Valley National Bancorp M&A announcement

Please go ahead. Good morning, and welcome to Valley's conference call to discuss our agreement to acquire Bluevine Inc. The press release and investor presentation accompanying this announcement are available on our website at www.valley.com.

Joining me today are Ira Robbins, Valley's Chairman and CEO, Travis Lan, Valley's Chief Financial Officer, and Eyal Lifshitz, Bluevine's Co-founder and CEO. Before we begin, please note that today's remarks may contain forward-looking statements and actual results could differ from those statements. For more information on these forward-looking statements and associated risk factors, please refer to our SEC filings including Forms 8K, 10Q and 10K. With that, I will turn the call over to Ira Robbins.

Thank you, Andrew, and good morning, everyone. I am excited to join you today to discuss our announced acquisition of Bluevine, a leading nationwide digital banking platform, purpose-built for small businesses. As Andrew mentioned, I am pleased to have Eyal, Bluevine's Co-founder and CEO here with us today. This acquisition builds on the significant progress we have made over the past several years. In 2024, we materially de-risked the balance sheet and drove a meaningful profitability inflection in 2025. 2026 has built on that momentum as we further optimize our funding base. 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. As a result of our organic progress and the strategic acquisitions of Providence and Bluevine, we are establishing 2028 loan to non-broker deposit ratios and loan-to-deposit targets of 100% and 90% respectively.

Achieving these targets should further improve profitability and enhance shareholder value. Beyond the funding benefits, this transaction advances our other strategic priorities we have outlined over the past several years and positions us to compete more effectively in a rapidly evolving banking landscape. Bluevine adds valuable technology and AI capabilities and significantly accelerates our path to relevancy in small business banking. Combining Valley's relationship focus, broad product suite, and balance sheet capacity with Bluevine's industry-leading digital acquisition platform and user experience gives us an immediate right to win in this large fragmented segment. We see significant growth potential in small business banking, and Bluevine improves our position to capitalize on that opportunity.

In a higher for longer interest rate environment, we believe that Bluevine's granular, low-cost core deposit base becomes even more valuable and provides Valley with a durable funding advantage that will support the replacement of higher cost wholesale fundings over time. Slide 3 of our investor presentation focuses on the tangible near-term benefits of the acquisition. As of June 30, 2026, Bluevine had approximately $2.1 billion of low-cost core deposits on its platform, originated from its nearly 175,000 active small business clients. These deposits are currently held at a third-party partner bank, but will be expected to transition to Valley in the first half of 2027. The attractive rate on this rapidly growing deposit portfolio reflects the value of Bluevine's purpose-built digital offering and leading customer experience for small businesses. Valley's legacy small business franchise is comprised of approximately $1.9 billion of deposits across roughly 9,000 relationships.

Bluevine will increase our small business client base by nearly 20 times and should meaningfully accelerate our pace of future customer acquisition in this segment. Combining Valley's balance sheet capacity, branch presence, and broader product suite with Bluevine's national digital reach and scalable customer acquisition will enable us to more holistically serve small business customers over time. Bluevine will also contribute deep engineering, data and AI capabilities to Valley. Bringing more of that expertise in-house will give us greater control over our client experiences, improve our speed to market, reduce our reliance on third-party providers, and create new opportunities to improve efficiency as we scale. Bluevine has invested nearly $200 million to build its technology platform and customer acquisition engine. When combined with the economic value of its existing deposit base and the significant opportunity for future growth, we believe these capabilities more than justify the transaction consideration.

The combination of strategic value and financial merit is central to how we evaluated this opportunity. We have consistently said that we will consider acquisitions that accelerate our strategic priorities while meeting our disciplined financial standards. Travis will discuss the financial impact shortly, but we believe this transaction satisfies both tests. Providence and Bluevine have addressed our near-term strategic priorities, and we do not anticipate pursuing additional acquisitions for the foreseeable future. Our capital, our resources, and our management attention will be explicitly directed towards integration, value realization, and executing on our substantial organic growth opportunities. Over the past decade, Bluevine has developed a purpose-built digital banking platform for small businesses, which combines banking, payments, lending, and financial management tools with the proprietary technology and risk infrastructure. Bluevine's platform has earned broad national recognition as a leading digital banking solution for small businesses.

As illustrated on slide 4, these efforts have resulted in a scaled and highly engaged national customer base. As of June 30, 2026, approximately 175,000 active small business platform users have generated $2.1 billion of deposits. Customer accounts and deposit balances continue to grow rapidly. Slide 5 illustrates the rapidly changing banking landscape. Fintechs increasingly want the balance sheet access, stability, and credibility that comes with a regulated banking infrastructure. While banks increasingly need proven digital acquisition channels, proprietary technology, and modern customer experiences. Rather than waiting for chartered fintechs to compete with us for small business relationships, we are proactively combining Valley's banking foundation with Bluevine's digital growth engine. That is the strategic logic of this transaction, and it is why we expect to be a much stronger and a more relevant small business competitor following this acquisition.

Slide six highlights Bluevine's nationwide digital reach against the backdrop of Valley's existing branch network. While Bluevine acquires small business clients across the country without a physical branch presence, roughly 40% of those customers already exist in Valley's footprint. This gives us a clear opportunity to deepen those relationships through cross-sell of our treasury management, wealth, insurance, capital markets, and relationship-led lending solutions. The opportunity also extends well beyond our physical footprint. Bluevine gives us a scalable way to grow deposits, deepen digital engagement, and selectively expand products over time for customers outside of our physical footprint. Together, we can serve small businesses through both traditional and digital means in a way that better matches how clients want to be served today. As you can see on slide seven, and as I mentioned earlier, we also view this as a transformational step for Valley's technology strategy.

The majority of Bluevine's code is AI-generated today, and approximately 80% of inbound client inquiries are resolved by AI. The team has built its own credit model, its own fraud, its own AML model, all supported by a single data layer that connects core banking and payment systems. Owning these capabilities will give us greater control over our client experiences, more speed in bringing solutions to market, and importantly, less reliance upon third parties software providers. Over time, by combining these capabilities with Valley's own emerging AI efforts, all of this should help to accelerate positive operating leverage and accelerate our progress towards a meaningfully lower efficiency ratio. Finally, I want to comment on Bluevine's people. Through our diligence, we spent meaningful time with the Bluevine team and came away with a strong appreciation for their culture, talent, and execution mindset.

We are delighted to welcome them to Valley and are excited to apply their technology, data, and AI capabilities across a broader set of opportunities. I am thrilled that Eyal will join Valley as head of small business banking, and that Nir, Bluevine's other co-founder and CTO, will remain with the combined company. We expect to retain a significant amount of the commercial and engineering talent that has made Bluevine so special and successful today. With that, I will turn the call over to Travis now to walk through the deposit franchise, the financial terms, and our integration priorities.

Thank you, Ira. As shown on slide eight, Bluevine has built a scaled, digitally gathered deposit franchise that is highly additive to Valley's own funding strategy. As of June 30, 2026, the platform had generated approximately $2.1 billion of active small business deposits, more than double the balance at the year-end 2023. These are granular core deposits gathered nationally without a branch network and supported by a product ecosystem that keeps small business customers engaged across checking, payments, bill pay, lending, and other financial management tools. This value proposition has resulted in high customer satisfaction and an attractive relative cost of deposits, which we expect to be fairly stable even in a higher for longer rate environment. On a combined basis, Providence and Bluevine will give Valley a larger, more diversified, and scalable low-cost core funding base.

This mature digital SMB focus will become Valley's newest specialty deposit vertical, bringing aggregate deposits in these business lines to approximately $15 billion on a pro forma basis. Bluevine's portfolio is granular, with an average balance of roughly $12,000 per active customer and approximately 86% customer retention after one year. Our specialty verticals have driven differentiated core deposit growth results in recent years. Based on current momentum and Bluevine's digital acquisition model, we expect platform deposits to more than double over the next three years. Importantly, that growth is expected to come without an over-reliance on rate, reinforcing both the quality of the customer relationships and the efficiency of Bluevine's model as we reduce brokered deposits post-transition. With respect to the deposit transition, Bluevine's existing partner banking program will be terminated at the close of this transaction.