Cross River chief prepares for PPP encore

The U.S. banking system has helped many small businesses stay above water during the pandemic — and Cross River Bank in Fort Lee, N.J., has played an outsize role in that effort.

The bank, which had $2.5 billion in assets on March 31, made $6.5 billion in loans to more than 198,000 borrowers during the Paycheck Protection Program’s initial run.

Cross River was third among all banks by PPP loans made, trailing only Bank of America and JPMorgan Chase, and it was No. 12 among PPP lenders in dollar volume. It accounted for 1% of all PPP volume.

Cross River quickly mobilized its 300 employees to make the loans, diving headfirst into PPP without adding staff, said Gilles Gade, the bank’s chairman, president and CEO. To make due, Gade and his team revamped job duties to meet the challenge.

“We dropped everything we were doing,” Gade said.

“We had a strong sense that the country needed us to step in,” he said. “If we’re not making these loans a lot of people will be out of jobs and won’t be able to put food on the table. That gave us a sense of purpose, and it drove us.”

Gade is bracing for another big PPP push as soon as the new stimulus package kicks in. For that reason, Gade is one of American Banker’s community bankers to watch in 2021.

“We want to step up in a big way,” Gade said.

Absent federal aid and emergency small-business lending, many companies would have collapsed in 2020 — costing millions of people their jobs, financial industry observers said. The hope is that new relief measures will help hard-hit businesses make it to the spring when vaccines are expected to be more widely distributed.

“A lot of small businesses are still struggling,” said Damon DelMonte, an analyst at Keefe, Bruyette & Woods. “Ultimately, [new stimulus] could be the shot in the arm we needed to get us to the finish line. I think banks will step up again … and help a lot of these companies get over one last hurdle.”

Cross River has a sense of duty and unique positioning when it comes to the PPP. The bank, founded in 2008 as the last financial crisis gripped the industry, launched with the intent of becoming a tech-savvy operation. It would go on to partner with dozens of fintechs.

After the public health crisis took hold this year, the bank worked with several fintech partners, including Intuit and Kabbage, and reached well beyond its own pre-pandemic customer base to serve borrowers that bigger banks overlooked.

As a result, Cross River swelled to $11.8 billion of assets by the close of the third quarter. Regulators have excused PPP participants around the size of Cross River from the stricter supervision they normally would have faced in surpassing $10 billion of assets.

Excluding the initial PPP loans expected to be forgiven and removed from its balance sheet, which is under way, Gade said Cross River would have about $3.5 billion in assets — a size he likes.


“We had a strong sense that the country needed us to step in” with PPP lending, said Cross River CEO Gilles Gade.

At its core, Cross River is a bank that originates, packages and sells loans and partners with fintechs to service them. Following another round of PPP — and forgiveness — Gade does not expect the bank to get much bigger.

Gade said he does expect Cross River to deepen ties with thousands of PPP borrowers. The bank is planning to delve further into traditional Small Business Administration lending, offering automated application services, to recovering small businesses.

“It’s in that way that we plan to tap into the wealth of new” borrowers added from the emergency lending program, Gade said.

Between now and then, Cross River plans to be an active participant in a new round of PPP, lending “more aggressively than usual because it’s absolutely important to reinvigorate the economy entirely,” he said.

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