Mar 6, 2025

Adobe Stock A capital markets growth strategy five years in the making is paying off for Cross River Bank in Fort Lee, New Jersey. The $8.3 billion-asset company recently helped securitize and sell $160 million of loans for Best Egg, solidifying its longstanding relationship with the prolific fintech lender. The transaction, which was completed last month, was the first in a program Best Egg created with Cross River Bank Securities. Going forward, Best Egg intends to utilize the securitization platform, the Best Egg Asset Structured Pass-Through Trust,  periodically to widen its suite of funding options. Cross River has served as Best Egg's sponsor bank since 2013, the year the Wilmington, Delaware-based fintech was founded. The relationship has grown over the past 12 years, and in December 2023, Cross River extended a $150 million credit facility to support Best Egg's flexible rent product. Best Egg, which says its lent out more than $21 billion, has also turned to other financial partners — including in the capital markets arena — to support its burgeoning business. The BEAST platform enables Cross River to capture some of that outside business. Noah Cooper, head of Cross River's capital solutions group "Being able to offer these broker-dealer services allows us to scale with [Best Egg] on the capital side," Noah Cooper, head of Cross River's capital solutions group, told American Banker. "We were both small, up-and-coming entities working together, and have really grown up together." "We're proud to further strengthen our partnership with Cross River as we announce the launch of BEAST," Adam King, head of capital markets at Best Egg, said in a press release. "It allows for a simple and efficient investment vehicle that attracts a wide group of investors, both new and existing, to the program." A unique skillset Plenty of other banks are active in the capital markets business. Among the institutions where capital markets contributed meaningfully to 2024 earnings: the $204.2 billion-asset Huntington Bancshares in Columbus, Ohio; the $564.1 billion-asset, Pittsburgh-based PNC Financial Services Group; and the $678.3 billion-asset U.S. Bancorp in Minneapolis. At community banks, participation in the capital markets business is less common. The infrastructure build, market positioning and specialized know-how that are necessary to build a business act as a moat to keep smaller players out, according to Cross River's Cooper. But the business was a natural extension for Cross River, given the bank's connections to fintechs and specialty lenders derived from its deep involvement in payments. "We have a really interesting vantage point into their originations, their growth, their product expansion," Cooper said. Widening its net and his three-person team in June 2019 with the goal of adding heft to the bank's capital markets capabilities. Cooper served previously as senior vice president, capital markets and strategy, for the consumer-lending fintech Laurel Road, which was acquired by Cleveland-based KeyCorp in April 2019. Where Cross River previously utilized its balance sheet to serve capital markets clients, doing everything from buying loans to providing warehouse facilities, it had begun developing a broker-dealer. "One of the things that enticed me about the move was that they were talking about forming this broker-dealer entity,' Cooper said. "I thought I was uniquely situated to advise fintech clients, given that I had been in their shoes at Laurel Road." Cooper said that 2023 was the first year the operation "did some meaningful business," while 2024 "was the first where the engines were firing on all cylinders." Last year, Cross River also to advise clients on key decisions like mergers and acquisitions, capital markets transactions and corporate finance. The bank hired industry veterans Benjamin Samuels and Henry Pinnell as co-heads of investment banking. Cross River focuses its capital markets activity on fintech and innovative specialty finance lenders, Cooper said. To date, its clients — like Best Egg — have come primarily from Cross River's existing customer base. "We feel we have the best knowledge of these companies," Cooper said. "We're the best place to pitch them and we have a lot of skin in the game with these clients."