Valley National Bancorp : 4Q25 Basel III Regulatory Capital Disclosures Report

About this update from Valley National Bancorp

VALLEY NATIONAL BANCORP BASEL III REGULATORY CAPITAL DISCLOSURES REPORT December 31, 2025 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 Application 4 General 4 Basis of Consolidation 4 Restrictions on the Transfer of Funds or Total Capital 4 Capital Requirements 4 Capital Structure 4 Summary of Capital 4 Regulatory Capital Tiers 5 Capital Adequacy 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 Disclosures 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 13 Credit Risk Mitigation 14 General Credit Risk Mitigation 14 Credit Concentrations 14 Securitization 16 Equities Not Subject to Market Risk Rule 16 Equity Risk 16 Book Value and Fair Value of Equity Exposures Not Subject to the Market Risk Rule 16 Capital Requirements of Equity Investment Exposures by Risk-Weighting 17 Interest Rate Risk for Non-Trading Activities 17 Appendix 20 ‌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 December 31, 2025, Valley had consolidated total assets of $64.1 billion, total net loans of $49.6 billion, total deposits of $52.2 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, through the Bank and its subsidiaries, offers a full suite of national and regional banking solutions through various commercial, private banking, retail, insurance, capital markets, and wealth management financial services products. Valley provides personalized service and customized solutions to assist its customers with their financial service needs. Our solutions include, but are not limited to, traditional consumer and commercial deposit and lending products, commercial real estate financing, asset-based loans, small business loans, equipment financing, insurance and wealth management solutions, and personal financing solutions, such as residential mortgages, home equity loans and automobile financing. Valley also offers niche financial services, including loan and deposit products for homeowners associations, cannabis-related business banking and venture banking, which we offer nationally. The Bank also provides convenient account access to customers through a number of account management services, including access to more than 200 branch locations across New Jersey, New York, Florida, 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. 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 securities broker-dealer registered 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 specializing 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 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 and the FR Y-9C for December 31, 2025. ‌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," "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. ‌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; asset management advisers that are registered investment advisers 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 December 31, 2025. ‌Capital Requirements Regulatory capital ratios for Valley and the Bank were above the regulatory requirement ratios under the Capital Rule at December 31, 2025. See Section IV " Capital Conservation Conservation Buffer and Capital Ratios" below and Note 16 to the consolidated financial statements of Valley's Annual Report for more information. ‌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 December 31, 2025. 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) $ 5,614,799 $ 5,892,422 Retained earnings (including CECL add-back) 1,912,933 2,366,696 Accumulated other comprehensive loss, net (74,379) (73,922) Regulatory adjustments and deductions made to CET1 (1,894,845) (1,887,638) Total Common Equity Tier 1 Capital 5,558,508 6,297,558 Additional Tier 1 Capital Preferred Stock 354,345 - Total Additional Tier 1 Capital (103) - Tier 1 Capital 5,912,750 6,297,558 Total Tier 2 Capital Qualifying subordinated debt 450,000 - Qualifying allowance for loan and lease losses 543,974 543,936 Non-qualifying capital instruments subject to phase out 59,000 - from Tier 2 Capital Total Risk-based Capital $ 6,965,724 $ 6,841,494 ‌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 December 31, 2025, 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 $ 646,320 Exposures to depository institutions, foreign banks, and credit unions 295,866 Exposures to public sector entities 149,139 Corporate exposures 34,147,344 Residential mortgage exposures 3,793,801 Statutory multifamily mortgages and pre-sold construction loans 6,310,639 High volatility commercial real estate loans 21,965 Past due loans 577,899 Other assets 4,575,852 Equity exposures 67,212 Total Risk-Weighted Assets $ 50,586,037 ‌CAPITAL CONSERVATION BUFFER AND CAPITAL RATIOS ‌Capital Conservation Buffer The Basel III rules require Valley and the Bank to have a minimum 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 December 31, 2025, under the "prompt corrective action" regulations. For reference see Note 16 to the consolidated financial statements of Valley's Annual Report for the year ended December 31, 2025. 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 $321 million of eligible retained income as of December 31, 2025. 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 December 31, 2025. ‌Regulatory Capital Ratios The following table presents the regulatory capital ratios and related capital requirements for Valley and the Bank at December 31, 2025. Table 3: Regulatory Capital Ratios Actual Ratio Minimum Capital Ratio Capital Conservation Buffer Minimum Capital Conservation Buffer Valley CET1 Capital 10.99% 7.00% 6.49% 2.50% Tier 1 Risk-based Capital 11.69 8.50 5.69 * 2.50 Total Risk-based Capital 13.77 10.50 5.77 2.50 Valley National Bank CET1 Capital 12.46 7.00 7.96 2.50 Tier 1 Risk-based Capital 12.46 8.50 6.46 2.50 Total Risk-based Capital 13.54 10.50 5.54 * 2.50 * The CCBs for Valley and the Bank are 5.69% and 5.54%, respectively, at December 31, 2025. ‌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. A reporting system supplements the management review process by providing management with frequent reports concerning loan production, loan quality, internal loan classification, concentrations of credit, loan delinquencies, non-performing, and potential problem loans. 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 for additional information. Valley maintains an ACL for financial assets measured at amortized cost. The ACL consists of the allowance for loan losses unfunded loan commitments (together, the "allowance of credit losses for loans"), and the allowance for credit losses for held to maturity securities. The estimate of expected credit losses under the CECL methodology is based on relevant information about the past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Our methodology to establish the allowance for loan losses has two basic components: (i) a collective reserve component for estimated lifetime expected credit losses for pools of loans that share common risk characteristics and (ii) an individual reserve component for loans that do not share risk characteristics, consisting of collateral dependent loans. Valley also maintains a separate allowance for unfunded credit commitments mainly consisting of reserves for credit losses on 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 generating probability of default and loss given default metrics. The metrics are based on 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 analysis periods for each loan portfolio pool, and the severity of loss, based on the aggregate net lifetime losses. The model's expected 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 reversion period, (ii) other weighted 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 quantitative model 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. ‌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 December 31, 2025. On-balance sheet exposures include the spot exposure as of December 31, 2025, and the daily average for the fourth quarter 2025 exposure amount. Table 4: On-Balance Sheet Credit Risk Exposures (in thousands) On-Balance Sheet Exposures Type Total Average Commercial and industrial $ 10,961,519 $ 10,906,341 Commercial real estate 26,772,749 26,338,955 Construction 2,489,257 2,507,513 Residential mortgage 5,834,404 5,833,105 Consumer 4,105,035 4,028,924 Total on-balance sheet $ 50,162,964 $ 49,614,838 Less: Loans held for sale, at fair value 26,236 19,260 Total loan portfolio $ 50,136,728 $ 49,595,578 Table 5: Off-Balance Sheet, Investment Securities, and Derivatives Credit Risk Exposures Exposures (in thousands) Total Total on-balance sheet $ 50,162,964 Commitments under commercial loans and lines of credit 10,740,227 Home equity and other revolving lines of credit 2,145,350 Standby letters of credit 575,325 Outstanding residential mortgage loan commitments 143,285 Commitments under unused lines of credit-credit card 154,953 Commitments to sell loans 13,020 Commercial letters of credit 11,408 Total off-balance sheet 13,783,568 Total investment securities 7,780,829 Derivatives 662,503 Total credit risk exposure $ 72,389,864 The following table presents the distribution of credit exposure by geography as of December 31, 2025. 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 Consumer Total New York $ 2,728,592 $ 9,343,633 $ 1,567,315 $ 1,174,407 $ 14,813,947 Florida 3,246,607 8,128,873 1,540,802 694,446 13,610,728 New Jersey 2,140,039 5,749,311 1,945,186 1,318,870 11,153,406 California 541,259 1,089,022 103,795 35,186 1,769,262 Pennsylvania 103,788 1,165,960 47,743 339,745 1,657,236 Illinois 429,150 317,123 6,934 14,538 767,745 Alabama 92,770 400,926 34,398 110,350 638,444 Other 1,679,314 3,067,158 588,231 417,493 5,752,196 Total 10,961,519 29,262,006 5,834,404 4,105,035 50,162,964 Less: Loans held for - 18,024 8,212 - 26,236 Total loan portfolio 10,961,519 29,243,982 5,826,192 4,105,035 50,136,728 (in thousands) Mortgage sale The following table presents the distribution of credit exposure by industry as of December 31, 2025. Table 7: Credit Exposure by Industry ($ in thousands) Total Percent of Total Commercial and industrial $ 10,961,519 22% Commercial real estate: Non owner-occupied 11,571,127 23% Multifamily 8,571,713 17% Owner occupied 6,629,909 13% Total 26,772,749 53% Construction 2,471,233 5% Total commercial real estate loans 29,243,982 58% Residential mortgage 5,826,192 12% Consumer Home equity 687,680 1% Automobile 2,184,600 4% Other consumer 1,232,755 3% Total consumer loans 4,105,035 8% Total loan portfolio $ 50,136,728 100% The following table presents the allowance Table 8: Allowance Reconciliation reconciliation by exposure type from September 30, 2025 to (in thousands) December 31, 2025. Commercial and Industrial Commercial Real Estate Residential Consumer Total Beginning at September 30, 2025 $ 161,848 $ 349,593 $ 51,094 $ 22,465 $ 585,000 Loans charged-off (5,958) (16,034) - (3,060) (25,052) Charged-off loans recovered 636 1,289 180 397 2,502 Net loan (charge-offs) (5,322) (14,745) 180 (2,663) (22,550) Provision (credit) for credit 24,339 (7,422) 2,255 1,778 20,950 Balance at December 31, 2025 $ 180,865 $ 327,426 $ 53,529 $ 21,580 $ 583,400 Mortgage recoveries losses for loans Net loan charge-offs totaled $22.6 million for the fourth quarter 2025 as compared to $14.6 million for the third quarter 2025. Total gross loan charge-offs totaled $25.1 million for the fourth quarter 2025 and were due, in part, to partial charge-offs of three non-performing loan relationships within the CRE loan category. The three CRE loans had prior total allocated reserves of $8.8 million within the allowance for loan losses at September 30, 2025. 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 1.19 percent at December 31, 2025 and 1.21 percent at September 30, 2025. During the fourth quarter 2025, the provision for credit losses for loans totaled $20.0 million as compared to $19.2 million for the third quarter 2025. The fourth quarter 2025 provision was mainly driven by increases in both specific reserves associated with collateral dependent loans and qualitative reserve components of the allowance for credit losses, partially offset by a decline in quantitative reserves in certain loan categories, including CRE and consumer loans, at December 31, 2025.

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