Crypto-Friendly Customers Bancorp Falls During Sector Selloff

Customers Bancorp Inc., a regional lender that rode the crypto wave last year, fell 24% on Monday amid a wider selloff of financial stocks stemming from the collapse of Silicon Valley Bank.

(Bloomberg) — Customers Bancorp Inc., a regional lender that rode the crypto wave last year, fell 24% on Monday amid a wider selloff of financial stocks stemming from the collapse of Silicon Valley Bank.

Shares of the Pennsylvania-based bank plunged by nearly 70% before paring losses. They closed at $17.43 Monday, down 38.5% so far this year and more than 70% from its peak in January 2022.

Regional bank stocks were pummeled Monday — tripping multiple trading halts along the way — after the seizure of SVB Financial Group’s Silicon Valley Bank on Friday, the closure of Signature Bank by New York state financial regulators over the weekend and the failure of fellow crypto-friendly bank Silvergate Capital Corp. last week.

Customers Bancorp has pushed into serving crypto clients in recent years, launching a real-time payments platform in 2021 that caters to crypto-trading firms, exchanges and institutional investors. After the collapse of FTX, the bank saw an increase in deposits from clients using the payments network, which rose to $2.3 billion as of the end of December from $1.85 billion in mid-November.

Stablecoin issuer Circle Internet Financial Ltd. holds $1 billion of USD Coin reserves at Customers Bank, Circle Chief Executive Officer Jeremy Allaire said on Saturday. USD Coin depegged over the weekend as Circle disclosed about $3.3 billion of reserves were held at failed Silicon Valley Bank.

Customers Bank had about $8.9 billion in uninsured deposits at the end of December, data from its latest call report shows. That was about half of the total deposits at domestic offices. That’s different from Signature, with roughly 90% of deposits uninsured and about 93% of domestic deposits at SVB.

Jay S. Sidhu, chairman Customers Bancorp, bought $499,950 of shares on Monday, according to a filing with the U.S. Securities & Exchange Commission.

A representative from Customers didn’t respond to requests for comments.

Related: Frank Sees Crypto as Common Element in New Bank Failures

–With assistance from Noah Buhayar and Paige Smith.

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