Customers Bank acquired a $631 million venture-banking portfolio from the Federal Deposit Insurance Corp. and hired 30 bankers from the group that originated the loans, the West Reading, Pennsylvania-based bank said Friday.
The portfolio came from Signature Bank, a source familiar with the matter told Reuters. A Customers Bank spokesperson confirmed that report to Banking Dive on Friday. The new team is expected to be onboarded in the next few weeks, Customers 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,” Customers Bancorp CEO Jay Sidhu said in a statement.
Customers bought the portfolio at approximately 85% of book value, the bank said. The tech and life sciences portion will be combined with Customers’ existing Boston-based tech and venture capital vertical. The portfolio of capital call loans to venture capital firms will integrate into the bank’s Fund Finance group based in New York and Chicago, the bank said.
New hires will give Customers Bank venture banking client coverage in Austin, Texas; Boston; Chicago; Denver; Raleigh, North Carolina; the San Francisco Bay Area; Southern California and Washington, D.C., the bank 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,” Customers Bank CEO Sam Sidhu 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.”
Customers is just the latest bank to grow from the stray pieces of banks that failed during a crisis of client confidence that stretched from March to May.
Providence, Rhode Island-based Citizens Bank last week said it hired roughly 50 senior private bankers from First Republic to help build out its wealth-management presence and scale its business banking footprint.
MUFG in April, hired Silicon Valley Bank’s former head of corporate banking and four other ex-SVB senior executives to bolster its technology, media and telecommunications unit.
And HSBC announced in April it had hired 42 investment bankers from SVB to establish a new practice aimed at courting tech, healthcare and venture capital clients. SVB’s buyer, Raleigh-based First Citizens, was less than pleased, suing the British lender in May over the hires.
In its statement Friday, Customers appeared to reference the issue thought to have hastened the downfall of SVB and Signature — namely, that their customer base was concentrated among clients with deposits above the FDIC’s insurance limit.
“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,” Sam Sidhu said.
Likewise, in his own statement, Jay Sidhu welcomed new team members and clients to “a forward-thinking bank with strong risk management.”