BORROWED FUNDS (Note 9)
Short-Term Borrowings
Short-term borrowings at December 31, 2025 and 2024 consisted of the following:
| | | | | | | | | | | |
| 2025 | | 2024 |
| | (in thousands) |
| | | |
| Securities sold under agreements to repurchase | $ | 91,475 | | | $ | 72,718 | |
| | | |
| | | |
Long-Term Borrowings
Long-term borrowings at December 31, 2025 and 2024 consisted of the following:
| | | | | | | | | | | |
| 2025 | | 2024 |
| | (in thousands) |
FHLB advances, net | $ | 2,463,604 | | | $ | 2,526,608 | |
Subordinated debt, net * | 444,975 | | | 647,547 | |
| | | |
| | | |
| Total long-term borrowings | $ | 2,908,579 | | | $ | 3,174,155 | |
| | | | | |
| * | Subordinated debt is reported net of debt issuance costs and fair value hedging adjustments at both December 31, 2025 and 2024. |
FHLB Advances. Long-term FHLB advances had a weighted average interest rate of 4.42 percent and 4.20 percent at December 31, 2025 and 2024, respectively. FHLB advances are secured by pledges of certain eligible collateral, including but not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgage and commercial real estate loans.
The long-term FHLB advances at December 31, 2025 are scheduled for contractual balance repayments as follows:
| | | | | | | | |
| Year | | Amount |
| | | (in thousands) |
| 2026 | | $ | 601,804 | |
| 2027 | | 1,066,800 | |
| 2028 | | 545,000 | |
| 2029 | | 250,000 | |
| | |
| | |
| Total long-term FHLB advances | | $ | 2,463,604 | |
The FHLB advances reported in the table above are not callable for early redemption.
Subordinated Debt. On June 15, 2025, Valley redeemed in full $115 million of 5.25 percent fixed-to-floating rate subordinated notes issued in June 2020 and due in June 2030. The transaction was accounted for as an early debt extinguishment and resulted in a $922 thousand pre-tax loss reported within non-interest expense for the year ended December 31, 2025. Valley also repaid $100 million of 4.55 percent fixed rate subordinated notes that matured on June 30, 2025. There were no new issuances or other maturities, calls or principal repayments of subordinated debt during the years ended December 31, 2025 and 2024.
At December 31, 2025, Valley had the following subordinated debt outstanding by its maturity date:
•$300 million of 3.00 percent Fixed-to-Floating Rate subordinated notes issued in May 2021 and due June 15, 2031. The subordinated notes are callable in whole or in part on or after June 15, 2026 or upon the occurrence of certain events. Interest on the subordinated notes during the initial five-year term through June 15, 2026 is payable semi-annually on June 15 and December 15. Thereafter, interest is expected to be set based on three-month Term SOFR plus 236 basis points and paid quarterly through maturity of the notes. In June 2021, Valley executed an interest rate swap to hedge the change in the fair value of the $300 million in subordinated notes. The subordinated notes had a carrying value of $295.8 million and $285.0 million, net of unamortized debt issuance costs and fair value of hedging adjustment at December 31, 2025 and 2024, respectively. See Note 14 for additional details. •$150 million of 6.25 percent fixed-to-floating rate subordinated notes issued on September 20, 2022 and due September 30, 2032. Interest on the subordinated notes during the initial five year term through September 30, 2027, is payable semi-annually in arrears on March 30 and September 30, commencing on March 30, 2023. Thereafter, interest will be set based on three-month Term SOFR plus 278 basis points and paid quarterly through maturity of the notes. The subordinated notes had a net carrying value of $149.2 million and $148.6 million, net of unamortized debt issuance costs at December 31, 2025 and 2024, respectively.
Pledged Securities. The fair value of securities pledged to secure public deposits, repurchase agreements, lines of credit, FHLB advances and for other purposes required by law approximated $2.7 billion and $3.0 billion for December 31, 2025 and 2024, respectively.