Customers Bancorp buys $631m FDIC venture banking loan portfolio

In a move expected to significantly expand its operations, Customers Bancorp, an American bank holding company, has acquired a $631 million venture banking loan portfolio from the Federal Deposit Insurance Corporation (FDIC) for about 85% of its book value.

The acquisition comes alongside the recruitment of 30 experienced professionals from the group that originally sourced the loans. The newly onboarded team is expected to enhance services for venture-backed industries ranging from seed-stage to late-stage, utilizing their long-standing client relationships and knowledge of a top-tier tech platform to support growth.

In addition to offering clients better access to growth capital, the addition of the new team members expands Customers Bancorp’s footprint to include key technology and entrepreneurial hubs such as Austin, the Bay Area, Boston, Southern California, Chicago, Denver, Raleigh/Durham, and Washington, D.C. The complete onboarding process for these new members is expected to be finished within the coming weeks.

Jay Sidhu — Customers Bancorp Chairman and CEO said: “We are excited to welcome our new clients and team members to Customers Bank, a forward-thinking bank with strong risk management.

“This team has deep relationships with their clients over the past two decades. They will enhance our relationship-based banking model focused on serving all banking needs of our clients.”

Customers Bancorp intends to integrate the acquired technology and life sciences portfolio with its existing Technology and Venture Capital Banking vertical in Boston. In a similar vein, the capital call loans to venture capital firms will be combined with Customers Bancorp’s existing capital call line portfolio within its New York and Chicago-based Fund Finance group.

The strategic moves are set to enhance Customers Bancorp’s service offering and market reach in the dynamic venture banking space.

Sam Sidhu — Customers Bank President and CEO said: “We are committed to following through on our stated goals of strengthening our deposit franchise, maintaining robust liquidity, moderating balance sheet growth, and improving our capital ratios and margins.

“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.”