Unveiling Customers Bancorp's Strategic Acquisition
Customers Bancorp (NYSE: CUBI) announced on Friday its acquisition of a $631 million venture banking loan portfolio from the Federal Deposit Insurance Corporation (FDIC). Significantly, the purchase was executed at about 85% of the book value, a discount that adds tremendous value to the transaction.
Origins of the Loan Portfolio: The Collapse of Signature Bank
The portfolio was previously managed by Signature Bank (OTC: SBNY), a lender that recently encountered financial struggles. The FDIC took over the bank's assets in March after its failure, according to an insider familiar with the situation.
Market Response to Customers Bancorp's Strategic Move
News of the acquisition spurred positive market sentiment, with shares of Customers Bancorp increasing approximately 2.5% to $30 in morning trading. The FDIC, however, has yet to comment on whose loan portfolio Customers Bancorp has gained control of.
Talent Acquisition to Boost Venture Banking Coverage
In a concurrent move, Customers Bancorp has brought on board 30 team members who were involved in the origination of these loans. These seasoned professionals are expected to enhance the bank's venture banking client coverage across major cities such as Austin, Boston, Southern California, and Chicago.
Tracing Back the Fall of Signature Bank and its Aftermath
Signature Bank, based in New York, was closed by state regulators on March 12. This marked the year's second major bank collapse, triggered by a run at the lender that resulted in worried depositors shifting to larger Wall Street institutions deemed 'too-big-to-fail'. New York Community Bancorp (NYSE: NYCB) later took over a large part of Signature Bank's deposits, certain loan portfolios, and all its 40 branches under an agreement with the FDIC.
FDIC's Marketing Move for Signature Bank's Loan Portfolio
The FDIC initiated the marketing process in April for the loan portfolio retained from Signature Bank after its closure. The portfolio, worth approximately $60 billion, has now partly found its way to Customers Bancorp.