- 1Valley National Bancorp is paying $340M, 75% cash and 25% stock, for Bluevine.
- 2Closing is expected in early Q1 2027 with no traditional bank regulatory or shareholder approval needed.
- 3Bluevine CEO Eyal Lifshitz becomes Head of Small Business Banking at Valley.
Valley National Bancorp is acquiring Bluevine for $340 million, paid 75% in cash and 25% in stock. On the announcement call, Valley CFO Travis Lan said the transaction can proceed without the usual bank regulatory sign-off or a shareholder vote, and that Valley expects it to close in early Q1 2027.
Why Valley wants it
Bluevine started in invoice factoring and lines of credit but has long since shifted mainly to small business banking. That is what appealed to Valley, particularly the deposits. Lan called it "a deposit play, not on-balance sheet loan play."
Bluevine has 175,000 small business banking customers, against about 9,000 at Valley, a roughly 20x increase in the bank's small business base. Valley said it does not plan to ramp up small business lending as a result. Lan said loan growth is not Valley's problem; funding it is.
The loan book
Lan said Bluevine holds about $130 million of loans on its balance sheet. It also sells much of its production under forward flow agreements, which Valley expects to continue, supporting fee income. He gave this profile of the portfolio:
- Average FICO around 720.
- Loss rates higher than Valley is used to, but improved over the past couple of years, with average annual losses in the low to mid single digits.
- An 11% allowance, to which Valley will add at acquisition.
Why Bluevine sold
Asked by analysts why Bluevine chose to sell, CEO Eyal Lifshitz said fintechs are turning into banks, and pointed to the economics, regulatory certainty and control over infrastructure. There are several routes there, he said: build a bank from scratch, buy one, or be acquired by one. Being acquired, he concluded, was the best way to accelerate the company's small business franchise. He will become Head of Small Business Banking at Valley.
Three years ago, Bluevine was weighing an IPO, according to Axios, which reported at the time that the company was unprofitable but expected it could become so. It put the valuation below $1 billion.
You're seeing a lot of fintechs becoming banks right now.
Costs and AI
Most Bluevine customers sign up for easy business banking rather than to borrow. Valley CEO Ira Robbins said Bluevine's enhanced due diligence on some AML and KYC clients costs about $20, versus roughly $500 at Valley. He added that AI agents resolve 80% of customer care contacts at Bluevine, compared with around 2% at Valley.
Bluevine's roots go back to factoring and credit lines, and a 2017 interview already suggested the company looked like the beginnings of a bank.
Source reporting: deBanked.
