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     119  0 Kommentare Customers Bancorp Reports First Quarter 2020 Net Income of $7.0 Million, or $0.22 Per Diluted Share

    Customers Bancorp, Inc. (NYSE: CUBI) the parent company of Customers Bank and its operating division BankMobile (collectively “Customers” or "CUBI"), today reported first quarter 2020 ("Q1 2020") net income to common shareholders of $7.0 million, or $0.22 per diluted share. Core earnings for Q1 2020 totaled $8.1 million, or $0.26 per diluted share.

    “We are very pleased with our financial success,” said Customers Bancorp Chairman and CEO Jay Sidhu. “But foremost, I am so pleased and proud to partner with such talented and hard-working team members at a time like this. We did not miss a beat in delivering tremendous service to our clients. And, we overcame tremendous obstacles to give access to Paycheck Protection Program loans to thousands of small businesses and non-profits. Working nearly round the clock, team members from every department worked with clients to finish loan applications to save the jobs of tens of thousands of Americans. Customers Bank is poised for great things in the future.”

    In light of the COVID-19 public health crisis, Customers immediately responded and implemented the following:

    Support for Team Members:

    • 85% of our team members are currently working remotely;
    • Special pay considerations, bonuses, additional PTO for essential front line team members;
    • No furloughs; team members are at 100% pay;
    • Zero-interest loans up to $2,500 are available to assist team members and their families facing challenges due to COVID-19; and
    • A hotline is available for any team member to call for assistance of any kind.

    Support for Consumers and Businesses:

    • Participated in the SBA Paycheck Protection Program (PPP) with the initial round resulting in $385 million in SBA-approved PPP loans;
    • Implemented payment modification programs for COVID-19 impacted clients;
    • Not reporting payment deferrals to credit bureaus; and
    • Waiving or reducing certain fees.

    Support for Communities:

    • Donations leading to more than $1 million to communities in our footprint for urgent basic needs;
    • Additional re-targeting of existing sponsorship and grants to non-profit organizations to support COVID-19 related activities;
    • Provided a webinar for the entire business community on how to survive and thrive during this pandemic crisis; and
    • Represented community bank perspectives on CNBC.

    Looking Ahead to 2020 and Beyond

    Lesen Sie auch

    Mr. Sidhu stated, "Before COVID-19, Customers was projecting core earnings per share of $3.00 for 2020 with continued improvement expected in all profitability metrics. However, rapid recent changes in economic activity introduce uncertainty to our near-term profitability. We have pivoted our strategy in this environment to building a stronger balance sheet and assisting our customers, team members and community to effectively deal with this crisis. Our provision will be higher, most customer activity will slow, and there will be disruptions, but we are also seeing positive trends in deposits and opportunities to serve customers through the SBA Paycheck Protection Program as well as other U.S. Treasury and Federal stimulus programs." Mr. Sidhu continued, "Longer term, we remain confident in our ability to achieve a run rate of $6 per share in annual core earnings by the end of 2025 or 2026."

    Status Report on Strategic Priorities Articulated at Analyst Day in October 2018, with Subsequent Updates

    Improve Profitability: Top Quartile Profitability with 1.25% Core ROAA in 2-3 years

    As stated during our 2018 Analysts Day in October 2018, Customers expects to remain focused on growing its core businesses, while improving margins, capital and profitability. Through favorable mix shifts in both assets and liabilities, while maintaining its superior credit quality culture and extreme focus on productivity improvement, Customers improved the overall quality of its balance sheet and deposit franchise, expanded its net interest margin, enhanced liquidity and remains relatively neutral to interest rate changes. The strategies articulated at the 2018 Analysts Day in October 2018 and subsequent progress through Q1 2020 are summarized below:

    • Target ROAA in top quartile of peer group, which we expect will equate to a ROAA of 1.25% or higher over the next 2-3 years. ROAA was 0.37% in Q1 2020, down from Q1 2019 ROAA of 0.64% due to the increase in the provision for credit losses resulting from the adoption of CECL and the impact of COVID-19. The pre-tax and pre-provision adjusted ROAA (a non-GAAP measure) was 1.34% for Q1 2020, up 29 basis points from 1.05% in Q1 2019.
    • Achieve NIM expansion to 2.75% or greater by Q4 2019, with full year 2019 NIM above 2.70%, through an expected shift in asset and funding mix. Actual results for 2019 were materially better, with full year 2019 NIM of 2.75%. Further expansion was achieved in Q1 2020, with NIM of 2.99%, up from 2.89% in Q4 2019 and 2.59% in Q1 2019. Since Q3 2018, Customers effectively restructured its balance sheet resulting in NIM expansion of 52 basis points. For 2020, full year NIM is expected to be above 3.00% (non-GAAP measures).
    • BankMobile growth and maturity was expected with profitability achieved by year end 2019. BankMobile reached profitability in Q3 2019 and maintained profitability in Q4 2019, and was also profitable in Q1 2020 on an adjusted pre-tax pre-provision basis. BankMobile's profitability in Q1 2020 was negatively impacted by increased CECL-related provision expense, the COVID-19 crisis, a legal reserve of $1 million related to the previously disclosed DOE matter, increased depreciation expense related to capitalized development costs for technology placed in service in 2019 and non-capitalizable technology-related expenses. Key strategic priorities for 2020 include keeping BankMobile profitable, and attempting to divest it by the end of 2020.
    • Expense control. Customers' efficiency ratio was 66.03% in Q1 2020, up from 56.98% in Q4 2019, but down from 68.32% in Q1 2019. Improving operating efficiency is a high priority.
    • Growth in core deposits and good quality higher-yielding loans. Demand Deposit Accounts ("DDAs") grew 38% year-over-year. Lower yielding multi-family loans decreased by $1.1 billion, or 36%, year-over-year and were replaced by higher yielding C&I loans and leases and other consumer loans, which had net growth of $616 million and $1.2 billion year-over-year, respectively.
    • Maintain strong credit quality and superior risk management. Non-performing loans ("NPLs") were negatively impacted by one commercial real estate loan collateralized by a Class A office building in northern New Jersey. The borrowers personally guaranteed a portion of the loan amount. Customers has received a letter of intent to sell this loan in the near future. In spite of this, NPLs were only 0.61% of total loans and leases at March 31, 2020. Reserves to NPLs at March 31, 2020 were 242%, compared to 265% at December 31, 2019. The Bank is relatively neutral to interest rate changes at March 31, 2020. We remain very focused on a strong Risk Management culture throughout our company.
    • Evaluate opportunities to redeem our preferred stock as it becomes callable. Redeeming all of the preferred stock as it becomes callable would result in an increase to our diluted earnings per share by approximately $0.46 annually, if not replaced. Given the current economic uncertainty stemming from the COVID-19 crisis, Customers will not call for redemption any preferred stock in 2020 that becomes callable this year.

    Focus on Capital Allocation

    Customers remains well capitalized by all regulatory measures. The tangible common equity to tangible assets ratio (a non-GAAP measure) was 6.16% in Q1 2020, reflecting industry-wide strong levels of asset growth, as well as the impact of CECL on tangible common equity. We continue to target reaching a 7.0% tangible common equity ratio organically by the end of 2020, adjusted for the impact of CECL and SBA-approved PPP loans held on our balance sheet.

    Q1 2020 Overview

    The following table presents a summary of key earnings and performance metrics for the quarter ended March 31, 2020 and the preceding four quarters:

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    EARNINGS SUMMARY - UNAUDITED

     

     

     

     

     

     

     

     

     

     

    (Dollars in thousands, except per share data and stock price data)

    Q1

     

    Q4

     

    Q3

     

    Q2

     

    Q1

    2020

     

    2019

     

    2019

     

    2019

     

    2019

     

     

     

     

     

     

    GAAP Profitability Metrics:

     

     

     

     

     

    Net income available to common shareholders

    $

    7,027

     

    $

    23,911

     

    $

    23,451

     

    $

    5,681

     

    $

    11,825

     

    Per share amounts:

     

     

     

     

     

    Earnings per share - basic

    $

    0.22

     

    $

    0.76

     

    $

    0.75

     

    $

    0.18

     

    $

    0.38

     

    Earnings per share - diluted

    $

    0.22

     

    $

    0.75

     

    $

    0.74

     

    $

    0.18

     

    $

    0.38

     

    Book value per common share (1)

    $

    23.98

     

    $

    26.66

     

    $

    25.66

     

    $

    24.80

     

    $

    24.44

     

    CUBI stock price (1)

    $

    10.93

     

    $

    23.81

     

    $

    20.74

     

    $

    21.00

     

    $

    18.31

     

    CUBI stock price as % of book value (1)

    46

    %

    89

    %

    81

    %

    85

    %

    75

    %

    Average shares outstanding - basic

    31,391,151

     

    31,306,813

     

    31,223,777

     

    31,154,292

     

    31,047,191

     

    Average shares outstanding - diluted

    31,820,538

     

    31,876,341

     

    31,644,728

     

    31,625,741

     

    31,482,867

     

    Shares outstanding (1)

    31,470,026

     

    31,336,791

     

    31,245,776

     

    31,202,023

     

    31,131,247

     

    Return on average assets ("ROAA")

    0.37

    %

    0.97

    %

    0.95

    %

    0.36

    %

    0.64

    %

    Return on average common equity ("ROCE")

    3.50

    %

    11.58

    %

    11.81

    %

    2.96

    %

    6.38

    %

    Efficiency ratio

    66.03

    %

    56.98

    %

    61.58

    %

    77.32

    %

    68.32

    %

    Non-GAAP Profitability Metrics (2):

     

     

     

     

     

    Core earnings

    $

    8,145

     

    $

    23,843

     

    $

    23,402

     

    $

    12,688

     

    $

    12,080

     

    Per share amounts:

     

     

     

     

     

    Core earnings per share - diluted

    $

    0.26

     

    $

    0.75

     

    $

    0.74

     

    $

    0.40

     

    $

    0.38

     

    Tangible book value per common share (1)

    $

    25.60

     

    $

    26.17

     

    $

    25.16

     

    $

    24.30

     

    $

    23.92

     

    CUBI stock price as % of tangible book value (1)

    43

    %

    91

    %

    82

    %

    86

    %

    77

    %

    Net interest margin, tax equivalent

    2.99

    %

    2.89

    %

    2.83

    %

    2.64

    %

    2.59

    %

    Core ROAA

    0.41

    %

    0.97

    %

    0.95

    %

    0.63

    %

    0.65

    %

    Core ROCE

    4.05

    %

    11.55

    %

    11.78

    %

    6.62

    %

    6.52

    %

    Adjusted pre-tax pre-provision net income

    $

    38,595

     

    $

    44,676

     

    $

    39,440

     

    $

    26,140

     

    $

    25,305

     

    Adjusted ROAA - pre-tax and pre-provision

    1.34

    %

    1.57

    %

    1.39

    %

    1.01

    %

    1.05

    %

    Adjusted ROCE - pre-tax and pre-provision

    17.41

    %

    19.89

    %

    18.04

    %

    11.75

    %

    11.71

    %

    Core efficiency ratio

    63.33

    %

    56.76

    %

    59.21

    %

    69.25

    %

    68.03

    %

    Asset Quality:

     

     

     

     

     

    Net charge-offs

    $

    5,914

     

    $

    4,362

     

    $

    1,761

     

    $

    637

     

    $

    1,060

     

    Annualized net charge-offs to average total loans and leases

    0.25

    %

    0.18

    %

    0.07

    %

    0.03

    %

    0.05

    %

    Non-performing loans ("NPLs") to total loans and leases (1)

    0.61

    %

    0.21

    %

    0.17

    %

    0.15

    %

    0.26

    %

    Reserves to NPLs (1)

    241.64

    %

    264.67

    %

    290.38

    %

    330.36

    %

    194.15

    %

    Customers Bank Capital Ratios (3):

     

     

     

     

     

    Common equity Tier 1 capital to risk-weighted assets

    10.66

    %

    11.32

    %

    10.85

    %

    11.19

    %

    12.57

    %

    Tier 1 capital to risk-weighted assets

    10.66

    %

    11.32

    %

    10.85

    %

    11.19

    %

    12.57

    %

    Total capital to risk-weighted assets

    12.29

    %

    12.93

    %

    12.42

    %

    12.84

    %

    14.37

    %

    Tier 1 capital to average assets (leverage ratio)

    10.06

    %

    10.38

    %

    9.83

    %

    10.32

    %

    10.97

    %

     

     

     

     

     

     

    (1) Metric is a spot balance for the last day of each quarter presented.

    (2) Non-GAAP measures exclude investment securities gains and losses, severance expense, merger and acquisition-related expenses, losses realized from the sale of non-QM residential mortgage loans, loss upon acquisition of interest-only GNMA securities, legal reserves, credit valuation adjustments on derivatives, and goodwill and intangible assets. Tangible book value per common share is adjusted to exclude the impact of adopting CECL. These notable items are not included in Customers' disclosures of core earnings and other core profitability metrics. Please note that not each of the aforementioned adjustments affected the reported amount in each of the periods presented. Customers' reasons for the use of these non-GAAP measures and a detailed reconciliation between the non-GAAP measures and the comparable GAAP amounts are included at the end of this document.

    (3) Regulatory capital ratios are estimated for Q1 2020 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected an option to delay the estimated impact of CECL on its regulatory capital over a five-year transition period ending January 1, 2025. As a result, capital ratios and amounts as of Q1 2020 exclude the impact of the increased allowance for credit losses on loans and leases and unfunded loan commitments attributed to the adoption of CECL.

    Net Interest Income

    Net interest income totaled $81.3 million in Q1 2020, an increase of $3.7 million from Q4 2019, primarily due to 10 basis points of NIM expansion (a non-GAAP measure) and a $300.1 million increase in average interest-earning assets. Compared to Q4 2019, total loan yields increased 21 basis points to 4.89%. The cost of interest-bearing deposits in Q1 2020 decreased by 20 basis points due to two Federal Reserve interest rate cuts for 150 basis points during March 2020 due to COVID-19. Borrowing costs increased 25 basis points to 3.16% due to the issuance of $74.8 million in 15-year 5.375% subordinated notes in December 2019, partially offset by lower short-term borrowing costs due to the decline in interest rates.

    Q1 2020 net interest income increased $22.0 million from Q1 2019, primarily due to 40 basis points of NIM expansion (a non-GAAP measure) and a $1.7 billion increase in average interest-earning assets. Compared to Q1 2019, total loan yields increased 41 basis points to 4.89%. Given the Federal Reserve interest rate cuts in the second half of 2019 and March 2020, the cost of interest-bearing liabilities decreased 30 basis points to 2.01%.

    Total loans and leases increased $1.6 billion, or 18.2%, to $10.3 billion at March 31, 2020 compared to the year-ago period. Loan mix improved year-over-year as mortgage warehouse loans increased $1.0 billion to $2.6 billion, C&I loans and leases increased $616 million to $2.0 billion, commercial real estate non-owner occupied loans increased $159 million to $1.3 billion and other consumer loans increased $1.2 billion to $1.3 billion. These increases were offset in part by planned decreases in multi-family loans of $1.1 billion to $2.1 billion and residential mortgages of $269 million to $358 million.

    Total deposits increased $1.0 billion, or 13%, to $8.4 billion at March 31, 2020 compared to the year-ago period. Total demand deposits increased $828 million, or 38%, to $3.0 billion and savings deposits increased $751 million, or 180%, to $1.2 billion. These increases were offset in part by decreases in money market deposits of $432 million, or 13%, to $2.8 billion and time deposits of $159 million, or 10%, to $1.4 billion. In July 2018, Customers launched a new digital, on-line savings banking product with a goal of gathering retail deposits. At March 31, 2020, this new product generated $1.1 billion in retail deposits, an increase of $237 million since December 31, 2019.

    Risk Management, Provision and Credit Quality

    Risk management is a critical component of how Customers creates long-term shareholder value, and Customers believes that asset quality is one of the most important risks in banking to be understood and managed. Customers believes that asset quality risks must be diligently addressed during good economic times with prudent underwriting standards so that when the economy deteriorates the bank's capital is sufficient to absorb all losses without threatening its ability to operate and serve its community and other constituents. Since mid-2019, Customers has been operating in a pre-recessionary environment assuming a recession was imminent in the foreseeable future. "Our Credit Administration Group and Market Presidents started analyzing their portfolios, in detail, and stressing them under adverse scenarios and either exiting or increasing the monitoring activities of higher risk credits. Customers' non-performing loans at March 31, 2020 were only 0.61% of total loans and leases, compared to the industry average non-performing loans of 0.98%, in the most recent period available. Our Q1 2020 non-performing loans were impacted by one commercial real estate credit which we expect to resolve in the near future, reducing our non-performing loans in future periods. Our expectation is superior asset quality performance in good times and in difficult years," said Mr. Sidhu.

    The provision for credit losses on loans and leases in Q1 2020, which was calculated under CECL accounting standard effective January 1, 2020, was $22.3 million, compared to $9.7 million in Q4 2019 and $4.8 million in Q1 2019. The increase compared to the prior periods primarily resulted from the adoption of CECL and the impact of COVID-19. Net charge-offs for Q1 2020 were $5.9 million, or 25 basis points of average loans and leases on an annualized basis, compared to net charge-offs of $4.4 million, or 18 basis points in Q4 2019, and $1.1 million, or 5 basis points in Q1 2019. The allowance for credit losses on loans and leases represented 2.1% of total loans and leases receivable at March 31, 2020, compared to 0.8% at December 31, 2019, and 0.6% at March 31, 2019. Upon adoption of the CECL standard on January 1, 2020, the allowance for credit losses for funded and unfunded loans increased by $79.8 million and $3.4 million, respectively. The allowance for credit losses for unfunded loan commitments is presented within accrued interest payable and other liabilities in the consolidated balance sheet. The Q1 2020 provision for credit losses for unfunded loan commitments was $0.8 million and is presented as part of other non-interest expense.

    Non-Interest Income

    Non-interest income totaled $21.9 million for Q1 2020 , a decrease of $3.9 million compared to Q4 2019. The decrease in non-interest income primarily resulted from a negative mark-to-market derivative credit value adjustment of $3.1 million, reduced gains realized from the sale of SBA loans of $2.8 million and fair value declines in equity securities issued by a foreign entity of $1.7 million, offset in part by $4.0 million of gains realized from the sale of $100.5 million of agency-guaranteed residential mortgage-backed securities in Q1 2020.

    Non-interest income totaled $21.9 million in Q1 2020, an increase of $2.2 million compared to Q1 2019. The increase in non-interest income primarily resulted from $4.0 million of gains realized from the sale of $100.5 million of agency-guaranteed residential mortgage-backed securities in Q1 2020, increased commercial lease income of $1.9 million driven by organic growth in commercial operating leases, increased deposit fees of $1.3 million resulting from higher activity volumes at BankMobile and a change in the fee structure on certain deposit accounts late in Q1 2019, and increased mortgage warehouse transactional fees of $0.6 million resulting from increased refinancing activity driven by the decline in market interest rates. These increases were offset in part by a negative mark-to-market derivative credit valuation adjustment of $2.2 million, decreased interchange and card revenue of $2.0 million primarily driven by lower activity volumes at BankMobile and a decline in the fair value of equity securities issued by a foreign entity of $1.3 million.

    Non-Interest Expense

    Non-interest expense totaled $66.5 million for Q1 2020, an increase of $7.7 million compared to Q4 2019. The increase in non-interest expense primarily resulted from increases of $2.7 million in technology, communications, and bank operations, $2.6 million in other non-interest expenses, $1.2 million in professional services, $0.7 million in advertising and promotion, $0.6 million in salaries and employee benefits, and $0.6 million in commercial lease depreciation, partially offset in part by a decrease of $0.5 million in provision for operating losses. The increase in technology, communications, and bank operations was driven by BankMobile product costs and processing expenses to support its white label partnership. The increase in other non-interest expenses was driven by legal reserves of $1.0 million related to a partial settlement of the previously disclosed DOE matter, and an increase in the provision for credit losses for unfunded commitments of $0.8 million coinciding with the adoption of CECL and the impact of COVID-19. The increase in professional services was primarily driven by costs to support BankMobile and its white label partnership. The increase in advertising and promotion was driven by increases in promotional campaigns related to Customers' Digital Banking product and BankMobile and its white label partnership. The increase in salaries and employee benefits was primarily driven by an increase in full time equivalents needed for future growth. The increase in commercial lease depreciation was driven by the organic growth of the commercial operating lease portfolio.

    Non-interest expense totaled $66.5 million in Q1 2020, an increase of $12.5 million compared to Q1 2019. The increase in non-interest expense primarily resulted from increases of $3.3 million in other non-interest expenses, $3.1 million in professional services, $2.5 million in salaries and employee benefits, $1.5 million in commercial lease depreciation, $1.1 million in technology, communications, and bank operations, $0.9 million in FDIC, non-income taxes, and regulatory fees, and $0.8 million in advertising and promotion, offset in part by a decrease of $0.9 million in provision for operating losses. The increase in other non-interest expense was primarily driven by legal reserves of $1.0 million related to the partial settlement of the previously disclosed DOE matter, certain product development costs related to our white label partnership, and an increase in the provision for credit losses for unfunded commitments of $0.8 million coinciding with the adoption of CECL and the impact of COVID-19. The increase in professional services was driven by costs incurred to support our white label partnership. The increase in salaries and employee benefits was primarily driven by annual salary increases and an increase in full time equivalents to support future growth. The increase in commercial lease depreciation was primarily driven by the organic growth of the commercial operating lease portfolio. The increase in technology, communications and bank operations primarily resulted from the continued investment in Customers' digital transformation initiatives. The increase in FDIC, non-income taxes, and regulatory fees was driven by higher fees resulting from management's decision to grow the balance sheet beyond $10 billion, as higher premiums become applicable. The increase in advertising and promotion was driven by increases in promotional campaigns related to Customers' Digital Banking product and BankMobile and its white label partnership.

    Taxes

    Customers' effective tax rate was 26.5% for Q1 2020, compared to 21.3% for Q4 2019 and 23.8% for Q1 2019. The increase in the effective tax rate from Q4 2019 was primarily driven by tax credits that were recorded in Q4 2019 and changes made to state taxes. The increase in the effective tax rate in Q1 2020 when compared to Q1 2019 is mainly driven by discrete provision items which increased income tax expense in Q1 2020.

    BankMobile Segment Results

    BankMobile, a division of Customers Bank, operates a branchless digital bank offering low cost banking services to over two million Americans, with approximately 0.9 million active deposit customers. Customers reported in Q4 2018 that it expects to retain BankMobile for up to a 2-3 year period, but will regularly evaluate the best options for BankMobile. Key strategic initiatives for 2020 include keeping BankMobile profitable and attempting to divest it by the end of 2020.

    BankMobile deposits averaged $622 million in Q1 2020, with an average cost of just 0.22%, and Q1 2020 revenues were $23.1 million compared to Q1 2019 of $20.2 million. BankMobile reported Q1 2020 segment net loss of $3.2 million, or $(0.10) per diluted share, compared to a net loss of $0.2 million, or $(0.01) per diluted share in Q1 2019, principally due to an increase in provision for loan losses from the CECL adoption, the impact of COVID-19 and increased non-interest expense resulting from legal reserves of $1.0 million related to the partial settlement of the previously disclosed DOE matter and increased depreciation expense related to capitalized development costs for technology placed in service during 2019 and other non-capitalizable technology-related expenses. "We remain in the investment mode for our white label and other unique Banking as a Service ("BaaS") strategic opportunities for BankMobile," stated Luvleen Sidhu, President and Chief Executive Officer of BankMobile. We are very optimistic about our longer term opportunities to supplement our profitability and growth with continued expansion of our BaaS business," Luvleen Sidhu concluded. "Since Customers Bancorp, Inc. decided to cross the $10 billion asset mark at December 31, 2019, Customers will explore all strategic options for BankMobile in 2020 and will attempt to divest it by the end of 2020," concluded Jay Sidhu, Customers Bancorp, Inc. CEO and Chairman.

    Conference Call

    Date:

    Monday, May 4, 2020

    Time:

    11:00 AM EDT

    US Dial-in:

    +1 (877) 886-2635

    International Dial-in:

    +1 (334) 323-0527

    Participant Code:

    822019

    Please dial in at least 10 minutes before the start of the call to ensure timely participation. Slides accompanying the presentation will be available on Customers' website at https://www.customersbank.com/investor-relations/ prior to the call.

    Please submit any questions you have regarding the earnings in advance to rramsey@customersbank.com and the executives will address them on the call. Customers will also open the lines to questions following management's presentation of the first quarter results. A playback of the call will be available beginning May 4, 2020 at 2:00 PM EDT until 2:00 PM EDT on June 3, 2020. To listen, call within the United States +1 (888) 203-1112, or +1 (719) 457-0820 when calling internationally. Please use the replay passcode 9446078.

    Institutional Background

    Customers Bancorp, Inc. is a bank holding company located in Wyomissing, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank. Customers Bank is a community-based, full-service bank with assets of approximately $12.0 billion at March 31, 2020. A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender that provides a range of banking services to small and medium-sized businesses, professionals, individuals and families through offices in Pennsylvania, Illinois, New York, Rhode Island, Massachusetts, New Hampshire and New Jersey. Committed to fostering customer loyalty, Customers Bank uses a High Tech/High Touch strategy that includes use of industry-leading technology to provide customers better access to their money, as well as Concierge Banking by appointment at customers’ homes or offices 12 hours a day, seven days a week. Customers Bank offers a continually expanding portfolio of loans to small businesses, multi-family projects, mortgage companies and consumers.

    Customers Bancorp, Inc.'s voting common shares are listed on the New York Stock Exchange under the symbol CUBI. Additional information about Customers Bancorp, Inc. can be found on the Company’s website, www.customersbank.com.

    “Safe Harbor” Statement

    In addition to historical information, this press release may contain ”forward-looking statements” within the meaning of the ”safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Customers Bancorp, Inc.’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words ”may,” ”could,” ”should,” ”pro forma,” ”looking forward,” ”would,” ”believe,” ”expect,” ”anticipate,” ”estimate,” ”intend,” ”plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.’s control). Numerous competitive, economic, regulatory, legal and technological events and factors, among others, could cause Customers Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements, including: the adverse impact on the U.S. economy, including the markets in which we operate, of the coronavirus outbreak, and the impact of a slowing U.S. economy and increased unemployment on the performance of our loan and lease portfolio, the market value of our investment securities, the demand for our products and services and the availability of sources of funding; the effects of actions by the federal government, including the Board of Governors of the Federal Reserve System and other government agencies, that effect market interest rates and the money supply; actions that we and our customers take in response to these developments and the effects such actions have on our operations, products, services and customer relationships; the effects of changes in accounting standards or policies, including Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (CECL); and, our ability to divest BankMobile on terms and conditions acceptable to us, in the timeframe we currently intend, and the possible effects on our business and results of operations of a divestiture of BankMobile or if we are unable to divest BankMobile for an extended period of time. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K for the year ended December 31, 2019, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank, except as may be required under applicable law.

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

    (Dollars in thousands, except per share data)

     

     

     

     

     

     

     

     

     

     

    Q1

     

    Q4

     

    Q3

     

    Q2

     

    Q1

     

    2020

     

    2019

     

    2019

     

    2019

     

    2019

    Interest income:

     

     

     

     

     

     

     

     

     

    Loans and leases

    $

    116,080

     

     

    $

    116,365

     

     

    $

    118,444

     

     

    $

    103,567

     

     

    $

    93,116

     

    Investment securities

    4,977

     

     

    5,125

     

     

    5,867

     

     

    6,481

     

     

    6,241

     

    Other

    4,286

     

     

    2,505

     

     

    2,407

     

     

    1,902

     

     

    1,718

     

    Total interest income

    125,343

     

     

    123,995

     

     

    126,718

     

     

    111,950

     

     

    101,075

     

     

     

     

     

     

     

     

     

     

     

    Interest expense:

     

     

     

     

     

     

     

     

     

    Deposits

    34,353

     

     

    35,992

     

     

    38,267

     

     

    35,980

     

     

    31,225

     

    FHLB advances

    5,390

     

     

    6,056

     

     

    7,563

     

     

    7,607

     

     

    5,293

     

    Subordinated debt

    2,689

     

     

    1,930

     

     

    1,684

     

     

    1,684

     

     

    1,684

     

    Federal funds purchased and other borrowings

    1,590

     

     

    2,424

     

     

    3,469

     

     

    2,000

     

     

    3,569

     

    Total interest expense

    44,022

     

     

    46,402

     

     

    50,983

     

     

    47,271

     

     

    41,771

     

    Net interest income

    81,321

     

     

    77,593

     

     

    75,735

     

     

    64,679

     

     

    59,304

     

    Provision for credit losses on loans and leases

    22,316

     

     

    9,689

     

     

    4,426

     

     

    5,346

     

     

    4,767

     

    Net interest income after provision for credit losses on loans and leases

    59,005

     

     

    67,904

     

     

    71,309

     

     

    59,333

     

     

    54,537

     

     

     

     

     

     

     

     

     

     

     

    Non-interest income:

     

     

     

     

     

     

     

     

     

    Interchange and card revenue

    6,809

     

     

    6,506

     

     

    6,869

     

     

    6,760

     

     

    8,806

     

    Deposit fees

    3,460

     

     

    3,616

     

     

    3,642

     

     

    3,348

     

     

    2,209

     

    Commercial lease income

    4,268

     

     

    3,839

     

     

    3,080

     

     

    2,730

     

     

    2,401

     

    Bank-owned life insurance

    1,762

     

     

    1,795

     

     

    1,824

     

     

    1,836

     

     

    1,816

     

    Mortgage warehouse transactional fees

    1,952

     

     

    1,983

     

     

    2,150

     

     

    1,681

     

     

    1,314

     

    Gain (loss) on sale of SBA and other loans

    11

     

     

    2,770

     

     

    —

     

     

    —

     

     

    —

     

    Mortgage banking income (loss)

    296

     

     

    (635)

     

     

    283

     

     

    250

     

     

    167

     

    Loss upon acquisition of interest-only GNMA securities

    —

     

     

    —

     

     

    —

     

     

    (7,476)

     

     

    —

     

    Gain (loss) on sale of investment securities

    3,974

     

     

    —

     

     

    1,001

     

     

    —

     

     

    —

     

    Unrealized gain (loss) on investment securities

    (1,378)

     

     

    310

     

     

    1,333

     

     

    (347)

     

     

    2

     

    Other

    776

     

     

    5,629

     

     

    3,187

     

     

    3,254

     

     

    3,003

     

    Total non-interest income

    21,930

     

     

    25,813

     

     

    23,369

     

     

    12,036

     

     

    19,718

     

     

     

     

     

     

     

     

     

     

     

    Non-interest expense:

     

     

     

     

     

     

     

     

     

    Salaries and employee benefits

    28,310

     

     

    27,697

     

     

    27,193

     

     

    26,920

     

     

    25,823

     

    Technology, communication and bank operations

    13,050

     

     

    10,370

     

     

    8,755

     

     

    12,402

     

     

    11,953

     

    Professional services

    7,670

     

     

    6,470

     

     

    8,348

     

     

    5,718

     

     

    4,573

     

    Occupancy

    3,032

     

     

    3,470

     

     

    3,661

     

     

    3,064

     

     

    2,903

     

    Commercial lease depreciation

    3,427

     

     

    2,840

     

     

    2,459

     

     

    2,252

     

     

    1,923

     

    FDIC assessments, non-income taxes and regulatory fees

    2,867

     

     

    2,492

     

     

    (777)

     

     

    2,157

     

     

    1,988

     

    Provision for operating losses

    912

     

     

    1,415

     

     

    3,998

     

     

    2,446

     

     

    1,779

     

    Advertising and promotion

    1,641

     

     

    899

     

     

    976

     

     

    1,360

     

     

    809

     

    Merger and acquisition related expenses

    50

     

     

    100

     

     

    —

     

     

    —

     

     

    —

     

    Loan workout

    366

     

     

    230

     

     

    495

     

     

    643

     

     

    320

     

    Other real estate owned

    8

     

     

    247

     

     

    108

     

     

    (14)

     

     

    57

     

    Other

    5,126

     

     

    2,510

     

     

    4,376

     

     

    2,634

     

     

    1,856

     

    Total non-interest expense

    66,459

     

     

    58,740

     

     

    59,592

     

     

    59,582

     

     

    53,984

     

    Income before income tax expense

    14,476

     

     

    34,977

     

     

    35,086

     

     

    11,787

     

     

    20,271

     

    Income tax expense

    3,834

     

     

    7,451

     

     

    8,020

     

     

    2,491

     

     

    4,831

     

    Net income

    10,642

     

     

    27,526

     

     

    27,066

     

     

    9,296

     

     

    15,440

     

    Preferred stock dividends

    3,615

     

     

    3,615

     

     

    3,615

     

     

    3,615

     

     

    3,615

     

    Net income available to common shareholders

    $

    7,027

     

     

    $

    23,911

     

     

    $

    23,451

     

     

    $

    5,681

     

     

    $

    11,825

     

     

     

     

     

     

     

     

     

     

     

    Basic earnings per common share

    $

    0.22

     

     

    $

    0.76

     

     

    $

    0.75

     

     

    $

    0.18

     

     

    $

    0.38

     

    Diluted earnings per common share

    $

    0.22

     

     

    $

    0.75

     

     

    $

    0.74

     

     

    $

    0.18

     

     

    $

    0.38

     

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEET - UNAUDITED

    (Dollars in thousands)

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

     

    March 31,

     

    2020

     

    2019

     

    2019

     

    2019

     

    2019

    ASSETS

     

     

     

     

     

     

     

     

     

    Cash and due from banks

    $

    18,842

     

     

    $

    33,095

     

     

    $

    12,555

     

     

    $

    24,757

     

     

    $

    41,723

     

    Interest earning deposits

    237,390

     

     

    179,410

     

     

    169,663

     

     

    71,038

     

     

    75,939

     

    Cash and cash equivalents

    256,232

     

     

    212,505

     

     

    182,218

     

     

    95,795

     

     

    117,662

     

    Investment securities available for sale, at fair value

    712,657

     

     

    595,876

     

     

    608,714

     

     

    708,359

     

     

    678,142

     

    Loans held for sale

    450,157

     

     

    486,328

     

     

    502,854

     

     

    5,697

     

     

    1,602

     

    Loans receivable, mortgage warehouse, at fair value

    2,518,012

     

     

    2,245,758

     

     

    2,438,530

     

     

    2,001,540

     

     

    1,480,195

     

    Loans and leases receivable

    7,366,058

     

     

    7,318,988

     

     

    7,336,237

     

     

    7,714,106

     

     

    7,264,049

     

    Allowance for credit losses on loans and leases

    (152,610)

     

     

    (56,379)

     

     

    (51,053)

     

     

    (48,388)

     

     

    (43,679)

     

    Total loans and leases receivable, net of allowance for credit losses on loans and leases

    9,731,460

     

     

    9,508,367

     

     

    9,723,714

     

     

    9,667,258

     

     

    8,700,565

     

    FHLB, Federal Reserve Bank, and other restricted stock

    87,140

     

     

    84,214

     

     

    81,853

     

     

    101,947

     

     

    80,416

     

    Accrued interest receivable

    40,570

     

     

    38,072

     

     

    38,412

     

     

    38,506

     

     

    35,716

     

    Bank premises and equipment, net

    8,890

     

     

    9,389

     

     

    14,075

     

     

    10,095

     

     

    10,542

     

    Bank-owned life insurance

    273,576

     

     

    272,546

     

     

    270,526

     

     

    268,682

     

     

    266,740

     

    Other real estate owned

    131

     

     

    173

     

     

    204

     

     

    1,076

     

     

    976

     

    Goodwill and other intangibles

    14,870

     

     

    15,195

     

     

    15,521

     

     

    15,847

     

     

    16,173

     

    Other assets

    450,659

     

     

    298,052

     

     

    285,699

     

     

    269,165

     

     

    235,360

     

    Total assets

    $

    12,026,342

     

     

    $

    11,520,717

     

     

    $

    11,723,790

     

     

    $

    11,182,427

     

     

    $

    10,143,894

     

     

     

     

     

     

     

     

     

     

     

    LIABILITIES AND SHAREHOLDERS' EQUITY

     

     

     

     

     

     

     

     

     

    Demand, non-interest bearing deposits

    $

    1,435,151

     

     

    $

    1,343,391

     

     

    $

    1,569,918

     

     

    $

    1,380,698

     

     

    $

    1,372,358

     

    Interest bearing deposits

    6,978,492

     

     

    7,305,545

     

     

    7,355,767

     

     

    6,805,079

     

     

    6,052,960

     

    Total deposits

    8,413,643

     

     

    8,648,936

     

     

    8,925,685

     

     

    8,185,777

     

     

    7,425,318

     

    FRB advances

    175,000

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

    Federal funds purchased

    705,000

     

     

    538,000

     

     

    373,000

     

     

    406,000

     

     

    388,000

     

    FHLB advances

    1,260,000

     

     

    850,000

     

     

    1,040,800

     

     

    1,262,100

     

     

    1,025,832

     

    Other borrowings

    123,732

     

     

    123,630

     

     

    123,528

     

     

    99,055

     

     

    123,963

     

    Subordinated debt

    181,185

     

     

    181,115

     

     

    109,050

     

     

    109,026

     

     

    109,002

     

    Accrued interest payable and other liabilities

    195,603

     

     

    126,241

     

     

    132,577

     

     

    129,064

     

     

    93,406

     

    Total liabilities

    11,054,163

     

     

    10,467,922

     

     

    10,704,640

     

     

    10,191,022

     

     

    9,165,521

     

     

     

     

     

     

     

     

     

     

     

    Preferred stock

    217,471

     

     

    217,471

     

     

    217,471

     

     

    217,471

     

     

    217,471

     

    Common stock

    32,751

     

     

    32,617

     

     

    32,526

     

     

    32,483

     

     

    32,412

     

    Additional paid in capital

    446,840

     

     

    444,218

     

     

    441,499

     

     

    439,067

     

     

    436,713

     

    Retained earnings

    327,072

     

     

    381,519

     

     

    357,608

     

     

    334,157

     

     

    328,476

     

    Accumulated other comprehensive loss

    (30,175)

     

     

    (1,250)

     

     

    (8,174)

     

     

    (9,993)

     

     

    (14,919)

     

    Treasury stock, at cost

    (21,780)

     

     

    (21,780)

     

     

    (21,780)

     

     

    (21,780)

     

     

    (21,780)

     

    Total shareholders' equity

    972,179

     

     

    1,052,795

     

     

    1,019,150

     

     

    991,405

     

     

    978,373

     

    Total liabilities & shareholders' equity

    $

    12,026,342

     

     

    $

    11,520,717

     

     

    $

    11,723,790

     

     

    $

    11,182,427

     

     

    $

    10,143,894

     

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED

    (Dollars in thousands)

     

    Three Months Ended

     

    March 31, 2020

     

    December 31, 2019

     

    March 31, 2019

     

    Average

    Balance

    Average

    Yield or

    Cost (%)

     

    Average

    Balance

    Average

    Yield or

    Cost (%)

     

    Average

    Balance

    Average

    Yield or

    Cost (%)

    Assets

     

     

     

     

     

     

     

     

    Interest earning deposits

    $

    772,249

     

    1.49%

     

    $

    150,382

     

    2.21%

     

    $

    85,263

     

    2.52%

    Investment securities (1)

    566,287

     

    3.52%

     

    584,955

     

    3.50%

     

    691,823

     

    3.61%

    Loans and leases:

     

     

     

     

     

     

     

     

    Commercial loans to mortgage companies

    1,841,659

     

    3.82%

     

    2,158,626

     

    4.16%

     

    1,264,478

     

    5.05%

    Multi-family loans

    2,213,858

     

    4.06%

     

    2,654,919

     

    3.96%

     

    3,253,792

     

    3.79%

    Commercial and industrial loans and leases (2)

    2,460,811

     

    4.70%

     

    2,318,313

     

    4.79%

     

    1,921,139

     

    5.14%

    Non-owner occupied commercial real estate loans

    1,335,600

     

    4.35%

     

    1,325,630

     

    4.55%

     

    1,169,333

     

    4.47%

    Residential mortgages

    445,953

     

    3.97%

     

    631,370

     

    4.05%

     

    695,748

     

    4.16%

    Other consumer loans

    1,259,051

     

    9.14%

     

    765,765

     

    9.11%

     

    116,295

     

    9.15%

    Total loans and leases (3)

    9,556,932

     

    4.89%

     

    9,854,623

     

    4.68%

     

    8,420,785

     

    4.48%

    Other interest-earning assets

    81,404

     

    7.04%

     

    86,770

     

    7.63%

     

    80,542

     

    5.98%

    Total interest-earning assets

    10,976,872

     

    4.59%

     

    10,676,730

     

    4.61%

     

    9,278,413

     

    4.41%

    Non-interest-earning assets

    596,618

     

     

     

    580,477

     

     

     

    481,116

     

     

    Total assets

    $

    11,573,490

     

     

     

    $

    11,257,207

     

     

     

    $

    9,759,529

     

     

    Liabilities

     

     

     

     

     

     

     

     

    Interest checking accounts

    $

    1,294,098

     

    1.43%

     

    $

    1,152,349

     

    1.65%

     

    $

    815,072

     

    1.90%

    Money market deposit accounts

    3,635,554

     

    1.79%

     

    3,190,543

     

    2.01%

     

    3,144,888

     

    2.24%

    Other savings accounts

    1,141,406

     

    2.05%

     

    722,487

     

    2.09%

     

    380,911

     

    2.02%

    Certificates of deposit

    1,524,770

     

    2.04%

     

    2,012,497

     

    2.21%

     

    1,552,153

     

    2.14%

    Total interest-bearing deposits (4)

    7,595,828

     

    1.82%

     

    7,077,876

     

    2.02%

     

    5,893,024

     

    2.15%

    Borrowings

    1,229,399

     

    3.16%

     

    1,424,550

     

    2.91%

     

    1,432,685

     

    2.98%

    Total interest-bearing liabilities

    8,825,227

     

    2.01%

     

    8,502,426

     

    2.17%

     

    7,325,709

     

    2.31%

    Non-interest-bearing deposits (4)

    1,573,371

     

     

     

    1,580,050

     

     

     

    1,360,815

     

     

    Total deposits and borrowings

    10,398,598

     

    1.70%

     

    10,082,476

     

    1.83%

     

    8,686,524

     

    1.95%

    Other non-interest-bearing liabilities

    149,453

     

     

     

    138,242

     

     

     

    104,401

     

     

    Total liabilities

    10,548,051

     

     

     

    10,220,718

     

     

     

    8,790,925

     

     

    Shareholders' equity

    1,025,439

     

     

     

    1,036,489

     

     

     

    968,604

     

     

    Total liabilities and shareholders' equity

    $

    11,573,490

     

     

     

    $

    11,257,207

     

     

     

    $

    9,759,529

     

     

    Interest spread

     

    2.89%

     

     

    2.78%

     

     

    2.46%

    Net interest margin

     

    2.98%

     

     

    2.89%

     

     

    2.59%

    Net interest margin tax equivalent (5)

     

    2.99%

     

     

    2.89%

     

     

    2.59%

     

     

     

     

     

     

     

     

     

    (1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.

    (2) Includes owner occupied commercial real estate loans.

    (3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.

    (4) Total costs of deposits (including interest bearing and non-interest bearing) were 1.51%, 1.65% and 1.75% for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

    (5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    SEGMENT REPORTING - UNAUDITED

    (Dollars in thousands, except per share amounts)

    The following tables present Customers' business segment results for the three months ended March 31, 2020 and 2019:

     

     

    Three Months Ended March 31, 2020

     

    Three Months Ended March 31, 2019

     

    Customers

    Bank

    Business

    Banking

     

    BankMobile

     

    Consolidated

     

    Customers

    Bank

    Business

    Banking

     

    BankMobile

     

    Consolidated

    Interest income (1)

    $

    112,717

     

     

    $

    12,626

     

     

    $

    125,343

     

     

    $

    92,871

     

     

    $

    8,204

     

     

    $

    101,075

     

    Interest expense

    43,678

     

     

    344

     

     

    44,022

     

     

    41,605

     

     

    166

     

     

    41,771

     

    Net interest income

    69,039

     

     

    12,282

     

     

    81,321

     

     

    51,266

     

     

    8,038

     

     

    59,304

     

    Provision for credit losses on loans and leases

    17,828

     

     

    4,488

     

     

    22,316

     

     

    2,976

     

     

    1,791

     

     

    4,767

     

    Non-interest income

    11,136

     

     

    10,794

     

     

    21,930

     

     

    7,577

     

     

    12,141

     

     

    19,718

     

    Non-interest expense

    43,860

     

     

    22,599

     

     

    66,459

     

     

    35,384

     

     

    18,600

     

     

    53,984

     

    Income (loss) before income tax expense (benefit)

    18,487

     

     

    (4,011)

     

     

    14,476

     

     

    20,483

     

     

    (212)

     

     

    20,271

     

    Income tax expense (benefit)

    4,650

     

     

    (816)

     

     

    3,834

     

     

    4,880

     

     

    (49)

     

     

    4,831

     

    Net income (loss)

    13,837

     

     

    (3,195)

     

     

    10,642

     

     

    15,603

     

     

    (163)

     

     

    15,440

     

    Preferred stock dividends

    3,615

     

     

    —

     

     

    3,615

     

     

    3,615

     

     

    —

     

     

    3,615

     

    Net income (loss) available to common shareholders

    $

    10,222

     

     

    $

    (3,195)

     

     

    $

    7,027

     

     

    $

    11,988

     

     

    $

    (163)

     

     

    $

    11,825

     

     

     

     

     

     

     

     

     

     

     

     

     

    Basic earnings (loss) per common share

    $

    0.33

     

     

    $

    (0.10)

     

     

    $

    0.22

     

     

    $

    0.39

     

     

    $

    (0.01)

     

     

    $

    0.38

     

    Diluted earnings (loss) per common share

    $

    0.32

     

     

    $

    (0.10)

     

     

    $

    0.22

     

     

    $

    0.38

     

     

    $

    (0.01)

     

     

    $

    0.38

     

    As of March 31, 2020 and 2019

     

     

     

     

     

     

     

     

     

     

    Goodwill and other intangibles

    $

    3,629

     

     

    $

    11,241

     

     

    $

    14,870

     

     

    $

    3,629

     

     

    $

    12,544

     

     

    $

    16,173

     

    Total assets (2)

    $

    11,425,543

     

     

    $

    600,799

     

     

    $

    12,026,342

     

     

    $

    9,916,308

     

     

    $

    227,586

     

     

    $

    10,143,894

     

    Total deposits

    $

    7,803,878

     

     

    $

    609,765

     

     

    $

    8,413,643

     

     

    $

    6,798,562

     

     

    $

    626,756

     

     

    $

    7,425,318

     

    Total non-deposit liabilities (2)

    $

    2,611,684

     

     

    $

    28,836

     

     

    $

    2,640,520

     

     

    $

    1,719,469

     

     

    $

    20,734

     

     

    $

    1,740,203

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1) Amounts reported include funds transfer pricing of $1.4 million and $5.6 million for the three months ended March 31, 2020 and 2019, respectively, credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.

    (2) Amounts reported exclude inter-segment receivables.

     

    The following tables present Customers' business segment results for the quarter ended March 31, 2020, the preceding four quarters, and the three months ended March 31, 2020 and 2019, respectively:

    Customers Bank Business Banking:

     

     

     

     

     

     

     

     

     

     

     

     

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    Interest income (1)

     

    $

    112,717

     

     

    $

    112,212

     

     

    $

    113,995

     

     

    $

    103,014

     

     

    $

    92,871

     

    Interest expense

     

    43,678

     

     

    46,111

     

     

    50,734

     

     

    47,061

     

     

    41,605

     

    Net interest income

     

    69,039

     

     

    66,101

     

     

    63,261

     

     

    55,953

     

     

    51,266

     

    Provision for credit losses on loans and leases

     

    17,828

     

     

    6,846

     

     

    2,475

     

     

    (2,206)

     

     

    2,976

     

    Non-interest income (loss)

     

    11,136

     

     

    14,964

     

     

    11,757

     

     

    970

     

     

    7,577

     

    Non-interest expense

     

    43,860

     

     

    41,494

     

     

    38,347

     

     

    38,107

     

     

    35,384

     

    Income before income tax expense

     

    18,487

     

     

    32,725

     

     

    34,196

     

     

    21,022

     

     

    20,483

     

    Income tax expense

     

    4,650

     

     

    6,892

     

     

    7,814

     

     

    4,629

     

     

    4,880

     

    Net income

     

    13,837

     

     

    25,833

     

     

    26,382

     

     

    16,393

     

     

    15,603

     

    Preferred stock dividends

     

    3,615

     

     

    3,615

     

     

    3,615

     

     

    3,615

     

     

    3,615

     

    Net income available to common shareholders

     

    $

    10,222

     

     

    $

    22,218

     

     

    $

    22,767

     

     

    $

    12,778

     

     

    $

    11,988

     

     

     

     

     

     

     

     

     

     

     

     

    Basic earnings per common share

     

    $

    0.33

     

     

    $

    0.71

     

     

    $

    0.73

     

     

    $

    0.41

     

     

    $

    0.39

     

    Diluted earnings per common share

     

    $

    0.32

     

     

    $

    0.70

     

     

    $

    0.72

     

     

    $

    0.40

     

     

    $

    0.38

     

     

     

     

     

     

     

     

     

     

     

     

    (1) Amounts reported include funds transfer pricing of $1.4 million, $0.7 million, $0.3 million, $2.2 million and $5.6 million for the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, respectively. These amounts are credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.

    BankMobile:

     

     

     

     

     

     

     

     

     

     

     

     

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    Interest income (2)

     

    $

    12,626

     

     

    $

    11,783

     

     

    $

    12,723

     

     

    $

    8,936

     

     

    $

    8,204

     

    Interest expense

     

    344

     

     

    291

     

     

    249

     

     

    210

     

     

    166

     

    Net interest income

     

    12,282

     

     

    11,492

     

     

    12,474

     

     

    8,726

     

     

    8,038

     

    Provision for credit losses on loans and leases

     

    4,488

     

     

    2,843

     

     

    1,951

     

     

    7,552

     

     

    1,791

     

    Non-interest income

     

    10,794

     

     

    10,849

     

     

    11,612

     

     

    11,066

     

     

    12,141

     

    Non-interest expense

     

    22,599

     

     

    17,246

     

     

    21,245

     

     

    21,475

     

     

    18,600

     

    Income (loss) before income tax expense (benefit)

     

    (4,011)

     

     

    2,252

     

     

    890

     

     

    (9,235)

     

     

    (212)

     

    Income tax benefit

     

    (816)

     

     

    559

     

     

    206

     

     

    (2,138)

     

     

    (49)

     

    Net income (loss) available to common shareholders

     

    $

    (3,195)

     

     

    $

    1,693

     

     

    $

    684

     

     

    $

    (7,097)

     

     

    $

    (163)

     

     

     

     

     

     

     

     

     

     

     

     

    Basic income (loss) per common share

     

    $

    (0.10)

     

     

    $

    0.05

     

     

    $

    0.02

     

     

    $

    (0.23)

     

     

    $

    (0.01)

     

    Diluted income (loss) per common share

     

    $

    (0.10)

     

     

    $

    0.05

     

     

    $

    0.02

     

     

    $

    (0.22)

     

     

    $

    (0.01)

     

     

     

     

     

     

     

     

     

     

     

     

    Deposit balances (3)

     

     

     

     

     

     

     

     

     

     

    Disbursements business deposits

     

    $

    502,711

     

     

    $

    319,263

     

     

    $

    598,064

     

     

    $

    409,683

     

     

    $

    615,710

     

    White label deposits

     

    107,054

     

     

    81,837

     

     

    67,541

     

     

    46,514

     

     

    11,046

     

    Total deposits

     

    $

    609,765

     

     

    $

    401,100

     

     

    $

    665,605

     

     

    $

    456,197

     

     

    $

    626,756

     

     

    (2) Amounts reported include funds transfer pricing of $1.4 million, $0.7 million, $0.3 million, $2.2 million and $5.6 million for the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019, respectively. These amounts are credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.

    (3) As of March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019.

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

     

    March 31,

     

    2020

     

    2019

     

    2019

     

    2019

     

    2019

    Commercial:

     

     

     

     

     

     

     

     

     

    Multi-family

    $

    2,070,599

     

     

    $

    2,392,146

     

     

    $

    2,800,018

     

     

    $

    3,017,531

     

     

    $

    3,212,312

     

    Mortgage warehouse

    2,573,671

     

     

    2,305,953

     

     

    2,549,286

     

     

    2,054,307

     

     

    1,535,343

     

    Commercial & industrial

    2,016,254

     

     

    1,829,785

     

     

    1,777,378

     

     

    1,545,704

     

     

    1,400,444

     

    Commercial real estate owner occupied

    543,961

     

     

    552,007

     

     

    475,465

     

     

    586,086

     

     

    582,637

     

    Commercial real estate non-owner occupied

    1,266,405

     

     

    1,223,529

     

     

    1,268,557

     

     

    1,176,575

     

     

    1,107,336

     

    Construction

    116,068

     

     

    118,418

     

     

    61,200

     

     

    59,811

     

     

    53,372

     

    Total commercial loans and leases

    8,586,958

     

     

    8,421,838

     

     

    8,931,904

     

     

    8,440,014

     

     

    7,891,444

     

    Consumer:

     

     

     

     

     

     

     

     

     

    Residential

    358,019

     

     

    378,470

     

     

    631,866

     

     

    654,556

     

     

    626,668

     

    Manufactured housing

    68,314

     

     

    70,398

     

     

    72,616

     

     

    75,597

     

     

    77,778

     

    Other consumer

    1,317,737

     

     

    1,178,283

     

     

    643,553

     

     

    552,839

     

     

    153,153

     

    Total consumer loans

    1,744,070

     

     

    1,627,151

     

     

    1,348,035

     

     

    1,282,992

     

     

    857,599

     

    Deferred (fees)/costs and unamortized (discounts)/premiums, net

    3,199

     

     

    2,085

     

     

    (2,318)

     

     

    (1,663)

     

     

    (3,197)

     

    Total loans and leases

    $

    10,334,227

     

     

    $

    10,051,074

     

     

    $

    10,277,621

     

     

    $

    9,721,343

     

     

    $

    8,745,846

     

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    PERIOD END DEPOSIT COMPOSITION - UNAUDITED

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

     

    March 31,

     

    2020

     

    2019

     

    2019

     

    2019

     

    2019

     

     

     

     

     

     

     

     

     

     

    Demand, non-interest bearing

    $

    1,435,151

     

     

    $

    1,343,391

     

     

    $

    1,569,918

     

     

    $

    1,380,698

     

     

    $

    1,372,358

     

    Demand, interest bearing

    1,577,034

     

     

    1,235,292

     

     

    1,139,675

     

     

    925,180

     

     

    811,490

     

    Savings

    1,168,121

     

     

    919,214

     

     

    591,336

     

     

    529,532

     

     

    417,346

     

    Money market

    2,833,990

     

     

    3,482,505

     

     

    3,201,883

     

     

    2,912,266

     

     

    3,265,823

     

    Time deposits

    1,399,347

     

     

    1,668,534

     

     

    2,422,873

     

     

    2,438,101

     

     

    1,558,301

     

    Total deposits

    $

    8,413,643

     

     

    $

    8,648,936

     

     

    $

    8,925,685

     

     

    $

    8,185,777

     

     

    $

    7,425,318

     

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    ASSET QUALITY - UNAUDITED

    (Dollars in thousands)

    As of March 31, 2020

    As of December 31, 2019

    As of March 31, 2019

     

    Total loans

    Non

    accrual

    /NPLs

    Total

    credit

    reserves

    Total

    NPLs to

    total loans

    Total

    reserves to

    total NPLs

    Total loans

    Non

    accrual

    /NPLs

    Total

    credit

    reserves

    Total

    NPLs to

    total loans

    Total

    reserves to

    total NPLs

    Total loans

    Non

    accrual

    /NPLs

    Total

    credit

    reserves

    Total

    NPLs to

    total loans

    Total

    reserves to

    total NPLs

     

    Loan type

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Multi-family

    $

    1,623,155

     

    $

    4,020

     

    $

    8,742

     

    0.25

    %

    217.46

    %

    $

    1,909,274

     

    $

    4,117

     

    $

    6,157

     

    0.22

    %

    149.55

    %

    $

    3,212,312

     

    $

    1,997

     

    $

    10,630

     

    0.06

    %

    532.30

    %

    Commercial & industrial

    2,071,913

     

    9,993

     

    19,603

     

    0.48

    %

    196.17

    %

    1,889,980

     

    4,531

     

    16,010

     

    0.24

    %

    353.34

    %

    1,455,592

     

    12,225

     

    14,182

     

    0.84

    %

    116.01

    %

    Commercial real estate owner occupied

    543,961

     

    2,411

     

    7,627

     

    0.44

    %

    316.34

    %

    552,007

     

    1,963

     

    1,781

     

    0.36

    %

    90.73

    %

    582,637

     

    839

     

    1,890

     

    0.14

    %

    225.27

    %

    Commercial real estate non-owner occupied

    1,266,405

     

    34,276

     

    21,816

     

    2.71

    %

    63.65

    %

    1,223,529

     

    76

     

    6,243

     

    0.01

    %

    8214.47

    %

    1,107,336

     

    102

     

    6,015

     

    0.01

    %

    5897.06

    %

    Construction

    116,068

     

    —

     

    1,933

     

    —

    %

    —

    %

    118,418

     

    —

     

    1,262

     

    —

    %

    —

    %

    53,372

     

    —

     

    584

     

    —

    %

    —

    %

    Total commercial loans and leases receivable

    5,621,502

     

    50,700

     

    59,721

     

    0.90

    %

    117.79

    %

    5,693,208

     

    10,687

     

    31,453

     

    0.19

    %

    294.31

    %

    6,411,249

     

    15,163

     

    33,301

     

    0.24

    %

    219.62

    %

    Residential

    355,306

     

    6,054

     

    4,148

     

    1.70

    %

    68.52

    %

    375,014

     

    6,128

     

    3,218

     

    1.63

    %

    52.51

    %

    625,066

     

    5,574

     

    6,572

     

    0.89

    %

    117.90

    %

    Manufactured housing

    68,314

     

    2,558

     

    4,950

     

    3.74

    %

    193.51

    %

    70,398

     

    1,655

     

    1,178

     

    2.35

    %

    71.18

    %

    77,778

     

    1,924

     

    644

     

    2.47

    %

    33.47

    %

    Other consumer

    1,317,737

     

    2,519

     

    83,791

     

    0.19

    %

    3326.36

    %

    1,178,283

     

    1,551

     

    20,648

     

    0.13

    %

    1331.27

    %

    153,153

     

    108

     

    3,689

     

    0.07

    %

    3415.74

    %

    Total consumer loans receivable

    1,741,357

     

    11,131

     

    92,889

     

    0.64

    %

    834.51

    %

    1,623,695

     

    9,334

     

    25,044

     

    0.57

    %

    268.31

    %

    855,997

     

    7,606

     

    10,905

     

    0.89

    %

    143.37

    %

    Deferred (fees) costs and unamortized (discounts) premiums, net

    3,199

     

    —

     

    —

     

    —

    %

    —

    %

    2,085

     

    —

     

    —

     

    —

    %

    —

    %

    (3,197)

     

    —

     

    —

     

    —

    %

    —

    %

    Loans and leases receivable

    7,366,058

     

    61,831

     

    152,610

     

    0.84

    %

    246.92

    %

    7,318,988

     

    20,021

     

    56,497

     

    0.27

    %

    282.19

    %

    7,264,049

     

    22,769

     

    44,206

     

    0.31

    %

    194.15

    %

    Loans receivable, mortgage warehouse, at fair value

    2,518,012

     

    —

     

    —

     

    —

    %

    —

    %

    2,245,758

     

    —

     

    —

     

    —

    %

    —

    %

    1,480,195

     

    —

     

    —

     

    —

    %

    —

    %

    Total loans held for sale

    450,157

     

    1,325

     

    —

     

    0.29

    %

    —

    %

    486,328

     

    1,325

     

    —

     

    0.27

    %

    —

    %

    1,602

     

    —

    —

     

    —

    %

    —

    %

    Total portfolio

    $

    10,334,227

     

    $

    63,156

     

    $

    152,610

     

    0.61

    %

    241.64

    %

    $

    10,051,074

     

    $

    21,346

     

    $

    56,497

     

    0.21

    %

    264.67

    %

    $

    8,745,846

     

    $

    22,769

     

    $

    44,206

     

    0.26

    %

    194.15

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1) Commercial & industrial loans, including owner occupied commercial real estate loans.

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

    Q1

     

    Q4

     

    Q3

     

    Q2

     

    Q1

     

    2020

     

    2019

     

    2019

     

    2019

     

    2019

    Loan type

     

     

     

     

     

     

     

     

     

    Multi-family

    $

    —

     

     

    $

    —

     

     

    $

    —

     

     

    $

    (7)

     

     

    $

    541

     

    Commercial & industrial

    43

     

     

    (224)

     

     

    (20)

     

     

    (155)

     

     

    (119)

     

    Commercial real estate owner occupied

    (3)

     

     

    (1)

     

     

    35

     

     

    (31)

     

     

    (120)

     

    Commercial real estate non-owner occupied

    —

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

    Construction

    (3)

     

     

    (8)

     

     

    (8)

     

     

    (114)

     

     

    (6)

     

    Residential

    (29)

     

     

    181

     

     

    (5)

     

     

    61

     

     

    33

     

    Other consumer

    5,906

     

     

    4,414

     

     

    1,759

     

     

    883

     

     

    731

     

    Total net charge-offs (recoveries) from loans held for investment

    $

    5,914

     

     

    $

    4,362

     

     

    $

    1,761

     

     

    $

    637

     

     

    $

    1,060

     

     
    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED

    Customers believes that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in Customers' industry. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our ongoing financial results, which we believe enhance an overall understanding of our performance and increases comparability of our period to period results. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. Although non-GAAP financial measures are frequently used in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results of operations or financial condition as reported under GAAP.

     

    The following tables present reconciliations of GAAP to non-GAAP measures disclosed within this document.

     

    Core Earnings - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    (dollars in thousands except per share data)

    USD

    Per

    share

     

    USD

    Per

    share

     

    USD

    Per

    share

     

    USD

    Per

    share

     

    USD

    Per

    share

    GAAP net income to common shareholders

    $

    7,027

     

    $

    0.22

     

     

    $

    23,911

     

    $

    0.75

     

     

    $

    23,451

     

    $

    0.74

     

     

    $

    5,681

    $

    0.18

     

    $

    11,825

     

    $

    0.38

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Severance expense

    —

     

    —

     

     

    —

     

    —

     

     

    —

     

    —

     

     

    373

    0.01

     

    —

     

    —

    Loss upon acquisition of interest-only GNMA securities

    —

     

    —

     

     

    —

     

    —

     

     

    —

     

    —

     

     

    5,682

    0.18

     

    —

     

    —

    Merger and acquisition related expenses

    40

     

    —

     

     

    76

     

    —

     

     

    —

     

    —

     

     

    —

    —

     

    —

     

    —

    Legal reserves

    830

     

    0.03

     

     

    —

     

    —

     

     

    1,520

     

    0.05

     

     

    —

    —

     

    —

     

    —

    (Gains) losses on investment securities

    (1,788

    )

    (0.06

    )

     

    (310

    )

    (0.01

    )

     

    (1,947

    )

    (0.06

    )

     

    347

    0.01

     

    (2

    )

    —

     

    Derivative credit valuation adjustment

    2,036

     

    0.06

     

     

    (429

    )

    (0.01

    )

     

    378

     

    0.01

     

     

    605

    0.02

     

    257

     

    0.01

    Losses on sale of non-QM residential mortgage loans

    —

     

    —

     

     

    595

     

    0.02

     

     

    —

     

    —

     

     

    —

    —

     

    —

     

    —

    Core earnings

    $

    8,145

     

    $

    0.26

     

     

    $

    23,843

     

    $

    0.75

     

     

    $

    23,402

     

    $

    0.74

     

     

    $

    12,688

    $

    0.40

     

    $

    12,080

     

    $

    0.38

     

    Core Return on Average Assets - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net income

    $

     

    10,642

     

     

    $

     

    27,526

     

     

    $

     

    27,066

     

     

    $

     

    9,296

     

     

    $

    15,440

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

    Severance expense

    —

     

     

    —

     

     

    —

     

     

     

    373

     

     

    —

     

    Loss upon acquisition of interest-only GNMA securities

    —

     

     

    —

     

     

    —

     

     

     

    5,682

     

     

    —

     

    Merger and acquisition related expenses

     

    40

     

     

     

    76

     

     

    —

     

     

    —

     

     

    —

     

    Legal reserves

     

    830

     

     

    —

     

     

     

    1,520

     

     

    —

     

     

    —

     

    (Gains) losses on investment securities

     

    (1,788

    )

     

     

    (310

    )

     

     

    (1,947

    )

     

     

    347

     

     

     

    (2

    )

    Derivative credit valuation adjustment

     

    2,036

     

     

     

    (429

    )

     

     

    378

     

     

     

    605

     

     

     

    257

     

    Losses on sale of non-QM residential mortgage loans

    —

     

     

     

    595

     

     

    —

     

     

    —

     

     

    —

     

    Core net income

    $

     

    11,760

     

     

    $

     

    27,458

     

     

    $

     

    27,017

     

     

    $

     

    16,303

     

     

    $

    15,695

     

     

     

     

     

     

     

     

     

     

     

    Average total assets

    $

     

    11,573,490

     

     

    $

     

    11,257,207

     

     

    $

     

    11,259,144

     

     

    $

     

    10,371,842

     

     

    $

    9,759,529

     

     

     

     

     

     

     

     

     

     

     

    Core return on average assets

     

    0.41

    %

     

     

    0.97

    %

     

     

    0.95

    %

     

     

    0.63

    %

     

     

    0.65

    %

     
    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)

    (Dollars in thousands, except per share data)

     

    Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net income

    $

     

    10,642

     

     

    $

     

    27,526

     

     

    $

     

    27,066

     

     

    $

     

    9,296

     

     

    $

     

    15,440

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Income tax expense

     

    3,834

     

     

     

    7,451

     

     

     

    8,020

     

     

     

    2,491

     

     

     

    4,831

     

    Provision for credit losses on loan and leases

     

    22,316

     

     

     

    9,689

     

     

     

    4,426

     

     

     

    5,346

     

     

     

    4,767

     

    Provision for credit losses on unfunded commitments

     

    751

     

     

     

    3

     

     

     

    (235

    )

     

     

    (102

    )

     

     

    (69

    )

    Severance expense

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    490

     

     

     

    —

     

    Loss upon acquisition of interest-only GNMA securities

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    7,476

     

     

     

    —

     

    Merger and acquisition related expenses

     

    50

     

     

     

    100

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Legal reserves

     

    1,042

     

     

     

    —

     

     

     

    2,000

     

     

     

    —

     

     

     

    —

     

    (Gains) losses on investment securities

     

    (2,596

    )

     

     

    (310

    )

     

     

    (2,334

    )

     

     

    347

     

     

     

    (2

    )

    Derivative credit valuation adjustment

     

    2,556

     

     

     

    (565

    )

     

     

    497

     

     

     

    796

     

     

     

    338

     

    Losses on sale of non-QM residential mortgage loans

     

    —

     

     

     

    782

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Adjusted net income - pre-tax pre-provision

    $

     

    38,595

     

     

    $

     

    44,676

     

     

    $

     

    39,440

     

     

    $

     

    26,140

     

     

    $

     

    25,305

     

     

     

     

     

     

     

     

     

     

     

    Average total assets

    $

     

    11,573,490

     

     

    $

     

    11,257,207

     

     

    $

     

    11,259,144

     

     

    $

     

    10,371,842

     

     

    $

     

    9,759,529

     

     

     

     

     

     

     

     

     

     

     

    Adjusted ROAA - pre-tax pre-provision

     

    1.34

    %

     

     

    1.57

    %

     

     

    1.39

    %

     

     

    1.01

    %

     

     

    1.05

    %

     

    Core Return on Average Common Equity - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net income to common shareholders

    $

    7,027

     

     

    $

    23,911

     

     

    $

    23,451

     

     

    $

    5,681

     

     

    $

    11,825

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

    Severance expense

    —

     

     

    —

     

     

    —

     

     

     

    373

     

     

    —

     

    Loss upon acquisition of interest-only GNMA securities

    —

     

     

    —

     

     

    —

     

     

     

    5,682

     

     

    —

     

    Merger and acquisition related expenses

     

    40

     

     

     

    76

     

     

    —

     

     

    —

     

     

    —

     

    Legal reserves

     

    830

     

     

    —

     

     

     

    1,520

     

     

    —

     

     

    —

     

    (Gains) losses on investment securities

     

    (1,788

    )

     

     

    (310

    )

     

     

    (1,947

    )

     

     

    347

     

     

     

    (2

    )

    Derivative credit valuation adjustment

     

    2,036

     

     

     

    (429

    )

     

     

    378

     

     

     

    605

     

     

     

    257

     

    Losses on sale of non-QM residential mortgage loans

    —

     

     

     

    595

     

     

    —

     

     

    —

     

     

    —

     

    Core earnings

    $

    8,145

     

     

    $

    23,843

     

     

    $

    23,402

     

     

    $

    12,688

     

     

    $

    12,080

     

     

     

     

     

     

     

     

     

     

     

    Average total common shareholders' equity

    $

    807,967

     

     

    $

    819,018

     

     

    $

    787,885

     

     

    $

    768,592

     

     

    $

    751,133

     

     

     

     

     

     

     

     

     

     

     

    Core return on average common equity

     

    4.05

    %

     

     

    11.55

    %

     

     

    11.78

    %

     

     

    6.62

    %

     

     

    6.52

    %

     
    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)

    (Dollars in thousands, except per share data)

     

    Adjusted ROCE - Pre-Tax Pre-Provision - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net income to common shareholders

    $

    7,027

     

     

    $

    23,911

     

     

    $

    23,451

     

     

    $

    5,681

     

     

    $

    11,825

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Income tax expense

     

    3,834

     

     

     

    7,451

     

     

     

    8,020

     

     

     

    2,491

     

     

     

    4,831

     

    Provision for credit losses on loan and leases

     

    22,316

     

     

     

    9,689

     

     

     

    4,426

     

     

     

    5,346

     

     

     

    4,767

     

    Provision for credit losses on unfunded commitments

     

    751

     

     

     

    3

     

     

     

    (235

    )

     

     

    (102

    )

     

     

    (69

    )

    Severance expense

    —

     

     

    —

     

     

    —

     

     

     

    490

     

     

    —

     

    Loss upon acquisition of interest-only GNMA securities

    —

     

     

    —

     

     

    —

     

     

     

    7,476

     

     

    —

     

    Merger and acquisition related expenses

     

    50

     

     

     

    100

     

     

    —

     

     

    —

     

     

    —

     

    Legal reserves

     

    1,042

     

     

    —

     

     

     

    2,000

     

     

    —

     

     

    —

     

    (Gains) losses on investment securities

     

    (2,596

    )

     

     

    (310

    )

     

     

    (2,334

    )

     

     

    347

     

     

     

    (2

    )

    Derivative credit valuation adjustment

     

    2,556

     

     

     

    (565

    )

     

     

    497

     

     

     

    796

     

     

     

    338

     

    Losses on sale of non-QM residential mortgage loans

    —

     

     

     

    782

     

     

    —

     

     

    —

     

     

    —

     

    Pre-tax pre-provision adjusted net income available to common shareholders

    $

    34,980

     

     

    $

    41,061

     

     

    $

    35,825

     

     

    $

    22,525

     

     

    $

    21,690

     

     

     

     

     

     

     

     

     

     

     

    Average total common shareholders' equity

    $

    807,967

     

     

    $

    819,018

     

     

    $

    787,885

     

     

    $

    768,592

     

     

    $

    751,133

     

     

     

     

     

     

     

     

     

     

     

    Adjusted ROCE - pre-tax pre-provision

     

    17.41

    %

     

     

    19.89

    %

     

     

    18.04

    %

     

     

    11.75

    %

     

     

    11.71

    %

     

    Net Interest Margin, Tax Equivalent - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net interest income

    $

    81,321

     

     

    $

    77,593

     

     

    $

    75,735

     

     

    $

    64,679

     

     

    $

    59,304

     

    Tax-equivalent adjustment

    205

     

     

    187

     

     

    184

     

     

    183

     

     

    181

     

    Net interest income tax equivalent

    $

    81,526

     

     

    $

    77,780

     

     

    $

    75,919

     

     

    $

    64,862

     

     

    $

    59,485

     

     

     

     

     

     

     

     

     

     

     

    Average total interest earning assets

    $

    10,976,872

     

     

    $

    10,676,730

     

     

    $

    10,667,198

     

     

    $

    9,851,150

     

     

    $

    9,278,413

     

     

     

     

     

     

     

     

     

     

     

    Net interest margin, tax equivalent

    2.99

    %

     

    2.89

    %

     

    2.83

    %

     

    2.64

    %

     

    2.59

    %

     

     

     

     

     

     

     

     

     

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)

    (Dollars in thousands, except per share data)

     

    Core Efficiency Ratio - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net interest income

    $

    81,321

     

     

    $

    77,593

     

     

    $

    75,735

     

     

    $

    64,679

     

     

    $

    59,304

     

     

     

     

     

     

     

     

     

     

     

    GAAP non-interest income

    $

    21,930

     

     

    $

    25,813

     

     

    $

    23,369

     

     

    $

    12,036

     

     

    $

    19,718

     

    Loss upon acquisition of interest-only GNMA securities

    —

     

     

    —

     

     

    —

     

     

     

    7,476

     

     

    —

     

    (Gains) losses on investment securities

     

    (2,596

    )

     

     

    (310

    )

     

     

    (2,334

    )

     

     

    347

     

     

     

    (2

    )

    Derivative credit valuation adjustment

     

    2,556

     

     

     

    (565

    )

     

     

    497

     

     

     

    796

     

     

     

    338

     

    Losses on sale of non-QM residential mortgage loans

    —

     

     

     

    782

     

     

    —

     

     

    —

     

     

    —

     

    Core non-interest income

     

    21,890

     

     

     

    25,720

     

     

     

    21,532

     

     

     

    20,655

     

     

     

    20,054

     

    Core revenue

    $

    103,211

     

     

    $

    103,313

     

     

    $

    97,267

     

     

    $

    85,334

     

     

    $

    79,358

     

     

     

     

     

     

     

     

     

     

     

    GAAP non-interest expense

    $

    66,459

     

     

    $

    58,740

     

     

    $

    59,592

     

     

    $

    59,582

     

     

    $

    53,984

     

    Severance expense

    —

     

     

    —

     

     

    —

     

     

     

    (490

    )

     

    —

     

    Legal reserves

     

    (1,042

    )

     

    —

     

     

     

    (2,000

    )

     

    —

     

     

    —

     

    Merger and acquisition related expenses

     

    (50

    )

     

     

    (100

    )

     

    —

     

     

    —

     

     

    —

     

    Core non-interest expense

    $

    65,367

     

     

    $

    58,640

     

     

    $

    57,592

     

     

    $

    59,092

     

     

    $

    53,984

     

     

     

     

     

     

     

     

     

     

     

    Core efficiency ratio (1)

     

    63.33

    %

     

     

    56.76

    %

     

     

    59.21

    %

     

     

    69.25

    %

     

     

    68.03

    %

     

     

     

     

     

     

     

     

     

     

    (1) Core efficiency ratio calculated as core non-interest expense divided by core revenue.

    Tangible Book Value per Common Share - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP - Total shareholders' equity

    $

    972,179

     

     

    $

    1,052,795

     

     

    $

    1,019,150

     

     

    $

    991,405

     

     

    $

    978,373

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    CECL adjustment

    65,821

    —

    —

    —

    —

    Preferred stock

    (217,471

    )

     

    (217,471

    )

     

    (217,471

    )

     

    (217,471

    )

     

    (217,471

    )

    Goodwill and other intangibles

    (14,870

    )

     

    (15,195

    )

     

    (15,521

    )

     

    (15,847

    )

     

    (16,173

    )

    Tangible common equity

    $

    739,838

     

     

    $

    820,129

     

     

    $

    786,158

     

     

    $

    758,087

     

     

    $

    744,729

     

     

     

     

     

     

     

     

     

     

     

    Total assets

    $

    12,026,342

     

     

    $

    11,520,717

     

     

    $

    11,723,790

     

     

    $

    11,182,427

     

     

    $

    10,143,894

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Goodwill and other intangibles

    (14,870

    )

     

    (15,195

    )

     

    (15,521

    )

     

    (15,847

    )

     

    (16,173

    )

    Tangible assets

    $

    12,011,472

     

     

    $

    11,505,522

     

     

    $

    11,708,269

     

     

    $

    11,166,580

     

     

    $

    10,127,721

     

     

     

     

     

     

     

     

     

     

     

    Tangible common equity to tangible assets

    6.16

    %

     

    7.13

    %

     

    6.71

    %

     

    6.79

    %

     

    7.35

    %

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)

    (Dollars in thousands, except per share data)

     

    Tangible Book Value per Common Share - Customers Bancorp

     

     

     

     

     

     

     

     

     

    (dollars in thousands except share and per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP - Total shareholders' equity

    $

     

    972,179

     

     

     

    $

     

    1,052,795

     

     

     

    $

     

    1,019,150

     

     

     

    $

     

    991,405

     

     

     

    $

     

    978,373

     

     

    Reconciling Items:

     

     

     

     

     

     

     

     

     

    CECL adjustment

     

    65,821

     

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

    Preferred stock

     

    (217,471

    )

     

     

     

    (217,471

    )

     

     

     

    (217,471

    )

     

     

     

    (217,471

    )

     

     

     

    (217,471

    )

     

    Goodwill and other intangibles

     

    (14,870

    )

     

     

     

    (15,195

    )

     

     

     

    (15,521

    )

     

     

     

    (15,847

    )

     

     

     

    (16,173

    )

     

    Tangible common equity

    $

     

    805,659

     

     

     

    $

     

    820,129

     

     

     

    $

     

    786,158

     

     

     

    $

     

    758,087

     

     

     

    $

     

    744,729

     

     

     

     

     

     

     

     

     

     

     

     

    Common shares outstanding

     

    31,470,026

     

     

     

     

    31,336,791

     

     

     

     

    31,245,776

     

     

     

     

    31,202,023

     

     

     

     

    31,131,247

     

     

     

     

     

     

     

     

     

     

     

     

    Tangible book value per common share

    $

     

    25.60

     

     

     

    $

     

    26.17

     

     

     

    $

     

    25.16

     

     

     

    $

     

    24.30

     

     

     

    $

     

    23.92

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted Net Income - Pre-Tax Pre-Provision - BankMobile

     

     

     

     

     

     

     

     

     

    (dollars in thousands except per share data)

    Q1 2020

     

    Q4 2019

     

    Q3 2019

     

    Q2 2019

     

    Q1 2019

    GAAP net income to common shareholders

    $

     

    (3,195

    )

     

     

    $

     

    1,693

     

     

    $

     

    684

     

     

    $

     

    (7,097

    )

     

     

    $

     

    (163

    )

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Income tax expense (benefit)

     

    (816

    )

     

     

     

    559

     

     

     

    206

     

     

     

    (2,138

    )

     

     

     

    (49

    )

     

    Provision for credit losses on loan and leases

     

    4,488

     

     

     

     

    2,843

     

     

     

    1,951

     

     

     

    7,552

     

     

     

     

    1,791

     

     

    Provision for credit losses on unfunded commitments

    —

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

    Severance expense

    —

     

     

    —

     

     

    —

     

     

     

    18

     

     

     

    —

     

    Merger and acquisition related expenses

     

    50

     

     

     

     

    100

     

     

    —

     

     

    —

     

     

    —

     

    Losses on sale of multi-family loans

    —

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

    Legal reserves

     

    1,042

     

     

     

    —

     

     

     

    1,000

     

     

    —

     

     

    —

     

    Pre-tax pre-provision adjusted net income available to common shareholders

    $

     

    1,569

     

     

     

    $

     

    5,195

     

     

    $

     

    3,841

     

     

    $

     

    (1,665

    )

     

     

    $

     

    1,579

     

     

     

     

     

     

     

     

     

     

     

     

     




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    Customers Bancorp Reports First Quarter 2020 Net Income of $7.0 Million, or $0.22 Per Diluted Share Customers Bancorp, Inc. (NYSE: CUBI) the parent company of Customers Bank and its operating division BankMobile (collectively “Customers” or "CUBI"), today reported first quarter 2020 ("Q1 2020") net income to common shareholders of $7.0 million, or …