Customers Bancorp acquires $631 million loan portfolio from FDIC at discount
By Manya Saini and Saeed Azhar
(Reuters) -Customers Bancorp said on Friday it acquired a $631 million venture banking loan portfolio from U.S. regulator Federal Deposit Insurance Corporation (FDIC) at about 85% of the book value.
The portfolio belonged to failed lender Signature Bank, which was put under FDIC receivership in March, a source familiar with the matter told Reuters.
Customers Bancorp shares rose on the news to their highest level since early March, and were up 3.3% at $30.23 at midday.
The FDIC did not immediately respond to a request for comment.
Customers Bancorp has also recruited 30 team members from the group that originated these loans, who will help expand the bank's venture capital coverage in major cities including Austin, Boston, Southern California and Chicago.
Loans to the technology and life sciences sector will be combined with Customer Bancorp's technology and venture capital business based in Boston, the bank said.
"We view this deal and team addition as a fairly low-risk transaction to accelerate CUBI's (Customer Bancorp's) presence in a high-growth" market and it has the potential to improve deposit funding, said Michael Perito, banking analyst at Keefe Bruyette & Woods, in a note.
The 15% discount on the acquired loans provides a cushion to absorb some losses, particularly for capital call loans, or revolving lines of credit, to private equity and venture capital firms, Perito said.
A unit based in New York and Chicago will manage the capital call loans.
On March 12, state regulators closed New York-based Signature Bank, marking this year's second high-profile bank collapse sparked by an exodus of depositors seeking higher returns and safer institutions.
Later that month, New York Community Bancorp entered into an agreement with the FDIC to buy substantially all deposits and certain loan portfolios, and all 40 of Signature Bank's former branches.
Following the bank's closure, the FDIC had announced in April the marketing process for the roughly $60-billion loan portfolio retained in receivership from Signature Bank.
(Reporting by Manya Saini in Bengaluru and Saeed Azhar in New York; Editing by Shailesh Kuber and Richard Chang)
