2Q24 Basel III Regulatory Capital Disclosures Report

VALLEY NATIONAL BANCORP

BASEL III REGULATORY CAPITAL DISCLOSURES REPORT

June 30, 2024

800-522-4100 • Valley.com

© 2024 Valley National Bank. Member FDIC. All Rights Reserved. For Internal Use Only.

CONTENTS

Contents	2
Introduction	3
Background	3
Forward-LookingStatements	3
I.	Scope of Application	4
General		4
Basis of Consolidation	4
Restrictions on the Transfer of Funds or Total Capital	4
Capital Requirements	4
II.	Capital Structure	4
Summary of Capital	4
Regulatory Capital Tiers	5
III.	Capital Adequacy	5
Internal Capital Adequacy Process	5
Components ofRisk-WeightedAssets	6
IV.	Capital Conservation Buffer and Capital Ratios	6
Capital Conservation Buffer	6
Regulatory Capital Ratios	7
V.	Credit Risk: General Disclosures	7
Credit Risk Management	7
Credit Risk Exposures	8
VI.	General Disclosures for Counterparty Credit Risk-Related Exposures	12
Counterparty Credit Risk Management	12
Derivative Financial Instruments	13
VII.	Credit Risk Mitigation	14
General Credit Risk Mitigation	14
Credit Concentrations	14
VIII.	Securitization	16
IX.	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
X.	Interest Rate Risk for Non-Trading Activities	17
Appendix	19

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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 June 30, 2024, Valley had consolidated total assets of $62.1 billion, total net loans of $49.8 billion, total deposits of $50.1 billion and total shareholders' equity of $6.7 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 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.

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 as investment advisers with the SEC; a registered securities broker-dealer with the SEC and members of 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.

This document, along with Valley's public filings, present the Regulatory Capital Disclosures in compliance with Basel III1 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 June 30, 2024 and the FR Y-9C for June 30, 2024.

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.

• Basel III or "the Capital Rule"

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I. 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 members of 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 June 30, 2024.

Capital Requirements

Regulatory capital ratios for Valley and the Bank were above the regulatory requirement ratios under the Capital Rule at June 30, 2024. For more information see Note 17 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 June 30, 2024.

II. 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. 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.

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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 June 30, 2024.

Table 1: Regulatory Capital Components

Additional Tier 1 Capital

III. 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

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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 June 30, 2024, 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

IV.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 June 30, 2024, 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 June 30, 2024.

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 $137 million of eligible retained income as of June 30, 2024.

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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 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 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.

Valley utilizes a two-year reasonable and supportable forecast period followed by a one-year period over which estimated losses revert to historical loss experience for the remaining life of the loan on a straight-line basis. The forecasts consist of a multi-scenario economic forecast model to estimate future credit losses and are governed by a cross-functional committee. The committee meets each quarter to determine which economic scenarios developed by Moody's will be incorporated into the model, as well as the relative probability weightings of the selected scenarios, based upon all readily available information. The model projects economic variables under each scenario based on detailed statistical analyses. We have identified and selected key variables that most closely correlated to our historical credit performance, which include GDP, unemployment and the Case-Shiller Home Price Index.

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 June 30, 2024.

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 June 30, 2024. On-balance sheet exposures include the spot exposure as of June 30, 2024, and the weekly average for the second quarter 2024 exposure amount.

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Table 5: Off-Balance Sheet, Investment Securities, and Derivatives Credit Risk Exposures

The following table presents the distribution of credit exposure by geography as of June 30, 2024. For the tables below, geography is considered as the location of the collateral for exposures collateralized by real estate.

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The following table presents the distribution of credit exposure by industry as of June 30, 2024.

Net loan charge-offs totaled $36.8 million for the second quarter 2024 as compared to $23.6 million for the first quarter 2024. Gross loan charge offs for the first quarter 2024 included: (i) partial charge-offs totaling $20.6 million related to a single non-performing commercial real estate loan relationship and (ii) $11.0 million of partial charge-offs related to one commercial and industrial loan (with prior reserves within the allowance for loan losses totaling $8.0 million at March 31, 2024).

While the amount of net loan charge-off has increased in the second quarter 2024, the relatively low level of individual loan charge-offs has continued to trend within management's expectations for the credit quality of the loan portfolio at June 30, 2024.

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 1.06 percent at June 30, 2024 and 0.93 percent at March 31, 2024. During the second quarter 2024, we recorded a provision for credit losses for loans totaled $82.1 million as compared to $45.3 million for the first quarter 2024, respectively. The increase in the second quarter 2024 provision was mainly due to higher quantitative reserves allocated to commercial real estate loans, commercial and industrial loan growth, and additional specific reserves and charge-offs associated with the revaluation of collateral dependent commercial loans at June 30, 2024.

The allowance for unfunded credit commitments declined to $13.2 million at June 30, 2024 mainly due to a continued decline in the level of our commercial real estate loan commitments pipeline.

Valley's provision for credit losses could remain elevated during the remainder of 2024 due to several factors, including, but not limited to the impact of future change in (1) our economic outlook, (2) the overall performance of our loan portfolio, (3) potential downgrades in the internal risk classification of commercial loans and (4) the composition of our loan portfolio, including targeted growth in loan categories not secured by real estate such as commercial and industrial loans.

For additional information regarding the allowance for credit losses for loans, see Note 5 to the consolidated financial statements of Valley's Annual Report and Note 7 to its Quarterly Report for the quarter ended June 30, 2024.

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