A major East Coast bank is setting up shop in Irvine with the help of former employees of Signature Bank.
Customers Bank, which has $24 billion in assets, in December announced its new office at 4 Park Plaza with a party that attracted about 70. The office, which already has 15 employees, is in hiring mode.
“We’re always looking for talented people,” Lyle Cunningham, Customers Bank’s chief banking officer, told the Business Journal. “If you have an entrepreneur kind of spirit, you can come here, work with the best people and you can make a difference every day. That’s the kind of people we are looking for.”
Customers Bank, with headquarters in West Reading, Pennsylvania, is the latest major bank to attempt to break into the Orange County market. Denver-based FirstSun Capital is acquiring First Foundation while Washington-based Columbia Bank last year completed its purchase of Pacific Premier Bank, which was formerly the biggest bank in Orange County.
Customers Bank, among the nation’s 80 largest banks by assets, is making a significant push into the West Coast by opening offices in Sherman Oaks, Sacramento, Reno, Las Vegas and Irvine.
“We are committed to being where our clients are—and where opportunity is growing,” Sam Sidhu, chief executive of Customers Bank said in a November statement. “Opening these new offices is a natural extension of our business strategy and reinforces our belief that great banking combines high-tech capabilities with local, high-touch relationships.”
The Signature Story
Customers Bank began in 2009 when New Century Bank, then a $250 million-asset troubled bank, was recapitalized and renamed by Jay Sidhu, who had previously been chairman and CEO of Sovereign Bancorp, a $90 billion financial institution. In 2021, Sidhu’s son, Sam Sidhu, became CEO.
Since its parent, Customers Bancorp, went public in 2013 at under $10 a share, the price has increased sevenfold to $73.50 and the company now has a $2.6 billion market cap. (NYSE: CUBI)
About a dozen years ago, it hired Cunningham, who has been in the industry for 30 years and previously worked at National City Bank.
Two years ago, he hired Judi Prejean, who was a top West Coast official at Signature Bank, including Orange County. Prejean is best known in Southern California banking circles for having worked at the Bank of the West for 28 years, rising to the position of West Coast Business Banking Group Manager, overseeing 250 employees.
She joined Signature Bank in 2020, bringing several of her employees with her.
On the Business Journal’s annual list of commercial banks in Orange County, Signature Bank shot up from no ranking to No. 33 with $570 million in deposits for the year ended June 30, 2022.
A year later, it didn’t make the list as it was part of the notorious bank runs that included Silicon Valley Bank.
“When Signature Bank did fail, we were all shocked,” recalled Prejean. “This was the first time in my career I’d ever seen a bank literally fail overnight.”
She attributed the failure to uninsured deposits, which caused a run on the bank that even federal officials couldn’t stop.
Cunningham saw Signature Bank’s failure as an opportunity to hire talented bankers. Before accepting the job, Prejean grilled him as if she were an analyst questioning the bank’s integrity.
“I needed to make sure that I wasn’t stepping into the same kind of management of the balance sheet,” Prejean said. “I was going to bring these people who trust me again. They came with me to Signature Bank, trusted me through that. We failed, and here we are, we’re going to try it again.
“It was traumatizing for all of us and our clients. And our clients are trusting us again as planting a stake in real estate here in the Orange County.”
Well Connected in OC
Out of the 15 employees at Customers Bank’s new Irvine office, about a dozen worked at Signature Bank.
“What I found was a very, very well-run organization that is very entrepreneurial, so not afraid to make new decisions and try new things, but they’re very measured in how they decide whether or not,” Prejean said.
Several had also worked with her at Bank of the West.
“They are very, very, very well connected, very successful here in this market.”
The top OC bankers are Jason Smallwood, a regional manager and executive vice president, and Byron Rivera, also an executive vice president.
Customers Bank isn’t entirely new to Orange County. For the past two years, it has been working out of temporary offices in Newport Beach before finding the Irvine office.
It’s not in acquisition mode because “you buy all of their problems” like system issues and the best employees, Cunningham said.
The bank already has major customers like Capitol Distributors and others that Cunningham declined to reveal.
“They’re marquee names that you would recognize.”
It’s concentrating on loans for commercial and industrial businesses as well as commercial real estate.
“We’re self-contained out here,” Cunningham said. “We can make credit decisions out here. We can underwrite the loans out here. We can lend the money out here, meaning that you don’t have to go across the country for credit approval.”
Prejean said companies with $5 million to $250 million in annual sales is a “sweet spot” because they’re too small for the larger banks.
The bankers said their edge over competitors is their keen attention to client service. For example, it doesn’t have a call center as clients are given the cell phone numbers of their bankers. That’s a similar practice to Santa Ana-based Infinity Bank, where President and Chief Operating Officer Victor Guerrero shares his cell phone number with clients of the No. 12-ranked bank in OC.
Cunningham says that practice tells customers you are available when they need you.
“Some of our larger competitors, even though they have thousands of people, it’s hard to find the person who is your banker who really cares about you or who can make a decision about you and your business,” Cunningham said.
