidated financial statements of Valley's Annual Report and the "Allowance for Credit Losses for Loans" section in Part I, Item 2 to its Quarterly Report for the quarter ended March 31, 2026. ‌Credit Risk Exposures The following tables provide the exposure information for the credit portfolios including on- and off-balance sheet exposures, debt securities, and derivatives as of March 31, 2026. On-balance sheet exposures include the spot exposure as of March 31, 2026, and the weekly average for the first quarter 2026 exposure amount. Table 4: On-Balance Sheet Credit Risk Exposures (in thousands) On-Balance Sheet Exposures Type Total Average Commercial and industrial $ 11,104,079 $ 11,015,736 Commercial real estate 27,224,590 26,898,522 Construction 2,494,137 2,470,225 Residential Mortgage 5,871,547 5,850,295 Consumer 4,145,694 4,030,605 Total on-balance sheet $ 50,840,047 $ 50,265,383 Less: Loans held for sale 11,227 16,413 Total loan portfolio $ 50,828,820 $ 50,248,970 Table 5: Off-Balance Sheet, Investment Securities, and Derivatives Credit Risk Exposures Exposures (in thousands) Total Total on-balance sheet $ 50,840,047 Commitments under commercial loans and lines of credit 11,601,424 Home equity and other revolving lines of credit 2,158,595 Standby letters of credit 561,582 Outstanding residential mortgage loan commitments 146,304 Commitments under unused lines of credit-credit card 155,594 Commitments to sell loans 17,748 Commercial letters of credit 18,606 Total off-balance sheet 14,659,853 Total investment securities 7,860,708 Derivatives 633,155 Total credit risk exposure $ 73,993,763 The following table presents the distribution of credit exposure by geography as of March 31, 2026. For the tables below, geography is considered as the location of the collateral for exposures collateralized by real estate. Table 6: Credit Exposures by Geography State Commercial and Industrial Commercial Real Estate Residential Mortgage (in thousands) Consumer Total New York $ 2,660,229 $ 9,585,141 $ 1,586,894 $ 1,186,247 $ 15,018,511 Florida 3,194,597 8,181,104 1,555,318 686,667 13,617,686 New Jersey 2,272,725 5,735,619 1,946,694 1,336,229 11,291,267 California 541,089 1,072,141 92,564 38,178 1,743,972 Pennsylvania 122,933 1,160,978 47,274 344,838 1,676,023 Illinois 510,656 312,443 6,903 13,658 843,660 Alabama 97,362 400,835 34,368 112,198 644,763 Other 1,704,488 3,270,466 601,532 427,679 6,004,165 Total 11,104,079 29,718,727 5,871,547 4,145,694 50,840,047 Less: Loans held for sale - 8,750 2,477 - 11,227 Total loan portfolio $ 11,104,079 $ 29,709,977 $ 5,869,070 $ 4,145,694 $ 50,828,820 The following table presents the distribution of credit exposure by industry as of March 31, 2026. Table 7: Credit Exposure by Industry ($ in thousands) Total Percent of Total Commercial and industrial 11,104,079 22% Commercial real estate: Non owner-occupied 11,503,874 23% Multifamily 8,588,462 17% Owner occupied 7,132,254 14% Total 27,224,590 54% Construction 2,485,387 5% Total commercial real estate loans 29,709,977 59% Residential mortgage 5,869,070 12% Consumer Home equity 701,136 1% Automobile 2,198,102 4% Other consumer 1,246,456 2% Total consumer loans 4,145,694 7% Total loan portfolio $ 50,828,820 100% The following table presents the allowance reconciliation by exposure type from December 31, Table 8: Allowance Reconciliation 2025 to March 31, (in thousands) 2026. Commercial and Industrial Commercial Real Estate Residential Consumer Total Beginning at December 31, 2025 $ 180,865 $ 327,426 $ 53,529 $ 21,580 $ 583,400 Loans charged-off (2,782) (13,756) - (3,263) (19,801) Charged-off loans recovered 1,398 347 83 429 2,257 Net (charge-offs) recoveries (1,384) (13,409) 83 (2,834) (17,544) Provision (credit) for credit losses 6,662 10,776 (1,912) 3,118 18,644 Balance at March 31, 2026 $ 186,143 $ 324,793 $ 51,700 $ 21,864 $ 584,500 Mortgage for loans Our loan portfolio, totaling $50.8 billion at March 31, 2026, had net loan charge-offs totaling $17.5 million for the first quarter 2026 as compared to $22.6 million for the fourth quarter 2025. Gross loan charge-offs totaled $19.8 million for the first quarter 2026 and were mostly driven by the partial charge-offs of non-performing loan relationships within the commercial real estate loan category. The allowance for credit losses for loans, comprised of our allowance for loan losses and unfunded credit commitments, as a percentage of total loans was 1.18 percent at March 31, 2026 and 1.19 percent at December 31, 2025. For the first quarter 2026, the provision for credit losses for loans totaled $21.2 million as compared to $20.0 million for the fourth quarter 2025. The first quarter 2026 provision was mainly impacted by (i) increases in the economic forecast and non-economic qualitative components of our reserve and (ii) commercial loan growth, partially offset by (iii) lower quantitative reserves in certain loan categories at March 31, 2026.

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