Customers Bank Buys $631M Venture Loan Portfolio from FDIC
Portfolio is understood to have been run by Signature Bank before its collapse
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- Written by Banking Exchange staff
Pennsylvania-based Customers Bank has acquired a $631 million loan book from the Federal Deposit Insurance Corporation (FDIC) along with 30 staff responsible for originating and servicing the loans.
Banking Exchange understands that the loan portfolio was previously run by Signature Bank, and transferred to the FDIC in March when the bank collapsed. It forms part of approximately $60 billion worth of loans that the corporation is in the process of selling after taking over Signature and Silicon Valley Bank (SVB).
The portfolio consists of venture banking loans and was acquired at approximately 85% of book value, according to a statement from Customers Bank.
The new team was recruited “from the group that originated these loans to service the venture-backed growth industry from seed-stage through late-stage”, the bank stated. The acquisition expands Customers Bank’s footprint to include venture banking services in areas such as Austin, the Bay Area, Boston, Southern California, Chicago, Denver, Raleigh/Durham, and Washington, D.C.
Sam Sidhu, CEO and president of Customers Bank, said: “This loan pool purchase was extremely attractive to us considering the historical customer deposit to loan ratio in this vertical of over 2 to 1.
“With the recruitment of this highly experienced team, we are extremely confident in our ability to build primacy of relationships with these new clients and further improve our liquidity profile with the addition of low-cost, core deposits.
“Consistent with our disciplined approach, we will not take concentration risk and believe this transaction will be an excellent addition to further diversify our business model.”
New York Community Bancorp subsidiary Flagstar Bank bought the bulk of Signature’s business from the FDIC in March.
Separately, the Financial Times has reported that the FDIC has begun the sales process for a loan portfolio worth approximately $460 million related to Silicon Valley Bank’s business in Germany.
Citing marketing materials, the FT said the corporation was seeking bids from interested buyers by July 19.
It follows the sale of SVB’s UK arm to HSBC for a nominal fee of £1 on the same weekend in March that the California-based bank collapsed.
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