Valley National Bancorp (NASDAQ:VLY) announced an agreement to acquire Bluevine Inc., a digital banking platform focused on small businesses, in a $340 million transaction expected to close early in the first quarter of 2027.
Valley said the acquisition is intended to strengthen its funding profile, expand its small-business customer base and add technology, data and artificial intelligence capabilities. The consideration consists of 75% cash and 25% stock. The deal does not require traditional bank regulatory or shareholder approval, according to Valley Chief Financial Officer Travis Lan.
Funding strategy and deposit growth
Chairman and CEO Ira Robbins said the transaction addresses Valley’s focus on improving its core funding mix and reducing reliance on higher-cost wholesale funding. Valley expects to use the transferred Bluevine deposits to replace brokered funding.
“Bluevine accelerates this progress by adding a mature and growing low-cost core deposit franchise that improves our funding mix and reduces our reliance on higher cost wholesale funding,” Robbins said.
Combined with Valley’s pending acquisition of Providence, the company said it is acquiring nearly $3.5 billion of low-cost core deposits. On a pro forma basis, Valley’s loans-to-non-brokered-deposits ratio would decline to 103% from 107% as of June 30, 2026, while its loans-to-total-deposits ratio would fall to 93% from 97%.
Valley established 2028 targets of 100% for loans to non-brokered deposits and 90% for loans to total deposits. Management said those targets do not assume additional mergers and acquisitions.
Bluevine’s deposits averaged about $12,000 per active customer, with customer retention of approximately 86% after one year. Lan said Valley expects Bluevine platform deposits to more than double over the next three years, projecting more than $3 billion at transition, less than $4 billion by the end of 2027 and about $5 billion by the end of 2028.
Financial expectations
Valley expects the acquisition to be approximately 8% accretive to 2028 earnings per share. The company projected roughly 5% tangible book value dilution at closing and an earn-back period of about three years.
The company’s model includes $50 million in annualized pre-tax cost savings, with 50% expected to be phased in during 2027 and the full amount thereafter. Valley said anticipated savings primarily relate to shared services, duplicative technology, small-business support and marketing spending.
Lan said the company does not include potential cross-selling, lending, treasury-management or additional AI-related benefits in its stated financial assumptions. He added that the deposit-migration benefit will be partly offset by foregone Durbin income as Bluevine moves from a partner bank with less than $10 billion in assets to Valley.
Valley expects its CET1 capital ratio to remain above 10.3% at closing, including the pending Providence acquisition, or about 11% when adjusted for the Basel III endgame proposal.
Technology and small-business strategy
Bluevine’s platform combines banking, payments, lending and financial-management tools for small businesses. The company said its digital onboarding process can open an account in about five minutes, while its products include bill pay, invoicing, accounting tools and merchant-processing capabilities.
Robbins said Bluevine will increase Valley’s small-business client base by nearly 20 times. Valley’s existing small-business franchise includes about $1.9 billion in deposits across roughly 9,000 relationships, compared with Bluevine’s 175,000 active users.
About 40% of Bluevine customers are located within Valley’s existing footprint, which management said creates potential opportunities to offer products such as treasury management, wealth, insurance, capital markets and relationship-based lending. Bluevine also gives Valley a national digital acquisition channel beyond its branch footprint.
Bluevine co-founder and CEO Eyal Lifshitz will join Valley as head of small-business banking, while co-founder and Chief Technology Officer Nir will remain with the combined company. Valley said it expects to retain a significant portion of Bluevine’s commercial and engineering workforce.
AI capabilities and loan portfolio
Valley emphasized Bluevine’s AI capabilities as a potential source of longer-term operating efficiencies. Robbins said approximately 80% of inbound client inquiries at Bluevine are resolved by AI, compared with about 2% at Valley. He also cited Bluevine’s use of AI in anti-money-laundering and know-your-customer processes.
“We think there’s going to be significant operational synergies that come into Valley,” Robbins said, while noting those benefits are not included in the acquisition’s financial projections.
Bluevine also had about $130 million of loans on its balance sheet as of June 30, 2026. Lan said the loans have an average FICO score of roughly 729 and that Bluevine sells a portion of its originations through forward-flow agreements. Valley characterized the acquisition primarily as a deposit and technology transaction rather than a balance-sheet lending expansion.
Management said it does not anticipate pursuing additional acquisitions in the foreseeable future, instead directing capital and management attention toward integrating Providence and Bluevine, realizing synergies and pursuing organic growth.
About Valley National Bancorp (NASDAQ:VLY)
Valley National Bancorp is the bank holding company for Valley National Bank, a full-service regional financial institution headquartered in Wayne, New Jersey. Founded in 1927, the company provides banking and financial services to consumers, businesses, commercial real estate clients and municipalities.
Valley National Bank offers deposit accounts, consumer and business lending, commercial and industrial loans, commercial real estate financing, residential mortgages, home equity products, and treasury management services.
