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ProfileCompany or group

Customers Bank

Lender or loan platform

PPP · PPPLF
Type
Company or group
Role
Lender or loan platform
Programs
PPP, PPPLF
Updated

The profile

Individuals and companies whose conduct was challenged or called into question during or after the pandemic. See sources: House fintech report, Dec. 1, 2022 Banking Dive on SBA review, Dec. 9, 2022

  • Type: Bank / bank holding company — PPP lender of record, fintech sponsor bank, and operator of a white-label PPP platform licensed to other banks.
  • Legal entities: Customers Bancorp, Inc. (NYSE: CUBI), holding company for Customers Bank. FDIC cert. #34444. State-chartered commercial bank, Member FDIC.
  • Founded: 2009 — Jay Sidhu led a recapitalization of New Century Bank (Pennsylvania) and rebranded it Customers Bank; the holding company listed on the NYSE in 2013 (company history and Wikipedia).
  • HQ: West Reading, Pennsylvania.
  • CEO: Jay S. Sidhu (Chairman & CEO through the PPP period; later Executive Chairman); Sam Sidhu (Vice Chairman & COO during PPP; later President & CEO) is named in Customers' own releases as the architect of its bank-fintech PPP model. Carla A. Leibold was CFO (Chang complaint). Richard A. Ehst was President & CEO of Customers Bank, the bank subsidiary, until he retired on July 1, 2021, when Sam Sidhu succeeded him (Customers Bancorp 10-K for 2021).
  • Role in PPP: Lender of record and platform operator. Customers originated PPP loans directly, served as the sponsor/issuing bank behind fintech loan volume (Kabbage among them), and ran an explicit "white-label" program letting other banks and a "nationally known fintech" originate PPP loans on the Customers platform under their own branding.

In the archive

Pandemic-role map

  • Reader shorthand: mid-sized PA bank that turned PPP into a national, platform-driven business — as lender of record, as fintech sponsor bank, and as a white-label back end for other lenders.
  • What Customers was: the chartered lender that held loans and submitted them to SBA — for its own borrowers, for fintech partners, and (via white-label) for other institutions' borrowers.
  • What the fintech partners did: supplied marketing, application flow, and borrower reach — including the small, thin-file borrowers ("sole proprietors, gig economy") that Customers, in its own words, could reach at scale only through fintechs.
  • The white-label wrinkle (in Customers' own words): a partner bank's borrowers used a page "branded with the bank's logo" and "will not know it isn't their bank until late in the process."
  • The PPP book: 249,661 PPP loans / $6.33 billion disbursed as originating lender, ~$0.56 billion in estimated SBA processing fees, $4.81 billion peak PPPLF balance (SBA FOIA and Federal Reserve PPPLF data).
  • Oversight status: named in the December 2022 House fintech-PPP report only as one of Kabbage's two round-one partner banks (pp. 63, 69); named among the eight PPP partner lenders SBA said it would investigate (Dec. 2022); subject of a 2024 Federal Reserve written agreement (AML/digital-asset, not PPP); defendant in a securities class action that closed without a lead plaintiff. No PPP-specific charge, settlement, or adverse finding against Customers has been identified.

Before the pandemic

In 2009, Jay Sidhu led a group that recapitalized New Century Bank and rebranded it Customers Bank; Customers Bancorp listed on the NYSE (CUBI) in 2013 (company history).

At year-end 2019, Customers Bank (FDIC cert. #34444) reported total assets of ~$11.5 billion and net income of ~$83.4 million.

During the pandemic (2020–2021)

The numbers

SBA loan-level FOIA data and Federal Reserve PPPLF disclosures put Customers Bank at 249,661 PPP loans and $6.33 billion disbursed as originating lender, an average loan of about $25,355, and estimated SBA processing fees of about $558 million, 80% of it from the 2021 round. Customers' peak PPPLF balance was $4.81 billion: PPP loans pledged to the Fed at 0.35% while the loans paid 1% and SBA paid the origination fee. The supply-chain table classifies Customers' intake as a "fintech/iBusiness channel."

Customers' own account of the model

Customers' own releases (Business Wire) describe the bank-fintech PPP funnel. Its January 12, 2021 release ("Customers Bank Opens PPP Loan Application Portal; Will Also Provide White Label Turnkey Solution for Other Lenders") says Customers "participated in more than 100,000 PPP loans totaling over $5 billion in the first rounds of PPP" (2020). It frames the origin of the fintech channel: many "truly small businesses, sole proprietors, 'gig economy'" workers lacked bank relationships, and "into this gap stepped the fintechs," who had marketing and technology but lacked underwriting capacity and capital, so "Customers Bank Vice Chair Sam Sidhu engineered a hybrid bank-fintech partnership that pioneered a scalable model to serve small businesses nationwide."

The same release describes the white-label architecture. Customers said its partners already included "a 'top five' bank, a $50 billion bank, and a nationally known fintech." Sam Sidhu: "It's simple and plug-and-play... There will be a landing page branded with the bank's logo... The customer will not know it isn't their bank until late in the process." Customers pledged not to solicit partner banks' borrowers. In the same document, Sam Sidhu framed PPP as "an opportunity for us to build more of a national presence and a national brand among small businesses and to acquire longer-term customers," while Jay Sidhu cast the effort as "a patriotic obligation".

A January 22, 2021 release reports "well over 50,000 (PPP) loans in process" in the 2021 round "in collaboration with best-in-class fintechs and other partners." The end-of-program July 28, 2021 release claims cumulative participation in "more than 320,000 PPP loans with an aggregate value of $9.6 billion," an average PPP loan "under $30,000," and status as "the largest PPP lender to join with the SBA" direct-forgiveness portal. Those totals are Customers self-reports. The company's 320,000/$9.6B claim exceeds the 249,661/$6.33B the SBA FOIA data attributes to Customers as originating lender. "Participated in" is broader than lender-of-record origination, which probably explains much of the gap; the release does not break the figure down.

The fintech channels

Customers was the sponsor bank behind fintech PPP volume, and Kabbage is the partner named in the record. The KServicing (Kabbage) Chapter 11 disclosure statement records a ~$2.6 billion Customers Bank channel with ~$65 million in associated fees — Kabbage-originated PPP loans run through Customers, with a fee dispute attached (disclosure statement text). And when Kabbage stopped originating after the American Express acquisition, Customers was the single largest destination for its 2021 second-draw borrowers: 16,189 matched Kabbage-2020 borrowers, $309.8 million of second-draw volume, ~$39.8 million in estimated fees.

Call reports: total assets from $12.0B to $17.9B in one quarter

Customers' quarterly FFIEC call reports trace the surge: total assets rose from about $12.0B (2020Q1) to about $17.9B (2020Q2) as PPP loans landed, funded substantially through the PPPLF (about $4.42B of PPP loans pledged at 2020Q2). Reported PPP loan counts ran about 84,570 (2020Q2) to about 192,445 (2021Q3). Bank-level net income climbed from about $83.4M (full-year 2019) and $139.6M (2020) to $321.8M for full-year 2021 ($216.6M through September), with return on equity of 21.85% through September and 23.84% for the year. The holding company reported record 2021 net income to common shareholders of $300.1 million (2022 proxy).

Executive PPP awards, staff and borrower relief

In February 2021 Customers Bancorp's compensation committee gave five of its named executive officers one-time awards worth $5.2 million for their work on the Paycheck Protection Program. The 2022 proxy statement put the total at "approximately 1.5% of the total deferred fees earned from the PPP loans."

In July 2020 Customers told investors PPP would "add about $100 million in origination revenues." The 2022 proxy reported "close to $350 million of deferred origination fees from the SBA," which the company called "close to 8 times higher" than it first expected. That is 3.5 times the July 2020 estimate. The 10-Ks report PPP interest income, including net origination fees, of $65.5 million in 2020, $279.2 million in 2021 and $79.4 million in 2022, $424.1 million in all.

Jay Sidhu, chairman and CEO of the holding company, received his award as $1,250,000 in cash. His son Sam Sidhu, whom the 10-K for 2021 credits with the fintech partnerships behind the bank's PPP lending, received 250,000 stock options with a grant-date fair value of $3,116,421, vesting after five years. The CFO, Carla Leibold, received $624,142, half of it in cash, and two other executives received options valued at $124,657 each. The award came on top of the regular 2020 bonus: Jay Sidhu's was $883,200, the maximum of 120% of his $736,000 salary. In paying the maximum, the committee said it "also considered the significant achievement in the SBA's PPP program during 2020," along with the BankMobile divestiture and fourth-quarter returns. None of the named executives took a pay cut in 2020; the CEO, COO and CFO stayed at their 2019 salaries, and one other named executive got a 5.2% raise.

Customers' Q2 2020 earnings release says "No furloughs; team members are at 100% pay," and a May 2020 release says the bank "has maintained its entire workforce." Staff could borrow up to $2,500 interest-free, and each received a $100 Amazon gift card and a paid "Financial First Responders Day." The 10-K for 2020 adds that the bank raised its paid-time-off carry-over from one week to two. Headcount was 867 full-time equivalents at the end of 2019, about 310 of them at BankMobile. At the end of 2020 the bank had 830 team members; about 257 of them became employees of BM Technologies when Customers divested BankMobile on January 4, 2021. Excluding BankMobile, the count rose from 573 at the end of 2020 to 641 a year later. Set against the 249,661 PPP loans SBA's data attributes to Customers as originating lender, that is about 390 loans per team member at the end of 2021, or about 300 per team member at the end of 2020 counting BankMobile. The 2022 proxy calls the bank's fintech partners "a force multiplier for PPP application intake and processing."

Customers let qualifying borrowers defer payments for "a maximum of 90 days at a time"; the deferred payments and the interest that accrued meanwhile fell due when the loan matured. Commercial deferments peaked at $1.2 billion and consumer deferments at $108 million. By December 31, 2020, commercial deferments were down to $202.1 million, 1.8% of loans and leases excluding PPP. The Q2 2020 release says the bank was not reporting deferrals to credit bureaus and was "waiving or reducing certain fees"; it does not say which fees or what that cost. All branches switched to appointment-only service on March 25, 2020. The 10-Ks say lobbies stayed appointment-only under the July 2020 "phase 1" of the bank's return-to-work roadmap, that appointment-only service was imposed at all branch locations on November 20, 2020, and that the branches resumed normal operations in June 2021.

The 2022 proxy adds a third loan count to SBA's and the July 2021 release's: about 358,000 loans worth $10.3 billion, funded "directly or indirectly," which it said was "more PPP loans than Bank of America, Wells Fargo, and PNC." The 10-K filed in February 2022 lists the PPP book among its risk factors: "Considering our immediate response to originate PPP loans, the loans originated under this program may present potential fraud risk, increasing the risk that loan forgiveness may not be obtained by the borrowers and that the guaranty may not be honored."

Enforcement / oversight / where they are now

House Select Subcommittee report (Dec. 1, 2022). Customers Bank appears in "We Are Not the Fraud Police" only as Kabbage's partner. The report says Kabbage signed round-one contracts to market, process and service PPP loans for two banks, Cross River and Customers Bank (p. 63), and that both banks stopped working with Kabbage after the first round (p. 69). It does not tie Customers to BlueVine, which it says worked only with Celtic Bank and Cross River Bank (pp. 73–74). The report is a majority-staff investigative document: congressional characterization, not an adjudication.

SBA investigation (Dec. 9, 2022). When SBA suspended Blueacorn and Womply after the report, it named eight PPP partner lenders it would investigate (Banking Dive). Customers was on the list, with Cross River, Celtic, Capital Plus, Prestamos, Fountainhead, Harvest, and Benworth. Being named is the extent of the documented PPP oversight exposure; no charge, False Claims Act settlement, or SBA-OIG adverse finding specific to Customers' PPP conduct has been identified.

Federal Reserve written agreement (Aug. 5, 2024). The FRB entered a written agreement with Customers Bancorp and Customers Bank over risk-management and compliance practices. Its subject is crypto/AML compliance, not PPP.

Securities class action (Chang v. Customers Bancorp). Chun Yao Chang v. Customers Bancorp, Inc., Carla A. Leibold, Jay S. Sidhu, E.D. Pa. No. 2:24-cv-06416 (Judge Sánchez), alleged failure to disclose inadequate AML/digital-asset risk controls, tied to the 2024 regulatory actions. The court denied the sole movant, Chang, appointment as lead plaintiff (Opinion, June 24, 2025), and the action was voluntarily dismissed on October 28, 2025 with no substitute lead plaintiff; it closed without any merits ruling adverse to Customers. A separate pro se suit is an unrelated real-estate matter dismissed with prejudice, not an investor suit.

Current posture. Customers Bancorp remains public (NYSE: CUBI) and active; Sam Sidhu is President & CEO, Jay Sidhu Executive Chairman. The PPP book has run off; the white-label platform episode survives chiefly in the company's own 2021 releases and the House report record.

  • Celtic Bank — the other sponsor bank in this pair; issuing lender behind Square Capital
  • Cross River — third large sponsor bank; 2023 FDIC consent order (non-PPP)
  • BlueVine — fintech lender; the House report says it worked only with Celtic Bank and Cross River Bank in the PPP (pp. 73–74)
  • Kabbage / KServicing — fintech lender whose ~$2.6B PPP channel ran through Customers
  • Blueacorn — LSP whose December 2022 report triggered the SBA investigation naming Customers
  • Capital Plus / Crossroads — CDFI lender of record whose call-report earnings surge parallels Customers'
  • Jay Sidhu · Sam Sidhu — principals

Sources

Company self-reported (attribute to Customers; not independently verified here)

Primary / analysis (verified)

External references

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