Customers Bancorp, through its principal subsidiary, Customers Bank, acquired a $631 million venture banking loan portfolio from the FDIC at approximately 85% of book value. The transaction is subject to customary closing adjustments. Separate from the loan pool purchase, Customers Bank also recruited 30 team members from the group that originated the loans to service the venture-backed growth industry from seed-stage through late-stage.
The newly recruited team will give clients access to the capital to grow from innovation to maturity and leverage a technology platform to support growth. The addition of these team members creates venture banking client coverage for Customers Bank in Austin, TX; the San Francisco Bay Area; Boston; Southern California; Chicago; Denver; Raleigh/Durham, NC; and Washington, D.C. The new team is expected to be fully onboarded within the next few weeks.
“We are excited to welcome our new clients and team members to Customers Bank, a forward-thinking bank with strong risk management,” Jay Sidhu, chairman and CEO of Customers Bancorp, said. “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.”
The new venture banking loan portfolio, which is primarily concentrated in the technology and life sciences industries, will be combined with Customers Bank’s existing technology and venture capital banking vertical based in Boston. The portfolio of capital call loans to venture capital firms will be combined with Customers Bank’s existing capital call line portfolio in its fund finance group based in New York and Chicago.
“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 two to one. 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,” Sam Sidhu, president and CEO of Customers Bank. “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.”
