Dive Brief:

• Morristown, New Jersey-based Valley National Bancorp has agreed to acquire Bluevine, a Jersey City-based small-business banking fintech, in a cash-and-stock deal valued at $340 million, the bank said Monday. 
• Bluevine, founded in 2013, has about 175,000 active small-business customers. The fintech is set to bring Valley about $2.1 billion in deposits and make the bank “a much stronger and more relevant small business competitor,” Valley CEO Ira Robbins said Monday during a conference call to discuss the deal. 
• The deal is projected to close early in 2027, the bank said.

Dive Insight:

Bluevine provides digital banking, payments, lending and financial management solutions for small businesses. Its deposits are held at partner bank Coastal Community Bank, but will transfer to $66 billion-asset Valley in the first half of 2027, Robbins said. 

Those deposits will improve the bank’s funding mix and reduce its reliance on higher-cost wholesale funding, Robbins said. Bluevine has a 1.44% cost of deposits, compared to Valley’s 2.28%, according to an investor presentation.  

Bluevine will grow Valley’s small-business customer base by 20 times, and should “meaningfully accelerate” its pace of customer acquisition, Robbins said. It also gives the bank a national distribution platform. 

Valley executives also stressed the appeal of absorbing Bluevine’s technology and artificial intelligence strategy. The bank will gain about 180 Bluevine research-and-development employees and engineers, and more in-house capabilities will reduce the bank’s reliance on third-party providers and improve its speed to market, Robbins said. 

“Bluevine adds valuable technology and AI capabilities, and significantly accelerates our path to relevancy in small business banking,” he said. The majority of the fintech’s code is AI-generated and about 80% of inbound client inquiries are resolved by AI, he said.

Bluevine has invested almost $200 million in its digital acquisition platform and user experience, and account opening takes about five minutes, Eyal Lifshitz, Bluevine’s co-founder and CEO, said during the call. 

Combining that platform and Valley’s relationship focus, product suite and balance sheet capacity bolsters the bank’s opportunity to serve a “large, fragmented” small-business market, Robbins said.

The deal consideration is 75% cash and 25% Valley stock. The bank expects about 8% earnings per share accretion and about 5% tangible book value dilution at closing, with a three-year earnback period.

Lifshitz, who will join Valley as head of small-business banking, said the deal “felt like, for us, the best option to accelerate our vision of building our small business franchise, and ultimately is a combination of complementary capabilities here, but also a strong cultural fit.” 

As the competitive landscape evolves, fintechs see the appeal of the regulated banking environment’s balance sheet access, stability and credibility, while lenders need the “proven digital acquisition channels, proprietary technology and modern customer experiences” that fintechs have cultivated, Robbins said.  

“Rather than waiting for chartered fintechs to compete with us for small business banking relationships, we are proactively combining Valley’s banking foundation with Bluevine’s digital growth engine,” Robbins said.

About 40% of Bluevine’s customers are within Valley’s footprint, and the bank envisions the opportunity to cross-sell treasury management, wealth and other services to those customers, he said.   

Bluevine is the second acquisition Valley has announced in the past two months, and bank executives emphasized Monday they’re not looking for more deals. Last month, Valley said it would acquire South Holland, Illinois-based Providence Financial Corp. for $247 million. 

“Providence and Bluevine have addressed our near-term priorities, and we do not anticipate pursuing additional acquisitions for the foreseeable future,” Robbins said during Monday’s conference call.

The two deals combined are aimed at cultivating a different funding profile at the bank, Robbins said.

“We're really trying to address the core funding challenge that we see today at Valley, and sort of exasperating as we think about the banking environment as it continues to move forward,” he said. 

Despite the short time frame between the two announcements, “we do not see either transaction as disrupting Valley’s organic growth profile given the relatively small size of both deals,” J.P. Morgan Securities analyst Anthony Elian wrote Monday.