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     181  0 Kommentare Customers Bancorp Reports Results for Second Quarter 2023

    Customers Bancorp, Inc. (NYSE:CUBI)

    Second Quarter 2023 Highlights

    • Q2 2023 net income available to common shareholders was $44.0 million, or $1.39 per diluted share; ROAA was 0.88% and ROCE was 13.22%.
    • Q2 2023 core earnings* were $52.2 million, or $1.65 per diluted share; Core ROAA* was 1.03% and Core ROCE* was 15.67%.
    • CET 1 capital ratio of 10.3%1 at June 30, 2023, compared to 9.6% at March 31, 2023. Significant progress toward stated goal of 11.0% - 11.5% by year-end 2023.
    • Q2 2023 net interest margin, tax equivalent (NIM) was 3.15%, an increase of 19 basis points over Q1 2023 NIM of 2.96%. Q1 2023 NIM (excluding PPP)* was 2.80%
    • Significant positive deposit mix shift in Q2 2023 as total deposits grew by $226.8 million, with an increase in non-interest bearing deposits of $1.0 billion, or 29%, over Q1 2023. The average cost of deposits decreased 21 basis points in Q2 2023 while the June 30, 2023 spot cost of deposits declined one basis point from March 31, 2023 despite an increase in market interest rates in Q2 2023.
    • Total estimated insured deposits were 77%2 of total deposits at June 30, 2023, with immediately available liquidity covering uninsured deposits by approximately 222%.
    • Q2 2023 adjusted pre-tax pre-provision net income* was $96.8 million; adjusted pre-tax pre-provision ROAA* was 1.79%; and adjusted pre-tax pre-provision ROCE* was 28.01%.
    • Q2 2023 loans declined $1.2 billion or 7.6% over Q1 2023, with average loan yields up 13 basis points in Q2 2023, principally due to non-strategic loan sales.
    • Q2 2023 provision for credit losses on loans and leases of $22.4 million was largely driven by the recognition of weaker macroeconomic forecasts.
    • Non-performing assets were $28.4 million, or 0.13% of total assets, at June 30, 2023, down $3.9 million, or 12%, from March 31, 2023. Allowance for credit losses on loans and leases equaled 494% of non-performing loans at June 30, 2023, compared to 406% at March 31, 2023.
    • Q2 2023 book value per share and tangible book value per share* both grew by $1.08, or 2.6%, with increased AOCI losses of $11.9 million over the same time period.

     

     

     

     

     

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    1 Regulatory capital ratios as of June 30, 2023 are estimates.

    2 Uninsured deposits (estimate) of $4.7 billion to be reported on the Bank's call report, less state and municipal deposits of $459.4 million collateralized by our line of credit from FHLB and from our affiliates of $92.0 million.

    CEO Commentary

    “We are very pleased with our second quarter results as we executed seamlessly on our strategic priorities and delivered one of our strongest quarters to date,” said Customers Bancorp Chairman and CEO Jay Sidhu. “While the industry continues to face significant headwinds from rising funding costs, negative deposit mix shifts and net interest margin compression, we successfully grew total deposits by $226.8 million in Q2 2023, even after the payoff of net brokered CDs of $660 million, with an increase in non-interest bearing deposits of $1 billion, or 29%. We expanded our net interest margin significantly over Q1 2023 despite holding even higher cash balances for prudent risk management purposes. Notably, our average cost of deposits decreased 21 basis points during the quarter as we replaced higher cost wholesale deposits with lower cost core deposits and continued to strengthen our deposit franchise. Our average loan yields increased 13 basis points as a result of the increase in interest rates and the floating rate nature of our loan portfolio. Following through on the commitments we made last quarter, we successfully exited certain non-strategic loan portfolios by selling $670 million in short-term syndicated capital call lines of credit and $556.7 million in consumer installment loans. This provided balance sheet capacity for the previously announced $631 million Venture Banking portfolio acquired from the FDIC at a 15% discount and afforded us a significant opportunity to further grow and strengthen our deposit franchise, improve our profitability, and increase our capital ratios,” stated Jay Sidhu.

    “Our Q2 2023 GAAP earnings were $44.0 million, or $1.39 per diluted share. Core earnings* were $52.2 million, or $1.65 per diluted share, well above consensus estimates. At June 30, 2023, our deposit base was well diversified, with approximately 77%2 of total deposits insured. We maintain a strong liquidity position, with $9.1 billion of liquidity immediately available, which covers approximately 222% of uninsured deposits and our loan to deposit ratio was about 77%. We continued to purposely moderate loan growth and took other strategic actions in the second quarter 2023 to further improve our capital ratios. At June 30, 2023, we had $3.2 billion of cash on hand, which we believe was prudent given persisting levels of uncertainty. Asset quality remains exceptional and credit reserves are extremely robust at 494% of total non-performing loans at the end of Q2 2023. The prudent risk management strategic actions that we have taken over the past several quarters have us well positioned from a capital, credit, liquidity, interest rate risk, and earnings perspective as we enter the second half of 2023. With persisting levels of uncertainty, we believe it is prudent to continue to moderate growth, or even shrink the balance sheet somewhat, and focus on further strengthening the balance sheet and improving capital ratios. We remain committed to improving our CET 1 ratio to 11.0% - 11.5% by year-end 2023 and are extremely proud of the progress that we made in just one quarter. We are confident in our ability to manage our credit, interest rate, and liquidity risks, and superbly service our clients in all operating environments. We are incredibly optimistic about our future,” Jay Sidhu continued.

     

     

     

     

     

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    1 Regulatory capital ratios as of June 30, 2023 are estimates.

    2 Uninsured deposits (estimate) of $4.7 billion to be reported on the Bank's call report, less state and municipal deposits of $459.4 million collateralized by our line of credit from FHLB and from our affiliates of $92.0 million.

     

    Financial Highlights

    (Dollars in thousands, except per share data)

     

    At or Three Months Ended

     

    Increase (Decrease)

     

    June 30, 2023

     

    March 31, 2023

     

    Profitability Metrics:

     

     

     

     

     

     

     

     

    Net income available for common shareholders

     

    $

    44,007

     

     

    $

    50,265

     

     

    $

    (6,258

    )

     

    (12.5

    )%

    Diluted earnings per share

     

    $

    1.39

     

     

    $

    1.55

     

     

    $

    (0.16

    )

     

    (10.3

    )%

    Core earnings*

     

    $

    52,163

     

     

    $

    51,143

     

     

    $

    1,020

     

     

    2.0

    %

    Core earnings per share*

     

    $

    1.65

     

     

    $

    1.58

     

     

    $

    0.07

     

     

    4.4

    %

    Core earnings, excluding PPP*

     

    $

    54,231

     

     

    $

    41,537

     

     

    $

    12,694

     

     

    30.6

    %

    Core earnings per share, excluding PPP*

     

    $

    1.72

     

     

    $

    1.28

     

     

    $

    0.44

     

     

    34.4

    %

    Return on average assets ("ROAA")

     

     

    0.88

    %

     

     

    1.03

    %

     

     

    (0.15

    )

     

     

    Core ROAA*

     

     

    1.03

    %

     

     

    1.05

    %

     

     

    (0.02

    )

     

     

    Core ROAA, excluding PPP*

     

     

    1.07

    %

     

     

    0.87

    %

     

     

    0.20

     

     

     

    Return on average common equity ("ROCE")

     

     

    13.22

    %

     

     

    16.00

    %

     

     

    (2.78

    )

     

     

    Core ROCE*

     

     

    15.67

    %

     

     

    16.28

    %

     

     

    (0.61

    )

     

     

    Adjusted pre-tax pre-provision net income*

     

    $

    96,833

     

     

    $

    89,282

     

     

    $

    7,551

     

     

    8.5

    %

    Adjusted pre-tax pre-provision net income ROAA, excluding PPP*

     

     

    1.83

    %

     

     

    1.53

    %

     

     

    0.30

     

     

     

    Net interest margin, tax equivalent

     

     

    3.15

    %

     

     

    2.96

    %

     

     

    0.19

     

     

     

    Net interest margin, tax equivalent, excluding PPP*

     

     

    3.20

    %

     

     

    2.80

    %

     

     

    0.40

     

     

     

    Loan yield

     

     

    6.83

    %

     

     

    6.70

    %

     

     

    0.13

     

     

     

    Loan yield, excluding PPP*

     

     

    6.89

    %

     

     

    6.46

    %

     

     

    0.43

     

     

     

    Cost of deposits

     

     

    3.11

    %

     

     

    3.32

    %

     

     

    (0.21

    )

     

     

    Efficiency ratio

     

     

    49.25

    %

     

     

    47.71

    %

     

     

    1.54

     

     

     

    Core efficiency ratio*

     

     

    47.84

    %

     

     

    47.09

    %

     

     

    0.75

     

     

     

    Balance Sheet Trends:

     

     

     

     

     

     

     

     

    Total assets

     

    $

    22,028,565

     

     

    $

    21,751,614

     

     

    $

    276,951

     

     

    1.3

    %

    Total loans and leases

     

    $

    13,910,907

     

     

    $

    15,063,034

     

     

    $

    (1,152,127

    )

     

    (7.6

    )%

    Total loans and leases, excluding PPP*

     

    $

    13,722,144

     

     

    $

    14,816,776

     

     

    $

    (1,094,632

    )

     

    (7.4

    )%

    Non-interest bearing demand deposits

     

    $

    4,490,198

     

     

    $

    3,487,517

     

     

    $

    1,002,681

     

     

    28.8

    %

    Total deposits

     

    $

    17,950,431

     

     

    $

    17,723,617

     

     

    $

    226,814

     

     

    1.3

    %

    Capital Metrics:

     

     

     

     

     

     

     

     

    Common Equity

     

    $

    1,318,858

     

     

    $

    1,283,226

     

     

    $

    35,632

     

     

    2.8

    %

    Tangible Common Equity*

     

    $

    1,315,229

     

     

    $

    1,279,597

     

     

    $

    35,632

     

     

    2.8

    %

    Common Equity to Total Assets

     

     

    6.0

    %

     

     

    5.9

    %

     

     

    0.1

     

     

     

    Tangible Common Equity to Tangible Assets*

     

     

    6.0

    %

     

     

    5.9

    %

     

     

    0.1

     

     

     

    Tangible Common Equity to Tangible Assets, excluding PPP*

     

     

    6.0

    %

     

     

    6.0

    %

     

     

    0.0

     

     

     

    Book Value per common share

     

    $

    42.16

     

     

    $

    41.08

     

     

    $

    1.08

     

     

    2.6

    %

    Tangible Book Value per common share*

     

    $

    42.04

     

     

    $

    40.96

     

     

    $

    1.08

     

     

    2.6

    %

    Common equity Tier 1 capital ratio (1)

     

     

    10.3

    %

     

     

    9.6

    %

     

     

    0.7

     

     

     

    Total risk based capital ratio (1)

     

     

    13.1

    %

     

     

    12.3

    %

     

     

    0.8

     

     

     

     

     

     

     

     

     

     

     

     

    (1) Regulatory capital ratios as of June 30, 2023 are estimates.

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    Financial Highlights

    (Dollars in thousands, except per share data)

     

    At or Three Months Ended

     

    Increase (Decrease)

     

    Six Months Ended

     

    Increase (Decrease)

     

    June 30, 2023

     

    June 30, 2022

     

     

    June 30, 2023

     

    June 30, 2022

     

    Profitability Metrics:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net income available for common shareholders

     

    $

    44,007

     

     

    $

    56,519

     

     

    $

    (12,512

    )

     

    (22.1

    )%

     

    $

    94,272

     

     

    $

    131,415

     

     

    $

    (37,143

    )

     

    (28.3

    )%

    Diluted earnings per share

     

    $

    1.39

     

     

    $

    1.68

     

     

    $

    (0.29

    )

     

    (17.3

    )%

     

    $

    2.95

     

     

    $

    3.87

     

     

    $

    (0.92

    )

     

    (23.8

    )%

    Core earnings*

     

    $

    52,163

     

     

    $

    59,367

     

     

    $

    (7,204

    )

     

    (12.1

    )%

     

    $

    103,306

     

     

    $

    134,777

     

     

    $

    (31,471

    )

     

    (23.4

    )%

    Core earnings per share*

     

    $

    1.65

     

     

    $

    1.77

     

     

    $

    (0.12

    )

     

    (6.8

    )%

     

    $

    3.22

     

     

    $

    3.97

     

     

    $

    (0.75

    )

     

    (18.9

    )%

    Core earnings, excluding PPP*

     

    $

    54,231

     

     

    $

    46,301

     

     

    $

    7,930

     

     

    17.1

    %

     

    $

    95,768

     

     

    $

    96,998

     

     

    $

    (1,230

    )

     

    (1.3

    )%

    Core earnings per share, excluding PPP*

     

    $

    1.72

     

     

    $

    1.38

     

     

    $

    0.34

     

     

    24.6

    %

     

    $

    2.99

     

     

    $

    2.86

     

     

    $

    0.13

     

     

    4.5

    %

    Return on average assets ("ROAA")

     

     

    0.88

    %

     

     

    1.17

    %

     

     

    (0.29

    )

     

     

     

     

    0.96

    %

     

     

    1.39

    %

     

     

    (0.43

    )

     

     

    Core ROAA*

     

     

    1.03

    %

     

     

    1.23

    %

     

     

    (0.20

    )

     

     

     

     

    1.04

    %

     

     

    1.43

    %

     

     

    (0.39

    )

     

     

    Core ROAA, excluding PPP*

     

     

    1.07

    %

     

     

    1.04

    %

     

     

    0.03

     

     

     

     

     

    0.97

    %

     

     

    1.04

    %

     

     

    (0.07

    )

     

     

    Return on average common equity ("ROCE")

     

     

    13.22

    %

     

     

    18.21

    %

     

     

    (4.99

    )

     

     

     

     

    14.57

    %

     

     

    21.23

    %

     

     

    (6.66

    )

     

     

    Core ROCE*

     

     

    15.67

    %

     

     

    19.13

    %

     

     

    (3.46

    )

     

     

     

     

    15.97

    %

     

     

    21.77

    %

     

     

    (5.80

    )

     

     

    Adjusted pre-tax pre-provision net income*

     

    $

    96,833

     

     

    $

    105,692

     

     

    $

    (8,859

    )

     

    (8.4

    )%

     

    $

    186,115

     

     

    $

    218,341

     

     

    $

    (32,226

    )

     

    (14.8

    )%

    Adjusted pre-tax pre-provision net income ROAA, excluding PPP*

     

     

    1.83

    %

     

     

    1.85

    %

     

     

    (0.02

    )

     

     

     

     

    1.69

    %

     

     

    1.86

    %

     

     

    (0.17

    )

     

     

    Net interest margin, tax equivalent

     

     

    3.15

    %

     

     

    3.39

    %

     

     

    (0.24

    )

     

     

     

     

    3.06

    %

     

     

    3.49

    %

     

     

    (0.43

    )

     

     

    Net interest margin, tax equivalent, excluding PPP*

     

     

    3.20

    %

     

     

    3.32

    %

     

     

    (0.12

    )

     

     

     

     

    3.01

    %

     

     

    3.32

    %

     

     

    (0.31

    )

     

     

    Loan yield

     

     

    6.83

    %

     

     

    4.54

    %

     

     

    2.29

     

     

     

     

     

    6.77

    %

     

     

    4.60

    %

     

     

    2.17

     

     

     

    Loan yield, excluding PPP*

     

     

    6.89

    %

     

     

    4.56

    %

     

     

    2.33

     

     

     

     

     

    6.67

    %

     

     

    4.50

    %

     

     

    2.17

     

     

     

    Cost of deposits

     

     

    3.11

    %

     

     

    0.54

    %

     

     

    2.57

     

     

     

     

     

    3.22

    %

     

     

    0.44

    %

     

     

    2.78

     

     

     

    Efficiency ratio

     

     

    49.25

    %

     

     

    42.14

    %

     

     

    7.11

     

     

     

     

     

    48.51

    %

     

     

    40.76

    %

     

     

    7.75

     

     

     

    Core efficiency ratio*

     

     

    47.84

    %

     

     

    41.74

    %

     

     

    6.10

     

     

     

     

     

    47.49

    %

     

     

    40.59

    %

     

     

    6.90

     

     

     

    Balance Sheet Trends:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Total assets

    $

    22,028,565

    $

    20,251,996

     

     

    $

    1,776,569

     

     

    8.8

    %

     

     

     

     

     

     

     

     

    Total loans and leases

     

    $

    13,910,907

     

     

    $

    15,664,353

     

     

    $

    (1,753,446

    )

     

    (11.2

    )%

     

     

     

     

     

     

     

     

    Total loans and leases, excluding PPP*

     

    $

    13,722,144

     

     

    $

    14,094,193

     

     

    $

    (372,049

    )

     

    (2.6

    )%

     

     

     

     

     

     

     

     

    Non-interest bearing demand deposits

     

    $

    4,490,198

     

     

    $

    4,683,030

     

     

    $

    (192,832

    )

     

    (4.1

    )%

     

     

     

     

     

     

     

     

    Total deposits

     

    $

    17,950,431

     

     

    $

    16,944,719

     

     

    $

    1,005,712

     

     

    5.9

    %

     

     

     

     

     

     

     

     

    Capital Metrics:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Common Equity

     

    $

    1,318,858

     

     

    $

    1,215,596

     

     

    $

    103,262

     

     

    8.5

    %

     

     

     

     

     

     

     

     

    Tangible Common Equity*

     

    $

    1,315,229

     

     

    $

    1,211,967

     

     

    $

    103,262

     

     

    8.5

    %

     

     

     

     

     

     

     

     

    Common Equity to Total Assets

     

     

    6.0

    %

     

     

    6.0

    %

     

     

    0.0

     

     

     

     

     

     

     

     

     

     

     

    Tangible Common Equity to Tangible Assets*

     

     

    6.0

    %

     

     

    6.0

    %

     

     

    0.0

     

     

     

     

     

     

     

     

     

     

     

    Tangible Common Equity to Tangible Assets, excluding PPP*

     

     

    6.0

    %

     

     

    6.5

    %

     

     

    (0.5

    )

     

     

     

     

     

     

     

     

     

     

    Book Value per common share

     

    $

    42.16

     

     

    $

    37.46

     

     

    $

    4.70

     

     

    12.5

    %

     

     

     

     

     

     

     

     

    Tangible Book Value per common share*

     

    $

    42.04

     

     

    $

    37.35

     

     

    $

    4.69

     

     

    12.6

    %

     

     

     

     

     

     

     

     

    Common equity Tier 1 capital ratio (1)

     

     

    10.3

    %

     

     

    9.7

    %

     

     

    0.6

     

     

     

     

     

     

     

     

     

     

     

    Total risk based capital ratio (1)

     

     

    13.1

    %

     

     

    12.6

    %

     

     

    0.5

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1) Regulatory capital ratios as of June 30, 2023 are estimates.

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    Lesen Sie auch

    Key Balance Sheet Trends

    Loans and Leases

    The following table presents the composition of total loans and leases as of the dates indicated:

    (Dollars in thousands)

    June 30,
    2023

     

    % of
    Total

     

    March 31,
    2023

     

    % of
    Total

     

    June 30,
    2022

     

    % of
    Total

    Loans and Leases Held for Investment

     

     

     

     

     

     

     

     

     

     

     

    Commercial:

     

     

     

     

     

     

     

     

     

     

     

    Commercial & industrial:

     

     

     

     

     

     

     

     

     

     

     

    Specialty lending

    $

    5,534,832

     

    40.0

    %

     

    $

    5,519,176

     

    37.7

    %

     

    $

    4,599,640

     

    29.4

    %

    Other commercial & industrial

     

    1,052,145

     

    7.6

     

     

     

    1,168,161

     

    8.0

     

     

     

    1,037,444

     

    6.7

     

    Multifamily

     

    2,151,734

     

    15.6

     

     

     

    2,195,211

     

    15.0

     

     

     

    2,008,784

     

    12.8

     

    Loans to mortgage companies

     

    1,108,598

     

    8.0

     

     

     

    1,374,894

     

    9.4

     

     

     

    1,975,189

     

    12.6

     

    Commercial real estate owner occupied

     

    842,042

     

    6.1

     

     

     

    895,314

     

    6.1

     

     

     

    710,577

     

    4.5

     

    Loans receivable, PPP

     

    188,763

     

    1.4

     

     

     

    246,258

     

    1.7

     

     

     

    1,570,160

     

    10.0

     

    Commercial real estate non-owner occupied

     

    1,211,091

     

    8.8

     

     

     

    1,245,248

     

    8.5

     

     

     

    1,152,869

     

    7.4

     

    Construction

     

    212,214

     

    1.5

     

     

     

    188,123

     

    1.3

     

     

     

    195,687

     

    1.2

     

    Total commercial loans and leases

     

    12,301,419

     

    89.0

     

     

     

    12,832,385

     

    87.7

     

     

     

    13,250,350

     

    84.6

     

    Consumer:

     

     

     

     

     

     

     

     

     

     

     

    Residential

     

    487,199

     

    3.5

     

     

     

    494,815

     

    3.4

     

     

     

    457,768

     

    3.0

     

    Manufactured housing

     

    41,664

     

    0.3

     

     

     

    43,272

     

    0.3

     

     

     

    48,570

     

    0.3

     

    Installment:

     

     

     

     

     

     

     

     

     

     

     

    Personal

     

    752,470

     

    5.4

     

     

     

    849,420

     

    5.8

     

     

     

    1,613,628

     

    10.3

     

    Other

     

    250,047

     

    1.8

     

     

     

    419,085

     

    2.8

     

     

     

    287,442

     

    1.8

     

    Total installment loans

     

    1,002,517

     

    7.2

     

     

     

    1,268,505

     

    8.6

     

     

     

    1,901,070

     

    12.1

     

    Total consumer loans

     

    1,531,380

     

    11.0

     

     

     

    1,806,592

     

    12.3

     

     

     

    2,407,408

     

    15.4

     

    Total loans and leases held for investment

    $

    13,832,799

     

    100.0

    %

     

    $

    14,638,977

     

    100.0

    %

     

    $

    15,657,758

     

    100.0

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Loans Held for Sale

     

     

     

     

     

     

     

     

     

     

     

    Commercial:

     

     

     

     

     

     

     

     

     

     

     

    Multifamily

    $

    —

     

    —

    %

     

    $

    4,051

     

    1.0

    %

     

    $

    4,136

     

    62.7

    %

    Commercial real estate non-owner occupied

     

    —

     

    —

     

     

     

    16,000

     

    3.7

     

     

     

    —

     

    —

     

    Total commercial loans and leases

     

    —

     

    —

     

     

     

    20,051

     

    4.7

     

     

     

    4,136

     

    62.7

     

    Consumer:

     

     

     

     

     

     

     

     

     

     

     

    Residential

     

    1,234

     

    1.6

     

     

     

    821

     

    0.2

     

     

     

    2,459

     

    37.3

     

    Installment:

     

     

     

     

     

     

     

     

     

     

     

    Personal

     

    76,874

     

    98.4

     

     

     

    307,336

     

    72.5

     

     

     

    —

     

    —

     

    Other

     

    —

     

    —

     

     

     

    95,849

     

    22.6

     

     

     

    —

     

    —

     

    Total installment loans

     

    76,874

     

    98.4

     

     

     

    403,185

     

    95.1

     

     

     

    —

     

    —

     

    Total consumer loans

     

    78,108

     

    100.0

     

     

     

    404,006

     

    95.3

     

     

     

    2,459

     

    37.3

     

    Total loans held for sale

    $

    78,108

     

    100.0

    %

     

    $

    424,057

     

    100.0

    %

     

    $

    6,595

     

    100.0

    %

     

     

     

     

     

     

     

     

     

     

     

     

    Total loans and leases portfolio

    $

    13,910,907

     

     

     

    $

    15,063,034

     

     

     

    $

    15,664,353

     

     

    Loans and Leases Held for Investment

    Loans and leases held for investment were $13.8 billion at June 30, 2023, down $806.2 million, or 5.5%, from March 31, 2023, consistent with our stated goal of purposely moderating loan growth and exiting non-strategic relationships. Loans held for investment decreased in every category, except for relatively small increases in construction loans and specialty lending activities within commercial and industrial ("C&I") loans quarter-over-quarter.

    On June 15, 2023, Customers acquired $631.0 million of a Venture Banking loan portfolio at a discount from the FDIC. Customers has also recruited team members that originated these loans to service the venture-backed growth industry from seed-stage through late-stage. The newly recruited team gives clients access to the capital to grow from innovation to maturity and leverage a customized, best-in-class tech platform to support their growth. The team has long-standing relationships with these clients offering them premier end-to-end financial services meeting their needs. The addition of these team members creates venture banking client coverage in Austin, the Bay Area, Boston, Southern California, Chicago, Denver, Raleigh/Durham, and Washington, D.C. The technology and life sciences portfolio has been combined with Customers’ existing technology and venture capital banking vertical. The portfolio of capital call loans to venture capital firms has been combined with Customers' existing direct capital call lines vertical within fund finance. This acquisition was accomplished from exiting and selling all non strategic short-term syndicated capital call lines of credit and payoffs and sales of other loans, and contributed to the moderate growth in specialty lending verticals of $15.7 million, or 0.3% quarter-over-quarter. Other C&I loans decreased $116.0 million, or 9.9% quarter-over-quarter, to $1.1 billion. Loans to mortgage companies decreased $266.3 million, or 19.4% quarter-over-quarter due to lower mortgage activity. Consumer installment loans held for investment decreased $266.0 million, or 21.0% quarter-over-quarter, to $1.0 billion as we continue to execute on our held-for-sale strategy and de-risk the held-for-investment loan portfolio in 2023.

    Loans and leases held for investment of $13.8 billion at June 30, 2023 was down $1.8 billion, or 11.7%, year-over-year, largely driven by reduced balances in PPP loans of $1.4 billion, consumer installment loans of $898.6 million, and loans to mortgage companies of $866.6 million, offset in part by net growth in the lower risk variable rate specialty lending verticals of $935.2 million.

    Loans Held for Sale

    Loans held for sale decreased $345.9 million quarter-over-quarter, and were only $78.1 million at June 30, 2023 as we continue to build out our held-for-sale strategy in 2023. On June 30, 2023, Customers sold consumer installment loans that were classified as held for sale with a carrying value of $556.7 million, inclusive of $154.0 million of other installment loans transferred from held for investment to held for sale during Q2 2023, accrued interest and unamortized deferred loan origination costs. As part of these sales, Customers recognized a net loss on sale of $1.0 million, which is presented within "Gain (loss) on sale of SBA and other loans" in the consolidated statement of income.

    Allowance for Credit Losses on Loans and Leases

    The following table presents the allowance for credit losses on loans and leases as of the dates and for the periods presented:

     

    At or Three Months Ended

     

    Increase
    (Decrease)

     

    At or Three Months Ended

     

    Increase
    (Decrease)

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

     

    June 30,
    2023

     

    June 30,
    2022

     

    Allowance for credit losses on loans and leases

    $

    139,656

     

     

    $

    130,281

     

     

    $

    9,375

     

     

    $

    139,656

     

     

    $

    156,530

     

     

    $

    (16,874

    )

    Provision for credit losses on loans and leases

    $

    22,363

     

     

    $

    18,008

     

     

    $

    4,355

     

     

    $

    22,363

     

     

    $

    24,164

     

     

    $

    (1,801

    )

    Net charge-offs from loans held for investment

    $

    15,564

     

     

    $

    18,651

     

     

    $

    (3,087

    )

     

    $

    15,564

     

     

    $

    13,481

     

     

    $

    2,083

     

    Annualized net charge-offs to average loans and leases

     

    0.42

    %

     

     

    0.49

    %

     

     

     

     

    0.42

    %

     

     

    0.36

    %

     

     

    Coverage of credit loss reserves for loans and leases held for investment

     

    1.09

    %

     

     

    0.97

    %

     

     

     

     

    1.09

    %

     

     

    1.14

    %

     

     

    Coverage of credit loss reserves for loans and leases held for investment, excluding PPP*

     

    1.11

    %

     

     

    0.99

    %

     

     

     

     

    1.11

    %

     

     

    1.28

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    The decrease in net charge-offs in Q2 2023 compared to Q1 2023 was primarily due to a charge-off of a non-owner occupied commercial real estate loan in Q1 2023 and a decrease in consumer installment net charge-offs in Q2 2023 compared to Q1 2023. The net charge-offs of $15.6 million in Q2 2023 excludes $6.2 million of charge-offs for certain PCD loans acquired from FDIC applied against $8.7 million of allowance for credit losses on PCD loans recognized upon acquisition of the loan portfolio on June 15, 2023.

    The increase in net charge-offs in Q2 2023 compared to Q2 2022, excluding the charge-offs for certain PCD loans acquired from FDIC, was primarily due to an increase in consumer installment net charge-offs in Q2 2023 compared to Q2 2022.

    Provision for Credit Losses

     

    Three Months Ended

     

    Increase
    (Decrease)

     

    Three Months Ended

     

    Increase
    (Decrease)

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

     

    June 30,
    2023

     

    June 30,
    2022

     

    Provision for credit losses on loans and leases

    $

    22,363

     

     

    $

    18,008

     

    $

    4,355

     

     

    $

    22,363

     

     

    $

    24,164

     

     

    $

    (1,801

    )

    Provision (benefit) for credit losses on available for sale debt securities

     

    1,266

     

     

     

    1,595

     

     

    (329

    )

     

     

    1,266

     

     

     

    (317

    )

     

     

    1,583

     

    Provision for credit losses

     

    23,629

     

     

     

    19,603

     

     

    4,026

     

     

     

    23,629

     

     

     

    23,847

     

     

     

    (218

    )

    Provision (benefit) for credit losses on unfunded commitments

     

    (304

    )

     

     

    280

     

     

    (584

    )

     

     

    (304

    )

     

     

    608

     

     

     

    (912

    )

    Total provision for credit losses

    $

    23,325

     

     

    $

    19,883

     

    $

    3,442

     

     

    $

    23,325

     

     

    $

    24,455

     

     

    $

    (1,130

    )

     

     

     

     

     

     

     

     

     

     

     

     

    The provision for credit losses on loans and leases in Q2 2023 was $22.4 million, compared to $18.0 million in Q1 2023. The provision in Q2 2023 was primarily due to our recognition of weaker macroeconomic forecasts, partially offset by lower consumer installment loans, as compared to provision in Q1 2023. The provision for credit losses on available for sale investment securities in Q2 2023 was $1.3 million compared to provision of $1.6 million in Q1 2023.

    The provision for credit losses on loans and leases in Q2 2023 was $22.4 million, compared to $24.2 million in Q2 2022. The provision in Q2 2023 was primarily due to our recognition of weaker macroeconomic forecasts, partially offset by lower consumer installment loans, as compared to provision in Q2 2022, which was primarily to support loan growth. The provision for credit losses on available for sale investment securities in Q2 2023 was $1.3 million compared to a benefit to provision of $0.3 million in Q2 2022.

    Asset Quality

    The following table presents asset quality metrics as of the dates indicated:

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

    Increase
    (Decrease)

     

    June 30,
    2023

     

    June 30,
    2022

     

    Increase
    (Decrease)

    Non-performing assets ("NPAs"):

     

     

     

     

     

     

     

     

     

     

     

    Nonaccrual / non-performing loans ("NPLs")

    $

    28,244

     

     

    $

    32,124

     

     

    $

    (3,880

    )

     

    $

    28,244

     

     

    $

    28,064

     

     

    $

    180

     

    Non-performing assets

    $

    28,380

     

     

    $

    32,260

     

     

    $

    (3,880

    )

     

    $

    28,380

     

     

    $

    28,150

     

     

    $

    230

     

    NPLs to total loans and leases

     

    0.20

    %

     

     

    0.21

    %

     

     

     

     

    0.20

    %

     

     

    0.18

    %

     

     

    Reserves to NPLs

     

    494.46

    %

     

     

    405.56

    %

     

     

     

     

    494.46

    %

     

     

    557.76

    %

     

     

    NPAs to total assets

     

    0.13

    %

     

     

    0.15

    %

     

     

     

     

    0.13

    %

     

     

    0.14

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Loans and leases (1) risk ratings:

     

     

     

     

     

     

     

     

     

     

     

    Commercial loans and leases (2)

     

     

     

     

     

     

     

     

     

     

     

    Pass

    $

    10,667,619

     

     

    $

    10,928,620

     

     

    $

    (261,001

    )

     

    $

    10,667,619

     

     

    $

    9,355,846

     

     

    $

    1,311,773

     

    Special Mention (3)

     

    166,468

     

     

     

    136,986

     

     

     

    29,482

     

     

     

    166,468

     

     

     

    106,566

     

     

     

    59,902

     

    Substandard (3)

     

    272,301

     

     

     

    273,154

     

     

     

    (853

    )

     

     

    272,301

     

     

     

    343,175

     

     

     

    (70,874

    )

    Total commercial loans and leases

     

    11,106,388

     

     

     

    11,338,760

     

     

     

    (232,372

    )

     

     

    11,106,388

     

     

     

    9,805,587

     

     

     

    1,300,801

     

    Consumer loans

     

     

     

     

     

     

     

     

     

     

     

    Performing

     

    1,508,208

     

     

     

    1,787,123

     

     

     

    (278,915

    )

     

     

    1,508,208

     

     

     

    2,392,852

     

     

     

    (884,644

    )

    Non-performing

     

    23,172

     

     

     

    19,469

     

     

     

    3,703

     

     

     

    23,172

     

     

     

    14,556

     

     

     

    8,616

     

    Total consumer loans

     

    1,531,380

     

     

     

    1,806,592

     

     

     

    (275,212

    )

     

     

    1,531,380

     

     

     

    2,407,408

     

     

     

    (876,028

    )

    Loans and leases receivable (1)

    $

    12,637,768

     

     

    $

    13,145,352

     

     

    $

    (507,584

    )

     

    $

    12,637,768

     

     

    $

    12,212,995

     

     

    $

    424,773

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1)

    Risk ratings are assigned to loans and leases held for investment, and excludes loans held for sale and loans receivable, mortgage warehouse, at fair value.

    (2)

    Excludes loan receivable, PPP, as eligible PPP loans are fully guaranteed by the Small Business Administration.

    (3)

    Includes $24.3 million of C&I loans rated Special Mention and $2.1 million rated Substandard at June 30, 2023 that were acquired from the FDIC on June 15, 2023.

    Over the last decade, we have developed a suite of commercial loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s C&I, loans to mortgage companies, corporate and specialty lending lines of business, and multifamily loans 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 incredibly healthy despite an 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, we employ a bottom-up data driven approach to analyze the commercial portfolio.

    Total consumer installment loans held for investment at June 30, 2023 were less than 5% of total assets and approximately 7% of total loans and leases held for investment, and were supported by an allowance for credit losses of $57.6 million. At June 30, 2023, our consumer installment portfolio had the following characteristics: average original FICO score of 733, average debt-to-income of 19% and average borrower income of $105 thousand.

    Non-performing loans at June 30, 2023 were essentially flat at 0.20% of total loans and leases, compared to 0.21% at March 31, 2023 and 0.18% at June 30, 2022.

    Investment Securities

    Our investment securities portfolio, including debt securities available for sale ("AFS") and held to maturity ("HTM") provides periodic cash flows through regular maturities and amortization, can be used as collateral to secure additional funding, and is an important component of our liquidity position.

    The following table presents the composition of our investment securities portfolio as of the dates indicated:

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

    June 30,
    2022

    Debt securities, available for sale

    $

    2,797,940

     

    $

    2,900,259

     

    $

    3,120,111

    Equity securities

     

    26,698

     

     

    26,710

     

     

    24,771

    Investment securities, at fair value

     

    2,824,638

     

     

    2,926,969

     

     

    3,144,882

    Debt securities, held to maturity

     

    1,258,560

     

     

    870,294

     

     

    495,039

    Total investment securities portfolio

    $

    4,083,198

     

    $

    3,797,263

     

    $

    3,639,921

    Critically important to performance during the recent banking crisis are the characteristics of a bank’s securities portfolio. While there may be virtually no credit risk in some of these portfolios, holding longer term and lower yielding securities is creating challenges for many banks. Our securities portfolio is highly liquid, short in duration, and high in yield. At June 30, 2023, our AFS debt securities portfolio had a spot yield of 5.38%, an effective duration of approximately 1.5 years, and approximately 47% are variable rate. Additionally, 62% of our AFS securities portfolio was AAA rated at June 30, 2023.

    At June 30, 2023, our HTM debt securities portfolio represented only 5.7% of our total assets at June 30, 2023, had a spot yield of 4.41% and an effective duration of approximately 3.0 years. Additionally, at June 30, 2023, approximately 36% of our HTM securities were AAA rated and 57% were credit enhanced asset backed securities with no current expectation of credit losses.

    As a part of the sales of consumer installment loans that were classified as held for sale, Customers provided some financing to the purchaser for a portion of the sale price in the form of $436.8 million of asset-backed securities, collateralized by the sold loans, which accounted for the increase in HTM debt securities at June 30, 2023 as compared to the prior quarter.

    Deposits

    The following table presents the composition of our deposit portfolio as of the dates indicated:

    (Dollars in thousands)

    June 30,
    2023

     

    % of
    Total

     

    March 31,
    2023

     

    % of
    Total

     

    June 30,
    2022

     

    % of
    Total

    Demand, non-interest bearing

    $

    4,490,198

     

    25.0

    %

     

    $

    3,487,517

     

    19.7

    %

     

    $

    4,683,030

     

    27.6

    %

    Demand, interest bearing

     

    5,551,037

     

    30.9

     

     

     

    5,791,302

     

    32.7

     

     

     

    6,644,398

     

    39.2

     

    Total demand deposits

     

    10,041,235

     

    55.9

     

     

     

    9,278,819

     

    52.4

     

     

     

    11,327,428

     

    66.8

     

    Savings

     

    1,048,229

     

    5.8

     

     

     

    924,359

     

    5.2

     

     

     

    640,062

     

    3.8

     

    Money market

     

    2,004,264

     

    11.2

     

     

     

    2,019,633

     

    11.4

     

     

     

    4,254,205

     

    25.1

     

    Time deposits

     

    4,856,703

     

    27.1

     

     

     

    5,500,806

     

    31.0

     

     

     

    723,024

     

    4.3

     

    Total deposits

    $

    17,950,431

     

    100.0

    %

     

    $

    17,723,617

     

    100.0

    %

     

    $

    16,944,719

     

    100.0

    %

    Total deposits increased $226.8 million, or 1.3%, to $18.0 billion at June 30, 2023 as compared to the prior quarter. Importantly, non-interest bearing demand deposits increased $1.0 billion, or 28.8%, to $4.5 billion. Savings deposits increased $123.9 million, or 13.4%, to $1.0 billion. These increases were offset by decreases in time deposits of $644.1 million, or 11.7%, to $4.9 billion, interest bearing demand deposits of $240.3 million, or 4.1%, to $5.6 billion and money market deposits of $15.4 million, or 0.8%, to $2.0 billion. The total average cost of deposits decreased by 21 basis points to 3.11% in Q2 2023 from 3.32% in the prior quarter primarily due to a shift in deposit mix. Total estimated uninsured deposits was $4.1 billion1, or 23% of total deposits (inclusive of accrued interest) at June 30, 2023. We are also highly focused on total deposits with contractual term to manage our liquidity profile and the funding of loans and securities.

    Total deposits increased $1.0 billion, or 5.9%, to $18.0 billion at June 30, 2023 as compared to a year ago. Time deposits increased $4.1 billion to $4.9 billion. Savings deposits increased $408.2 million, or 63.8%, to $1.0 billion. These increases were offset in part by decreases in money market deposits of $2.2 billion, or 52.9%, to $2.0 billion, interest bearing demand deposits of $1.1 billion, or 16.5%, to $5.6 billion and non-interest bearing demand deposits of $192.8 million, or 4.1%, to $4.5 billion. The total average cost of deposits increased by 257 basis points to 3.11% in Q2 2023 from 0.54% in the prior year primarily due to higher market interest rates and a shift in deposit mix.

    __________________________________
    1 Uninsured deposits (estimate) of $4.7 billion to be reported on the Bank's call report, less state and municipal deposits of $459.4 million collateralized by our line of credit from FHLB and from our affiliates of $92.0 million.

    Borrowings

    The following table presents the composition of our borrowings as of the dates indicated:

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

    June 30,
    2022

    Federal funds purchased

    $

    —

     

    $

    —

     

    $

    770,000

    FHLB advances

     

    2,046,142

     

     

    2,052,143

     

     

    635,000

    Senior notes

     

    123,710

     

     

    123,645

     

     

    123,450

    Subordinated debt

     

    182,091

     

     

    182,021

     

     

    181,812

    Total borrowings

    $

    2,351,943

     

    $

    2,357,809

     

    $

    1,710,262

    Total borrowings were $2.4 billion at June 30, 2023, relatively unchanged from the prior quarter. As of June 30, 2023, Customers' borrowing capacity with the FRB and FHLB was approximately $8.6 billion, of which $2.1 billion of available capacity was utilized in borrowings and $600.5 million was utilized to collateralize state and municipal deposits.

    Total borrowings increased $641.7 million, or 37.5%, to $2.4 billion at June 30, 2023 as compared to a year ago. This increase primarily resulted from an increase in FHLB advances to ensure ample cash on hand given the heightened liquidity risk in the banking system, particularly among regional banks since early March 2023, net of repayments of federal funds purchased.

    Capital

    The following table presents certain capital amounts and ratios as of the dates indicated:

    (Dollars in thousands except per share data)

    June 30,
    2023

     

    March 31,
    2023

     

    June 30,
    2022

    Customers Bancorp, Inc.

     

     

     

     

     

    Common Equity

    $

    1,318,858

     

     

    $

    1,283,226

     

     

    $

    1,215,596

     

    Tangible Common Equity*

    $

    1,315,229

     

     

    $

    1,279,597

     

     

    $

    1,211,967

     

    Common Equity to Total Assets

     

    6.0

    %

     

     

    5.9

    %

     

     

    6.0

    %

    Tangible Common Equity to Tangible Assets*

     

    6.0

    %

     

     

    5.9

    %

     

     

    6.0

    %

    Tangible Common Equity to Tangible Assets, excluding PPP*

     

    6.0

    %

     

     

    6.0

    %

     

     

    6.5

    %

    Book Value per common share

    $

    42.16

     

     

    $

    41.08

     

     

    $

    37.46

     

    Tangible Book Value per common share*

    $

    42.04

     

     

    $

    40.96

     

     

    $

    37.35

     

    Common equity Tier 1 (CET 1) capital ratio (1)

     

    10.3

    %

     

     

    9.6

    %

     

     

    9.7

    %

    Total risk based capital ratio (1)

     

    13.1

    %

     

     

    12.3

    %

     

     

    12.6

    %

     

     

     

     

     

     

    (1) Regulatory capital ratios as of June 30, 2023 are estimates.

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    Customers Bancorp's common equity increased $35.6 million to $1.3 billion, and tangible common equity* increased $35.6 million to $1.3 billion, at June 30, 2023 compared to the prior quarter, respectively, as earnings of $44.0 million more than offset a negative impact of increased unrealized losses on investment securities of $11.9 million (net of taxes) deferred in accumulated other comprehensive income ("AOCI"). Similarly, book value per common share increased to $42.16 from $41.08, and tangible book value per common share* increased to $42.04 from $40.96, at June 30, 2023 and March 31, 2023, respectively.

    Customers Bancorp's common equity increased $103.3 million to $1.3 billion, and tangible common equity* increased $103.3 million to $1.3 billion, at June 30, 2023 compared to a year ago, respectively, as earnings of $181.3 million more than offset a negative impact to AOCI from increased unrealized losses on investment securities of $43.3 million (net of taxes) and $45.1 million of common share repurchases. Similarly, book value per common share increased to $42.16 from $37.46, and tangible book value per common share* increased to $42.04 from $37.35, at June 30, 2023 and June 30, 2022, respectively.

    At the Customers Bancorp level, the CET 1 capital ratio (estimate), total risk based capital ratio (estimate), common equity to total assets ratio and tangible common equity to tangible assets ratio ("TCE ratio") were 10.3%, 13.1%, 6.0%, and 6.0%, respectively, at June 30, 2023.

    At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At June 30, 2023, estimated Tier 1 capital (estimate) and total risk-based capital (estimate) were 11.9% and 13.3%, respectively.

    Even though Customers remains well capitalized by all regulatory measures, its goal is to increase its CET 1 ratio at year-end 2023 to be between 11.0% - 11.5%. "It is prudent to continue to moderate or even shrink our balance sheet in this uncertain environment and have strong capital ratios," stated Jay Sidhu.

    Key Profitability Trends

    Net Interest Income

    Net interest income totaled $165.3 million in Q2 2023, an increase of $15.4 million from Q1 2023, primarily due to higher interest income from interest earning deposits of $17.2 million maintained in response to heightened liquidity risk in the banking system, particularly among regional banks since early March 2023, variable rate lower credit risk specialty lending of $18.1 million, and commercial loans to mortgage companies of $2.2 million, reflecting higher average balances and market interest rates. These increases were partially offset by lower interest income on consumer installment loans of $2.3 million reflecting the impact of the sales transactions that occurred late in Q2 2023 and reduced PPP interest income of $21.9 million resulting primarily from reduced recognition of deferred fees as the PPP program was substantially completed in Q1 2023. In addition, interest expense on deposits and other borrowings decreased by $0.2 million in Q2 2023 largely resulting from the positive shift in deposit mix towards no to lower-interest bearing deposits despite higher interest rates during Q2 2023, mostly offset by increased borrowing costs reflecting a full quarter impact of FHLB advances drawn in Q1 2023.

    Net interest income totaled $165.3 million in Q2 2023, an increase of $0.4 million from Q2 2022. This increase was due to higher interest income of $133.8 million resulting from increased average balance of interest earning assets of $1.5 billion and higher market interest rates on variable rate loans and investments, offset in part by higher interest expenses on deposits and other borrowings of $133.4 million primarily resulting from higher average balances of interest bearing deposits and other borrowings and increased market rates. Interest-earning asset growth was primarily driven by increases in C&I loans and leases, mostly in the variable rate lower credit risk specialty lending verticals and multifamily loans, offset in part by decreases in commercial loans to mortgage companies due to lower mortgage activity from rising interest rates, PPP loans as the PPP program was substantially completed in Q1 2023 and consumer installment loans. Total consumer installment loans decreased in Q2 2023 as compared to Q2 2022, as installment loans held for investment decreased primarily for risk management purposes and implementation of our held-for-sale strategy.

    Non-Interest Income

    The following table presents details of non-interest income for the periods indicated:

     

    Three Months Ended

     

    Increase
    (Decrease)

     

    Three Months Ended

     

    Increase
    (Decrease)

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

     

    June 30,
    2023

     

    June 30,
    2022

     

    Commercial lease income

    $

    8,917

     

     

    $

    9,326

     

    $

    (409

    )

     

    $

    8,917

     

     

    $

    6,592

     

     

    $

    2,325

     

    Loan fees

     

    4,271

     

     

     

    3,990

     

     

    281

     

     

     

    4,271

     

     

     

    2,618

     

     

     

    1,653

     

    Bank-owned life insurance

     

    4,997

     

     

     

    2,647

     

     

    2,350

     

     

     

    4,997

     

     

     

    1,947

     

     

     

    3,050

     

    Mortgage warehouse transactional fees

     

    1,376

     

     

     

    1,074

     

     

    302

     

     

     

    1,376

     

     

     

    1,883

     

     

     

    (507

    )

    Gain (loss) on sale of SBA and other loans

     

    (761

    )

     

     

    —

     

     

    (761

    )

     

     

    (761

    )

     

     

    1,542

     

     

     

    (2,303

    )

    Loss on sale of capital call lines of credit

     

    (5,037

    )

     

     

    —

     

     

    (5,037

    )

     

     

    (5,037

    )

     

     

    —

     

     

     

    (5,037

    )

    Net gain (loss) on sale of investment securities

     

    —

     

     

     

    —

     

     

    —

     

     

     

    —

     

     

     

    (3,029

    )

     

     

    3,029

     

    Other

     

    2,234

     

     

     

    1,084

     

     

    1,150

     

     

     

    2,234

     

     

     

    1,193

     

     

     

    1,041

     

    Total non-interest income

    $

    15,997

     

     

    $

    18,121

     

    $

    (2,124

    )

     

    $

    15,997

     

     

    $

    12,746

     

     

    $

    3,251

     

     

     

     

     

     

     

     

     

     

     

     

     

    Non-interest income totaled $16.0 million for Q2 2023, a decrease of $2.1 million compared to Q1 2023. The decrease was primarily due to a loss of $5.0 million realized from the sale of non-strategic short-term syndicated capital call lines of credit within our Specialty Lending vertical that the Bank exited completely and $0.8 million of net loss on sales of SBA loans and consumer installment loans that were classified as held for sale. These decreases were offset in part by increases in death benefits paid by insurance carriers under the bank-owned life insurance policies of $2.4 million and other income of $1.2 million mostly related to income from CRA-qualified investments in small business investment companies and tax interest and penalties refunds.

    Non-interest income totaled $16.0 million for Q2 2023, an increase of $3.3 million compared to Q2 2022. The increase was primarily due to lower loss on securities sales of $3.0 million as there were no such sales in Q2 2023, and increases in death benefits paid by insurance carriers under the bank-owned life insurance policies of $3.1 million, commercial lease income of $2.3 million, loan fees of $1.7 million resulting from growth and other income of $1.0 million. These increases were offset partially by a $5.0 million loss realized from the sale of non-strategic short-term syndicated capital call lines of credit that the Bank exited completely and a decrease in net gain on sale of SBA and other loans of $2.3 million due to lower gains on sales of SBA loans and losses on sales of consumer installment loans that were classified as held for sale.

    Non-Interest Expense

    The following table presents details of non-interest expense for the periods indicated:

     

    Three Months Ended

     

    Increase
    (Decrease)

     

    Three Months Ended

     

    Increase
    (Decrease)

    (Dollars in thousands)

    June 30,
    2023

     

    March 31,
    2023

     

     

    June 30,
    2023

     

    June 30,
    2022

     

    Salaries and employee benefits

    $

    33,120

     

    $

    32,345

     

    $

    775

     

     

    $

    33,120

     

    $

    25,334

     

    $

    7,786

     

    Technology, communication and bank operations

     

    16,407

     

     

    16,589

     

     

    (182

    )

     

     

    16,407

     

     

    22,738

     

     

    (6,331

    )

    Commercial lease depreciation

     

    7,328

     

     

    7,875

     

     

    (547

    )

     

     

    7,328

     

     

    5,552

     

     

    1,776

     

    Professional services

     

    9,192

     

     

    7,596

     

     

    1,596

     

     

     

    9,192

     

     

    7,415

     

     

    1,777

     

    Loan servicing

     

    4,777

     

     

    4,661

     

     

    116

     

     

     

    4,777

     

     

    4,341

     

     

    436

     

    Occupancy

     

    2,519

     

     

    2,760

     

     

    (241

    )

     

     

    2,519

     

     

    4,279

     

     

    (1,760

    )

    FDIC assessments, non-income taxes and regulatory fees

     

    9,780

     

     

    2,728

     

     

    7,052

     

     

     

    9,780

     

     

    1,619

     

     

    8,161

     

    Advertising and promotion

     

    546

     

     

    1,049

     

     

    (503

    )

     

     

    546

     

     

    353

     

     

    193

     

    Other

     

    5,628

     

     

    4,530

     

     

    1,098

     

     

     

    5,628

     

     

    4,574

     

     

    1,054

     

    Total non-interest expense

    $

    89,297

     

    $

    80,133

     

    $

    9,164

     

     

    $

    89,297

     

    $

    76,205

     

    $

    13,092

     

     

     

     

     

     

     

     

     

     

     

     

     

    The management of non-interest expenses remains a priority for us. However, this will not deter us from making investments in new technologies to support efficient and responsible growth in the future.

    Non-interest expenses totaled $89.3 million in Q2 2023, an increase of $9.2 million compared to Q1 2023. The increase was primarily attributable to higher FDIC assessments, non-income taxes and regulatory fees of $7.1 million resulting from higher FDIC assessment rates, higher professional fees of $1.6 million to enhance our technology, compliance and risk management capabilities, other expenses of $1.1 million primarily due to higher provision for operating losses and increased salaries and employee benefits of $0.8 million driven by higher incentives and stock based awards offset by lower benefits and severance.

    Non-interest expenses totaled $89.3 million in Q2 2023, an increase of $13.1 million compared to Q2 2022. The increase was primarily attributable to increases of $8.2 million of FDIC assessments, non-income taxes and regulatory fees resulting from higher FDIC assessment rates, $7.8 million in salaries and employee benefits due to higher headcount, annual merit increases, incentives and SERP expenses, $1.8 million in professional fees mostly for transaction related legal fees, $1.8 million in commercial lease depreciation from growth and $1.1 million in other expenses primarily due to higher provision for operating losses. These increases were offset in part by decreases of $6.3 million in deposit servicing-related expenses mostly due to lower servicing fees and the discontinuation of interchange maintenance fees paid to BM Technologies offset by higher fees paid for software as a service and $1.8 million in occupancy mostly due to impairments associated with consolidation of branch locations in Q2 2022.

    Taxes

    Income tax expense increased by $6.2 million to $20.8 million in Q2 2023 from $14.6 million in Q1 2023 primarily due to tax expense of $4.1 million recognized in Q2 2023 on surrendered bank-owned life insurance policies.

    Income tax expense increased by $1.9 million to $20.8 million in Q2 2023 from $18.9 million in Q2 2022 primarily due to tax expense on surrendered bank-owned life insurance policies, offset in part by lower pre-tax income and increased income tax credits.

    The effective tax rate for Q2 2023 was 30%, primarily due to tax on surrendered bank-owned life insurance policies. Excluding the tax on surrendered bank-owned life insurance policies, the effective tax rate for Q2 2023 was 24%. Customers expects the full-year 2023 effective tax rate to be approximately 22% to 24%.

    Outlook

    “Looking ahead, we will continue to moderate growth, or even reduce the size of the balance sheet, as we optimize the balance sheet and materially improve our capital ratios, maintain positive operating leverage with prudent expense management, and continue to improve deposits and liquidity. We expect 2023 core loans to be essentially flat to down. Deposits are expected to remain relatively flat with a focus on improving our funding profile and reducing high cost deposits. We expect full year 2023 net interest margin, excluding PPP* to be at the upper end of the previously guided range of 2.85% - 3.05%. 2023 Core EPS (excluding PPP)* is still expected to be about $6.00 with a core return on common equity* of over 15%. Core non-interest expense* is now expected to increase about 15% in 2023 as a result of higher FDIC assessments and the newly recruited Venture Banking team. We are still targeting a CET 1 ratio of approximately 11.0% - 11.5% by year-end 2023, following up on the 70 basis point increase we achieved during Q2 2023. We are focused on improving the quality of our balance sheet and deposit franchise, improving capital and liquidity, maintaining superior credit quality, expanding our net interest margin, and achieving our tangible book value guidance in excess of $45 by year-end 2023,” concluded Customers Bancorp President Sam Sidhu.

     

     

     

     

     

    * Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

    Webcast

    Date:

    Friday, July 28, 2023

    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 2nd Quarter Earnings Webcast.

    You may submit questions in advance of the live webcast by emailing our Communications Director, David Patti at dpatti@customersbank.com; questions may also be asked during the webcast through the webcast application.

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

    Institutional Background

    Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation’s top-performing banking companies with over $22 billion in assets, making it the 81 largest bank holding companies in the US. Through its primary subsidiary, Customers Bank, commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service. In addition to traditional lines such as C&I lending, commercial real estate lending, and multifamily lending, Customers Bank also provides a number of national corporate banking services to Specialty Lending clients. Major accolades include:

    • #5 in top-performing banks with assets between $10 billion and $50 billion in 2022 per American Banker;
    • #34 out of the 100 largest publicly traded banks in 2023 per Forbes; and
    • #64 on Fortune Magazine’s 2022 list of the 100 fastest growing companies in America.

    A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: 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,” “project,” 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: a continuation of the recent turmoil in the banking industry, responsive measures taken by us and regulatory authorities to mitigate and manage related risks, regulatory actions taken that address related issues and the costs and obligations associated therewith, the impact of COVID-19 and its variants on the U.S. economy and customer behavior, the impact that changes in the economy have on the performance of our loan and lease portfolio, the market value of our investment securities, the continued success and acceptance of our blockchain payments system, 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 affect 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, higher inflation and its impacts, and the effects of any changes in accounting standards or policies. 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, 2022, 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.

    Q2 2023 Overview

    The following table presents a summary of key earnings and performance metrics for the quarter ended June 30, 2023 and the preceding four quarters:

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    EARNINGS SUMMARY - UNAUDITED

     

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

    Q2

     

    Q1

     

    Q4

     

    Q3

     

    Q2

     

    Six Months Ended
    June 30,

    2023

     

    2023

     

    2022

     

    2022

     

    2022

     

    2023

     

    2022

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    GAAP Profitability Metrics:

    Net income available to common shareholders

    $

    44,007

    $

    50,265

    $

    25,623

    $

    61,364

    $

    56,519

    $

    94,272

    $

    131,415

    Per share amounts:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Earnings per share - basic

    $

    1.41

     

     

    $

    1.58

     

     

    $

    0.79

     

     

    $

    1.89

     

     

    $

    1.73

     

     

    $

    2.99

     

     

    $

    4.00

     

    Earnings per share - diluted

    $

    1.39

     

     

    $

    1.55

     

     

    $

    0.77

     

     

    $

    1.85

     

     

    $

    1.68

     

     

    $

    2.95

     

     

    $

    3.87

     

    Book value per common share (1)

    $

    42.16

     

     

    $

    41.08

     

     

    $

    39.08

     

     

    $

    38.46

     

     

    $

    37.46

     

     

    $

    42.16

     

     

    $

    37.46

     

    CUBI stock price (1)

    $

    30.26

     

     

    $

    18.52

     

     

    $

    28.34

     

     

    $

    29.48

     

     

    $

    33.90

     

     

    $

    30.26

     

     

    $

    33.90

     

    CUBI stock price as % of book value (1)

     

    72

    %

     

     

    45

    %

     

     

    73

    %

     

     

    77

    %

     

     

    90

    %

     

     

    72

    %

     

     

    90

    %

    Average shares outstanding - basic

     

    31,254,125

     

     

     

    31,819,203

     

     

     

    32,413,459

     

     

     

    32,455,814

     

     

     

    32,712,616

     

     

     

    31,535,103

     

     

     

    32,834,150

     

    Average shares outstanding - diluted

     

    31,591,142

     

     

     

    32,345,017

     

     

     

    33,075,422

     

     

     

    33,226,607

     

     

     

    33,579,013

     

     

     

    31,965,997

     

     

     

    33,950,973

     

    Shares outstanding (1)

     

    31,282,318

     

     

     

    31,239,750

     

     

     

    32,373,697

     

     

     

    32,475,502

     

     

     

    32,449,486

     

     

     

    31,282,318

     

     

     

    32,449,486

     

    Return on average assets ("ROAA")

     

    0.88

    %

     

     

    1.03

    %

     

     

    0.55

    %

     

     

    1.24

    %

     

     

    1.17

    %

     

     

    0.96

    %

     

     

    1.39

    %

    Return on average common equity ("ROCE")

     

    13.22

    %

     

     

    16.00

    %

     

     

    8.05

    %

     

     

    19.33

    %

     

     

    18.21

    %

     

     

    14.57

    %

     

     

    21.23

    %

    Net interest margin, tax equivalent

     

    3.15

    %

     

     

    2.96

    %

     

     

    2.67

    %

     

     

    3.16

    %

     

     

    3.39

    %

     

     

    3.06

    %

     

     

    3.49

    %

    Efficiency ratio

     

    49.25

    %

     

     

    47.71

    %

     

     

    49.20

    %

     

     

    50.00

    %

     

     

    42.14

    %

     

     

    48.51

    %

     

     

    40.76

    %

    Non-GAAP Profitability Metrics (2):

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core earnings

    $

    52,163

     

     

    $

    51,143

     

     

    $

    39,368

     

     

    $

    82,270

     

     

    $

    59,367

     

     

    $

    103,306

     

     

    $

    134,777

     

    Adjusted pre-tax pre-provision net income

    $

    96,833

     

     

    $

    89,282

     

     

    $

    81,377

     

     

    $

    100,994

     

     

    $

    105,692

     

     

    $

    186,115

     

     

    $

    218,341

     

    Per share amounts:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core earnings per share - diluted

    $

    1.65

     

     

    $

    1.58

     

     

    $

    1.19

     

     

    $

    2.48

     

     

    $

    1.77

     

     

    $

    3.22

     

     

    $

    3.97

     

    Tangible book value per common share (1)

    $

    42.04

     

     

    $

    40.96

     

     

    $

    38.97

     

     

    $

    38.35

     

     

    $

    37.35

     

     

    $

    42.04

     

     

    $

    37.35

     

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

     

    72

    %

     

     

    45

    %

     

     

    73

    %

     

     

    77

    %

     

     

    91

    %

     

     

    72

    %

     

     

    91

    %

    Core ROAA

     

    1.03

    %

     

     

    1.05

    %

     

     

    0.81

    %

     

     

    1.64

    %

     

     

    1.23

    %

     

     

    1.04

    %

     

     

    1.43

    %

    Core ROCE

     

    15.67

    %

     

     

    16.28

    %

     

     

    12.36

    %

     

     

    25.91

    %

     

     

    19.13

    %

     

     

    15.97

    %

     

     

    21.77

    %

    Adjusted ROAA - pre-tax and pre-provision

     

    1.79

    %

     

     

    1.72

    %

     

     

    1.56

    %

     

     

    1.95

    %

     

     

    2.11

    %

     

     

    1.76

    %

     

     

    2.25

    %

    Adjusted ROCE - pre-tax and pre-provision

     

    28.01

    %

     

     

    27.33

    %

     

     

    24.59

    %

     

     

    31.01

    %

     

     

    33.37

    %

     

     

    27.68

    %

     

     

    34.62

    %

    Net interest margin, tax equivalent, excluding PPP loans

     

    3.20

    %

     

     

    2.80

    %

     

     

    2.87

    %

     

     

    3.18

    %

     

     

    3.32

    %

     

     

    3.01

    %

     

     

    3.32

    %

    Core efficiency ratio

     

    47.84

    %

     

     

    47.09

    %

     

     

    49.12

    %

     

     

    42.57

    %

     

     

    41.74

    %

     

     

    47.49

    %

     

     

    40.59

    %

    Asset Quality:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net charge-offs

    $

    15,564

     

     

    $

    18,651

     

     

    $

    27,164

     

     

    $

    18,497

     

     

    $

    13,481

     

     

    $

    34,215

     

     

    $

    20,707

     

    Annualized net charge-offs to average total loans and leases

     

    0.42

    %

     

     

    0.49

    %

     

     

    0.70

    %

     

     

    0.47

    %

     

     

    0.36

    %

     

     

    0.46

    %

     

     

    0.29

    %

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

     

    0.20

    %

     

     

    0.21

    %

     

     

    0.19

    %

     

     

    0.18

    %

     

     

    0.18

    %

     

     

    0.20

    %

     

     

    0.18

    %

    Reserves to NPLs (1)

     

    494.46

    %

     

     

    405.56

    %

     

     

    425.95

    %

     

     

    466.34

    %

     

     

    557.76

    %

     

     

    494.46

    %

     

     

    557.76

    %

    Non-performing assets ("NPAs") to total assets

     

    0.13

    %

     

     

    0.15

    %

     

     

    0.15

    %

     

     

    0.14

    %

     

     

    0.14

    %

     

     

    0.13

    %

     

     

    0.14

    %

    Customers Bank Capital Ratios (3):

     

     

     

     

     

     

     

     

     

     

     

     

     

    Common equity Tier 1 capital to risk-weighted assets

     

    11.9

    %

     

     

    11.31

    %

     

     

    11.21

    %

     

     

    11.42

    %

     

     

    11.46

    %

     

     

    11.9

    %

     

     

    11.46

    %

    Tier 1 capital to risk-weighted assets

     

    11.9

    %

     

     

    11.31

    %

     

     

    11.21

    %

     

     

    11.42

    %

     

     

    11.46

    %

     

     

    11.9

    %

     

     

    11.46

    %

    Total capital to risk-weighted assets

     

    13.3

    %

     

     

    12.64

    %

     

     

    12.40

    %

     

     

    12.65

    %

     

     

    12.91

    %

     

     

    13.3

    %

     

     

    12.91

    %

    Tier 1 capital to average assets (leverage ratio)

     

    8.0

    %

     

     

    8.09

    %

     

     

    8.15

    %

     

     

    8.10

    %

     

     

    8.09

    %

     

     

    8.0

    %

     

     

    8.09

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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

    (2) 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 Q2 2023 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected to apply the CECL capital transition provisions which delayed the effects of CECL on regulatory capital for two years until January 1, 2022, followed by a three-year transition period. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million will be phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of June 30, 2023, our regulatory capital ratios reflected 50%, or $30.8 million, benefit associated with the CECL transition provisions.

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

    (Dollars in thousands, except per share data)

     

     

     

     

     

     

     

     

     

     

    Six Months Ended

     

    Q2

     

    Q1

     

    Q4

     

    Q3

     

    Q2

     

    June 30,

     

    2023

     

    2023

     

    2022

     

    2022

     

    2022

     

    2023

     

    2022

    Interest income:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Loans and leases

    $

    241,745

     

     

    $

    244,212

     

    $

    217,471

     

     

    $

    200,438

     

     

    $

    168,920

     

     

    $

    485,957

     

     

    $

    326,040

     

    Investment securities

     

    48,026

     

     

     

    47,316

     

     

    42,953

     

     

     

    30,546

     

     

     

    25,442

     

     

     

    95,342

     

     

     

    45,737

     

    Loans held for sale

     

    11,149

     

     

     

    11,701

     

     

    1,269

     

     

     

    19

     

     

     

    21

     

     

     

    22,850

     

     

     

    76

     

    Interest earning deposits

     

    27,624

     

     

     

    10,395

     

     

    6,754

     

     

     

    2,949

     

     

     

    919

     

     

     

    38,019

     

     

     

    1,248

     

    Other

     

    1,616

     

     

     

    1,321

     

     

    1,200

     

     

     

    1,964

     

     

     

    1,032

     

     

     

    2,937

     

     

     

    6,709

     

    Total interest income

     

    330,160

     

     

     

    314,945

     

     

    269,647

     

     

     

    235,916

     

     

     

    196,334

     

     

     

    645,105

     

     

     

    379,810

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest expense:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Deposits

     

    136,375

     

     

     

    143,930

     

     

    124,366

     

     

     

    65,380

     

     

     

    22,781

     

     

     

    280,305

     

     

     

    36,493

     

    FHLB advances

     

    24,285

     

     

     

    10,370

     

     

    4,464

     

     

     

    4,684

     

     

     

    2,316

     

     

     

    34,655

     

     

     

    2,316

     

    FRB advances

     

    —

     

     

     

    6,286

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    6,286

     

     

     

    —

     

    Subordinated debt

     

    2,689

     

     

     

    2,689

     

     

    2,688

     

     

     

    2,689

     

     

     

    2,689

     

     

     

    5,378

     

     

     

    5,378

     

    Other borrowings

     

    1,540

     

     

     

    1,771

     

     

    2,992

     

     

     

    4,131

     

     

     

    3,696

     

     

     

    3,311

     

     

     

    6,072

     

    Total interest expense

     

    164,889

     

     

     

    165,046

     

     

    134,510

     

     

     

    76,884

     

     

     

    31,482

     

     

     

    329,935

     

     

     

    50,259

     

    Net interest income

     

    165,271

     

     

     

    149,899

     

     

    135,137

     

     

     

    159,032

     

     

     

    164,852

     

     

     

    315,170

     

     

     

    329,551

     

    Provision (benefit) for credit losses

     

    23,629

     

     

     

    19,603

     

     

    28,216

     

     

     

    (7,994

    )

     

     

    23,847

     

     

     

    43,232

     

     

     

    39,844

     

    Net interest income after provision (benefit) for credit losses

     

    141,642

     

     

     

    130,296

     

     

    106,921

     

     

     

    167,026

     

     

     

    141,005

     

     

     

    271,938

     

     

     

    289,707

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Non-interest income:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commercial lease income

     

    8,917

     

     

     

    9,326

     

     

    8,135

     

     

     

    7,097

     

     

     

    6,592

     

     

     

    18,243

     

     

     

    12,487

     

    Loan fees

     

    4,271

     

     

     

    3,990

     

     

    4,017

     

     

     

    3,008

     

     

     

    2,618

     

     

     

    8,261

     

     

     

    5,163

     

    Bank-owned life insurance

     

    4,997

     

     

     

    2,647

     

     

    1,975

     

     

     

    3,449

     

     

     

    1,947

     

     

     

    7,644

     

     

     

    10,273

     

    Mortgage warehouse transactional fees

     

    1,376

     

     

     

    1,074

     

     

    1,295

     

     

     

    1,545

     

     

     

    1,883

     

     

     

    2,450

     

     

     

    3,898

     

    Gain (loss) on sale of SBA and other loans

     

    (761

    )

     

     

    —

     

     

    —

     

     

     

    106

     

     

     

    1,542

     

     

     

    (761

    )

     

     

    3,049

     

    Loss on sale of capital call lines of credit

     

    (5,037

    )

     

     

    —

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    (5,037

    )

     

     

    —

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

    —

     

     

     

    (23,465

    )

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Net gain (loss) on sale of investment securities

     

    —

     

     

     

    —

     

     

    (16,937

    )

     

     

    (2,135

    )

     

     

    (3,029

    )

     

     

    —

     

     

     

    (4,092

    )

    Legal settlement gain

     

    —

     

     

     

    —

     

     

    7,519

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Other

     

    2,234

     

     

     

    1,084

     

     

    1,341

     

     

     

    1,378

     

     

     

    1,193

     

     

     

    3,318

     

     

     

    3,166

     

    Total non-interest income

     

    15,997

     

     

     

    18,121

     

     

    7,345

     

     

     

    (9,017

    )

     

     

    12,746

     

     

     

    34,118

     

     

     

    33,944

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Non-interest expense:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Salaries and employee benefits

     

    33,120

     

     

     

    32,345

     

     

    29,194

     

     

     

    31,230

     

     

     

    25,334

     

     

     

    65,465

     

     

     

    51,941

     

    Technology, communication and bank operations

     

    16,407

     

     

     

    16,589

     

     

    18,604

     

     

     

    19,588

     

     

     

    22,738

     

     

     

    32,996

     

     

     

    46,806

     

    Commercial lease depreciation

     

    7,328

     

     

     

    7,875

     

     

    6,518

     

     

     

    5,966

     

     

     

    5,552

     

     

     

    15,203

     

     

     

    10,494

     

    Professional services

     

    9,192

     

     

     

    7,596

     

     

    6,825

     

     

     

    6,269

     

     

     

    7,415

     

     

     

    16,788

     

     

     

    14,371

     

    Loan servicing

     

    4,777

     

     

     

    4,661

     

     

    4,460

     

     

     

    3,851

     

     

     

    4,341

     

     

     

    9,438

     

     

     

    6,712

     

    Occupancy

     

    2,519

     

     

     

    2,760

     

     

    3,672

     

     

     

    2,605

     

     

     

    4,279

     

     

     

    5,279

     

     

     

    7,329

     

    FDIC assessments, non-income taxes and regulatory fees

     

    9,780

     

     

     

    2,728

     

     

    2,339

     

     

     

    2,528

     

     

     

    1,619

     

     

     

    12,508

     

     

     

    4,002

     

    Advertising and promotion

     

    546

     

     

     

    1,049

     

     

    1,111

     

     

     

    762

     

     

     

    353

     

     

     

    1,595

     

     

     

    668

     

    Other

     

    5,628

     

     

     

    4,530

     

     

    5,696

     

     

     

    3,399

     

     

     

    4,574

     

     

     

    10,158

     

     

     

    7,689

     

    Total non-interest expense

     

    89,297

     

     

     

    80,133

     

     

    78,419

     

     

     

    76,198

     

     

     

    76,205

     

     

     

    169,430

     

     

     

    150,012

     

    Income before income tax expense

     

    68,342

     

     

     

    68,284

     

     

    35,847

     

     

     

    81,811

     

     

     

    77,546

     

     

     

    136,626

     

     

     

    173,639

     

    Income tax expense

     

    20,768

     

     

     

    14,563

     

     

    7,136

     

     

     

    17,899

     

     

     

    18,896

     

     

     

    35,331

     

     

     

    38,228

     

    Net income

     

    47,574

     

     

     

    53,721

     

     

    28,711

     

     

     

    63,912

     

     

     

    58,650

     

     

     

    101,295

     

     

     

    135,411

     

    Preferred stock dividends

     

    3,567

     

     

     

    3,456

     

     

    3,088

     

     

     

    2,548

     

     

     

    2,131

     

     

     

    7,023

     

     

     

    3,996

     

    Net income available to common shareholders

    $

    44,007

     

     

    $

    50,265

     

    $

    25,623

     

     

    $

    61,364

     

     

    $

    56,519

     

     

    $

    94,272

     

     

    $

    131,415

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Basic earnings per common share

    $

    1.41

     

     

    $

    1.58

     

    $

    0.79

     

     

    $

    1.89

     

     

    $

    1.73

     

     

    $

    2.99

     

     

    $

    4.00

     

    Diluted earnings per common share

     

    1.39

     

     

     

    1.55

     

     

    0.77

     

     

     

    1.85

     

     

     

    1.68

     

     

     

    2.95

     

     

     

    3.87

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEET - UNAUDITED

    (Dollars in thousands)

    June 30,

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

     

    2023

     

    2023

     

    2022

     

    2022

     

    2022

    ASSETS

     

     

     

     

     

     

     

     

     

    Cash and due from banks

    $

    54,127

     

     

    $

    77,251

     

     

    $

    58,025

     

     

    $

    41,520

     

     

    $

    66,703

     

    Interest earning deposits

     

    3,101,097

     

     

     

    1,969,434

     

     

     

    397,781

     

     

     

    362,945

     

     

     

    178,475

     

    Cash and cash equivalents

     

    3,155,224

     

     

     

    2,046,685

     

     

     

    455,806

     

     

     

    404,465

     

     

     

    245,178

     

    Investment securities, at fair value

     

    2,824,638

     

     

     

    2,926,969

     

     

     

    2,987,500

     

     

     

    2,943,694

     

     

     

    3,144,882

     

    Investment securities held to maturity

     

    1,258,560

     

     

     

    870,294

     

     

     

    840,259

     

     

     

    886,294

     

     

     

    495,039

     

    Loans held for sale

     

    78,108

     

     

     

    424,057

     

     

     

    328,312

     

     

     

    5,224

     

     

     

    6,595

     

    Loans receivable, mortgage warehouse, at fair value

     

    1,006,268

     

     

     

    1,247,367

     

     

     

    1,323,312

     

     

     

    1,569,090

     

     

     

    1,874,603

     

    Loans receivable, PPP

     

    188,763

     

     

     

    246,258

     

     

     

    998,153

     

     

     

    1,154,632

     

     

     

    1,570,160

     

    Loans and leases receivable

     

    12,637,768

     

     

     

    13,145,352

     

     

     

    13,144,894

     

     

     

    12,607,742

     

     

     

    12,212,995

     

    Allowance for credit losses on loans and leases

     

    (139,656

    )

     

     

    (130,281

    )

     

     

    (130,924

    )

     

     

    (130,197

    )

     

     

    (156,530

    )

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

     

    13,693,143

     

     

     

    14,508,696

     

     

     

    15,335,435

     

     

     

    15,201,267

     

     

     

    15,501,228

     

    FHLB, Federal Reserve Bank, and other restricted stock

     

    126,240

     

     

     

    124,733

     

     

     

    74,196

     

     

     

    64,112

     

     

     

    74,626

     

    Accrued interest receivable

     

    119,501

     

     

     

    123,754

     

     

     

    123,374

     

     

     

    107,621

     

     

     

    98,727

     

    Bank premises and equipment, net

     

    8,031

     

     

     

    8,581

     

     

     

    9,025

     

     

     

    6,610

     

     

     

    6,755

     

    Bank-owned life insurance

     

    290,322

     

     

     

    339,607

     

     

     

    338,441

     

     

     

    336,130

     

     

     

    335,153

     

    Goodwill and other intangibles

     

    3,629

     

     

     

    3,629

     

     

     

    3,629

     

     

     

    3,629

     

     

     

    3,629

     

    Other assets

     

    471,169

     

     

     

    374,609

     

     

     

    400,135

     

     

     

    408,575

     

     

     

    340,184

     

    Total assets

    $

    22,028,565

     

     

    $

    21,751,614

     

     

    $

    20,896,112

     

     

    $

    20,367,621

     

     

    $

    20,251,996

     

     

     

     

     

     

     

     

     

     

     

    LIABILITIES AND SHAREHOLDERS' EQUITY

     

     

     

     

     

     

     

     

     

    Demand, non-interest bearing deposits

    $

    4,490,198

     

     

    $

    3,487,517

     

     

    $

    1,885,045

     

     

    $

    2,993,793

     

     

    $

    4,683,030

     

    Interest bearing deposits

     

    13,460,233

     

     

     

    14,236,100

     

     

     

    16,271,908

     

     

     

    14,528,645

     

     

     

    12,261,689

     

    Total deposits

     

    17,950,431

     

     

     

    17,723,617

     

     

     

    18,156,953

     

     

     

    17,522,438

     

     

     

    16,944,719

     

    Federal funds purchased

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    365,000

     

     

     

    770,000

     

    FHLB advances

     

    2,046,142

     

     

     

    2,052,143

     

     

     

    800,000

     

     

     

    500,000

     

     

     

    635,000

     

    Other borrowings

     

    123,710

     

     

     

    123,645

     

     

     

    123,580

     

     

     

    123,515

     

     

     

    123,450

     

    Subordinated debt

     

    182,091

     

     

     

    182,021

     

     

     

    181,952

     

     

     

    181,882

     

     

     

    181,812

     

    Accrued interest payable and other liabilities

     

    269,539

     

     

     

    249,168

     

     

     

    230,666

     

     

     

    287,855

     

     

     

    243,625

     

    Total liabilities

     

    20,571,913

     

     

     

    20,330,594

     

     

     

    19,493,151

     

     

     

    18,980,690

     

     

     

    18,898,606

     

     

     

     

     

     

     

     

     

     

     

    Preferred stock

     

    137,794

     

     

     

    137,794

     

     

     

    137,794

     

     

     

    137,794

     

     

     

    137,794

     

    Common stock

     

    35,301

     

     

     

    35,258

     

     

     

    35,012

     

     

     

    34,948

     

     

     

    34,922

     

    Additional paid in capital

     

    555,737

     

     

     

    552,255

     

     

     

    551,721

     

     

     

    549,066

     

     

     

    545,670

     

    Retained earnings

     

    1,018,406

     

     

     

    974,399

     

     

     

    924,134

     

     

     

    898,511

     

     

     

    837,147

     

    Accumulated other comprehensive income (loss), net

     

    (168,176

    )

     

     

    (156,276

    )

     

     

    (163,096

    )

     

     

    (156,126

    )

     

     

    (124,881

    )

    Treasury stock, at cost

     

    (122,410

    )

     

     

    (122,410

    )

     

     

    (82,604

    )

     

     

    (77,262

    )

     

     

    (77,262

    )

    Total shareholders' equity

     

    1,456,652

     

     

     

    1,421,020

     

     

     

    1,402,961

     

     

     

    1,386,931

     

     

     

    1,353,390

     

    Total liabilities and shareholders' equity

    $

    22,028,565

     

     

    $

    21,751,614

     

     

    $

    20,896,112

     

     

    $

    20,367,621

     

     

    $

    20,251,996

     

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended

     

    June 30, 2023

     

    March 31, 2023

     

    June 30, 2022

     

    Average
    Balance

     

    Interest
    Income or
    Expense

     

    Average
    Yield or
    Cost (%)

     

    Average
    Balance

     

    Interest
    Income or
    Expense

     

    Average
    Yield or
    Cost (%)

     

    Average
    Balance

     

    Interest
    Income or
    Expense

     

    Average
    Yield or
    Cost (%)

    Assets

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest earning deposits

    $

    2,150,154

     

    $

    27,624

     

    5.15

    %

     

    $

    914,149

     

    $

    10,395

     

    4.61

    %

     

    $

    434,950

     

    $

    919

     

    0.85

    %

    Investment securities (1)

     

    3,949,732

     

     

    48,026

     

    4.86

    %

     

     

    4,031,247

     

     

    47,316

     

    4.69

    %

     

     

    4,104,463

     

     

    25,442

     

    2.48

    %

    Loans and leases:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commercial & industrial:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Specialty lending loans and leases (2)

     

    5,832,485

     

     

    121,779

     

    8.37

    %

     

     

    5,694,168

     

     

    103,688

     

    7.38

    %

     

     

    4,068,175

     

     

    39,160

     

    3.86

    %

    Other commercial & industrial loans (2)

     

    1,672,668

     

     

    26,028

     

    6.24

    %

     

     

    1,705,205

     

     

    25,570

     

    6.08

    %

     

     

    1,509,655

     

     

    14,706

     

    3.91

    %

    Commercial loans to mortgage companies

     

    1,300,496

     

     

    19,606

     

    6.05

    %

     

     

    1,262,139

     

     

    17,412

     

    5.59

    %

     

     

    1,898,554

     

     

    15,615

     

    3.30

    %

    Multifamily loans

     

    2,181,617

     

     

    21,095

     

    3.88

    %

     

     

    2,206,600

     

     

    20,470

     

    3.76

    %

     

     

    1,845,527

     

     

    17,313

     

    3.76

    %

    Loans receivable, PPP

     

    207,127

     

     

    1,633

     

    3.16

    %

     

     

    889,235

     

     

    23,551

     

    10.74

    %

     

     

    1,863,429

     

     

    20,572

     

    4.43

    %

    Non-owner occupied commercial real estate loans

     

    1,428,086

     

     

    19,877

     

    5.58

    %

     

     

    1,449,722

     

     

    20,199

     

    5.65

    %

     

     

    1,307,995

     

     

    12,749

     

    3.91

    %

    Residential mortgages

     

    535,739

     

     

    5,735

     

    4.28

    %

     

     

    542,909

     

     

    5,598

     

    4.18

    %

     

     

    515,612

     

     

    4,898

     

    3.81

    %

    Installment loans

     

    1,684,215

     

     

    37,141

     

    8.84

    %

     

     

    1,727,995

     

     

    39,425

     

    9.25

    %

     

     

    1,909,551

     

     

    43,928

     

    9.23

    %

    Total loans and leases (3)

     

    14,842,432

     

     

    252,894

     

    6.83

    %

     

     

    15,477,973

     

     

    255,913

     

    6.70

    %

     

     

    14,918,498

     

     

    168,941

     

    4.54

    %

    Other interest-earning assets

     

    131,362

     

     

    1,616

     

    4.93

    %

     

     

    91,308

     

     

    1,321

     

    5.87

    %

     

     

    68,025

     

     

    1,032

     

    6.09

    %

    Total interest-earning assets

     

    21,073,680

     

     

    330,160

     

    6.28

    %

     

     

    20,514,677

     

     

    314,945

     

    6.21

    %

     

     

    19,525,936

     

     

    196,334

     

    4.03

    %

    Non-interest-earning assets

     

    581,055

     

     

     

     

     

     

    538,243

     

     

     

     

     

     

    530,084

     

     

     

     

    Total assets

    $

    21,654,735

     

     

     

     

     

    $

    21,052,920

     

     

     

     

     

    $

    20,056,020

     

     

     

     

    Liabilities

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Interest checking accounts

    $

    5,309,775

     

    $

    49,862

     

    3.77

    %

     

    $

    7,494,379

     

    $

    70,485

     

    3.81

    %

     

    $

    6,409,617

     

    $

    13,644

     

    0.85

    %

    Money market deposit accounts

     

    1,978,546

     

     

    19,678

     

    3.99

    %

     

     

    2,470,004

     

     

    20,783

     

    3.41

    %

     

     

    4,704,767

     

     

    7,523

     

    0.64

    %

    Other savings accounts

     

    997,205

     

     

    9,839

     

    3.96

    %

     

     

    822,312

     

     

    6,286

     

    3.10

    %

     

     

    695,176

     

     

    758

     

    0.44

    %

    Certificates of deposit

     

    5,020,205

     

     

    56,996

     

    4.55

    %

     

     

    4,504,333

     

     

    46,376

     

    4.18

    %

     

     

    530,180

     

     

    856

     

    0.65

    %

    Total interest-bearing deposits (4)

     

    13,305,731

     

     

    136,375

     

    4.11

    %

     

     

    15,291,028

     

     

    143,930

     

    3.82

    %

     

     

    12,339,740

     

     

    22,781

     

    0.74

    %

    Federal funds purchased

     

    —

     

     

    —

     

    —

    %

     

     

    15,333

     

     

    188

     

    4.97

    %

     

     

    642,747

     

     

    1,429

     

    0.89

    %

    Borrowings

     

    2,357,981

     

     

    28,514

     

    4.85

    %

     

     

    1,788,116

     

     

    20,928

     

    4.75

    %

     

     

    940,068

     

     

    7,272

     

    3.10

    %

    Total interest-bearing liabilities

     

    15,663,712

     

     

    164,889

     

    4.22

    %

     

     

    17,094,477

     

     

    165,046

     

    3.91

    %

     

     

    13,922,555

     

     

    31,482

     

    0.91

    %

    Non-interest-bearing deposits (4)

     

    4,258,711

     

     

     

     

     

     

    2,299,295

     

     

     

     

     

     

    4,491,574

     

     

     

     

    Total deposits and borrowings

     

    19,922,423

     

     

     

    3.32

    %

     

     

    19,393,772

     

     

     

    3.45

    %

     

     

    18,414,129

     

     

     

    0.69

    %

    Other non-interest-bearing liabilities

     

    259,111

     

     

     

     

     

     

    247,575

     

     

     

     

     

     

    259,279

     

     

     

     

    Total liabilities

     

    20,181,534

     

     

     

     

     

     

    19,641,347

     

     

     

     

     

     

    18,673,408

     

     

     

     

    Shareholders' equity

     

    1,473,201

     

     

     

     

     

     

    1,411,573

     

     

     

     

     

     

    1,382,612

     

     

     

     

    Total liabilities and shareholders' equity

    $

    21,654,735

     

     

     

     

     

    $

    21,052,920

     

     

     

     

     

    $

    20,056,020

     

     

     

     

    Net interest income

     

     

     

    165,271

     

     

     

     

     

     

    149,899

     

     

     

     

     

     

    164,852

     

     

    Tax-equivalent adjustment

     

     

     

    390

     

     

     

     

     

     

    375

     

     

     

     

     

     

    270

     

     

    Net interest earnings

     

     

    $

    165,661

     

     

     

     

     

    $

    150,274

     

     

     

     

     

    $

    165,122

     

     

    Interest spread

     

     

     

     

    2.96

    %

     

     

     

     

     

    2.76

    %

     

     

     

     

     

    3.35

    %

    Net interest margin

     

     

     

     

    3.14

    %

     

     

     

     

     

    2.95

    %

     

     

     

     

     

    3.38

    %

    Net interest margin tax equivalent

     

     

     

     

    3.15

    %

     

     

     

     

     

    2.96

    %

     

     

     

     

     

    3.39

    %

    Net interest margin tax equivalent excl. PPP (5)

     

     

     

     

    3.20

    %

     

     

     

     

     

    2.80

    %

     

     

     

     

     

    3.32

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (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 3.11%, 3.32% and 0.54% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

    (5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, presented to approximate interest income as a taxable asset and 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 (CONTINUED)

    		 

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

     

    		 

     

    Six Months Ended

    		 

     

    June 30, 2023

     

    June 30, 2022

    		 

     

    Average
    Balance

     

    Interest
    Income or
    Expense

     

    Average
    Yield or
    Cost (%)

     

    Average
    Balance

     

    Interest
    Income or
    Expense

     

    Average
    Yield or
    Cost (%)

    Assets

     

     

     

     

     

     

     

     

     

     

     

    		 

    Interest earning deposits

    $

    1,535,566

     

    $

    38,019

     

    4.99

    %

     

    $

    629,514

     

    $

    1,248

     

    0.40

    %

    Investment securities (1)

     

    3,990,265

     

     

    95,342

     

    4.78

    %

     

     

    4,070,901

     

     

    45,737

     

    2.25

    %

    Loans and leases:

     

     

     

     

     

     

     

     

     

     

     

    		 

    Commercial & industrial:

     

     

     

     

     

     

     

     

     

     

     

    		 

    Specialty lending loans and leases (2)

     

    5,763,708

     

     

    225,467

     

    7.89

    %

     

     

    3,403,276

     

     

    62,551

     

    3.71

    %

    Other commercial & industrial loans (2)

     

    1,688,847

     

     

    51,598

     

    6.16

    %

     

     

    1,451,858

     

     

    27,974

     

    3.89

    %

    Commercial loans to mortgage companies

     

    1,281,424

     

     

    37,018

     

    5.83

    %

     

     

    1,867,772

     

     

    29,620

     

    3.20

    %

    Multifamily loans

     

    2,194,039

     

     

    41,565

     

    3.82

    %

     

     

    1,689,553

     

     

    31,079

     

    3.71

    %

    Loans receivable, PPP

     

    546,297

     

     

    25,184

     

    9.30

    %

     

     

    2,250,224

     

     

    57,466

     

    5.15

    %

    Non-owner occupied commercial real estate loans

     

    1,438,844

     

     

    40,076

     

    5.62

    %

     

     

    1,310,091

     

     

    24,956

     

    3.84

    %

    Residential mortgages

     

    539,304

     

     

    11,333

     

    4.24

    %

     

     

    466,288

     

     

    8,578

     

    3.71

    %

    Installment loans

     

    1,705,984

     

     

    76,566

     

    9.05

    %

     

     

    1,852,167

     

     

    83,892

     

    9.13

    %

    Total loans and leases (3)

     

    15,158,447

     

     

    508,807

     

    6.77

    %

     

     

    14,291,229

     

     

    326,116

     

    4.60

    %

    Other interest-earning assets

     

    111,446

     

     

    2,937

     

    5.32

    %

     

     

    60,113

     

     

    6,709

     

    NM (6)

    		 

    Total interest-earning assets

     

    20,795,724

     

     

    645,105

     

    6.25

    %

     

     

    19,051,757

     

     

    379,810

     

    4.02

    %

    Non-interest-earning assets

     

    559,766

     

     

     

     

     

     

    543,479

     

     

     

     

    		 

    Total assets

    $

    21,355,490

     

     

     

     

     

    $

    19,595,236

     

     

     

     

    		 

    Liabilities

     

     

     

     

     

     

     

     

     

     

     

    		 

    Interest checking accounts

    $

    6,396,042

     

    $

    120,347

     

    3.79

    %

     

    $

    6,091,263

     

    $

    21,374

     

    0.71

    %

    Money market deposit accounts

     

    2,222,917

     

     

    40,461

     

    3.67

    %

     

     

    4,791,925

     

     

    12,197

     

    0.51

    %

    Other savings accounts

     

    910,241

     

     

    16,125

     

    3.57

    %

     

     

    787,134

     

     

    1,542

     

    0.39

    %

    Certificates of deposit

     

    4,763,694

     

     

    103,372

     

    4.38

    %

     

     

    490,632

     

     

    1,380

     

    0.57

    %

    Total interest-bearing deposits (4)

     

    14,292,894

     

     

    280,305

     

    3.95

    %

     

     

    12,160,954

     

     

    36,493

     

    0.61

    %

    Federal funds purchased

     

    7,624

     

     

    188

     

    4.97

    %

     

     

    367,210

     

     

    1,502

     

    0.82

    %

    Borrowings

     

    2,074,623

     

     

    49,442

     

    4.81

    %

     

     

    737,464

     

     

    12,264

     

    3.35

    %

    Total interest-bearing liabilities

     

    16,375,141

     

     

    329,935

     

    4.06

    %

     

     

    13,265,628

     

     

    50,259

     

    0.76

    %

    Non-interest-bearing deposits (4)

     

    3,284,416

     

     

     

     

     

     

    4,695,148

     

     

     

     

    		 

    Total deposits and borrowings

     

    19,659,557

     

     

     

    3.38

    %

     

     

    17,960,776

     

     

     

    0.56

    %

    Other non-interest-bearing liabilities

     

    253,376

     

     

     

     

     

     

    248,266

     

     

     

     

    		 

    Total liabilities

     

    19,912,933

     

     

     

     

     

     

    18,209,042

     

     

     

     

    		 

    Shareholders' equity

     

    1,442,557

     

     

     

     

     

     

    1,386,194

     

     

     

     

    		 

    Total liabilities and shareholders' equity

    $

    21,355,490

     

     

     

     

     

    $

    19,595,236

     

     

     

     

    		 

    Net interest income

     

     

     

    315,170

     

     

     

     

     

     

    329,551

     

     

    		 

    Tax-equivalent adjustment

     

     

     

    765

     

     

     

     

     

     

    509

     

     

    		 

    Net interest earnings

     

     

    $

    315,935

     

     

     

     

     

    $

    330,060

     

     

    		 

    Interest spread

     

     

     

     

    2.86

    %

     

     

     

     

     

    3.45

    %

    Net interest margin

     

     

     

     

    3.05

    %

     

     

     

     

     

    3.48

    %

    Net interest margin tax equivalent

     

     

     

     

    3.06

    %

     

     

     

     

     

    3.49

    %

    Net interest margin tax equivalent excl. PPP (5)

     

     

     

     

    3.01

    %

     

     

     

     

     

    3.32

    %

     

     

     

     

     

     

     

     

     

     

     

     

    		 

     

     

     

     

     

     

     

     

     

     

     

     

    		 

    (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 3.22% and 0.44% for the six months ended June 30, 2023 and 2022, respectively.

    		 

    (5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the six months ended June 30, 2023 and 2022, presented to approximate interest income as a taxable asset and 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.

    		 

    (6) Not meaningful.

    		 

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

    June 30,

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

     

    2023

     

    2023

     

    2022

     

    2022

     

    2022

    Loans and leases held for investment

     

     

     

     

     

     

     

     

     

    Commercial:

     

     

     

     

     

     

     

     

     

    Commercial & industrial:

     

     

     

     

     

     

     

     

     

    Specialty lending

    $

    5,534,832

     

    $

    5,519,176

     

    $

    5,412,887

     

    $

    5,103,974

     

    $

    4,599,640

    Other commercial & industrial

     

    1,052,145

     

     

    1,168,161

     

     

    1,135,336

     

     

    1,064,332

     

     

    1,037,444

    Multifamily

     

    2,151,734

     

     

    2,195,211

     

     

    2,213,019

     

     

    2,263,268

     

     

    2,008,784

    Loans to mortgage companies

     

    1,108,598

     

     

    1,374,894

     

     

    1,447,919

     

     

    1,708,587

     

     

    1,975,189

    Commercial real estate owner occupied

     

    842,042

     

     

    895,314

     

     

    885,339

     

     

    726,670

     

     

    710,577

    Loans receivable, PPP

     

    188,763

     

     

    246,258

     

     

    998,153

     

     

    1,154,632

     

     

    1,570,160

    Commercial real estate non-owner occupied

     

    1,211,091

     

     

    1,245,248

     

     

    1,290,730

     

     

    1,263,211

     

     

    1,152,869

    Construction

     

    212,214

     

     

    188,123

     

     

    162,009

     

     

    136,133

     

     

    195,687

    Total commercial loans and leases

     

    12,301,419

     

     

    12,832,385

     

     

    13,545,392

     

     

    13,420,807

     

     

    13,250,350

    Consumer:

     

     

     

     

     

     

     

     

     

    Residential

     

    487,199

     

     

    494,815

     

     

    497,952

     

     

    465,772

     

     

    457,768

    Manufactured housing

     

    41,664

     

     

    43,272

     

     

    45,076

     

     

    46,990

     

     

    48,570

    Installment:

     

     

     

     

     

     

     

     

     

    Personal

     

    752,470

     

     

    849,420

     

     

    964,641

     

     

    1,056,432

     

     

    1,613,628

    Other

     

    250,047

     

     

    419,085

     

     

    413,298

     

     

    341,463

     

     

    287,442

    Total installment loans

     

    1,002,517

     

     

    1,268,505

     

     

    1,377,939

     

     

    1,397,895

     

     

    1,901,070

    Total consumer loans

     

    1,531,380

     

     

    1,806,592

     

     

    1,920,967

     

     

    1,910,657

     

     

    2,407,408

    Total loans and leases held for investment

    $

    13,832,799

     

    $

    14,638,977

     

    $

    15,466,359

     

    $

    15,331,464

     

    $

    15,657,758

     

     

     

     

     

     

     

     

     

     

    Loans held for sale

     

     

     

     

     

     

     

     

     

    Commercial:

     

     

     

     

     

     

     

     

     

    Multifamily

    $

    —

     

    $

    4,051

     

    $

    4,079

     

    $

    4,108

     

    $

    4,136

    Commercial real estate non-owner occupied

     

    —

     

     

    16,000

     

     

    —

     

     

    —

     

     

    —

    Total commercial loans and leases

     

    —

     

     

    20,051

     

     

    4,079

     

     

    4,108

     

     

    4,136

    Consumer:

     

     

     

     

     

     

     

     

     

    Residential

     

    1,234

     

     

    821

     

     

    829

     

     

    1,116

     

     

    2,459

    Installment:

     

     

     

     

     

     

     

     

     

    Personal

     

    76,874

     

     

    307,336

     

     

    133,801

     

     

    —

     

     

    —

    Other

     

    —

     

     

    95,849

     

     

    189,603

     

     

    —

     

     

    —

    Total installment loans

     

    76,874

     

     

    403,185

     

     

    323,404

     

     

    —

     

     

    —

    Total consumer loans

     

    78,108

     

     

    404,006

     

     

    324,233

     

     

    1,116

     

     

    2,459

    Total loans held for sale

    $

    78,108

     

    $

    424,057

     

    $

    328,312

     

    $

    5,224

     

    $

    6,595

     

     

     

     

     

     

     

     

     

     

    Total loans and leases portfolio

    $

    13,910,907

     

    $

    15,063,034

     

    $

    15,794,671

     

    $

    15,336,688

     

    $

    15,664,353

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    PERIOD END DEPOSIT COMPOSITION - UNAUDITED

    (Dollars in thousands)

     

     

     

     

     

     

     

     

     

     

    June 30,

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

     

    2023

     

    2023

     

    2022

     

    2022

     

    2022

     

     

     

     

     

     

     

     

     

     

    Demand, non-interest bearing

    $

    4,490,198

     

    $

    3,487,517

     

    $

    1,885,045

     

    $

    2,993,793

     

    $

    4,683,030

    Demand, interest bearing

     

    5,551,037

     

     

    5,791,302

     

     

    8,476,027

     

     

    7,124,663

     

     

    6,644,398

    Total demand deposits

     

    10,041,235

     

     

    9,278,819

     

     

    10,361,072

     

     

    10,118,456

     

     

    11,327,428

    Savings

     

    1,048,229

     

     

    924,359

     

     

    811,798

     

     

    592,002

     

     

    640,062

    Money market

     

    2,004,264

     

     

    2,019,633

     

     

    2,734,217

     

     

    4,913,967

     

     

    4,254,205

    Time deposits

     

    4,856,703

     

     

    5,500,806

     

     

    4,249,866

     

     

    1,898,013

     

     

    723,024

    Total deposits

    $

    17,950,431

     

    $

    17,723,617

     

    $

    18,156,953

     

    $

    17,522,438

     

    $

    16,944,719

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

     

    ASSET QUALITY - UNAUDITED

     

    (Dollars in
    thousands)

    As of June 30, 2023

     

    As of March 31, 2023

     

    As of June 30, 2022

     

     

    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

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commercial & industrial, including specialty lending (1)

    $

    6,689,307

     

    $

    4,441

     

    $

    29,092

     

    0.07

    %

     

    655.08

    %

     

    $

    6,814,864

     

    $

    3,886

     

    $

    20,050

     

    0.06

    %

     

    515.95

    %

     

    $

    5,737,670

     

    $

    4,061

     

    $

    11,081

     

    0.07

    %

     

    272.86

    %

     

    Multifamily

     

    2,151,734

     

     

    4,022

     

     

    15,400

     

    0.19

    %

     

    382.89

    %

     

     

    2,195,211

     

     

    881

     

     

    15,084

     

    0.04

    %

     

    1712.15

    %

     

     

    2,008,784

     

     

    1,153

     

     

    9,765

     

    0.06

    %

     

    846.92

    %

     

    Commercial real estate owner occupied

     

    842,042

     

     

    3,304

     

     

    10,215

     

    0.39

    %

     

    309.17

    %

     

     

    895,314

     

     

    3,621

     

     

    8,472

     

    0.40

    %

     

    233.97

    %

     

     

    710,577

     

     

    2,913

     

     

    4,745

     

    0.41

    %

     

    162.89

    %

     

    Commercial real estate non-owner occupied

     

    1,211,091

     

     

    —

     

     

    13,495

     

    —

    %

     

    —

    %

     

     

    1,245,248

     

     

    —

     

     

    11,032

     

    —

    %

     

    —

    %

     

     

    1,152,869

     

     

    —

     

     

    8,880

     

    —

    %

     

    —

    %

     

    Construction

     

    212,214

     

     

    —

     

     

    2,639

     

    —

    %

     

    —

    %

     

     

    188,123

     

     

    —

     

     

    2,336

     

    —

    %

     

    —

    %

     

     

    195,687

     

     

    —

     

     

    1,179

     

    —

    %

     

    —

    %

     

    Total commercial loans and leases receivable

     

    11,106,388

     

     

    11,767

     

     

    70,841

     

    0.11

    %

     

    602.03

    %

     

     

    11,338,760

     

     

    8,388

     

     

    56,974

     

    0.07

    %

     

    679.23

    %

     

     

    9,805,587

     

     

    8,127

     

     

    35,650

     

    0.08

    %

     

    438.66

    %

     

    Residential

     

    487,199

     

     

    7,306

     

     

    6,846

     

    1.50

    %

     

    93.70

    %

     

     

    494,815

     

     

    6,473

     

     

    6,853

     

    1.31

    %

     

    105.87

    %

     

     

    457,768

     

     

    6,258

     

     

    5,578

     

    1.37

    %

     

    89.13

    %

     

    Manufactured housing

     

    41,664

     

     

    2,634

     

     

    4,338

     

    6.32

    %

     

    164.69

    %

     

     

    43,272

     

     

    2,568

     

     

    4,339

     

    5.93

    %

     

    168.96

    %

     

     

    48,570

     

     

    3,071

     

     

    4,080

     

    6.32

    %

     

    132.86

    %

     

    Installment

     

    1,002,517

     

     

    6,537

     

     

    57,631

     

    0.65

    %

     

    881.61

    %

     

     

    1,268,505

     

     

    8,720

     

     

    62,115

     

    0.69

    %

     

    712.33

    %

     

     

    1,901,070

     

     

    5,965

     

     

    111,222

     

    0.31

    %

     

    1864.58

    %

     

    Total consumer loans receivable

     

    1,531,380

     

     

    16,477

     

     

    68,815

     

    1.08

    %

     

    417.64

    %

     

     

    1,806,592

     

     

    17,761

     

     

    73,307

     

    0.98

    %

     

    412.74

    %

     

     

    2,407,408

     

     

    15,294

     

     

    120,880

     

    0.64

    %

     

    790.38

    %

     

    Loans and leases receivable (1)

     

    12,637,768

     

     

    28,244

     

     

    139,656

     

    0.22

    %

     

    494.46

    %

     

     

    13,145,352

     

     

    26,149

     

     

    130,281

     

    0.20

    %

     

    498.23

    %

     

     

    12,212,995

     

     

    23,421

     

     

    156,530

     

    0.19

    %

     

    668.33

    %

     

    Loans receivable, PPP

     

    188,763

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

     

    246,258

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

     

    1,570,160

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

    Loans receivable, mortgage warehouse, at fair value

     

    1,006,268

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

     

    1,247,367

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

     

    1,874,603

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

    Total loans held for sale

     

    78,108

     

     

    —

     

     

    —

     

    —

    %

     

    —

    %

     

     

    424,057

     

     

    5,975

     

     

    —

     

    1.41

    %

     

    —

    %

     

     

    6,595

     

     

    4,643

     

     

    —

     

    70.40

    %

     

    —

    %

     

    Total portfolio

    $

    13,910,907

     

    $

    28,244

     

    $

    139,656

     

    0.20

    %

     

    494.46

    %

     

    $

    15,063,034

     

    $

    32,124

     

    $

    130,281

     

    0.21

    %

     

    405.56

    %

     

    $

    15,664,353

     

    $

    28,064

     

    $

    156,530

     

    0.18

    %

     

    557.76

    %

     

    (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)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Q2

     

    Q1

     

    Q4

     

    Q3

     

    Q2

     

    Six Months Ended
    June 30,

     

    2023 (1)

     

    2023

     

    2022 (2)

     

    2022

     

    2022

     

    2023

     

    2022

    Loan type

     

     

     

     

     

     

     

     

     

     

     

     

     

    Commercial & industrial, including specialty lending

    $

    258

     

     

    $

    (71

    )

     

    $

    12,960

     

     

    $

    2,581

     

     

    $

    (416

    )

     

    $

    187

     

     

    $

    (475

    )

    Multifamily

     

    1,448

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    1,990

     

     

     

    1,448

     

     

     

    1,653

     

    Commercial real estate owner occupied

     

    (34

    )

     

     

    —

     

     

     

    (2

    )

     

     

    —

     

     

     

    (42

    )

     

     

    (34

    )

     

     

    (49

    )

    Commercial real estate non-owner occupied

     

    266

     

     

     

    4,234

     

     

     

    972

     

     

     

    4,831

     

     

     

    159

     

     

     

    4,500

     

     

     

    151

     

    Construction

     

    —

     

     

     

    (116

    )

     

     

    (10

    )

     

     

    (10

    )

     

     

    (103

    )

     

     

    (116

    )

     

     

    (216

    )

    Residential

     

    24

     

     

     

    (2

    )

     

     

    7

     

     

     

    (13

    )

     

     

    (39

    )

     

     

    22

     

     

     

    (41

    )

    Installment

     

    13,602

     

     

     

    14,606

     

     

     

    13,237

     

     

     

    11,108

     

     

     

    11,932

     

     

     

    28,208

     

     

     

    19,684

     

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

    $

    15,564

     

     

    $

    18,651

     

     

    $

    27,164

     

     

    $

    18,497

     

     

    $

    13,481

     

     

    $

    34,215

     

     

    $

    20,707

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (1)

    Excludes $6.2 million of charge-offs for certain PCD loans acquired from FDIC during the three months ended June 30, 2023 that were applied against $8.7 million of allowance for credit losses on PCD loans recognized upon the acquisition of the loan portfolio on June 15, 2023.

    (2)

    Includes $11.0 million of one-time charge-offs from certain C&I loans originated under the PPP program that were subsequently determined to be ineligible for SBA forgiveness and guarantee and were deemed uncollectible during the three months ended December 31, 2022.

    CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

    RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED

    We believe 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 our 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. The non-GAAP measures presented are not necessarily comparable to non-GAAP measures that may be presented by other financial institutions. 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

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    (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

    $

    44,007

     

    $

    1.39

     

    $

    50,265

     

    $

    1.55

     

    $

    25,623

    $

    0.77

     

    $

    61,364

     

    $

    1.85

     

     

    $

    56,519

     

    $

    1.68

     

     

    $

    94,272

    $

    2.95

     

    $

    131,415

     

    $

    3.87

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Severance expense

     

    141

     

     

    0.00

     

     

    637

     

     

    0.02

     

     

    —

     

    —

     

     

    1,058

     

     

    0.03

     

     

     

    —

     

     

    —

     

     

     

    778

     

    0.02

     

     

    —

     

     

    —

     

    Impairments on fixed assets and leases

     

    12

     

     

    0.00

     

     

    86

     

     

    0.00

     

     

    —

     

    —

     

     

    126

     

     

    0.00

     

     

     

    705

     

     

    0.02

     

     

     

    98

     

    0.00

     

     

    925

     

     

    0.03

     

    Loss on sale of consumer installment loans

     

    —

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

    —

     

     

    18,221

     

     

    0.55

     

     

     

    —

     

     

    —

     

     

     

    —

     

    —

     

     

    —

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    3,914

     

     

    0.12

     

     

    —

     

     

    —

     

     

    —

     

    —

     

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

     

    3,914

     

    0.12

     

     

    —

     

     

    —

     

    (Gains) losses on investment securities

     

    49

     

     

    0.00

     

     

    (49

    )

     

    0.00

     

     

    13,543

     

    0.41

     

     

    1,859

     

     

    0.06

     

     

     

    2,494

     

     

    0.07

     

     

     

    0

     

    0.00

     

     

    3,524

     

     

    0.10

     

    Derivative credit valuation adjustment

     

    (101

    )

     

    0.00

     

     

    204

     

     

    0.01

     

     

    202

     

    0.01

     

     

    (358

    )

     

    (0.01

    )

     

     

    (351

    )

     

    (0.01

    )

     

     

    103

     

    0.00

     

     

    (1,087

    )

     

    (0.03

    )

    Tax on surrender of bank-owned life insurance policies

     

    4,141

     

     

    0.13

     

     

    —

     

     

    —

     

     

    —

     

    —

     

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

     

    4,141

     

    0.13

     

     

    —

     

     

    —

     

    Core earnings

    $

    52,163

     

    $

    1.65

     

    $

    51,143

     

    $

    1.58

     

    $

    39,368

    $

    1.19

     

    $

    82,270

     

    $

    2.48

     

     

    $

    59,367

     

    $

    1.77

     

     

    $

    103,306

    $

    3.22

     

    $

    134,777

     

    $

    3.97

     

     

    Core Earnings, excluding PPP - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    (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

    $

    44,007

     

    $

    1.39

     

     

    $

    50,265

     

    $

    1.55

     

    $

    25,623

     

    $

    0.77

     

     

    $

    61,364

     

    $

    1.85

     

     

    $

    56,519

     

    $

    1.68

     

     

    $

    94,272

    $

    2.95

     

    $

    131,415

     

    $

    3.87

     

    Less: PPP net income (loss) (after tax)

     

    (2,068

    )

     

    (0.07

    )

     

     

    9,606

     

     

    0.30

     

     

    (5,956

    )

     

    (0.18

    )

     

     

    5,846

     

     

    0.18

     

     

     

    13,066

     

     

    0.39

     

     

     

    7,538

     

    0.24

     

     

    37,779

     

     

    1.11

     

    Net income to common shareholders, excluding PPP

     

    46,075

     

     

    1.46

     

     

     

    40,659

     

     

    1.26

     

     

    31,579

     

     

    0.95

     

     

     

    55,518

     

     

    1.67

     

     

     

    43,453

     

     

    1.29

     

     

     

    86,734

     

    2.71

     

     

    93,636

     

     

    2.76

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Severance expense

     

    141

     

     

    0.00

     

     

     

    637

     

     

    0.02

     

     

    —

     

     

    —

     

     

     

    1,058

     

     

    0.03

     

     

     

    —

     

     

    —

     

     

     

    778

     

    0.02

     

     

    —

     

     

    —

     

    Impairments on fixed assets and leases

     

    12

     

     

    0.00

     

     

     

    86

     

     

    0.00

     

     

    —

     

     

    —

     

     

     

    126

     

     

    0.00

     

     

     

    705

     

     

    0.02

     

     

     

    98

     

    0.00

     

     

    925

     

     

    0.03

     

    Loss on sale of consumer installment loans

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

     

     

    18,221

     

     

    0.55

     

     

     

    —

     

     

    —

     

     

     

    —

     

    —

     

     

    —

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    3,914

     

     

    0.12

     

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

     

    3,914

     

    0.12

     

     

    —

     

     

    —

     

    (Gains) losses on investment securities

     

    49

     

     

    0.00

     

     

     

    (49

    )

     

    0.00

     

     

    13,543

     

     

    0.41

     

     

     

    1,859

     

     

    0.06

     

     

     

    2,494

     

     

    0.07

     

     

     

    0

     

    0.00

     

     

    3,524

     

     

    0.10

     

    Derivative credit valuation adjustment

     

    (101

    )

     

    0.00

     

     

     

    204

     

     

    0.01

     

     

    202

     

     

    0.01

     

     

     

    (358

    )

     

    (0.01

    )

     

     

    (351

    )

     

    (0.01

    )

     

     

    103

     

    0.00

     

     

    (1,087

    )

     

    (0.03

    )

    Tax on surrender of bank-owned life insurance policies

     

    4,141

     

     

    0.13

     

     

     

    —

     

     

    —

     

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

     

    —

     

     

    —

     

     

     

    4,141

     

    0.13

     

     

    —

     

     

    —

     

    Core earnings, excluding PPP

    $

    54,231

     

    $

    1.72

     

     

    $

    41,537

     

    $

    1.28

     

    $

    45,324

     

    $

    1.37

     

     

    $

    76,424

     

    $

    2.30

     

     

    $

    46,301

     

    $

    1.38

     

     

    $

    95,768

    $

    2.99

     

    $

    96,998

     

    $

    2.86

     

    Core Return on Average Assets - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net income

    $

    47,574

     

     

    $

    53,721

     

     

    $

    28,711

     

     

    $

    63,912

     

     

    $

    58,650

     

     

    $

    101,295

     

     

    $

    135,411

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

     

     

     

     

    Severance expense

     

    141

     

     

     

    637

     

     

     

    —

     

     

     

    1,058

     

     

     

    —

     

     

     

    778

     

     

     

    —

     

    Impairments on fixed assets and leases

     

    12

     

     

     

    86

     

     

     

    —

     

     

     

    126

     

     

     

    705

     

     

     

    98

     

     

     

    925

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    18,221

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    3,914

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    3,914

     

     

     

    —

     

    (Gains) losses on investment securities

     

    49

     

     

     

    (49

    )

     

     

    13,543

     

     

     

    1,859

     

     

     

    2,494

     

     

     

    0

     

     

     

    3,524

     

    Derivative credit valuation adjustment

     

    (101

    )

     

     

    204

     

     

     

    202

     

     

     

    (358

    )

     

     

    (351

    )

     

     

    103

     

     

     

    (1,087

    )

    Tax on surrender of bank-owned life insurance policies

     

    4,141

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    4,141

     

     

     

    —

     

    Core net income

    $

    55,730

     

     

    $

    54,599

     

     

    $

    42,456

     

     

    $

    84,818

     

     

    $

    61,498

     

     

    $

    110,329

     

     

    $

    138,773

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total assets

    $

    21,654,735

     

     

    $

    21,052,920

     

     

    $

    20,717,362

     

     

    $

    20,514,366

     

     

    $

    20,056,020

     

     

    $

    21,355,490

     

     

    $

    19,595,236

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core return on average assets

     

    1.03

    %

     

     

    1.05

    %

     

     

    0.81

    %

     

     

    1.64

    %

     

     

    1.23

    %

     

     

    1.04

    %

     

     

    1.43

    %

    Core Return on Average Assets, excluding PPP - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net income

    $

    47,574

     

     

    $

    53,721

     

     

    $

    28,711

     

     

    $

    63,912

     

     

    $

    58,650

     

     

    $

    101,295

     

     

    $

    135,411

     

    Less: PPP net income (loss) (after tax)

     

    (2,068

    )

     

     

    9,606

     

     

     

    (5,956

    )

     

     

    5,846

     

     

     

    13,066

     

     

     

    7,538

     

     

     

    37,779

     

    Net income, excluding PPP

     

    49,642

     

     

     

    44,115

     

     

     

    34,667

     

     

     

    58,066

     

     

     

    45,584

     

     

     

    93,757

     

     

     

    97,632

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

     

     

     

     

    Severance expense

     

    141

     

     

     

    637

     

     

     

    —

     

     

     

    1,058

     

     

     

    —

     

     

     

    778

     

     

     

    —

     

    Impairments on fixed assets and leases

     

    12

     

     

     

    86

     

     

     

    —

     

     

     

    126

     

     

     

    705

     

     

     

    98

     

     

     

    925

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    18,221

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    3,914

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    3,914

     

     

     

    —

     

    (Gains) losses on investment securities

     

    49

     

     

     

    (49

    )

     

     

    13,543

     

     

     

    1,859

     

     

     

    2,494

     

     

     

    0

     

     

     

    3,524

     

    Derivative credit valuation adjustment

     

    (101

    )

     

     

    204

     

     

     

    202

     

     

     

    (358

    )

     

     

    (351

    )

     

     

    103

     

     

     

    (1,087

    )

    Tax on surrender of bank-owned life insurance policies

     

    4,141

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    4,141

     

     

     

    —

     

    Core net income, excluding PPP

    $

    57,798

     

     

    $

    44,993

     

     

    $

    48,412

     

     

    $

    78,972

     

     

    $

    48,432

     

     

    $

    102,791

     

     

    $

    100,994

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total assets

    $

    21,654,735

     

     

    $

    21,052,920

     

     

    $

    20,717,362

     

     

    $

    20,514,366

     

     

    $

    20,056,020

     

     

    $

    21,355,490

     

     

    $

    19,595,236

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core return on average assets, excluding PPP

     

    1.07

    %

     

     

    0.87

    %

     

     

    0.93

    %

     

     

    1.53

    %

     

     

    0.97

    %

     

     

    0.97

    %

     

     

    1.04

    %

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

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net income

    $

    47,574

     

     

    $

    53,721

     

     

    $

    28,711

     

     

    $

    63,912

     

     

    $

    58,650

     

     

    $

    101,295

     

     

    $

    135,411

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income tax expense

     

    20,768

     

     

     

    14,563

     

     

     

    7,136

     

     

     

    17,899

     

     

     

    18,896

     

     

     

    35,331

     

     

     

    38,228

     

    Provision (benefit) for credit losses

     

    23,629

     

     

     

    19,603

     

     

     

    28,216

     

     

     

    (7,994

    )

     

     

    23,847

     

     

     

    43,232

     

     

     

    39,844

     

    Provision (benefit) for credit losses on unfunded commitments

     

    (304

    )

     

     

    280

     

     

     

    153

     

     

     

    254

     

     

     

    608

     

     

     

    (24

    )

     

     

    499

     

    Severance expense

     

    182

     

     

     

    809

     

     

     

    —

     

     

     

    1,363

     

     

     

    —

     

     

     

    991

     

     

     

    —

     

    Impairments on fixed assets and leases

     

    15

     

     

     

    109

     

     

     

    —

     

     

     

    162

     

     

     

    914

     

     

     

    124

     

     

     

    1,200

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    23,465

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    5,037

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    5,037

     

     

     

    —

     

    (Gains) losses on investment securities

     

    62

     

     

     

    (62

    )

     

     

    16,909

     

     

     

    2,394

     

     

     

    3,232

     

     

     

    0

     

     

     

    4,571

     

    Derivative credit valuation adjustment

     

    (130

    )

     

     

    259

     

     

     

    252

     

     

     

    (461

    )

     

     

    (455

    )

     

     

    129

     

     

     

    (1,412

    )

    Adjusted net income - pre-tax pre-provision

    $

    96,833

     

     

    $

    89,282

     

     

    $

    81,377

     

     

    $

    100,994

     

     

    $

    105,692

     

     

    $

    186,115

     

     

    $

    218,341

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total assets

    $

    21,654,735

     

     

    $

    21,052,920

     

     

    $

    20,717,362

     

     

    $

    20,514,366

     

     

    $

    20,056,020

     

     

    $

    21,355,490

     

     

    $

    19,595,236

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted ROAA - pre-tax pre-provision

     

    1.79

    %

     

     

    1.72

    %

     

     

    1.56

    %

     

     

    1.95

    %

     

     

    2.11

    %

     

     

    1.76

    %

     

      

    2.25

    % 

    Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision, excluding PPP - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net income

    $

    47,574

     

     

    $

    53,721

     

     

    $

    28,711

     

     

    $

    63,912

     

     

    $

    58,650

     

     

    $

    101,295

     

     

    $

    135,411

     

    Less: PPP net income (loss) (after tax)

     

    (2,068

    )

     

     

    9,606

     

     

     

    (5,956

    )

     

     

    5,846

     

     

     

    13,066

     

     

     

    7,538

     

     

     

    37,779

     

    Net income, excluding PPP

     

    49,642

     

     

     

    44,115

     

     

     

    34,667

     

     

     

    58,066

     

     

     

    45,584

     

     

     

    93,757

     

     

     

    97,632

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income tax expense

     

    20,768

     

     

     

    14,563

     

     

     

    7,136

     

     

     

    17,899

     

     

     

    18,896

     

     

     

    35,331

     

     

     

    38,228

     

    Provision (benefit) for credit losses

     

    23,629

     

     

     

    19,603

     

     

     

    28,216

     

     

     

    (7,994

    )

     

     

    23,847

     

     

     

    43,232

     

     

     

    39,844

     

    Provision (benefit) for credit losses on unfunded commitments

     

    (304

    )

     

     

    280

     

     

     

    153

     

     

     

    254

     

     

     

    608

     

     

     

    (24

    )

     

     

    499

     

    Severance expense

     

    182

     

     

     

    809

     

     

     

    —

     

     

     

    1,363

     

     

     

    —

     

     

     

    991

     

     

     

    —

     

    Impairments on fixed assets and leases

     

    15

     

     

     

    109

     

     

     

    —

     

     

     

    162

     

     

     

    914

     

     

     

    124

     

     

     

    1,200

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    23,465

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    5,037

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    5,037

     

     

     

    —

     

    (Gains) losses on investment securities

     

    62

     

     

     

    (62

    )

     

     

    16,909

     

     

     

    2,394

     

     

     

    3,232

     

     

     

    0

     

     

     

    4,571

     

    Derivative credit valuation adjustment

     

    (130

    )

     

     

    259

     

     

     

    252

     

     

     

    (461

    )

     

     

    (455

    )

     

     

    129

     

     

     

    (1,412

    )

    Adjusted net income - pre-tax pre-provision, excluding PPP

    $

    98,901

     

     

    $

    79,676

     

     

    $

    87,333

     

     

    $

    95,148

     

     

    $

    92,626

     

     

    $

    178,577

     

     

    $

    180,562

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total assets

    $

    21,654,735

     

     

    $

    21,052,920

     

     

    $

    20,717,362

     

     

    $

    20,514,366

     

     

    $

    20,056,020

     

     

    $

    21,355,490

     

     

    $

    19,595,236

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted ROAA - pre-tax pre-provision, excluding PPP

     

    1.83

    %

     

     

    1.53

    %

     

     

    1.67

    %

     

     

    1.84

    %

     

     

    1.85

    %

     

     

    1.69

    %

     

     

    1.86

    %

    Core Return on Average Common Equity - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net income to common shareholders

    $

    44,007

     

     

    $

    50,265

     

     

    $

    25,623

     

     

    $

    61,364

     

     

    $

    56,519

     

     

    $

    94,272

     

     

    $

    131,415

     

    Reconciling items (after tax):

     

     

     

     

     

     

     

     

     

     

     

     

     

    Severance expense

     

    141

     

     

     

    637

     

     

     

    —

     

     

     

    1,058

     

     

     

    —

     

     

     

    778

     

     

     

    —

     

    Impairments on fixed assets and leases

     

    12

     

     

     

    86

     

     

     

    —

     

     

     

    126

     

     

     

    705

     

     

     

    98

     

     

     

    925

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    18,221

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    3,914

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    3,914

     

     

     

    —

     

    (Gains) losses on investment securities

     

    49

     

     

     

    (49

    )

     

     

    13,543

     

     

     

    1,859

     

     

     

    2,494

     

     

     

    0

     

     

     

    3,524

     

    Derivative credit valuation adjustment

     

    (101

    )

     

     

    204

     

     

     

    202

     

     

     

    (358

    )

     

     

    (351

    )

     

     

    103

     

     

     

    (1,087

    )

    Tax on surrender of bank-owned life insurance policies

     

    4,141

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    4,141

     

     

     

    —

     

    Core earnings

    $

    52,163

     

     

    $

    51,143

     

     

    $

    39,368

     

     

    $

    82,270

     

     

    $

    59,367

     

     

    $

    103,306

     

     

    $

    134,777

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total common shareholders' equity

    $

    1,335,408

     

     

    $

    1,273,780

     

     

    $

    1,263,190

     

     

    $

    1,259,711

     

     

    $

    1,244,819

     

     

    $

    1,304,764

     

     

    $

    1,248,400

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core return on average common equity

     

    15.67

    %

     

     

    16.28

    %

     

     

    12.36

    %

     

     

    25.91

    %

     

     

    19.13

    %

     

     

    15.97

    %

     

     

    21.77

    %

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

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net income to common shareholders

    $

    44,007

     

     

    $

    50,265

     

     

    $

    25,623

     

     

    $

    61,364

     

     

    $

    56,519

     

     

    $

    94,272

     

     

    $

    131,415

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Income tax expense

     

    20,768

     

     

     

    14,563

     

     

     

    7,136

     

     

     

    17,899

     

     

     

    18,896

     

     

     

    35,331

     

     

     

    38,228

     

    Provision (benefit) for credit losses

     

    23,629

     

     

     

    19,603

     

     

     

    28,216

     

     

     

    (7,994

    )

     

     

    23,847

     

     

     

    43,232

     

     

     

    39,844

     

    Provision (benefit) for credit losses on unfunded commitments

     

    (304

    )

     

     

    280

     

     

     

    153

     

     

     

    254

     

     

     

    608

     

     

     

    (24

    )

     

     

    499

     

    Severance expense

     

    182

     

     

     

    809

     

     

     

    —

     

     

     

    1,363

     

     

     

    —

     

     

     

    991

     

     

     

    —

     

    Impairments on fixed assets and leases

     

    15

     

     

     

    109

     

     

     

    —

     

     

     

    162

     

     

     

    914

     

     

     

    124

     

     

     

    1,200

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    23,465

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    5,037

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    5,037

     

     

     

    —

     

    (Gains) losses on investment securities

     

    62

     

     

     

    (62

    )

     

     

    16,909

     

     

     

    2,394

     

     

     

    3,232

     

     

     

    0

     

     

     

    4,571

     

    Derivative credit valuation adjustment

     

    (130

    )

     

     

    259

     

     

     

    252

     

     

     

    (461

    )

     

     

    (455

    )

     

     

    129

     

     

     

    (1,412

    )

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

    $

    93,266

     

     

    $

    85,826

     

     

    $

    78,289

     

     

    $

    98,446

     

     

    $

    103,561

     

     

    $

    179,092

     

     

    $

    214,345

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total common shareholders' equity

    $

    1,335,408

     

     

    $

    1,273,780

     

     

    $

    1,263,190

     

     

    $

    1,259,711

     

     

    $

    1,244,819

     

     

    $

    1,304,764

     

     

    $

    1,248,400

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Adjusted ROCE - pre-tax pre-provision

     

    28.01

    %

     

     

    27.33

    %

     

     

    24.59

    %

     

     

    31.01

    %

     

     

    33.37

    %

     

     

    27.68

    %

     

     

    34.62

    %

    Net Interest Margin, Tax Equivalent, excluding PPP - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net interest income

    $

    165,271

     

     

    $

    149,899

     

     

    $

    135,137

     

     

    $

    159,032

     

     

    $

    164,852

     

     

    $

    315,170

     

     

    $

    329,551

     

    PPP net interest (income) expense

     

    765

     

     

     

    (14,106

    )

     

     

    2,791

     

     

     

    (9,632

    )

     

     

    (18,946

    )

     

     

    (13,341

    )

     

     

    (53,561

    )

    Tax-equivalent adjustment

     

    390

     

     

     

    375

     

     

     

    342

     

     

     

    334

     

     

     

    270

     

     

     

    765

     

     

     

    509

     

    Net interest income, tax equivalent, excluding PPP

    $

    166,426

     

     

    $

    136,168

     

     

    $

    138,270

     

     

    $

    149,734

     

     

    $

    146,176

     

     

    $

    302,594

     

     

    $

    276,499

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    GAAP average total interest earning assets

    $

    21,073,680

     

     

    $

    20,514,677

     

     

    $

    20,211,028

     

     

    $

    20,021,455

     

     

    $

    19,525,936

     

     

    $

    20,795,724

     

     

    $

    19,051,757

     

    Average PPP loans

     

    (207,127

    )

     

     

    (889,235

    )

     

     

    (1,065,919

    )

     

     

    (1,349,403

    )

     

     

    (1,863,429

    )

     

     

    (546,297

    )

     

     

    (2,250,224

    )

    Adjusted average total interest earning assets, excluding PPP

    $

    20,866,553

     

     

    $

    19,625,442

     

     

    $

    19,145,109

     

     

    $

    18,672,052

     

     

    $

    17,662,507

     

     

    $

    20,249,427

     

     

    $

    16,801,533

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Net interest margin, tax equivalent, excluding PPP

     

    3.20

    %

     

     

    2.80

    %

     

     

    2.87

    %

     

     

    3.18

    %

     

     

    3.32

    %

     

     

    3.01

    %

     

     

    3.32

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Loan Yield, excluding PPP

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    Interest income on loans and leases

    $

    252,894

     

     

    $

    255,913

     

     

    $

    218,740

     

     

    $

    200,457

     

     

    $

    168,941

     

     

    $

    508,807

     

     

    $

    326,116

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    PPP interest income

     

    (1,633

    )

     

     

    (23,551

    )

     

     

    (7,249

    )

     

     

    (14,666

    )

     

     

    (20,572

    )

     

     

    (25,184

    )

     

     

    (57,466

    )

    Interest income on core loans (Loans and leases, excluding PPP)

    $

    251,261

     

     

    $

    232,362

     

     

    $

    211,491

     

     

    $

    185,791

     

     

    $

    148,369

     

     

    $

    483,623

     

     

    $

    268,650

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Average total loans and leases

    $

    14,842,432

     

     

    $

    15,477,973

     

     

    $

    15,388,003

     

     

    $

    15,653,983

     

     

    $

    14,918,498

     

     

    $

    15,158,447

     

     

    $

    14,291,229

     

    Average PPP loans

     

    (207,127

    )

     

     

    (889,235

    )

     

     

    (1,065,919

    )

     

     

    (1,349,403

    )

     

     

    (1,863,429

    )

     

     

    (546,297

    )

     

     

    (2,250,224

    )

    Adjusted average total loans and leases

    $

    14,635,305

     

     

    $

    14,588,738

     

     

    $

    14,322,084

     

     

    $

    14,304,580

     

     

    $

    13,055,069

     

     

    $

    14,612,150

     

     

    $

    12,041,005

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Loan yield, excluding PPP

     

    6.89

    %

     

     

    6.46

    %

     

     

    5.86

    %

     

     

    5.15

    %

     

     

    4.56

    %

     

     

    6.67

    %

     

     

    4.50

    %

    Core Efficiency Ratio - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

    Six Months Ended
     June 30,

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

     

    2023

     

    2022

    GAAP net interest income

    $

    165,271

     

     

    $

    149,899

     

     

    $

    135,137

     

     

    $

    159,032

     

     

    $

    164,852

     

     

    $

    315,170

     

     

    $

    329,551

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    GAAP non-interest income

    $

    15,997

     

     

    $

    18,121

     

     

    $

    7,345

     

     

    $

    (9,017

    )

     

    $

    12,746

     

     

    $

    34,118

     

     

    $

    33,944

     

    Loss on sale of consumer installment loans

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    23,465

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

    Loss on sale of capital call lines of credit

     

    5,037

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    —

     

     

     

    5,037

     

     

     

    —

     

    (Gains) losses on investment securities

     

    62

     

     

     

    (62

    )

     

     

    16,909

     

     

     

    2,394

     

     

     

    3,232

     

     

     

    —

     

     

     

    4,571

     

    Derivative credit valuation adjustment

     

    (130

    )

     

     

    259

     

     

     

    252

     

     

     

    (461

    )

     

     

    (455

    )

     

     

    129

     

     

     

    (1,412

    )

    Core non-interest income

     

    20,966

     

     

     

    18,318

     

     

     

    24,506

     

     

     

    16,381

     

     

     

    15,523

     

     

     

    39,284

     

     

     

    37,103

     

    Core revenue

    $

    186,237

     

     

    $

    168,217

     

     

    $

    159,643

     

     

    $

    175,413

     

     

    $

    180,375

     

     

    $

    354,454

     

     

    $

    366,654

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    GAAP non-interest expense

    $

    89,297

     

     

    $

    80,133

     

     

    $

    78,419

     

     

    $

    76,198

     

     

    $

    76,205

     

     

    $

    169,430

     

     

    $

    150,012

     

    Severance expense

     

    (182

    )

     

     

    (809

    )

     

     

    —

     

     

     

    (1,363

    )

     

     

    —

     

     

     

    (991

    )

     

     

    —

     

    Impairments on fixed assets and leases

     

    (15

    )

     

     

    (109

    )

     

     

    —

     

     

     

    (162

    )

     

     

    (914

    )

     

     

    (124

    )

     

     

    (1,200

    )

    Core non-interest expense

    $

    89,100

     

     

    $

    79,215

     

     

    $

    78,419

     

     

    $

    74,673

     

     

    $

    75,291

     

     

    $

    168,315

     

     

    $

    148,812

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core efficiency ratio (1)

     

    47.84

    %

     

     

    47.09

    %

     

     

    49.12

    %

     

     

    42.57

    %

     

     

    41.74

    %

     

     

    47.49

    %

     

     

    40.59

    %

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (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)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    GAAP total shareholders' equity

    $

    1,456,652

     

     

    $

    1,421,020

     

     

    $

    1,402,961

     

     

    $

    1,386,931

     

     

    $

    1,353,390

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Preferred stock

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

    Goodwill and other intangibles

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

    Tangible common equity

    $

    1,315,229

     

     

    $

    1,279,597

     

     

    $

    1,261,538

     

     

    $

    1,245,508

     

     

    $

    1,211,967

     

     

     

     

     

     

     

     

     

     

     

    GAAP total assets

    $

    22,028,565

     

     

    $

    21,751,614

     

     

    $

    20,896,112

     

     

    $

    20,367,621

     

     

    $

    20,251,996

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Goodwill and other intangibles

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

    Tangible assets

    $

    22,024,936

     

     

    $

    21,747,985

     

     

    $

    20,892,483

     

     

    $

    20,363,992

     

     

    $

    20,248,367

     

     

     

     

     

     

     

     

     

     

     

    Tangible common equity to tangible assets

     

    6.0

    %

     

     

    5.9

    %

     

     

    6.0

    %

     

     

    6.1

    %

     

     

    6.0

    %

    Tangible Common Equity to Tangible Assets, excluding PPP - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    GAAP total shareholders' equity

    $

    1,456,652

     

     

    $

    1,421,020

     

     

    $

    1,402,961

     

     

    $

    1,386,931

     

     

    $

    1,353,390

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Preferred stock

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

    Goodwill and other intangibles

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

    Tangible common equity

    $

    1,315,229

     

     

    $

    1,279,597

     

     

    $

    1,261,538

     

     

    $

    1,245,508

     

     

    $

    1,211,967

     

     

     

     

     

     

     

     

     

     

     

    GAAP total assets

    $

    22,028,565

     

     

    $

    21,751,614

     

     

    $

    20,896,112

     

     

    $

    20,367,621

     

     

    $

    20,251,996

     

    Loans receivable, PPP

     

    (188,763

    )

     

     

    (246,258

    )

     

     

    (998,153

    )

     

     

    (1,154,632

    )

     

     

    (1,570,160

    )

    Total assets, excluding PPP

    $

    21,839,802

     

     

    $

    21,505,356

     

     

    $

    19,897,959

     

     

    $

    19,212,989

     

     

    $

    18,681,836

     

    Reconciling items:

     

     

     

     

     

     

     

     

     

    Goodwill and other intangibles

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

    Tangible assets, excluding PPP

    $

    21,836,173

     

     

    $

    21,501,727

     

     

    $

    19,894,330

     

     

    $

    19,209,360

     

     

    $

    18,678,207

     

     

     

     

     

     

     

     

     

     

     

    Tangible common equity to tangible assets, excluding PPP

     

    6.0

    %

     

     

    6.0

    %

     

     

    6.3

    %

     

     

    6.5

    %

     

    6.5

    %

    Tangible Book Value per Common Share - Customers Bancorp

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    GAAP total shareholders' equity

    $

    1,456,652

     

     

    $

    1,421,020

     

     

    $

    1,402,961

     

     

    $

    1,386,931

     

     

    $

    1,353,390

     

    Reconciling Items:

     

     

     

     

     

     

     

     

     

    Preferred stock

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

     

     

    (137,794

    )

    Goodwill and other intangibles

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

     

     

    (3,629

    )

    Tangible common equity

    $

    1,315,229

     

     

    $

    1,279,597

     

     

    $

    1,261,538

     

     

    $

    1,245,508

     

     

    $

    1,211,967

     

     

     

     

     

     

     

     

     

     

     

    Common shares outstanding

     

    31,282,318

     

     

     

    31,239,750

     

     

     

    32,373,697

     

     

     

    32,475,502

     

     

     

    32,449,486

     

     

     

     

     

     

     

     

     

     

     

    Tangible book value per common share

    $

    42.04

     

     

    $

    40.96

     

     

    $

    38.97

     

     

    $

    38.35

     

     

    $

    37.35

     

     

     

     

     

     

     

     

     

     

     

    Core Loans (Total Loans and Leases, excluding PPP)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    Total loans and leases

    $

    13,910,907

     

     

    $

    15,063,034

     

     

    $

    15,794,671

     

     

    $

    15,336,688

     

     

    $

    15,664,353

     

     

     

     

     

     

     

     

     

     

     

    Loans receivable, PPP

     

    (188,763

    )

     

     

    (246,258

    )

     

     

    (998,153

    )

     

     

    (1,154,632

    )

     

     

    (1,570,160

    )

    Core Loans (Total loans and leases, excluding PPP)

    $

    13,722,144

     

     

    $

    14,816,776

     

     

    $

    14,796,518

     

     

    $

    14,182,056

     

     

    $

    14,094,193

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Core Loans Held for Investment

    (Total Loans and Leases Held for Investment, excluding PPP)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    Total loans and leases, held for investment

    $

    13,832,799

     

     

    $

    14,638,977

     

     

    $

    15,466,359

     

     

    $

    15,331,464

     

     

    $

    15,657,758

     

     

     

     

     

     

     

     

     

     

     

    Loans receivable, PPP

     

    (188,763

    )

     

     

    (246,258

    )

     

     

    (998,153

    )

     

     

    (1,154,632

    )

     

     

    (1,570,160

    )

    Core Loans Held for Investment

    (Total loans and leases held for investment, excluding PPP)

    $

    13,644,036

     

     

    $

    14,392,719

     

     

    $

    14,468,206

     

     

    $

    14,176,832

     

     

    $

    14,087,598

     

     

     

     

     

     

     

     

     

     

     

    Total Assets, excluding PPP

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    Total assets

    $

    22,028,565

     

     

    $

    21,751,614

     

     

    $

    20,896,112

     

     

    $

    20,367,621

     

     

    $

    20,251,996

     

     

     

     

     

     

     

     

     

     

     

    Loans receivable, PPP

     

    (188,763

    )

     

     

    (246,258

    )

     

     

    (998,153

    )

     

     

    (1,154,632

    )

     

     

    (1,570,160

    )

    Total assets, excluding PPP

    $

    21,839,802

     

     

    $

    21,505,356

     

     

    $

    19,897,959

     

     

    $

    19,212,989

     

     

    $

    18,681,836

     

     

     

     

     

     

     

     

     

     

     

    Coverage of credit loss reserves for loans and leases held for investment, excluding PPP

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    (Dollars in thousands, except per share data)

    Q2 2023

     

    Q1 2023

     

    Q4 2022

     

    Q3 2022

     

    Q2 2022

    Loans and leases receivable

    $

    12,826,531

     

     

    $

    13,391,610

     

     

    $

    14,143,047

     

     

    $

    13,762,374

     

     

    $

    13,783,155

     

     

     

     

     

     

     

     

     

     

     

    Loans receivable, PPP

     

    (188,763

    )

     

     

    (246,258

    )

     

     

    (998,153

    )

     

     

    (1,154,632

    )

     

     

    (1,570,160

    )

    Loans and leases held for investment, excluding PPP

    $

    12,637,768

     

     

    $

    13,145,352

     

     

    $

    13,144,894

     

     

    $

    12,607,742

     

     

    $

    12,212,995

     

     

     

     

     

     

     

     

     

     

     

    Allowance for credit losses on loans and leases

    $

    139,656

     

     

    $

    130,281

     

     

    $

    130,924

     

     

    $

    130,197

     

     

    $

    156,530

     

     

     

     

     

     

     

     

     

     

     

    Coverage of credit loss reserves for loans and leases held for investment, excluding PPP

     

    1.11

    %

     

     

    0.99

    %

     

     

    1.00

    %

     

     

    1.03

    %

     

     

    1.28

    %

     


    The Customers Bancorp Stock at the time of publication of the news with a raise of +1,06 % to 38,10EUR on Lang & Schwarz stock exchange (27. Juli 2023, 22:34 Uhr).


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    Customers Bancorp Reports Results for Second Quarter 2023 Customers Bancorp, Inc. (NYSE:CUBI) Second Quarter 2023 Highlights Q2 2023 net income available to common shareholders was $44.0 million, or $1.39 per diluted share; ROAA was 0.88% and ROCE was 13.22%. Q2 2023 core earnings* were $52.2 million, or …

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