Customers Bancorp Inc. purchased $631 million of loans that belonged to Signature Bank, the latest example of a financial firm snapping up at a steep discount assets associated with a failed US lender.
The purchase from the Federal Deposit Insurance Corp. was at 85% of the portfolio’s book value, West Reading, Pennsylvania-based bank said in a statement on Friday. The portfolio was acquired by the FDIC when it seized Signature Bank in March, according to a person with knowledge of the deal.
Signature was one of four midsize banks that collapsed this year. The government took over three of them, and has been selling assets from the New York-based lender, as well as those once belonging to Silicon Valley Bank.
In March, when First Citizens BancShares Inc. bought Silicon Valley Bank from the regulator, it acquired about $110.1 billion in SVB assets, including $72.1 billion of loans, at a discount of roughly $16.5 billion.
Read More: FDIC Added Sweeteners to Deals to Offload SVB, Signature
Friday’s deal “shows that the FDIC will need to take meaningful discounts on the remaining asset dispositions,” Thomas Dee, who heads the financial services practice at policy analysis firm Capstone, said in an email. “Discounts may vary on the rest of the portfolio, but investors have shown uncertainty around how to value the failed banks’ loan portfolios.”
As part of the deal announced on Friday, Customers said it would add a team of bankers that had worked on the financing. The bankers will join Customers in the next few weeks.
Real estate advisory firm Newmark Group Inc. was hired by the FDIC to sell about $60 billion of Signature Bank loans, Bloomberg reported earlier this year.
Customers climbed rose as much as 4.3% after the announcement. Shares were up 2.4% to $29.97 at 2:28 p.m. in New York.
Customers Bancorp has pushed in the past few years to increase its digital capabilities, including the introduction of a real-time payments platform that caters to businesses such as crypto-trading firms and institutional investors. It’s emerged as one of the few US firms still regularly banking the digital-asset sector.
The technology and life sciences portfolio will be combined with Customers’ existing technology and venture capital banking division, which is based in Boston, the bank said. The portfolio of capital call loans to venture capital firms will be combined with an existing capital call line portfolio in its fund-finance group, based in New York and Chicago.
--With assistance from Natalie Wong.
(Updates with analyst quote in fifth paragraph.)
Author: Max Reyes, Daniel Taub and Katanga Johnson