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New Jersey Bank Ranks 13th Nationally For PPP Loans

Fees More Than Double Cross River Bank's Net Revenue Posted In 2019

Keith Griffin

July 15, 2020

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Cross River Bank isn’t what one would consider a large bank based on its $2.5 billion in assets. That didn’t stop the New Jersey bank from being one of the more active banks when it came to securing Paycheck Protection Program funds.

The Fort Lee, New Jersey-based firm with $2.5 billion in assets at the end of the first quarter, arranged more than $5 billion in PPP loans, according to Bloomberg. That made it the 13th-most-active lender, according to the SBA. S&P estimates that Cross River will pull in $163 million in related fees, more than double its pre-provision net revenue last year.

JPMorgan Chase & Co., Bank of America Corp., Truist Financial Corp., PNC Financial Services Group Inc. and Wells Fargo & Co. were the top five PPP lenders by volume, arranging a combined $91 billion as of June 30, SBA figures show. JPMorgan could make $864 million in related fees, according to S&P, but that will “represent a modest boost to the top line.” And JPMorgan is among the lenders, also including Bank of America and Wells Fargo, that plan to donate the fees.

The Intercept, a news website, reports banks will make out with $18 billion in fees for processing small business PPP relief loans during the pandemic, according to calculations by Amanda Fischer, policy director at the Washington Center for Equitable Growth, a progressive economic think tank.

That’s money taken directly out of the overall $640 billion pot of funding Congress allocated to the program it created as part of the CARES Act. “If we did it through a public institution, there would be [more than] $140 billion left,” Fischer noted, as opposed to the $130 billion still up for grabs.

The Intercept story adds, “The fact that banks are siphoning money off of the relief program is thanks to the fact that the United States had no existing public infrastructure ready to quickly get money out to struggling businesses when the pandemic hit.” Fischer characterized it as “a failure of preparedness,” adding, “We should have invested in better systems.”

Cross River, founded in 2008 by 53-year-old, French-born CEO Gilles Gade, told the New York Post the secret to its PPP success is its DNA as a community bank that serves a community of financial tech companies.

Cross River confirms that it will hold onto much of its government-sponsored capital, using it as a buffer to address any future economic fallout from the pandemic. The bank has hired 22 people during the COVID crisis and has purchased roughly $1 billion in PPP loans originated at other banks. “We’re committed to growth,” said a bank spokesman.

The spokesman said the bank will share part of its PPP windfall with a slew of fintech partners that are clients. Those include payroll app Gusto, the Kabbage lending platform, payments startup Veem, and Intuit, the maker of the QuickBooks accounting software — all of which funneled their customers to Cross River during the crisis.

Cross River has just 320 employees, and when COVID struck, only 10 of them were underwriters. Sensing the moment, Gade had his team dramatically shift almost its entire focus to PPP lending.

While many small banks ended up with tellers and salespeople working 20-hour days, Cross River’s glitch-free hookups with its fintech partners enabled it to process applications at a much higher speed.

Cross River has made 134,472 PPP loans, more than US megabanks like US Bank, Truist Bank, and PNC. KeyBanc, which has about $156 billion in total assets, made just over 41,000 loans in the same period.

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