Customers Bancorp Reports Record Fourth Quarter 2020 Results

Customers Bancorp, Inc. (NYSE: CUBI), the parent company of Customers Bank (collectively “Customers” or "CUBI"), today reported fourth quarter 2020 ("Q4 2020") net income to common shareholders of $52.8 million or $1.65 per diluted share, up from third quarter 2020 ("Q3 2020") net income to common shareholders of $47.1 million or $1.48 per diluted share. Core earnings for Q4 2020 totaled $52.6 million or $1.65 per diluted share, up from Q3 2020 core earnings of $38.2 million or $1.20 per diluted share (non-GAAP measures). Net interest margin, tax equivalent ("NIM") expanded 28 basis points during Q4 2020 to 2.78% from 2.50% in Q3 2020 (non-GAAP measures). NIM excluding PPP loans expanded 18 basis points to 3.04% in Q4 2020 from 2.86% in Q3 2020 (non-GAAP measures). ROAA for Q4 2020 was 1.23%, up 11 basis points from Q3 2020 ROAA of 1.12%. ROCE for Q4 2020 was 24.26%, up 121 basis points from Q3 2020 ROCE of 23.05%.

Full year 2020 ("FY 2020") net income to common shareholders was $118.5 million or $3.74 per diluted share, up from full year 2019 ("FY 2019") net income to common shareholders of $64.9 million or $2.05 per diluted share. Core earnings for FY 2020 totaled $110.6 million or $3.49 per diluted share, compared to core earnings of $72.0 million or $2.28 per diluted share for FY 2019 (non-GAAP measures). FY 2020 NIM declined 4 basis points to 2.71% from FY 2019 NIM of 2.75% (non-GAAP measures). FY 2020 NIM excluding PPP loans expanded 21 basis points to 2.96% from FY 2019 NIM of 2.75% (non-GAAP measures). ROAA for FY 2020 was 0.85%, up 11 basis points from FY 2019 ROAA of 0.74%. ROCE for FY 2020 was 14.55%, up 625 basis points from FY 2019 ROCE of 8.30%.

“In a year of extraordinary circumstances, our institution rose to the challenge of supporting our team members and their families, our communities and our clients by providing outstanding customer service and responsiveness at a time when it was needed most,” remarked Customers Bancorp Chairman and CEO, Jay Sidhu. “In providing approximately 100,000 small businesses and nonprofits access to Paycheck Protection Program loans, we were able to help save thousands of jobs in the communities we serve and improve the financial position of Customers Bank at the same time. We generated record earnings in 2020, driven by expansion of NIM as well as PPP related income and expansion in our core net interest margin. We achieved these results while maintaining superior asset quality during the pandemic and significantly improving the quality of our funding mix. And in early January, as promised, we successfully completed the divestiture of BankMobile, and are pleased to provide a special distribution of BM Technologies, Inc. (BMTX) stock to our shareholders with current market value of about $75 million,” Mr. Sidhu concluded.

Key Balance Sheet Trends

Total loans and leases increased $5.8 billion, or 57.5%, to $15.8 billion at December 31, 2020 compared to the year-ago period. PPP loans originated directly or through fintech partnerships were $4.6 billion at December 31, 2020. Additionally, the loan mix improved year-over-year as commercial loans to mortgage companies increased $1.4 billion to $3.7 billion, commercial and industrial loans and leases increased $473.1 million to $2.3 billion, construction loans increased $23.3 million to $140.9 million, and commercial real estate owner occupied loans increased $20.4 million to $572.3 million. The commercial loans to mortgage companies trend has been a function of greater refinance activity due to sharply lower interest rates, an increase in home purchase volumes, and market share gains from other banks. These increases in loans and leases were partially offset by planned decreases in multi-family loans of $628.9 million to $1.8 billion and residential mortgages of $62.8 million to $323.3 million. “Looking ahead, we see continued growth in core C&I loans offsetting some of the expected decreases in loans to mortgage companies," stated Sidhu.

Total deposits increased $2.7 billion, or 30.8%, to $11.3 billion at December 31, 2020 compared to the year-ago period. Total demand deposits increased $2.2 billion, or 83.9%, to $4.7 billion, money market deposits increased $1.1 billion, or 32.1%, to $4.6 billion, and savings deposits increased $395.6 million, or 43.0%, to $1.3 billion. These increases were offset, in part, by a decrease in time deposits of $1.0 billion, or 60.9%, to $651.9 million. The total cost of deposits declined by 107 basis points to 0.58% in Q4 2020 from 1.65% in the year-ago quarter.

Customers' experienced moderate declines in regulatory capital ratios in 2020, driven by strong growth in commercial loans to mortgage companies of $1.4 billion. However, Customers Bancorp's tangible common equity (a non-GAAP measure) increased by $65.2 million to $885 million at December 31, 2020 from $820 million at December 31, 2019, and the tangible book value per common share (a non-GAAP measure) increased to $27.92 at December 31, 2020 from $26.17 at December 31, 2019. "This increase in tangible common equity and tangible book value per common share was achieved in spite of a decrease in retained earnings of $61 million recorded on January 1, 2020 upon the adoption of CECL," commented Mr. Sidhu. Customers remains well capitalized by all regulatory measures. At the Customers Bancorp level, the total risk based capital ratio (estimate) and tangible common equity to tangible assets ratio ("TCE ratio"), excluding PPP loans (a non-GAAP measure), were 11.9% and 6.4%, respectively, at December 31, 2020. At September 30, 2020, Customers Bancorp's total risk based capital ratio and TCE ratio, excluding PPP loans (a non-GAAP measure), were 11.3% and 5.9%, respectively. "As a consequence of PPP related income and a potential cyclical decline in residential mortgage activity, we expect our capital levels to increase sharply in 2021 and be in the 7.5% or higher range by December 31, 2021," commented Customers Bancorp CFO, Carla Leibold.

Loan Portfolio Management During the COVID-19 Crisis

Over the last decade, Customers has developed a suite of commercial and retail loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s multifamily, mortgage warehouse, and specialty finance lines of business, for example, are characterized by conservative underwriting standards and low loss rates. Because of this emphasis, the Bank’s credit quality to-date has been healthy despite a highly adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, Customers employs a bottom-up data driven approach to analyze its commercial portfolio.

Strong commercial loan portfolio with very low concentration in COVID-19 impacted industries and CRE

• Total commercial deferments declined to $202.1 million or 1.8% of total loans and leases, excluding PPP loans (a non-GAAP measure), at December 31, 2020, down from $277 million, or 2.4% of total loans and leases, excluding PPP loans, at September 30, 2020. Of the $202.1 million in total commercial deferments, $107.4 million or 53.1% were principal only deferments. Customers' commercial deferments peaked at about $1.2 billion earlier this year.
• Exposure to industry segments significantly impacted by COVID-19 is not substantial. At December 31, 2020, Customers had $87 million in energy and utilities exposure; $62 million in colleges and universities (no deferments requested); $72 million in CRE retail sales exposure (mostly auto sales; with no deferments); $30 million in franchise restaurants and dining (with no deferments); and $27 million in entertainment only businesses (with no deferments).
• At year-end, the hospitality portfolio was $406 million or 3.6% of total loans and leases excluding PPP loans, with $126 million in deferment. Approximately 79% ($318 million) represents “flagged” facilities, with the majority of the non-flagged being high-end destination hotels in Cape May (NJ), Avalon (NJ), and Long Island (NY). The majority of the hotels, based on our recent assessment, have sufficient cash resources to get through the COVID-19 crisis and, for those who may need assistance, the Bank is working with them to bridge any potential cash flow gaps.
• At December 31, 2020, the healthcare portfolio was approximately $359 million, comprised predominantly of skilled nursing, which has been deemed an essential business and through a number of federal and state actions has been provided immunity from liability for COVID-19 related deaths. No deferments have been requested and there are no delinquencies.
• The multi-family portfolio is highly seasoned, with an average loan to value of 61% as of quarter-end. 55% of the portfolio was in New York City, of which 69% was in rent controlled/regulated properties. As of December 31, 2020, $11 million of the portfolio was on deferment.
• At December 31, 2020, investment CRE had a loan to value of 64%, with approximately 30% of the portfolio housed in the New York, Philadelphia, and Boston metro and surrounding markets. As of December 31, 2020, $29 million of the portfolio was on deferment.

Consumer installment, mortgage and home equity loan portfolio continues to perform well

• Total consumer-related deferments declined to $16.4 million, or 0.1% of total loans and leases, excluding PPP loans (a non-GAAP measure), at December 31, 2020, down from $25 million, or 0.2% of total loans and leases, excluding PPP loans, at September 30, 2020.
• The $1.2 billion consumer installment loan portfolio outperformed industry peers with deferments dropping to 0.8% and 30+ DPD delinquency at only 1.1%. Strong credit quality (avg. FICO at origination: 740), low concentration in at-risk job segments, and outstanding performance of CB Direct originations have resulted in solid results through the end of Q4 2020.
• The consumer installment portfolio has been managed to moderate growth and strengthening credit quality, by replacing run-off with CB Direct originations with strong FICO scores.

Aggressively addressing non-performing assets

• During January 2021, Customers sold a collateral dependent loan secured by a hotel property in Massachusetts. This loan made up approximately 24% of non-performing assets as of December 31, 2020. “We expect our credit quality to improve or stay unchanged over the next few quarters,” stated Sidhu.

Key Profitability Trends

Net Interest Income

Net interest income totaled $122.9 million in Q4 2020, an increase of $15.5 million from Q3 2020, primarily due to a $480.9 million increase in average interest-earning assets. Earning assets were driven by increases in commercial loans to mortgage companies, commercial and industrial loans and leases, and investment securities. The benefit of this growth resulted in a 28 basis point linked-quarter increase in NIM (a non-GAAP measure) to 2.78%. Compared to Q3 2020, total loan yields increased 21 basis points to 3.62%. The increase is attributable to increased originations of commercial loans to mortgage companies, commercial and industrial loans and leases, and PPP loan forgiveness which accelerated the recognition of net deferred loan origination fees. This increase is partially offset by lower market interest rates due to the Federal Reserve's forecast of interest rates at zero through 2023. The cost of interest-bearing deposits in Q4 2020 decreased by 9 basis points to 0.76% due to the decline in market interest rates and strategic decisions to reallocate deposit funding to lower cost deposits. Borrowing costs decreased by 3 basis points to 0.94% primarily due to the utilization of the FRB PPP Liquidity Facility, costing 0.35%, to fund PPP loans.

Provision for Credit Losses

The provision for credit losses on loans and leases in Q4 2020, which was calculated under the CECL accounting standard effective January 1, 2020, was a $2.9 million benefit to (or release from) the provision, compared to a $13.0 million provision in Q3 2020. The decrease in Q4 2020 primarily resulted from an improvement in forecasts of macroeconomic conditions since Q3 2020. The allowance for credit losses on loans and leases represented 1.9% of total loans and leases receivable, excluding PPP loans (a non-GAAP measure) at December 31, 2020, compared to just over 2.0% at September 30, 2020, and 0.8% at December 31, 2019. Customers' non-performing loans at December 31, 2020 were only 0.45% of total loans and leases. Our Q4 2020 non-performing loans were impacted by one commercial real estate credit, which was resolved during January 2021, reducing the non performing asset ratio to 0.30% of the assets (a non-GAAP measure).

Non-Interest Income

Non-interest income totaled $23.8 million for Q4 2020, a decrease of $10.0 million compared to Q3 2020. The decrease in non-interest income primarily resulted from decreases of $11.7 million in gain on sale of investment securities, $0.7 million in mortgage banking income, $0.4 million in interchange and card revenue, and $0.7 million in other non-interest income, partially offset by increases of $1.4 million in gain on sale of SBA and other loans, a $1.1 million increase in unrealized gains on equity securities issued by a foreign entity, $0.4 million in mortgage warehouse transactional fees, and $0.3 million in commercial lease income.

The decrease in gain on sale of investment securities primarily resulted from the sale of $58.4 million of agency-guaranteed mortgage-backed securities and $70.0 million in corporate notes in Q3 2020, compared to sales of $10 million in corporate notes during Q4 2020. The decrease in mortgage banking income was mainly related to unrealized losses on derivatives. The decrease in interchange and card revenue primarily resulted from lower debit card spending volume. The decrease in other non-interest income was driven by an unrealized loss on a loan held for sale of $1.1 million during Q4 2020, partially offset by a net derivative valuation adjustment of $0.2 million due to changes in market interest rates and increased SERP income of $0.3 million. The increase in gain on sale of SBA and other loans was driven by increased sales volume. The increase in unrealized gains on equity securities issued by a foreign entity primarily resulted from an increase in the valuation of those securities. The increase in mortgage warehouse transactional fees primarily resulted from an increase in transaction volume due to continued low market interest rates. The increase in commercial lease income was driven by continued organic growth in volume.

Non-Interest Expense

Non-interest expense totaled $71.2 million for Q4 2020, an increase of $5.6 million compared to Q3 2020. The increase in non-interest expense primarily resulted from increases of $5.3 million in other non-interest expense, $1.1 million in salaries and employee benefits, $0.9 million in provision for operating losses, and $0.3 million in commercial lease depreciation, partially offset by decreases of $1.1 million in FDIC assessments, $0.7 million in loan workout expenses, and $0.4 million in occupancy expenses. The increase in other non-interest expense primarily resulted from a decrease in operating cost reimbursements from Customers' white label partnership. The increase in salaries and employee benefits was primarily due to lower stock based compensation expense in Q3 2020. The increase in provision for operating losses primarily resulted from an increase in the estimate for fraud related losses. The increase in commercial lease depreciation was driven by continued organic growth in volume. The decrease in FDIC assessments, non-income taxes and regulatory fees was a function of an increase in FDIC assessment rates due to the temporary utilization of brokered deposits to fund PPP loans in Q3 2020. The decrease in loan workout expenses primarily resulted from lower costs related to the workout of two commercial relationships in Q3 2020. The decrease in occupancy expenses primarily resulted from a decrease in rent expense as we continue to reassess our office spaces and branches.

Taxes

Income tax expense increased by $10 million to $22.2 million in Q4 2020 from $12.2 million in Q3 2020 due to higher pre-tax income and effective tax rate. The effective tax rate increased to 28.3% for Q4 2020 compared to 19.5% for Q3 2020 primarily due to a lower annual benefit from investment tax credits than what was estimated in Q3 2020. Customers expects the full-year 2021 effective tax rate to be approximately 21% to 22%.

Outlook

“Looking ahead, we are very optimistic about the prospects of our company. The ongoing digital transformation of Customers Bancorp has positioned us well to be a major participant in the second round of PPP and to incubate new lines of businesses that leverage our fintech relationships. We expect our tangible common equity and regulatory capital levels to achieve targeted levels within the next 18 months and our credit quality to remain in line with or better than peers. The financial benefits of PPP aside, we project our recurring earnings power to expand well above the $4.00 level during 2021 and remain on track to achieve $6.00 in core EPS in 2026,” concluded Mr. Sidhu.

Our updated financial guidance is as follows:

• Loan growth, excluding PPP and mortgage warehouse balances, is expected to average in the mid-to-high single digits over the next several quarters.
• The balance of commercial loans to mortgage companies is expected to decline to $2.8-$3.2 billion at March 31, 2021 and $1.6-$2.4 billion at December 31, 2021.
• The Total Capital Ratio is expected to exceed 13.0% by year-end 2021. The TCE-to-TA ratio excluding PPP loans is expected to be 7.5-8.0% by year-end 2021.
• We project the NIM excluding PPP loans to expand into the 3.10%-3.30% range by Q4 2021.
• Impacted by the divestiture of BankMobile, we project non-interest income of $9.0-11.0 million and operating expenses of $59.0-$61.0 million in Q1 2021 (excluding BankMobile related severance expense).
• We project an effective tax rate for 2021 of 21.0%-22.0%, down from 24.7% in 2020.
• Our earnings trend is likely to be volatile over the next several quarters owing to our participation in PPP. We expect to earn at least $4.00 in core EPS in 2021, at least $4.50 in core EPS in 2023, and remain on track to earn $6.00 in core EPS in 2026. Our core EPS guidance includes the net interest income expected to be earned on the PPP loans.

2021 NIM expansion is expected to be achieved by:

• Remixing the loan portfolio away from commercial loans to mortgage companies toward other C&I categories and consumer loans.
• Bringing our cost of deposits to around 40 basis points during 2021.

BankMobile Technologies, Inc.:

• On January 4, 2021, Customers completed the previously announced divestiture of BankMobile Technologies Inc. (“BMT”), the technology arm of the BankMobile segment, to Megalith Financial Acquisition Corp., a Delaware corporation ("Megalith"). In connection with the closing of the divestiture, Megalith changed its name to “BM Technologies, Inc.” ("BMTX"). Beginning in first quarter of 2021, BMT’s historical financial results for periods prior to the divestiture will be reflected in Customers consolidated financial statements as discontinued operations.
• All Customers Bancorp shareholders on record on December 18, 2020 received approximately $73 million in value of BMTX stock at closing date of the transaction in the form of special distribution.

Status Report on Main Strategic Priorities Articulated at Last Analysts Day

	Goal #1: Top Quartile Profitability with 1.25% Core ROAA in 2-3 years.   Result: Achieved 1.22% in Core ROAA (a non-GAAP measure) in Q4 2020.
	Goal #2: 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.   Result: Achieved NIM of 2.78% in Q4 2020. NIM, excluding PPP loans (a non-GAAP measure), was 3.04% in Q4 2020.
	Goal #3: BankMobile growth and maturity was expected with profitability achieved by year end 2019.   Result: BankMobile was profitable, and BMT was divested on January 4, 2021 resulting in the special distribution of approximately 4.9 million shares of BMTX common stock to Customers Bancorp shareholders.
	Goal #4: Efficiency improvement.   Result: Customers' efficiency ratio was 48.98% in Q4 2020, down from 50.71% in Q3 2020 and 56.98% in Q4 2019.
	Goal #5: Growth in core deposits.   Result: Demand Deposit Accounts ("DDAs") grew 84% year-over-year.
	Goal #6: Maintain strong credit quality and superior risk management.   Result: Non-performing loans ("NPLs") were only 0.45% of total loans and leases at December 31, 2020. NPLs decreased by $17 million in January 2021. We remain very focused on a strong Risk Management culture throughout our company.

Webcast

Date: Thursday, January 28, 2021

Time: 9:00 AM EDT

The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 4th Quarter Earnings Webcast.

The fourth quarter 2020 earnings press release will be issued after the market close on Wednesday, January 27, 2021.

You may submit questions in advance of the live webcast by emailing Customers' Communications & Marketing Director, David Patti at [e-mail]; questions may also be asked during the webcast through the webcast application.

The webcast will be archived for viewing on the Customers Bancorp Investor Relations page and available beginning approximately two hours after the conclusion of the live event.

Institutional Background

Customers Bancorp, Inc. is a bank holding company located in West Reading, 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 $18.4 billion at December 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; and the effects of changes in accounting standards or policies, including Accounting Standards Update ("ASU") 2016-13, Financial Instruments—Credit Losses ("CECL"). 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.

Q4 2020 Overview

The following table presents a summary of key earnings and performance metrics for the quarter ended December 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)		Q4			Q3			Q2			Q1			Q4			Year Ended December 31,
		2020			2020			2020			2020			2019			2020				2019
GAAP Profitability Metrics:
Net income available to common shareholders		$	52,831		$	47,085		$	19,137		$	(515	)	$	23,911		$	118,537			$	64,868
Per share amounts:
Earnings per share - basic		$	1.67		$	1.49		$	0.61		$	(0.02	)	$	0.76		$	3.76			$	2.08
Earnings per share - diluted		$	1.65		$	1.48		$	0.61		$	(0.02	)	$	0.75		$	3.74			$	2.05
Book value per common share (1)		$	28.37		$	26.43		$	25.08		$	23.74		$	26.66		$	28.37			$	26.66
CUBI stock price (1)		$	18.18		$	11.20		$	12.02		$	10.93		$	23.81		$	18.18			$	23.81
CUBI stock price as % of book value (1)		64		%	42		%	48		%	46		%	89		%	64		%		89		%
Average shares outstanding - basic		31,638,447			31,517,504			31,477,591			31,391,151			31,306,813			31,506,699				31,183,841
Average shares outstanding - diluted		31,959,100			31,736,311			31,625,771			31,391,151			31,876,341			31,727,784				31,646,216
Shares outstanding (1)		31,705,088			31,555,124			31,510,287			31,470,026			31,336,791			31,705,088				31,336,791
Return on average assets ("ROAA")		1.23		%	1.12		%	0.62		%	0.11		%	0.97		%	0.85			%	0.74			%
Return on average common equity ("ROCE")		24.26		%	23.05		%	9.97		%	(0.26		)%	11.58		%	14.55			%	8.30			%
Efficiency ratio		48.98		%	50.71		%	58.44		%	66.03		%	56.98		%	55.11			%	65.15		%
Non-GAAP Profitability Metrics (2):
Core earnings		$	52,648		$	38,210		$	19,174		$	603		$	23,843		$	110,634			$	72,013
Adjusted pre-tax pre-provision net income		$	74,883		$	64,176		$	50,766		$	38,595		$	44,676		$	228,420			$	135,558
Per share amounts:
Core earnings per share - diluted		$	1.65		$	1.20		$	0.61		$	0.02		$	0.75		$	3.49			$	2.28
Tangible book value per common share (1)		$	27.92		$	25.97		$	24.62		$	23.27		$	26.17		$	27.92			$	26.17
CUBI stock price as % of tangible book value (1)		65		%	43		%	49		%	47		%	91		%	65		%		91		%
Core ROAA		1.22		%	0.93		%	0.62		%	0.15		%	0.97		%	0.80		%		0.81		%
Core ROCE		24.17		%	18.71		%	9.99		%	0.30		%	11.55		%	13.58		%		9.21		%
Adjusted ROAA - pre-tax and pre-provision		1.63		%	1.43		%	1.39		%	1.34		%	1.57		%	1.46		%		1.27		%
Adjusted ROCE - pre-tax and pre-provision		32.82		%	29.74		%	24.59		%	17.41		%	19.89		%	26.31		%		15.49		%
Net interest margin, tax equivalent		2.78		%	2.50		%	2.65		%	2.99		%	2.89		%	2.71		%		2.75		%
Net interest margin, tax equivalent, excluding PPP loans		3.04		%	2.86		%	2.97		%	2.99		%	2.89		%	2.96		%		2.75		%
Core efficiency ratio		47.97		%	49.81		%	55.39		%	63.33		%	56.76		%	53.40		%		62.78		%
Asset Quality:
Net charge-offs		$	8,472		$	17,299		$	10,325		$	18,711		$	4,362		$	54,807			$	7,820
Annualized net charge-offs to average total loans and leases		0.21		%	0.45		%	0.32		%	0.79		%	0.18		%	0.41		%		0.08		%
Non-performing loans ("NPLs") to total loans and leases (1)		0.45		%	0.38		%	0.56		%	0.49		%	0.21		%	0.45		%		0.21		%
Reserves to NPLs (1)		204.48		%	244.70		%	185.36		%	296.44		%	264.67		%	204.48		%		264.67		%
Non-performing assets ("NPAs") to total assets		0.39		%	0.34		%	0.48		%	0.53		%	0.19		%	0.39		%		0.19		%
Customers Bank Capital Ratios (3):
Common equity Tier 1 capital to risk-weighted assets		10.61		%	10.12		%	10.64		%	10.60		%	11.32		%	10.61		%		11.32		%
Tier 1 capital to risk-weighted assets		10.61		%	10.12		%	10.64		%	10.60		%	11.32		%	10.61		%		11.32		%
Total capital to risk-weighted assets		12.06		%	11.62		%	12.30		%	12.21		%	12.93		%	12.06		%		12.93		%
Tier 1 capital to average assets (leverage ratio)		9.21		%	9.29		%	9.59		%	9.99		%	10.38		%	9.21		%		10.38		%

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

(2) Non-GAAP measures exclude unrealized gains (losses) on loans HFS, 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, risk participation agreement mark-to-market adjustments, and goodwill and intangible assets. 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 Q4 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 Q4 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 and 25% of the quarterly provision for credit losses for subsequent quarters through Q4 2021.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data)																						Twelve Months Ended
		Q4				Q3				Q2				Q1				Q4				December 31,
		2020				2020				2020				2020				2019				2020				2019
Interest income:
Loans and leases		$	145,414			$	132,107			$	118,447			$	116,080			$	116,365			$	512,048			$	431,491
Investment securities		6,777				6,297				6,155				4,977				5,125				24,206				23,713
Other		902				1,246				616				4,286				2,505				7,050				8,535
Total interest income		153,093				139,650				125,218				125,343				123,995				543,304				463,739
Interest expense:
Deposits		16,107				18,347				23,238				34,353				35,992				92,045				141,464
FHLB advances		5,749				5,762				4,736				5,390				6,056				21,637				26,519
Subordinated debt		2,688				2,689				2,689				2,689				1,930				10,755				6,983
Federal funds purchased and other borrowings		5,603				5,413				2,573				1,590				2,424				15,179				11,463
Total interest expense		30,147				32,211				33,236				44,022				46,402				139,616				186,429
Net interest income		122,946				107,439				91,982				81,321				77,593				403,688				277,310
Provision for credit losses on loans and leases		(2,913		)		12,955				20,946				31,786				9,689				62,774				24,227
Net interest income after provision for credit losses on loans and leases		125,859				94,484				71,036				49,535				67,904				340,914				253,083
Non-interest income:
Interchange and card revenue		3,671				4,081				6,478				6,809				6,506				21,039				28,941
Deposit fees		3,615				3,439				3,321				3,460				3,616				13,835				12,815
Commercial lease income		4,853				4,510				4,508				4,268				3,839				18,139				12,051
Bank-owned life insurance		1,744				1,746				1,757				1,762				1,795				7,009				7,272
Mortgage warehouse transactional fees		3,681				3,320				2,582				1,952				1,983				11,535				7,128
Gain (loss) on sale of SBA and other loans		1,689				286				23				11				2,770				2,009				2,770
Mortgage banking income (loss)		346				1,013				38				296				(635		)		1,693				66
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				(7,476		)
Gain (loss) on sale of investment securities		44				11,707				4,353				3,974				—				20,078				1,001
Unrealized gain (loss) on investment securities		1,387				238				1,200				(1,378		)		310				1,447				1,299
Other		2,745				3,453				(2,024		)		776				5,629				4,950				15,071
Total non-interest income		23,775				33,793				22,236				21,930				25,813				101,734				80,938
Non-interest expense:
Salaries and employee benefits		33,726				32,676				31,296				28,310				27,697				126,008				107,632
Technology, communication and bank operations		13,290				13,215				13,310				13,050				10,370				52,865				43,481
Professional services		7,490				7,253				4,552				7,670				6,470				26,965				25,109
Occupancy		3,188				3,632				3,025				3,032				3,470				12,877				13,098
Commercial lease depreciation		3,982				3,663				3,643				3,427				2,840				14,715				9,473
FDIC assessments, non-income taxes and regulatory fees		2,642				3,784				2,368				2,867				2,492				11,661				5,861
Provision for operating losses		2,115				1,186				1,068				912				1,415				5,281				9,638
Advertising and promotion		—				—				582				1,641				899				2,223				4,044
Merger and acquisition related expenses		996				1,035				25				50				100				2,106				100
Loan workout		123				846				1,808				366				230				3,143				1,687
Other real estate owned		52				7				12				8				247				79				398
Other		3,560				(1,736		)		1,817				5,126				2,510				8,767				11,380
Total non-interest expense		71,164				65,561				63,506				66,459				58,740				266,690				231,901
Income before income tax expense		78,470				62,716				29,766				5,006				34,977				175,958				102,120
Income tax expense		22,225				12,201				7,048				1,906				7,451				43,380				22,793
Net income		56,245				50,515				22,718				3,100				27,526				132,578				79,327
Preferred stock dividends		3,414				3,430				3,581				3,615				3,615				14,041				14,459
Net income available to common shareholders		$	52,831			$	47,085			$	19,137			$	(515	)		$	23,911			$	118,537			$	64,868
Basic earnings per common share		$	1.67			$	1.49			$	0.61			$	(0.02	)		$	0.76			$	3.76			$	2.08
Diluted earnings per common share		$	1.65			$	1.48			$	0.61			$	(0.02	)		$	0.75			$	3.74			$	2.05

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
ASSETS
Cash and due from banks		$	78,090			$	5,822			$	44,577			$	18,842			$	33,095
Interest earning deposits		615,264				325,594				1,022,753				237,390				179,410
Cash and cash equivalents		693,354				331,416				1,067,330				256,232				212,505
Investment securities, at fair value		1,210,285				1,133,831				681,382				712,657				595,876
Loans held for sale		79,086				26,689				464,164				450,157				486,328
Loans receivable, mortgage warehouse, at fair value		3,616,432				3,913,593				2,793,164				2,518,012				2,245,758
Loans receivable, PPP		4,561,365				4,964,105				4,760,427				—				—
Loans and leases receivable		7,575,368				7,700,892				7,272,447				7,353,262				7,318,988
Allowance for credit losses on loans and leases		(144,176		)		(155,561		)		(159,905		)		(149,283		)		(56,379		)
Total loans and leases receivable, net of allowance for credit losses on loans and leases		15,608,989				16,423,029				14,666,133				9,721,991				9,508,367
FHLB, Federal Reserve Bank, and other restricted stock		71,368				70,387				91,023				87,140				84,214
Accrued interest receivable		80,412				65,668				49,911				40,570				38,072
Bank premises and equipment, net		11,626				11,744				8,380				8,890				9,389
Bank-owned life insurance		280,067				277,826				275,842				273,576				272,546
Other real estate owned		57				131				131				131				173
Goodwill and other intangibles		14,298				14,437				14,575				14,870				15,195
Other assets		389,706				423,569				584,247				452,585				298,052
Total assets		$	18,439,248			$	18,778,727			$	17,903,118			$	12,018,799			$	11,520,717
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, non-interest bearing deposits		$	2,356,998			$	2,327,017			$	1,879,789			$	1,435,151			$	1,343,391
Interest bearing deposits		8,952,931				8,512,060				9,086,086				6,978,492				7,305,545
Total deposits		11,309,929				10,839,077				10,965,875				8,413,643				8,648,936
FRB advances		—				—				—				175,000				—
Federal funds purchased		250,000				680,000				—				705,000				538,000
FHLB advances		850,000				850,000				850,000				1,260,000				850,000
Other borrowings		124,037				123,935				123,833				123,732				123,630
Subordinated debt		181,394				181,324				181,255				181,185				181,115
FRB PPP liquidity facility		4,415,016				4,811,009				4,419,967				—				—
Accrued interest payable and other liabilities		191,786				241,891				354,341				195,603				126,241
Total liabilities		17,322,162				17,727,236				16,895,271				11,054,163				10,467,922
Preferred stock		217,471				217,471				217,471				217,471				217,471
Common stock		32,986				32,836				32,791				32,751				32,617
Additional paid in capital		455,592				452,965				450,665				446,840				444,218
Retained earnings		438,581				385,750				338,665				319,529				381,519
Accumulated other comprehensive loss		(5,764		)		(15,751		)		(9,965		)		(30,175		)		(1,250		)
Treasury stock, at cost		(21,780		)		(21,780		)		(21,780		)		(21,780		)		(21,780		)
Total shareholders' equity		1,117,086				1,051,491				1,007,847				964,636				1,052,795
Total liabilities & shareholders' equity		$	18,439,248			$	18,778,727			$	17,903,118			$	12,018,799			$	11,520,717

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
		Three Months Ended
		December 31, 2020					September 30, 2020					December 31, 2019
		Average Balance			Average Yield or Cost (%)		Average Balance			Average Yield or Cost (%)		Average Balance			Average Yield or Cost (%)
Assets
Interest earning deposits		$	413,381		0.12%		$	686,928		0.12%		$	150,382		2.21%
Investment securities (1)		1,120,491			2.42%		950,723			2.65%		584,955			3.50%
Loans and leases:
Commercial loans to mortgage companies		3,518,371			3.06%		2,847,169			2.90%		2,158,626			4.16%
Multi-family loans		1,871,956			3.70%		1,989,074			3.72%		2,654,919			3.96%
Commercial and industrial loans and leases (2)		2,801,172			3.96%		2,599,806			3.82%		2,318,313			4.79%
Loans receivable, PPP		4,782,606			2.45%		4,909,197			1.97%		—			—%
Non-owner occupied commercial real estate loans		1,358,541			3.80%		1,388,306			3.70%		1,325,630			4.55%
Residential mortgages		400,771			3.80%		414,781			3.97%		631,370			4.05%
Installment loans		1,253,679			8.50%		1,255,505			8.37%		765,765			9.11%
Total loans and leases (3)		15,987,096			3.62%		15,403,838			3.41%		9,854,623			4.68%
Other interest-earning assets		81,031			3.80%		79,656			5.23%		86,770			7.63%
Total interest-earning assets		17,601,999			3.46%		17,121,145			3.25%		10,676,730			4.61%
Non-interest-earning assets		648,720					744,429					580,477
Total assets		$	18,250,719				$	17,865,574				$	11,257,207
Liabilities
Interest checking accounts		$	2,240,959		0.86%		$	2,370,709		0.78%		$	1,152,349		1.65%
Money market deposit accounts		4,166,635			0.60%		3,786,032			0.65%		3,190,543			2.01%
Other savings accounts		1,205,592			0.74%		1,125,273			1.06%		722,487			2.09%
Certificates of deposit		833,689			1.30%		1,344,134			1.35%		2,012,497			2.21%
Total interest-bearing deposits (4)		8,446,875			0.76%		8,626,148			0.85%		7,077,876			2.02%
FRB PPP liquidity facility		4,684,756			0.35%		4,479,036			0.35%		—			—%
Borrowings		1,276,212			3.09%		1,236,127			3.19%		1,424,550			2.91%
Total interest-bearing liabilities		14,407,843			0.83%		14,341,311			0.89%		8,502,426			2.17%
Non-interest-bearing deposits (4)		2,543,529					2,194,689					1,580,050
Total deposits and borrowings		16,951,372			0.71%		16,536,000			0.78%		10,082,476			1.83%
Other non-interest-bearing liabilities		215,465					299,526					138,242
Total liabilities		17,166,837					16,835,526					10,220,718
Shareholders' equity		1,083,882					1,030,048					1,036,489
Total liabilities and shareholders' equity		$	18,250,719				$	17,865,574				$	11,257,207
Interest spread					2.75%					2.47%					2.78%
Net interest margin					2.78%					2.50%					2.89%
Net interest margin tax equivalent (5)					2.78%					2.50%					2.89%
Net interest margin tax equivalent excl. PPP (6)					3.04%					2.86%					2.89%

(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 0.58%, 0.67% and 1.65% for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively.

(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended December 31, 2020, September 30, 2020 and December 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.

(6) Non-GAAP tax-equivalent basis, as described in note (5) for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. 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
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
		Twelve Months Ended
		December 31, 2020					December 31, 2019
		Average Balance			Average Yield or Cost (%)		Average Balance			Average Yield or Cost (%)
Assets
Interest earning deposits		$	564,218		0.59%		$	103,833		2.68%
Investment securities (1)		836,815			2.89%		653,694			3.63%
Loans and leases:
Commercial loans to mortgage companies		2,668,642			3.11%		1,799,489			4.58%
Multi-family loans		2,020,640			3.85%		2,982,185			3.87%
Commercial and industrial loans and leases (2)		2,581,119			4.12%		2,111,181			5.08%
Loans receivable, PPP		3,121,157			2.10%		—			—%
Non-owner occupied commercial real estate loans		1,368,684			3.91%		1,243,236			4.53%
Residential mortgages		422,696			3.82%		694,889			4.15%
Installment loans		1,264,255			8.68%		445,166			9.28%
Total loans and leases (3)		13,447,193			3.81%		9,276,146			4.65%
Other interest-earning assets		85,091			4.41%		90,035			6.39%
Total interest-earning assets		14,933,317			3.64%		10,123,708			4.58%
Non-interest-earning assets		671,484					543,962
Total assets		$	15,604,801				$	10,667,670
Liabilities
Interest checking accounts		$	2,098,138		0.89%		$	955,630		1.82%
Money market deposit accounts		3,657,422			0.96%		3,151,328			2.18%
Other savings accounts		1,162,472			1.44%		538,375			2.12%
Certificates of deposit		1,357,688			1.58%		1,943,361			2.26%
Total interest-bearing deposits (4)		8,275,720			1.11%		6,588,694			2.15%
FRB PPP liquidity facility		2,537,744			0.35%		—			—%
Borrowings		1,504,760			2.57%		1,523,171			2.95%
Total interest-bearing liabilities		12,318,224			1.13%		8,111,865			2.30%
Non-interest-bearing deposits (4)		2,052,376					1,430,149
Total deposits and borrowings		14,370,600			0.97%		9,542,014			1.95%
Other non-interest-bearing liabilities		201,961					126,325
Total liabilities		14,572,561					9,668,339
Shareholders' equity		1,032,240					999,331
Total liabilities and shareholders' equity		$	15,604,801				$	10,667,670
Interest spread					2.67%					2.63%
Net interest margin					2.70%					2.74%
Net interest margin tax equivalent (5)					2.71%					2.75%
Net interest margin tax equivalent (6)					2.96%					2.75%

(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 0.89% and 1.76% for the twelve months ended December 31, 2020 and December 31, 2019, respectively.

(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the years ended December 31, 2020 and 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.

(6) Non-GAAP tax-equivalent basis as described in noted (5), for the years ended December 31, 2020 and 2019, excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. 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 and twelve months ended December 31, 2020 and 2019:
		Three Months Ended December 31, 2020												Three Months Ended December 31, 2019
		Customers Bank Business Banking				BankMobile				Consolidated				Customers Bank Business Banking				BankMobile				Consolidated
Interest income (1)		$	138,209			$	14,884			$	153,093			$	112,212			$	11,783			$	123,995
Interest expense		29,230				917				30,147				46,111				291				46,402
Net interest income		108,979				13,967				122,946				66,101				11,492				77,593
Provision for credit losses on loans and leases		(3,912		)		999				(2,913		)		6,846				2,843				9,689
Non-interest income		13,413				10,362				23,775				14,964				10,849				25,813
Non-interest expense		50,098				21,066				71,164				41,494				17,246				58,740
Income (loss) before income tax expense (benefit)		76,206				2,264				78,470				32,725				2,252				34,977
Income tax expense (benefit)		21,600				625				22,225				6,892				559				7,451
Net income (loss)		54,606				1,639				56,245				25,833				1,693				27,526
Preferred stock dividends		3,414				—				3,414				3,615				—				3,615
Net income (loss) available to common shareholders		$	51,192			$	1,639			$	52,831			$	22,218			$	1,693			$	23,911
Basic earnings (loss) per common share		$	1.62			$	0.05			$	1.67			$	0.71			$	0.05			$	0.76
Diluted earnings (loss) per common share		$	1.60			$	0.05			$	1.65			$	0.70			$	0.05			$	0.75

(1) Amounts reported include funds transfer pricing of $3.9 million and $0.7 million for the three months ended December 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.

		Twelve Months Ended December 31, 2020												Twelve Months Ended December 31, 2019
		Customers Bank Business Banking				BankMobile				Consolidated				Customers Bank Business Banking				BankMobile				Consolidated
Interest income (1)		$	490,028			$	53,276			$	543,304			$	422,094			$	41,645			$	463,739
Interest expense		137,480				2,136				139,616				185,513				916				186,429
Net interest income		352,548				51,140				403,688				236,581				40,729				277,310
Provision for credit losses on loans and leases		51,708				11,066				62,774				10,091				14,136				24,227
Non-interest income		57,834				43,900				101,734				35,268				45,670				80,938
Non-interest expense		187,153				79,537				266,690				153,333				78,568				231,901
Income (loss) before income tax expense (benefit)		171,521				4,437				175,958				108,425				(6,305		)		102,120
Income tax expense (benefit)		42,307				1,073				43,380				24,215				(1,422		)		22,793
Net income (loss)		129,214				3,364				132,578				84,210				(4,883		)		79,327
Preferred stock dividends		14,041				—				14,041				14,459				—				14,459
Net income (loss) available to common shareholders		$	115,173			$	3,364			$	118,537			$	69,751			$	(4,883	)		$	64,868
Basic earnings (loss) per common share		$	3.65			$	0.11			$	3.76			$	2.24			$	(0.16	)		$	2.08
Diluted earnings (loss) per common share		$	3.63			$	0.11			$	3.74			$	2.20			$	(0.15	)		$	2.05
As of December 31, 2020 and 2019
Goodwill and other intangibles		$	3,629			$	10,669			$	14,298			$	3,629			$	11,566			$	15,195
Total assets (2)		$	17,821,665			$	617,583			$	18,439,248			$	10,990,550			$	530,167			$	11,520,717
Total deposits		$	10,350,028			$	959,901			$	11,309,929			$	8,247,836			$	401,100			$	8,648,936
Total non-deposit liabilities (2)		$	5,982,010			$	30,223			$	6,012,233			$	1,789,329			$	29,657			$	1,818,986

(1) Amounts reported include funds transfer pricing of $9.3 million and $8.8 million for the twelve months ended December 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 and payables.

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

Customers Bank Business Banking:																						Twelve Months Ended December 31,
		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
Interest income (1)		$	138,209			$	126,648			$	112,455			$	112,717			$	112,212			$	490,028			$	422,094
Interest expense		29,230				31,718				32,856				43,678				46,111				137,480				185,513
Net interest income		108,979				94,930				79,599				69,039				66,101				352,548				236,581
Provision for credit losses on loans and leases		(3,912		)		8,699				19,623				27,298				6,846				51,708				10,091
Non-interest income		13,413				21,603				11,683				11,136				14,964				57,834				35,268
Non-interest expense		50,098				48,926				44,270				43,860				41,494				187,153				153,333
Income (loss) before income tax expense (benefit)		76,206				58,908				27,389				9,017				32,725				171,521				108,425
Income tax expense (benefit)		21,600				11,374				6,611				2,722				6,892				42,307				24,215
Net income (loss)		54,606				47,534				20,778				6,295				25,833				129,214				84,210
Preferred stock dividends		3,414				3,430				3,581				3,615				3,615				14,041				14,459
Net income (loss) available to common shareholders		$	51,192			$	44,104			$	17,197			$	2,680			$	22,218			$	115,173			$	69,751
Basic earnings (loss) per common share		$	1.62			$	1.40			$	0.55			$	0.09			$	0.71			$	3.65			$	2.24
Diluted earnings (loss) per common share		$	1.60			$	1.39			$	0.54			$	0.09			$	0.70			$	3.63			$	2.20

(1) Amounts reported include funds transfer pricing of $3.9 million, $2.2 million, $1.6 million, $1.4 million and $0.7 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively. Amounts reported also include funds transfer pricing of $9.3 million and $8.8 million for the twelve months ended December 31, 2020 and 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:																						Twelve Months Ended December 31,
		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
Interest income (2)		$	14,884			$	13,002			$	12,763			$	12,626			$	11,783			$	53,276			$	41,645
Interest expense		917				493				380				344				291				2,136				916
Net interest income		13,967				12,509				12,383				12,282				11,492				51,140				40,729
Provision for credit losses on loans and leases		999				4,256				1,323				4,488				2,843				11,066				14,136
Non-interest income		10,362				12,190				10,553				10,794				10,849				43,900				45,670
Non-interest expense		21,066				16,635				19,236				22,599				17,246				79,537				78,568
Income (loss) before income tax expense (benefit)		2,264				3,808				2,377				(4,011		)		2,252				4,437				(6,305		)
Income tax expense (benefit)		625				827				437				(816		)		559				1,073				(1,422		)
Net income (loss) available to common shareholders		$	1,639			$	2,981			$	1,940			$	(3,195	)		$	1,693			$	3,364			$	(4,883	)
Basic income (loss) per common share		$	0.05			$	0.09			$	0.06			$	(0.10	)		$	0.05			$	0.11			$	(0.16	)
Diluted income (loss) per common share		$	0.05			$	0.09			$	0.06			$	(0.10	)		$	0.05			$	0.11			$	(0.15	)
Deposit balances (3)
Disbursements business deposits		$	404,601			$	644,658			$	500,072			$	502,711			$	319,263
White label deposits		555,300				299,091				162,691				107,054				81,837
Total deposits		$	959,901			$	943,749			$	662,763			$	609,765			$	401,100

(2) Amounts reported include funds transfer pricing of $3.9 million, $2.2 million, $1.6 million, $1.4 million and $0.7 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively. Amounts reported also include funds transfer pricing of $9.3 million and $8.8 million for the twelve months ended December 31, 2020 and 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 December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands)
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Commercial:
Multi-family		$	1,761,301			$	1,950,300			$	2,023,571			$	2,069,077			$	2,390,204
Mortgage warehouse		3,657,350				3,947,828				2,832,112				2,573,397				2,305,784
Commercial & industrial		2,304,206				2,186,480				2,060,494				2,017,567				1,831,126
Commercial real estate owner occupied		572,338				557,595				544,772				543,945				551,948
Loans receivable, PPP		4,561,365				4,964,105				4,760,427				—				—
Commercial real estate non-owner occupied		1,213,815				1,233,882				1,262,373				1,252,826				1,222,772
Construction		140,905				122,963				128,834				115,448				117,617
Total commercial loans and leases		14,211,280				14,963,153				13,612,583				8,572,260				8,419,451
Consumer:
Residential		323,322				343,775				352,941				364,760				386,089
Manufactured housing		62,243				64,638				66,865				69,240				71,359
Installment		1,235,406				1,233,713				1,257,813				1,315,171				1,174,175
Total consumer loans		1,620,971				1,642,126				1,677,619				1,749,171				1,631,623
Total loans and leases		$	15,832,251			$	16,605,279			$	15,290,202			$	10,321,431			$	10,051,074

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
Demand, non-interest bearing		$	2,356,998			$	2,327,017			$	1,879,789			$	1,435,151			$	1,343,391
Demand, interest bearing		2,384,691				2,308,627				2,666,209				1,577,034				1,235,292
Total demand deposits		4,741,689				4,635,644				4,545,998				3,012,185				2,578,683
Savings		1,314,817				1,173,641				1,144,788				1,168,121				919,214
Money market		4,601,492				4,057,366				3,404,709				2,833,990				3,482,505
Time deposits		651,931				972,426				1,870,380				1,399,347				1,668,534
Total deposits		$	11,309,929			$	10,839,077			$	10,965,875			$	8,413,643			$	8,648,936

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)	As of December 31, 2020													As of September 30, 2020													As of December 31, 2019
	Total loans			Non accrual /NPLs			Allowance for credit losses			Total NPLs to total loans		Total reserves to total NPLs		Total loans			Non accrual /NPLs			Allowance for credit losses			Total NPLs to total loans		Total reserves to total NPLs		Total loans			Non accrual /NPLs			Allowance for credit losses			Total NPLs to total loans		Total reserves to total NPLs
Loan type
Multi-family	$	1,761,301		$	21,728		$	12,620		1.23	%	58.08	%	$	1,950,300		$	11,710		$	15,026		0.60	%	128.32	%	$	1,907,331		$	4,117		$	6,157		0.22	%	149.55	%
Commercial & industrial(1)	2,289,441			8,453			12,239			0.37	%	144.79	%	2,220,715			9,633			12,926			0.43	%	134.18	%	1,891,152			4,531			16,010			0.24	%	353.34	%
Commercial real estate owner occupied	572,338			3,411			9,512			0.60	%	278.86	%	557,595			3,599			9,552			0.65	%	265.41	%	551,948			1,963			1,781			0.36	%	90.73	%
Commercial real estate non-owner occupied	1,196,564			2,356			19,452			0.20	%	825.64	%	1,215,516			2,408			20,200			0.20	%	838.87	%	1,222,772			76			6,243			0.01	%	8214.47	%
Construction	140,905			—			5,871			—	%	—	%	122,963			—			6,423			—	%	—	%	117,617			—			1,262			—	%	—	%
Total commercial loans and leases receivable	5,960,549			35,948			59,694			0.60	%	166.06	%	6,067,089			27,350			64,127			0.45	%	234.47	%	5,690,820			10,687			31,453			0.19	%	294.31	%
Residential	317,170			9,911			3,977			3.12	%	40.13	%	335,452			10,634			4,649			3.17	%	43.72	%	382,634			6,128			3,218			1.60	%	52.51	%
Manufactured housing	62,243			2,969			5,189			4.77	%	174.77	%	64,638			2,778			5,625			4.30	%	202.48	%	71,359			1,655			1,178			2.32	%	71.18	%
Installment	1,235,406			3,211			75,316			0.26	%	2345.56	%	1,233,713			3,118			81,160			0.25	%	2602.95	%	1,174,175			1,551			20,648			0.13	%	1331.27	%
Total consumer loans receivable	1,614,819			16,091			84,482			1.00	%	525.03	%	1,633,803			16,530			91,434			1.01	%	553.14	%	1,628,168			9,334			25,044			0.57	%	268.31	%
Loans and leases receivable(1)	7,575,368			52,039			144,176			0.69	%	277.05	%	7,700,892			43,880			155,561			0.57	%	354.51	%	7,318,988			20,021			56,497			0.27	%	282.19	%
Loans receivable, PPP	4,561,365			—			—			—	%	—	%	4,964,105			—			—			—	%	—	%	—			—			—			—	%	—	%
Loans receivable, mortgage warehouse, at fair value	3,616,432			—			—			—	%	—	%	3,913,593			—			—							2,245,758			—			—
Total loans held for sale	79,086			18,469			—			23.35	%	—	%	26,689			19,691			—			73.78	%	—	%	486,328			1,325			—			0.27	%	—	%
Total portfolio	$	15,832,251		$	70,508		$	144,176		0.45	%	204.48	%	$	16,605,279		$	63,571		$	155,561		0.38	%	244.70	%	$	10,051,074		$	21,346		$	56,497		0.21	%	264.67	%

(1) Excluding loans receivable, PPP from total loans and leases receivable is a non-GAAP measure. 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. Please refer to the reconciliation schedules that follow this table.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)
		Q4				Q3				Q2				Q1				Q4				Twelve Months Ended December 31,
		2020				2020				2020				2020				2019				2020				2019
Loan type
Multi-family		$	—			$	—			$	—			$	—			$	—			$	—			$	534
Commercial & industrial		155				(55		)		(4		)		43				(224		)		139				(518		)
Commercial real estate owner occupied		12				44				(2		)		(3		)		(1		)		51				(117		)
Commercial real estate non-owner occupied		(35		)		8,923				2,801				12,797				—				24,486				—
Construction		(6		)		(6		)		(113		)		(3		)		(8		)		(128		)		(136		)
Residential		46				(17		)		(26		)		(29		)		181				(26		)		270
Installment		8,300				8,410				7,669				5,906				4,414				30,285				7,787
Total net charge-offs (recoveries) from loans held for investment		$	8,472			$	17,299			$	10,325			$	18,711			$	4,362			$	54,807			$	7,820

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																																										Twelve Months Ended December 31,
		Q4 2020								Q3 2020								Q2 2020								Q1 2020								Q4 2019								2020								2019
(dollars in thousands except per share data)		USD				Per share				USD				Per share				USD				Per share				USD				Per share				USD				Per share				USD				Per share				USD				Per share
GAAP net income to common shareholders		$	52,831			$	1.65			$	47,085			$	1.48			$	19,137			$	0.61			$	(515	)		$	(0.02	)		$	23,911			$	0.75			$	118,537			$	3.74			$	64,868			$	2.05
Reconciling items (after tax):
Severance expense		171				0.01				—				—				—				—				—				—				—				—				171				0.01				373				0.01
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				—				—				—				—				—				—				5,682				0.18
Merger and acquisition related expenses		714				0.02				833				0.03				19				—				40				—				76				—				1,606				0.05				76				—
Legal reserves		—				—				258				0.01				—				—				830				0.03				—				—				1,088				0.03				1,520				0.05
(Gains) losses on investment securities		(1,419		)		(0.04		)		(9,662		)		(0.30		)		(4,543		)		(0.14		)		(1,788		)		(0.06		)		(310		)		(0.01		)		(17,412		)		(0.55		)		(1,912		)		(0.06		)
Derivative credit valuation adjustment		(448		)		(0.01		)		(304		)		(0.01		)		4,527				0.14				2,036				0.06				(429		)		(0.01		)		5,811				0.18				811				0.03
Risk participation agreement mark-to-market adjustment		—				—				—				—				(1,080		)		(0.03		)		—				—				—				—				(1,080		)		(0.03		)		—				—
Losses on sale of non-QM residential mortgage loans		—				—				—				—				—				—				—				—				595				0.02				—				—				595				0.02
Unrealized losses on loans held for sale		799				0.03				—				—				1,114				0.04				—				—				—				—				1,913				0.06				—				—
Core earnings		$	52,648			$	1.65			$	38,210			$	1.20			$	19,174			$	0.61			$	603			$	0.02			$	23,843			$	0.75			$	110,634			$	3.49			$	72,013			$	2.28

(Dollars in thousands, except per share data)
Core Return on Average Assets - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net income		$	56,245			$	50,515			$	22,718			$	3,100			$	27,526			$	132,578			$	79,327
Reconciling items (after tax):
Severance expense		171				—				—				—				—				171				373
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				5,682
Merger and acquisition related expenses		714				833				19				40				76				1,606				76
Legal reserves		—				258				—				830				—				1,088				1,520
(Gains) losses on investment securities		(1,419)				(9,662)				(4,543)				(1,788)				(310)				(17,412)				(1,912)
Derivative credit valuation adjustment		(448)				(304)				4,527				2,036				(429)				5,811				811
Risk participation agreement mark-to-market adjustment		—				—				(1,080)				—				—				(1,080)				—
Losses on sale of non-QM residential mortgage loans		—				—				—				—				595				—				595
Unrealized losses on loans held for sale		799				—				1,114				—				—				1,913				—
Core net income		$	56,062			$	41,640			$	22,755			$	4,218			$	27,458			$	124,675			$	86,472
Average total assets		$	18,250,719			$	17,865,574			$	14,675,584			$	11,573,406			$	11,257,207			$	15,604,801			$	10,667,670
Core return on average assets		1.22		%		0.93		%		0.62		%		0.15		%		0.97		%		0.80		%		0.81		%

(Dollars in thousands, except per share data)
Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net income		$	56,245			$	50,515			$	22,718			$	3,100			$	27,526			$	132,578			$	79,327
Reconciling items:
Income tax expense		22,225				12,201				7,048				1,906				7,451				43,380				22,793
Provision for credit losses on loans and leases		(2,913		)		12,955				20,946				31,786				9,689				62,774				24,227
Provision for credit losses on unfunded commitments		(968		)		(527		)		(356		)		751				3				(1,100		)		(403		)
Severance expense		239				—				—				—				—				239				490
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				7,476
Merger and acquisition related expenses		996				1,035				25				50				100				2,106				100
Legal reserves		—				320				—				1,042				—				1,362				2,000
(Gains) losses on investment securities		(1,431		)		(11,945		)		(5,553		)		(2,596		)		(310		)		(21,525		)		(2,300		)
Derivative credit valuation adjustment		(625		)		(378		)		5,895				2,556				(565		)		7,448				1,066
Risk participation agreement mark-to-market adjustment		—				—				(1,407		)		—				—				(1,407		)		—
Losses on sale of non-QM residential mortgage loans		—				—				—				—				782				—				782
Unrealized losses on loans held for sale		1,115				—				1,450				—				—				2,565				—
Adjusted net income - pre-tax pre-provision		$	74,883			$	64,176			$	50,766			$	38,595			$	44,676			$	228,420			$	135,558
Average total assets		$	18,250,719			$	17,865,574			$	14,675,584			$	11,573,406			$	11,257,207			$	15,604,801			$	10,667,670
Adjusted ROAA - pre-tax pre-provision		1.63		%		1.43		%		1.39		%		1.34		%		1.57		%		1.46		%		1.27		%

Core Return on Average Common Equity - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net income to common shareholders		$	52,831			$	47,085			$	19,137			$	(515	)		$	23,911			$	118,537			$	64,868
Reconciling items (after tax):
Severance expense		171				—				—				—				—				171				373
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				5,682
Merger and acquisition related expenses		714				833				19				40				76				1,606				76
Legal reserves		—				258				—				830				—				1,088				1,520
(Gains) losses on investment securities		(1,419		)		(9,662		)		(4,543		)		(1,788		)		(310		)		(17,412		)		(1,912		)
Derivative credit valuation adjustment		(448		)		(304		)		4,527				2,036				(429		)		5,811				811
Risk participation agreement mark-to-market adjustment		—				—				(1,080		)		—				—				(1,080		)		—
Losses on sale of non-QM residential mortgage loans		—				—				—				—				595				—				595
Unrealized losses on loans held for sale		799				—				1,114				—				—				1,913				—
Core earnings		$	52,648			$	38,210			$	19,174			$	603			$	23,843			$	110,634			$	72,013
Average total common shareholders' equity		$	866,411			$	812,577			$	771,663			$	807,884			$	819,018			$	814,769			$	781,860
Core return on average common equity		24.17		%		18.71		%		9.99		%		0.30		%		11.55		%		13.58		%		9.21		%

(Dollars in thousands, except per share data)
Adjusted ROCE - Pre-Tax Pre-Provision - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net income to common shareholders		$	52,831			$	47,085			$	19,137			$	(515)			$	23,911			$	118,537			$	64,868
Reconciling items:
Income tax expense		22,225				12,201				7,048				1,906				7,451				43,380				22,793
Provision for credit losses on loan and leases		(2,913)				12,955				20,946				31,786				9,689				62,774				24,227
Provision for credit losses on unfunded commitments		(968)				(527)				(356)				751				3				(1,100)				(403)
Severance expense		239				—				—				—				—				239				490
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				7,476
Merger and acquisition related expenses		996				1,035				25				50				100				2,106				100
Legal reserves		—				320				—				1,042				—				1,362				2,000
(Gains) losses on investment securities		(1,431)				(11,945)				(5,553)				(2,596)				(310)				(21,525)				(2,300)
Derivative credit valuation adjustment		(625)				(378)				5,895				2,556				(565)				7,448				1,066
Risk participation agreement mark-to-market adjustment		—				—				(1,407)				—				—				(1,407)				—
Losses on sale of non-QM residential mortgage loans		—				—				—				—				782				—				782
Unrealized losses on loans held for sale		1,115				—				1,450				—				—				2,565				—
Pre-tax pre-provision adjusted net income available to common shareholders		$	71,469			$	60,746			$	47,185			$	34,980			$	41,061			$	214,379			$	121,099
Average total common shareholders' equity		$	866,411			$	812,577			$	771,663			$	807,884			$	819,018			$	814,769			$	781,860
Adjusted ROCE - pre-tax pre-provision		32.82		%		29.74		%		24.59		%		17.41		%		19.89		%		26.31		%		15.49		%

Net Interest Margin, Tax Equivalent - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net interest income		$	122,946			$	107,439			$	91,982			$	81,321			$	77,593			$	403,688			$	277,310
Tax-equivalent adjustment		219				225				225				205				187				874				735
Net interest income tax equivalent		$	123,165			$	107,664			$	92,207			$	81,526			$	77,780			$	404,562			$	278,045
Average total interest earning assets		$	17,601,999			$	17,121,145			$	13,980,021			$	10,976,731			$	10,676,730			$	14,933,317			$	10,123,708
Net interest margin, tax equivalent		2.78		%		2.50		%		2.65		%		2.99		%		2.89		%		2.71		%		2.75		%

Net Interest Margin, Tax Equivalent, Excluding PPP - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net interest income		$	122,946			$	107,439			$	91,982			$	81,321			$	77,593			$	403,688			$	277,310
PPP net interest income		(25,257		)		(20,018		)		(9,308		)		—				—				(54,583		)		—
Tax-equivalent adjustment		219				225				225				205				187				874				735
Net interest income, tax equivalent, excluding PPP		$	97,908			$	87,646			$	82,899			$	81,526			$	77,780			$	349,979			$	278,045
GAAP average total interest earning assets		$	17,601,999			$	17,121,145			$	13,980,021			$	10,976,731			$	10,676,730			$	14,933,317			$	10,123,708
Average PPP loans		(4,782,606		)		(4,909,197		)		(2,754,920		)		—				—				(3,121,157		)		—
Adjusted average total interest earning assets		$	12,819,393			$	12,211,948			$	11,225,101			$	10,976,731			$	10,676,730			$	11,812,160			$	10,123,708
Net interest margin, tax equivalent, excluding PPP		3.04		%		2.86		%		2.97		%		2.99		%		2.89		%		2.96		%		2.75		%

(Dollars in thousands, except per share data)
Core Efficiency Ratio - Customers Bancorp																						Twelve Months Ended December 31,
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019				2020				2019
GAAP net interest income		$	122,946			$	107,439			$	91,982			$	81,321			$	77,593			$	403,688			$	277,310
GAAP non-interest income		$	23,775			$	33,793			$	22,236			$	21,930			$	25,813			$	101,734			$	80,938
Loss upon acquisition of interest-only GNMA securities		—				—				—				—				—				—				7,476
(Gains) losses on investment securities		(1,431		)		(11,945		)		(5,553		)		(2,596		)		(310		)		(21,525		)		(2,300		)
Derivative credit valuation adjustment		(625		)		(378		)		5,895				2,556				(565		)		7,448				1,066
Risk participation agreement mark-to-market adjustment		—				—				(1,407		)		—				—				(1,407		)		—
Losses on sale of non-QM residential mortgage loans		—				—				—				—				782				—				782
Unrealized losses on loans held for sale		1,115				—				1,450				—				—				2,565				—
Core non-interest income		22,834				21,470				22,621				21,890				25,720				88,815				87,962
Core revenue		$	145,780			$	128,909			$	114,603			$	103,211			$	103,313			$	492,503			$	365,272
GAAP non-interest expense		$	71,164			$	65,561			$	63,506			$	66,459			$	58,740			$	266,690			$	231,901
Severance expense		(239		)		—				—				—				—				(239		)		(490		)
Legal reserves		—				(320		)		—				(1,042		)		—				(1,362		)		(2,000		)
Merger and acquisition related expenses		(996		)		(1,035		)		(25		)		(50		)		(100		)		(2,106		)		(100		)
Core non-interest expense		$	69,929			$	64,206			$	63,481			$	65,367			$	58,640			$	262,983			$	229,311
Core efficiency ratio (1)		47.97		%		49.81		%		55.39		%		63.33		%		56.76		%		53.40		%		62.78		%

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

Tangible Common Equity to Tangible Assets - Customers Bancorp
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019
GAAP total shareholders' equity		$	1,117,086			$	1,051,491			$	1,007,847			$	964,636			$	1,052,795
Reconciling items:
Preferred stock		(217,471		)		(217,471		)		(217,471		)		(217,471		)		(217,471		)
Goodwill and other intangibles		(14,298		)		(14,437		)		(14,575		)		(14,870		)		(15,195		)
Tangible common equity		$	885,317			$	819,583			$	775,801			$	732,295			$	820,129
GAAP total assets		$	18,439,248			$	18,778,727			$	17,903,118			$	12,018,799			$	11,520,717
Reconciling items:
Goodwill and other intangibles		(14,298		)		(14,437		)		(14,575		)		(14,870		)		(15,195		)
Tangible assets		$	18,424,950			$	18,764,290			$	17,888,543			$	12,003,929			$	11,505,522
Tangible common equity to tangible assets		4.80		%		4.37		%		4.34		%		6.10		%		7.13		%

(Dollars in thousands, except per share data)
Tangible Book Value per Common Share - Customers Bancorp
(dollars in thousands except share and per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019
GAAP total shareholders' equity		$	1,117,086			$	1,051,491			$	1,007,847			$	964,636			$	1,052,795
Reconciling Items:
Preferred stock		(217,471		)		(217,471		)		(217,471		)		(217,471		)		(217,471		)
Goodwill and other intangibles		(14,298		)		(14,437		)		(14,575		)		(14,870		)		(15,195		)
Tangible common equity		$	885,317			$	819,583			$	775,801			$	732,295			$	820,129
Common shares outstanding		31,705,088				31,555,124				31,510,287				31,470,026				31,336,791
Tangible book value per common share		$	27.92			$	25.97			$	24.62			$	23.27			$	26.17

Total Loans and Leases, excluding PPP
(dollars in thousands)		Q4 2020				Q3 2020				Q2 2020					Q1 2020				Q4 2019
Total loans and leases		$	15,832,251			$	16,605,279			$	15,290,202				$	10,321,431			$	10,051,074
Loans receivable, PPP		(4,561,365		)		(4,964,105		)		(4,760,427		)			—				—
Loans and leases, excluding PPP		$	11,270,886			$	11,641,174			$	10,529,775				$	10,321,431			$	10,051,074

Total Assets, excluding PPP
(dollars in thousands)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019
Total assets		$	18,439,248			$	18,778,727			$	17,903,118			$	12,018,799			$	11,520,717
Loans receivable, PPP		(4,561,365		)		(4,964,105		)		(4,760,427		)		—				—
Total assets, excluding PPP		$	13,877,883			$	13,814,622			$	13,142,691			$	12,018,799			$	11,520,717

Coverage of credit loss reserves for loans and leases held for investment, excluding PPP
(dollars in thousands)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019
Loans and leases receivable		$	12,136,733			$	12,664,997			$	12,032,874			$	7,353,262			$	7,318,988
Loans receivable, PPP		(4,561,365		)		(4,964,105		)		(4,760,427		)		—				—
Loans and leases held for investment, excluding PPP		$	7,575,368			$	7,700,892			$	7,272,447			$	7,353,262			$	7,318,988
Allowance for credit losses on loans and leases		144,176				155,561				159,905				149,283				56,379
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP		1.90		%		2.02		%		2.20		%		2.03		%		0.77		%

(Dollars in thousands, except per share data)
Tangible Common Equity to Tangible Assets, excluding PPP - Customers Bancorp
(dollars in thousands except per share data)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019
GAAP total shareholders' equity		$	1,117,086			$	1,051,491			$	1,007,847			$	964,636			$	1,052,795
Reconciling items:
Preferred stock		(217,471		)		(217,471		)		(217,471		)		(217,471		)		(217,471		)
Goodwill and other intangibles		(14,298		)		(14,437		)		(14,575		)		(14,870		)		(15,195		)
Tangible common equity		$	885,317			$	819,583			$	775,801			$	732,295			$	820,129
GAAP total assets		$	18,439,248			$	18,778,727			$	17,903,118			$	12,018,799			$	11,520,717
Loans receivable, PPP		(4,561,365		)		(4,964,105		)		(4,760,427		)		—				—
Total assets, excluding PPP		$	13,877,883			$	13,814,622			$	13,142,691			$	12,018,799			$	11,520,717
Reconciling items:
Goodwill and other intangibles		(14,298		)		(14,437		)		(14,575		)		(14,870		)		(15,195		)
Tangible assets		$	13,863,585			$	13,800,185			$	13,128,116			$	12,003,929			$	11,505,522
Tangible common equity to tangible assets		6.39		%		5.94		%		5.91		%		6.10		%		7.13		%

Commercial criticized loans and leases receivable to total loans and leases, excluding PPP
(dollars in thousands)		Q4 2020				Q3 2020				Q2 2020				Q1 2020				Q4 2019
Special mention loans		$	250,575			$	126,361			$	105,110			$	75,838			$	111,157
Substandard loans		202,965				172,217				119,651				130,370				139,744
Doubtful loans		—				—				27,921				19,050				—
Criticized commercial loans and leases receivable		$	453,540			$	298,578			$	252,682			$	225,258			$	250,901
Total loans and leases		15,753,165				16,605,279				15,290,202				10,321,431				10,051,074
Loans receivable, PPP		(4,561,365		)		(4,964,105		)		(4,760,427		)		—				—
Total loans and leases, excluding PPP		$	11,191,800			$	11,641,174			$	10,529,775			$	10,321,431			$	10,051,074
Commercial criticized loans and leases receivable to total loans and leases, excluding PPP		4.05		%		2.56		%		2.40		%		2.18		%		2.50		%

Adjusted non-performing assets to total assets
(dollars in thousands)		Q4 2020
Non-performing assets		$	71,175
Collateral dependent loan sold in January 2021		17,251
Adjusted non-performing assets		$	53,924
Total assets		$	18,439,248
Adjusted non-performing assets to total assets		0.30		%

 

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