Customers Bancorp, Inc. (NYSE:CUBI)
Second Quarter 2022 Results
Earnings
Earnings Per Share
Return on Assets
Return on Common
Equity
$56.5 million
$1.68
1.2%
18.2%
Net Income
Diluted Earnings Per
Share
ROAA
ROCE
$59.4 million
$1.77
1.2%
19.1%
Core Earnings*
Core Earnings Per Diluted
Share*
Core ROAA*
Core ROCE*
$46.3 million
$1.38
2.1%
33.4%
Core Earnings, excluding
PPP*
Core Earnings Per Diluted
Share, excluding PPP*
Pre-tax and Pre-provision
Adjusted ROAA*
Pre-tax and Pre-provision
Adjusted ROCE*
Second Quarter 2022 Highlights
- Q2 2022 net income available to common shareholders was $56.5
million, or $1.68 per diluted share, down 2.6% over Q2 2021.
- Q2 2022 adjusted pre-tax pre-provision net income* was $105.7
million, up 22% over Q2 2021.
- Q2 2022 core earnings* were $59.4 million, or $1.77 per diluted
share, up 0.1% over Q2 2021.
- Q2 2022 core earnings excluding Paycheck Protection Program*
("PPP") were $46.3 million, or $1.38 per diluted share, up 32.3%
over Q2 2021.
- Q2 2022 ROAA was 1.17% and Core ROAA* was 1.23%. Q2 2021 ROAA
was 1.27% and Core ROAA* was 1.30%.
- Q2 2022 ROCE was 18.2% and Core ROCE* was 19.1%. Q2 2021 ROCE
was 23.2% and Core ROCE* was 23.7%.
- Q2 2022 adjusted pre-tax pre-provision ROAA* was 2.11%. Q2 2021
adjusted pre-tax pre-provision ROAA* was 1.80%.
- Year-over-year loan growth (excluding PPP loans and loans to
mortgage companies*) was $4.4 billion or 56.6%, led by our low-risk
variable rate specialty lending verticals.
- Year-over-year commercial and industrial (C&I) loans and
leases growth, including specialty lending, of $3.3 billion (up
145.8%), multifamily loan growth of $515.4 million (up 34.4%), and
consumer loan increase of $500.8 million (up 26.2%).
- Q2 2022 net interest margin, tax equivalent* increased 41 basis
points from Q2 2021 to 3.39%. Q2 2022 net interest margin, tax
equivalent, excluding the impact of PPP loans* increased 2 basis
points from Q2 2021 to 3.32%.
- Year-over-year deposit growth was $3.1 billion, up 22.1%. Total
demand deposits increased $4.4 billion, or 64.0% year-over-year.
This increase included CBIT-related deposits with a balance of $2.1
billion at June 30, 2022, up $0.3 billion from March 31, 2022.
- Onboarded 90 new CBIT customers in Q2 2022, bringing total
customers to 190.
- Q2 2022 efficiency ratio was 42.14% compared to 46.59% for Q2
2021. Q2 2022 core efficiency ratio* was 41.74% compared to 44.33%
in Q2 2021.
- Q2 2022 provision for credit losses on loans and leases of
$24.2 million was largely driven by strong loan growth as asset
quality remains exceptional and compares to $15.3 million in Q1
2022 and $3.3 million in Q2 2021.
- Non-performing assets were $28.2 million, or 0.14% of total
assets, at June 30, 2022 compared to $43.9 million, or 0.23% of
total assets, at March 31, 2022 and $46.9 million, or 0.24% of
total assets, at June 30, 2021. Allowance for credit losses on
loans and leases equaled 558% of non-performing loans at June 30,
2022, compared to 333% at March 31, 2022 and 270% at June 30,
2021.
- Well positioned to support growth in 2022 and 2023 and expect
to meet or beat projections of core earnings (excluding PPP)*
between $4.75 - $5.00 in 2022 and over $6.00 in 2023.
* 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 is
included at the end of this document.
CEO Commentary
West Reading, PA, July 27, 2022 - “We continued to
perform well in the second quarter and are extremely pleased with
our results for the first half of 2022,” remarked Customers Bancorp
Chairman and CEO, Jay Sidhu. “Despite the challenging macro and
geopolitical environment, we remain laser focused on executing on
our strategy which has not changed. Our core earnings per share,
excluding PPP* were up over 32.3% year-over-year. Core ROAA* was
1.23% and core ROCE* was 19.1%. We continue to responsibly deliver
remarkable organic loan growth without sacrificing credit quality.
Our core loans* increased $2.2 billion in Q2 2022, up 18.7% from Q1
2022, and well above our $500 million average quarterly target.
Nearly all of this growth was in low-risk specialty lending
verticals and was predominately floating rate as we manage overall
asset sensitivity. Asset quality remains exceptional and credit
reserves are strong. Continuing the momentum from record 2021
performance and strong results for the first half of 2022, our loan
and deposit pipelines remain robust, a testament to our customer
centric business model supported by best-in-class service and
technology. We remain very excited and optimistic about our
future,” Mr. Jay Sidhu continued.
Financial Highlights
At or Three Months
Ended
Increase (Decrease)
Six Months Ended
Increase (Decrease)
(Dollars in thousands, except per share
data and stock price data)
June 30, 2022
June 30, 2021
June 30, 2022
June 30, 2021
Profitability Metrics:
Net income available for common
shareholders
$
56,519
$
58,042
$
(1,523)
(2.6) %
$
131,415
$
91,246
$
40,169
44.0 %
Diluted earnings per share
$
1.68
$
1.72
$
(0.04)
(2.3) %
$
3.87
$
2.74
$
1.13
41.2 %
Core earnings*
$
59,367
$
59,303
$
64
0.1 %
$
134,777
$
129,611
$
5,166
4.0 %
Core earnings per share*
$
1.77
$
1.76
$
0.01
0.6 %
$
3.97
$
3.89
$
0.08
2.1 %
Core earnings, excluding PPP*
$
46,301
$
34,991
$
11,310
32.3 %
$
96,998
$
80,220
$
16,778
20.9 %
Core earnings per share, excluding
PPP*
$
1.38
$
1.04
$
0.34
32.7 %
$
2.86
$
2.41
$
0.45
18.7 %
Return on average assets ("ROAA")
1.17 %
1.27 %
(0.10)
1.39 %
1.04 %
0.35
Core ROAA*
1.23 %
1.30 %
(0.07)
1.43 %
1.45 %
(0.02)
Return on average common equity
("ROCE")
18.21 %
23.22 %
(5.01)
21.23 %
19.15 %
2.08
Core ROCE*
19.13 %
23.72 %
(4.59)
21.77 %
27.20 %
(5.43)
Adjusted pre-tax pre-provision net
income*
$
105,692
$
86,467
$
19,225
22.2 %
$
218,341
$
173,236
$
45,105
26.0 %
Net interest margin, tax equivalent*
3.39 %
2.98 %
0.41
3.49 %
2.99 %
0.50
Net interest margin, tax equivalent,
excluding PPP loans*
3.32 %
3.30 %
0.02
3.32 %
3.14 %
0.18
Loan yield, excluding PPP*
4.56 %
4.36 %
0.20
4.50 %
4.32 %
0.18
Cost of deposits
0.54 %
0.47 %
0.07
0.44 %
0.50 %
(0.06)
Efficiency ratio
42.14 %
46.59 %
(4.45)
40.76 %
47.64 %
(6.88)
Core efficiency ratio*
41.74 %
44.33 %
(2.59)
40.59 %
42.76 %
(2.17)
Balance Sheet Trends:
Total assets
$
20,251,996
$
19,635,108
$
616,888
3.1 %
Total assets, excluding PPP*
$
18,681,836
$
13,330,052
$
5,351,784
40.1 %
Total loans and leases
$
15,664,353
$
16,967,022
$
(1,302,669)
(7.7) %
Total loans and leases, excluding PPP*
$
14,094,193
$
10,661,966
$
3,432,227
32.2 %
Non-interest bearing demand deposits
$
4,683,030
$
2,699,869
$
1,983,161
73.5 %
Total deposits
$
16,944,719
$
13,873,939
$
3,070,780
22.1 %
Capital Metrics:
Common Equity
$
1,215,596
$
1,033,258
$
182,338
17.6 %
Tangible Common Equity*
$
1,211,967
$
1,029,405
$
182,562
17.7 %
Tangible Common Equity to Tangible
Assets*
5.99 %
5.24 %
0.75
Tangible Common Equity to Tangible Assets,
excluding PPP*
6.49 %
7.72 %
(1.23)
Tangible Book Value per common share*
$
37.35
$
31.82
$
5.53
17.4 %
Total risk based capital ratio (1)
12.6 %
13.3 %
(0.7)
(1) Total risk based capital ratio as of
June 30, 2022 is an estimate.
* 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 is
included at the end of this document.
Customers Bank Instant Token (CBITTM)
"Despite significant market volatility in the digital asset
space during second quarter, we are very pleased with our progress
to date. In Q2 2022, we onboarded 90 new CBIT-related customers to
the Digital Bank, once again beating our internal target, and
bringing total customers to 190. Our digital asset-related deposits
stabilized in Q2 2022 and ended the quarter approximately $0.3
billion higher than Q1 2022. We continue to expect digital
asset-related deposits to grow in 2022 as our pipelines remain
strong, giving us an opportunity to further transform our deposits
into a high quality, low-to-no cost, stable and growing deposit
franchise. We believe our technology, compliance and customer
service and support systems remain among the best in the country,"
commented Mr. Sam Sidhu, President and CEO of Customers Bank.
At June 30, 2022, $2.1 billion in core low-to-no cost demand
deposits have been attracted to the Bank through this system.
Paycheck Protection Program (PPP)
We funded, either directly or indirectly, about 256,000 PPP
loans totaling $5.2 billion in 2021, bringing total PPP loans
funded to approximately 358,000 and $10.3 billion. We also earned
close to $350 million of deferred origination fees from the SBA
through the PPP loans, which is significantly accretive to our
earnings and capital levels as these loans are forgiven by the
government. In Q2 2022, we recognized $15 million of these fees in
earnings, bringing total fees recognized to date to $307 million,
resulting in approximately $43 million remaining to be recognized
throughout 2022 and 2023. "As we've stated previously, it is
difficult to predict the timing of PPP forgiveness. We continue to
expect most of the fees to be recognized in 2022, with
approximately two-thirds of the remaining fees to be recognized in
the second half of this year," commented Customers Bancorp CFO,
Carla Leibold.
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, 2022
% of Total
March 31, 2022
% of Total
June 30, 2021
% of Total
Commercial:
Commercial & industrial, including
specialty lending
$
5,637,083
36.0
%
$
3,921,439
27.9
%
$
2,293,723
13.5
%
Multi-family
2,012,920
12.9
1,705,027
12.1
1,497,485
8.8
Loans to mortgage companies
1,975,189
12.6
1,830,121
13.0
2,922,217
17.2
Commercial real estate owner occupied
710,577
4.5
701,893
5.0
653,649
3.9
Loans receivable, PPP
1,570,160
10.0
2,195,902
15.6
6,305,056
37.2
Commercial real estate non-owner
occupied
1,152,869
7.4
1,140,311
8.1
1,206,646
7.1
Construction
195,687
1.2
161,024
1.1
179,198
1.1
Total commercial loans and leases
13,254,485
84.6
11,655,717
82.8
15,057,974
88.8
Consumer:
Residential
460,228
2.9
469,426
3.3
273,493
1.6
Manufactured housing
48,570
0.3
50,669
0.4
57,904
0.3
Installment
1,901,070
12.1
1,897,706
13.5
1,577,651
9.3
Total consumer loans
2,409,868
15.4
2,417,801
17.2
1,909,048
11.2
Total loans and leases
$
15,664,353
100.0
%
$
14,073,518
100.0
%
$
16,967,022
100.0
%
C&I loans and leases, including specialty lending, increased
$3.3 billion, or 145.8% year-over-year, to $5.6 billion.
Practically all of the increases were in low-risk variable rate
secured categories of Fund Finance and Lender Finance. Multi-family
loans increased $515.4 million, or 34.4%, to $2.0 billion, consumer
installment loans increased $323.4 million, or 20.5%, to $1.9
billion, residential loans increased $186.7 million, or 68.3%, to
$460.2 million, commercial real estate owner occupied loans
increased $56.9 million, or 8.7%, to $710.6 million and
construction loans increased $16.5 million, or 9.2%, to $195.7
million. These increases in loans and leases were partially offset
by a decrease in commercial real estate non-owner occupied loans of
$53.8 million, or 4.5% year-over-year to $1.2 billion.
Allowance for Credit Losses on Loans and Leases
The following table presents allowance for credit losses on
loans and leases information as of the dates and periods
indicated:
At or Three Months
Ended
Increase (Decrease)
At or Three Months
Ended
Increase (Decrease)
(Dollars in thousands)
June 30, 2022
March 31, 2022
June 30, 2022
June 30, 2021
Allowance for credit losses on loans and
leases
$
156,530
$
145,847
$
10,683
$
156,530
$
125,436
$
31,094
Provision for credit losses on loans and
leases
24,164
15,269
8,895
24,164
3,291
20,873
Net charge-offs (recoveries)
13,481
7,226
6,255
13,481
6,591
6,890
Annualized net charge-offs (recoveries) to
average loans and leases
0.36
%
0.21
%
0.36
%
0.16
%
Coverage of credit loss reserves for loans
and leases held for investment
1.14
%
1.18
%
1.14
%
0.89
%
Coverage of credit loss reserves for loans
and leases held for investment, excluding PPP*
1.28
%
1.44
%
1.28
%
1.61
%
* 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 is
included at the end of this document.
Provision for Credit Losses
Three Months Ended
Increase (Decrease)
(Dollars in thousands)
June 30, 2022
March 31, 2022
Provision for credit losses on loans and
leases
$
24,164
$
15,269
$
8,895
Provision (benefit) for credit losses on
unfunded commitments
608
(109
)
717
Provision (benefit) for credit losses on
available for sale debt securities
(317
)
728
(1,045
)
Total provision for credit losses
$
24,455
$
15,888
$
8,567
The provision for credit losses on loans and leases in Q2 2022
was $24.2 million, compared to $15.3 million in Q1 2022. The
provision in Q2 2022 was primarily to support loan growth. The
provision (benefit) for credit losses for available for sale
investment securities in Q2 2022 was a benefit to provision of $0.3
million compared to provision expense of $0.7 million in Q1
2022.
Asset Quality
The following table presents asset quality metrics as of the
dates indicated:
(Dollars in thousands)
June 30, 2022
March 31, 2022
Increase (Decrease)
June 30, 2022
June 30, 2021
Increase (Decrease)
Non-performing assets ("NPAs"):
Nonaccrual / non-performing loans
("NPLs")
$
28,064
$
43,778
$
(15,714
)
$
28,064
$
46,465
$
(18,401
)
Non-performing assets
28,150
43,864
(15,714
)
28,150
46,932
(18,782
)
NPLs to total loans and leases (1)
0.18
%
0.31
%
0.18
%
0.27
%
Reserves to NPLs (1)
557.76
%
333.15
%
557.76
%
269.96
%
NPAs to total assets
0.14
%
0.23
%
0.14
%
0.24
%
Loans and leases risk ratings:
Commercial loans and leases (1)
Pass
$
9,355,846
$
7,274,294
$
2,081,552
$
9,355,846
$
5,381,909
$
3,973,937
Special Mention
106,566
128,622
(22,056
)
106,566
268,130
(161,564
)
Substandard
343,175
301,141
42,034
343,175
247,595
95,580
Total commercial loans and leases
9,805,587
7,704,057
2,101,530
9,805,587
5,897,634
3,907,953
Consumer loans
Performing
2,392,852
2,399,860
(7,008
)
2,392,852
1,858,204
534,648
Non-performing
14,556
14,938
(382
)
14,556
16,304
(1,748
)
Total consumer loans
2,407,408
2,414,798
(7,390
)
2,407,408
1,874,508
532,900
Loans and leases receivable
$
12,212,995
$
10,118,855
$
2,094,140
$
12,212,995
$
7,772,142
$
4,440,853
(1) Excludes loan receivable, PPP, as PPP loans are fully
guaranteed by the Small Business Administration.
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, specialty finance lines of business, and
multi-family 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 healthy
despite a highly adverse economic environment. Maintaining strong
asset quality also requires a highly active portfolio monitoring
process. In addition to frequent client outreach and monitoring at
the individual loan level, we employ a bottom-up data driven
approach to analyze the commercial portfolio. Exposure to industry
segments and CRE significantly impacted by COVID-19 initially is
not substantial.
Total consumer installment loans were approximately 9% of total
assets at June 30, 2022 and were supported by an allowance for
credit losses of $111.2 million. At June 30, 2022, our consumer
installment portfolio had the following characteristics: average
FICO score of 729, average debt-to-income of 17.4% and average
borrower income of $102 thousand.
Non-performing loans at June 30, 2022 were 0.18% of total loans
and leases, compared to 0.31% at March 31, 2022 and 0.27% at June
30, 2021.
Deposits and Borrowings
The following table presents the composition of our deposit
portfolio as of the dates indicated:
(Dollars in thousands)
June 30, 2022
% of Total
March 31, 2022
% of Total
June 30, 2021
% of Total
Demand, non-interest bearing
$
4,683,030
27.6
%
$
4,594,428
28.0
%
$
2,699,869
19.5
%
Demand, interest bearing
6,644,398
39.2
5,591,468
34.1
4,206,355
30.3
Total demand deposits
11,327,428
66.8
10,185,896
62.1
6,906,224
49.8
Savings
640,062
3.8
802,395
4.9
1,431,756
10.3
Money market
4,254,205
25.1
4,981,077
30.3
4,908,809
35.4
Time deposits
723,024
4.3
446,192
2.7
627,150
4.5
Total deposits
$
16,944,719
100.0
%
$
16,415,560
100.0
%
$
13,873,939
100.0
%
Total deposits increased $3.1 billion, or 22.1%, to $16.9
billion at June 30, 2022 as compared to a year ago. Total demand
deposits increased $4.4 billion, or 64.0%, to $11.3 billion. Time
deposits increased $95.9 million, or 15.3%, to $723.0 million.
These increases were offset, in part, by decreases in savings
deposits of $791.7 million, or 55.3%, to $640.1 million and money
market deposits of $654.6 million, or 13.3%, to $4.3 billion. The
total cost of deposits increased by 7 basis points to 0.54% in Q2
2022 from 0.47% in the prior year.
Other borrowings remained relatively unchanged at $123.5 million
at June 30, 2022 compared to the prior year due to the issuance of
the Customers Bancorp 2.875% senior notes in August 2021, offset by
the pay off at maturity of the Customers Bancorp 3.95% senior notes
in June 2022.
Capital
The following table presents certain capital amounts and ratios
as of the dates indicated:
(Dollars in thousands except per share
data)
June 30, 2022
March 31, 2022
June 30, 2021
Customers Bancorp, Inc.
Common Equity
$
1,215,596
$
1,239,612
$
1,033,258
Tangible Common Equity*
1,211,967
1,235,934
1,029,405
Tangible Common Equity to Tangible
Assets*
5.99
%
6.45
%
5.24
%
Tangible Common Equity to Tangible Assets,
excluding PPP*
6.49
%
7.29
%
7.72
%
Tangible Book Value per common share*
$
37.35
$
37.50
$
31.82
Total risk based capital ratio (1)
12.6
%
12.9
%
13.3
%
(1) Total risk-based capital ratio as of
June 30, 2022 is an estimate.
* 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 is
included at the end of this document.
Customers Bancorp's tangible common equity* increased $182.3
million to $1.2 billion at June 30, 2022 compared to a year ago, as
earnings of $340.3 million more than offset a negative impact to
accumulated other comprehensive income ("AOCI") from increased
unrealized losses on investment securities of $130.9 million (net
of taxes) and share buyback of $55.5 million. Similarly, tangible
book value per common share* increased to $37.35 at June 30, 2022
from $31.82 at June 30, 2021. Customers remains well capitalized by
all regulatory measures.
At the Customers Bancorp level, the total risk based capital
ratio (estimate) and tangible common equity to tangible assets
ratio ("TCE ratio"), excluding PPP loans*, were 12.6% and 6.49%,
respectively, at June 30, 2022. "We expect our TCE ratio to be at
or above 7.5% within the next three to four quarters," stated Mr.
Sam Sidhu.
At the Customers Bank level, capital levels remained strong and
well above regulatory minimums. At June 30, 2022, estimated Tier 1
capital and total risk-based capital were 11.5% and 12.9%
respectively.
Key Profitability Trends
Net Interest Income
Net interest income totaled $164.9 million in Q2 2022, an
increase of $0.2 million from Q1 2022, primarily due to increased
net interest income earned by the core bank, including increased
interest income on investment securities and core loans* of $5.1
million and $28.1 million, respectively, mostly due to higher
average balances. This increase was offset in part by lower PPP
interest income of $16.3 million resulting from reduced recognition
of deferred fees of $14.7 million driven by lower loan forgiveness
in Q2 2022 and by dividend income of $5.2 million primarily from an
equity investment distribution in Q1 2022. In addition, higher
expenses paid on deposits, FHLB advances and other borrowings of
$12.7 million resulted mainly from higher interest rates during Q2
2022. Excluding PPP loans, average interest-earning assets
increased $1.7 billion. Interest-earning asset growth was primarily
driven by increases in C&I loans and leases and multi-family
loans, offset in part by a decrease in interest earning deposits.
Compared to Q1 2022, total loan yields decreased 13 basis points to
4.54% primarily due to higher PPP yields driven by deferred fee
recognition and average balances in Q1 2022. Excluding PPP loans,
the Q2 2022 total loan yield was 13 basis points higher than Q1
2022 reflecting increased interest rates and the variable rate
nature of the loan portfolio.
Non-Interest Income
The following table presents details of non-interest income for
the periods indicated:
Three Months Ended
Increase (Decrease)
(Dollars in thousands)
June 30, 2022
March 31, 2022
Interchange and card revenue
$
24
$
76
$
(52
)
Deposit fees
964
940
24
Commercial lease income
6,592
5,895
697
Bank-owned life insurance
1,947
8,326
(6,379
)
Mortgage warehouse transactional fees
1,883
2,015
(132
)
Gain (loss) on sale of SBA and other
loans
1,542
1,507
35
Loan fees
2,618
2,545
73
Mortgage banking income (loss)
173
481
(308
)
Gain (loss) on sale of investment
securities
(3,029
)
(1,063
)
(1,966
)
Unrealized gain (loss) on investment
securities
(203
)
(276
)
73
Unrealized gain (loss) on derivatives
821
964
(143
)
Other
(586
)
(212
)
(374
)
Total non-interest income
$
12,746
$
21,198
$
(8,452
)
Non-interest income totaled $12.7 million for Q2 2022, a
decrease of $8.5 million compared to Q1 2022. The decrease was
primarily due to $6.4 million of death benefits from bank-owned
life insurance policies in Q1 2022 and higher realized losses from
the sale of investment securities of $2.0 million in Q2 2022
compared to Q1 2022.
Non-Interest Expense
The following table presents details of non-interest expense for
the periods indicated:
Three Months Ended
Increase (Decrease)
(Dollars in thousands)
June 30, 2022
March 31, 2022
Salaries and employee benefits
$
25,334
$
26,607
$
(1,273
)
Technology, communication and bank
operations
22,738
24,068
(1,330
)
Professional services
7,415
6,956
459
Occupancy
4,279
3,050
1,229
Commercial lease depreciation
5,552
4,942
610
FDIC assessments, non-income taxes and
regulatory fees
1,619
2,383
(764
)
Loan servicing
4,341
2,371
1,970
Loan workout
179
(38
)
217
Advertising and promotion
353
315
38
Other
4,395
3,153
1,242
Total non-interest expense
$
76,205
$
73,807
$
2,398
The management of non-interest expenses remains a priority for
us. However, this will not be at the expense of not making adequate
investments with new technologies to support efficient and
responsible growth.
Non-interest expenses totaled $76.2 million in Q2 2022, an
increase of $2.4 million compared to Q1 2022. The increase was
primarily attributable to $2.0 million in higher loan servicing
costs for consumer loans, $0.9 million in one-time impairment
charges included in occupancy primarily due to consolidation of
five branches into other existing locations in Southeastern
Pennsylvania, $0.7 million in higher provision for credit losses on
unfunded commitments, $0.6 million in commercial lease depreciation
due to growth in our leasing business and $0.5 million in
professional fees primarily associated with the PPP loan
forgiveness. These increases were offset in part by a $1.3 million
decrease in technology, processing and deposit servicing-related
expenses mostly due to lower deposit servicing and interchange
maintenance fees and lower salaries and employee benefits of $1.3
million due to expense management initiatives.
Taxes
Income tax expense from continuing operations decreased by $0.4
million to $18.9 million in Q2 2022 from $19.3 million in Q1 2022
primarily due to a reduction in pre-tax income, partially offset by
a decrease in excess tax benefits from restricted stock units that
vested in Q1 2022. The effective tax rate from continuing
operations for Q2 2022 was 24%, resulting in an effective tax rate
of 22% for the six months ended June 30, 2022. Customers expects
the full-year 2022 effective tax rate from continuing operations to
be approximately 21% to 23%.
Outlook
“Looking ahead, we continue to project sustainable and
responsible organic core growth and are very optimistic about the
prospects of our company. We are focused on improving the quality
of our balance sheet and deposit franchise and are not focused on
growth just for the sake of growth. We continue to expect, on
average, $500 million of quarterly loan growth and continued
digital asset-related deposit growth by year-end 2022. Through a
combination of revenue growth and prudent expense management we
expect our efficiency ratio to be around 45% by early 2023.
Customers Bancorp stock at the close of business on July 22, 2022
was trading at $38.02, only 1 times tangible book value* at June
30, 2022. We continue to expect to meet or beat projections of our
core earnings (excluding PPP)* between $4.75 - $5.00 in 2022 and
over $6.00 in 2023, two to three years ahead of our previous
guidance of $6.00 by 2025/2026,” concluded Mr. Jay 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 is
included at the end of this document.
Webcast
Date: Thursday, July 28, 2022 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 a bank holding company
located in West Reading, Pennsylvania engaged in banking and
related businesses through its bank subsidiary, Customers Bank, a
full-service bank with $20.3 billion in assets at June 30, 2022. A
member of the Federal Reserve System with deposits insured by the
Federal Deposit Insurance Corporation, Customers Bank is an equal
opportunity lender that provides a range of banking and lending
services to small and medium-sized businesses, professionals,
individuals and families. Services and products are available
wherever permitted by law through mobile-first apps, online
portals, and a network of offices and branches. Customers Bank
provides blockchain-based digital payments via the Customers Bank
Instant Token (CBITTM) which allows clients to make instant
payments in U.S. dollars, 24 hours a day, 7 days a week, 365 days a
year.
“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: the impact of the ongoing pandemic 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, 2021,
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 2022 Overview
The following table presents a summary of key earnings and
performance metrics for the quarter ended June 30, 2022 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,
2022
2022
2021
2021
2021
2022
2021
GAAP Profitability Metrics:
Net income available to common
shareholders
(from continuing and discontinued
operations)
$
56,519
$
74,896
$
98,647
$
110,241
$
58,042
$
131,415
$
91,246
Per share amounts:
Earnings per share - basic
$
1.73
$
2.27
$
3.02
$
3.40
$
1.80
$
4.00
$
2.84
Earnings per share - diluted
$
1.68
$
2.18
$
2.87
$
3.25
$
1.72
$
3.87
$
2.74
Book value per common share (1)
$
37.46
$
37.61
$
37.32
$
35.24
$
31.94
$
37.46
$
31.94
CUBI stock price (1)
$
33.90
$
52.14
$
65.37
$
43.02
$
38.99
$
33.90
$
38.99
CUBI stock price as % of book value
(1)
90
%
139
%
175
%
122
%
122
%
90
%
122
%
Average shares outstanding - basic
32,712,616
32,957,033
32,625,960
32,449,853
32,279,625
32,834,150
32,082,878
Average shares outstanding - diluted
33,579,013
34,327,065
34,320,327
33,868,553
33,741,468
33,950,973
33,294,075
Shares outstanding (1)
32,449,486
32,957,847
32,913,267
32,537,976
32,353,256
32,449,486
32,353,256
Return on average assets ("ROAA")
1.17
%
1.63
%
2.08
%
2.33
%
1.27
%
1.39
%
1.04
%
Return on average common equity
("ROCE")
18.21
%
24.26
%
33.18
%
40.82
%
23.22
%
21.23
%
19.15
%
Efficiency ratio
42.14
%
39.42
%
38.70
%
33.42
%
46.59
%
40.76
%
47.64
%
Non-GAAP Profitability Metrics
(2):
Core earnings
$
59,367
$
75,410
$
101,213
$
113,876
$
59,303
$
134,777
$
129,611
Adjusted pre-tax pre-provision net
income
$
105,692
$
112,649
$
130,595
$
167,215
$
86,467
$
218,341
$
173,236
Per share amounts:
Core earnings per share - diluted
$
1.77
$
2.20
$
2.95
$
3.36
$
1.76
$
3.97
$
3.89
Tangible book value per common share
(1)
$
37.35
$
37.50
$
37.21
$
35.12
$
31.82
$
37.35
$
31.82
CUBI stock price as % of tangible book
value (1)
91
%
139
%
176
%
122
%
123
%
91
%
123
%
Core ROAA
1.23
%
1.64
%
2.13
%
2.35
%
1.30
%
1.43
%
1.45
%
Core ROCE
19.13
%
24.43
%
34.04
%
42.16
%
23.72
%
21.77
%
27.20
%
Adjusted ROAA - pre-tax and
pre-provision
2.11
%
2.39
%
2.70
%
3.36
%
1.80
%
2.25
%
1.85
%
Adjusted ROCE - pre-tax and
pre-provision
33.37
%
35.89
%
43.25
%
60.81
%
33.27
%
34.62
%
34.95
%
Net interest margin, tax equivalent
3.39
%
3.60
%
4.14
%
4.59
%
2.98
%
3.49
%
2.99
%
Net interest margin, tax equivalent,
excluding PPP loans
3.32
%
3.32
%
3.12
%
3.24
%
3.30
%
3.32
%
3.14
%
Core efficiency ratio
41.74
%
39.47
%
38.14
%
30.36
%
44.33
%
40.59
%
42.76
%
Asset Quality:
Net charge-offs
$
13,481
$
7,226
$
7,582
$
7,104
$
6,591
$
20,707
$
19,112
Annualized net charge-offs to average
total loans and leases
0.36
%
0.21
%
0.21
%
0.17
%
0.16
%
0.29
%
0.24
%
Non-performing loans ("NPLs") to total
loans and leases (1)
0.18
%
0.31
%
0.34
%
0.34
%
0.27
%
0.18
%
0.27
%
Reserves to NPLs (1)
557.76
%
333.15
%
277.72
%
252.68
%
269.96
%
557.76
%
269.96
%
Non-performing assets ("NPAs") to total
assets
0.14
%
0.23
%
0.25
%
0.27
%
0.24
%
0.14
%
0.24
%
Customers Bank Capital Ratios
(3):
Common equity Tier 1 capital to
risk-weighted assets
11.47
%
11.60
%
11.83
%
12.77
%
12.40
%
11.47
%
12.40
%
Tier 1 capital to risk-weighted assets
11.47
%
11.60
%
11.83
%
12.77
%
12.40
%
11.47
%
12.40
%
Total capital to risk-weighted assets
12.92
%
13.03
%
13.11
%
14.16
%
13.77
%
12.92
%
13.77
%
Tier 1 capital to average assets (leverage
ratio)
8.09
%
8.21
%
7.93
%
8.66
%
9.07
%
8.09
%
9.07
%
(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 2022 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, 2022, our regulatory capital ratios reflected 75%, or $46.2
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,
2022
2022
2021
2021
2021
2022
2021
Interest income:
Loans and leases
$
168,941
$
157,175
$
198,000
$
233,097
$
153,608
$
326,116
$
305,725
Investment securities
25,442
20,295
15,202
8,905
8,327
45,737
16,306
Other
1,951
6,006
835
849
946
7,957
1,965
Total interest income
196,334
183,476
214,037
242,851
162,881
379,810
323,996
Interest expense:
Deposits
22,781
13,712
15,415
15,915
15,653
36,493
31,311
FHLB advances
2,316
—
51
5
963
2,316
6,155
Subordinated debt
2,689
2,689
2,688
2,689
2,689
5,378
5,378
FRB PPP liquidity facility, federal funds
purchased and other borrowings
3,696
2,376
2,189
4,350
4,819
6,072
9,664
Total interest expense
31,482
18,777
20,343
22,959
24,124
50,259
52,508
Net interest income
164,852
164,699
193,694
219,892
138,757
329,551
271,488
Provision for credit losses
23,847
15,997
13,890
13,164
3,291
39,844
372
Net interest income after provision for
credit losses
141,005
148,702
179,804
206,728
135,466
289,707
271,116
Non-interest income:
Interchange and card revenue
24
76
84
83
84
100
169
Deposit fees
964
940
1,026
994
891
1,904
1,754
Commercial lease income
6,592
5,895
5,378
5,213
5,311
12,487
10,516
Bank-owned life insurance
1,947
8,326
1,984
1,988
2,765
10,273
4,444
Mortgage warehouse transactional fees
1,883
2,015
2,262
3,100
3,265
3,898
7,512
Gain (loss) on sale of SBA and other
loans
1,542
1,507
2,493
5,359
1,900
3,049
3,475
Loan fees
2,618
2,545
2,513
1,909
1,670
5,163
3,106
Mortgage banking income (loss)
173
481
262
425
386
654
849
Gain (loss) on sale of investment
securities
(3,029
)
(1,063
)
(49
)
6,063
1,812
(4,092
)
25,378
Unrealized gain (loss) on investment
securities
(203
)
(276
)
—
—
1,746
(479
)
2,720
Loss on sale of foreign subsidiaries
—
—
—
—
(2,840
)
—
(2,840
)
Unrealized gain (loss) on derivatives
821
964
586
524
(439
)
1,785
2,098
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
(24,467
)
Other
(586
)
(212
)
452
(72
)
271
(798
)
576
Total non-interest income
12,746
21,198
16,991
25,586
16,822
33,944
35,290
Non-interest expense:
Salaries and employee benefits
25,334
26,607
29,940
26,268
28,023
51,941
51,994
Technology, communication and bank
operations
22,738
24,068
22,657
21,281
19,618
46,806
39,606
Professional services
7,415
6,956
7,058
6,871
6,882
14,371
12,759
Occupancy
4,279
3,050
4,336
2,704
2,482
7,329
5,103
Commercial lease depreciation
5,552
4,942
4,625
4,493
4,415
10,494
8,706
FDIC assessments, non-income taxes and
regulatory fees
1,619
2,383
2,427
2,313
2,602
4,002
5,321
Loan servicing
4,341
2,371
4,361
4,265
1,700
6,712
2,137
Merger and acquisition related
expenses
—
—
—
—
—
—
418
Loan workout
179
(38
)
226
198
102
141
(159
)
Advertising and promotion
353
315
344
302
313
668
874
Deposit relationship adjustment fees
—
—
—
6,216
—
—
—
Other
4,395
3,153
5,574
5,098
4,686
7,548
5,991
Total non-interest expense
76,205
73,807
81,548
80,009
70,823
150,012
132,750
Income before income tax expense
77,546
96,093
115,247
152,305
81,465
173,639
173,656
Income tax expense
18,896
19,332
12,993
36,263
20,124
38,228
37,684
Net income from continuing
operations
$
58,650
$
76,761
$
102,254
$
116,042
$
61,341
$
135,411
$
135,972
(continued)
CUSTOMERS BANCORP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS -
UNAUDITED (CONTINUED)
(Dollars in thousands, except per share
data)
Six Months Ended
Q2
Q1
Q4
Q3
Q2
June 30,
2022
2022
2021
2021
2021
2022
2021
Loss from discontinued operations before
income taxes
$
—
$
—
$
—
$
—
$
—
$
—
$
(20,354
)
Income tax expense (benefit) from
discontinued operations
—
—
1,585
—
—
—
17,682
Net loss from discontinued operations
—
—
(1,585
)
—
—
—
(38,036
)
Net income
58,650
76,761
100,669
116,042
61,341
135,411
97,936
Preferred stock dividends
2,131
1,865
2,022
2,981
3,299
3,996
6,690
Loss on redemption of preferred
stock
—
—
—
2,820
—
—
—
Net income available to common
shareholders
$
56,519
$
74,896
$
98,647
$
110,241
$
58,042
$
131,415
$
91,246
Basic earnings per common share from
continuing operations
$
1.73
$
2.27
$
3.07
$
3.40
$
1.80
$
4.00
$
4.03
Basic earnings per common share
1.73
2.27
3.02
3.40
1.80
4.00
2.84
Diluted earnings per common share from
continuing operations
1.68
2.18
2.92
3.25
1.72
3.87
3.88
Diluted earnings per common share
1.68
2.18
2.87
3.25
1.72
3.87
2.74
CUSTOMERS BANCORP, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEET -
UNAUDITED
(Dollars in thousands)
June 30,
March 31,
December 31,
September 30,
June 30,
2022
2022
2021
2021
2021
ASSETS
Cash and due from banks
$
66,703
$
55,515
$
35,238
$
51,169
$
36,837
Interest earning deposits
178,475
219,085
482,794
1,000,885
393,663
Cash and cash equivalents
245,178
274,600
518,032
1,052,054
430,500
Investment securities, at fair value
3,144,882
4,169,853
3,817,150
1,866,697
1,526,792
Investment securities held to maturity
495,039
—
—
—
—
Loans held for sale
6,595
3,003
16,254
29,957
34,540
Loans receivable, mortgage warehouse, at
fair value
1,874,603
1,755,758
2,284,325
2,557,624
2,855,284
Loans receivable, PPP
1,570,160
2,195,902
3,250,008
4,957,357
6,305,056
Loans and leases receivable
12,212,995
10,118,855
9,018,298
7,970,599
7,772,142
Allowance for credit losses on loans and
leases
(156,530
)
(145,847
)
(137,804
)
(131,496
)
(125,436
)
Total loans and leases receivable, net of
allowance for credit losses on loans and leases
15,501,228
13,924,668
14,414,827
15,354,084
16,807,046
FHLB, Federal Reserve Bank, and other
restricted stock
74,626
54,553
64,584
57,184
39,895
Accrued interest receivable
98,727
94,669
92,239
93,514
90,009
Bank premises and equipment, net
6,755
8,233
8,890
9,944
10,391
Bank-owned life insurance
335,153
332,239
333,705
331,423
329,421
Goodwill and other intangibles
3,629
3,678
3,736
3,794
3,853
Other assets
340,184
298,212
305,611
310,271
362,661
Total assets
$
20,251,996
$
19,163,708
$
19,575,028
$
19,108,922
$
19,635,108
LIABILITIES AND SHAREHOLDERS'
EQUITY
Demand, non-interest bearing deposits
$
4,683,030
$
4,594,428
$
4,459,790
$
4,954,331
$
2,699,869
Interest bearing deposits
12,261,689
11,821,132
12,318,134
12,016,694
11,174,070
Total deposits
16,944,719
16,415,560
16,777,924
16,971,025
13,873,939
Federal funds purchased
770,000
700,000
75,000
—
—
FHLB advances
635,000
—
700,000
—
—
Other borrowings
123,450
223,230
223,086
223,151
124,240
Subordinated debt
181,812
181,742
181,673
181,603
181,534
FRB PPP liquidity facility
—
—
—
—
3,865,865
Accrued interest payable and other
liabilities
243,625
265,770
251,128
448,844
338,801
Total liabilities
18,898,606
17,786,302
18,208,811
17,824,623
18,384,379
Preferred stock
137,794
137,794
137,794
137,794
217,471
Common stock
34,922
34,882
34,722
33,818
33,634
Additional paid in capital
545,670
542,402
542,391
525,894
519,294
Retained earnings
837,147
780,628
705,732
607,085
496,844
Accumulated other comprehensive income
(loss), net
(124,881
)
(62,548
)
(4,980
)
1,488
5,266
Treasury stock, at cost
(77,262
)
(55,752
)
(49,442
)
(21,780
)
(21,780
)
Total shareholders' equity
1,353,390
1,377,406
1,366,217
1,284,299
1,250,729
Total liabilities and shareholders'
equity
$
20,251,996
$
19,163,708
$
19,575,028
$
19,108,922
$
19,635,108
CUSTOMERS BANCORP, INC. AND
SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST
MARGIN - UNAUDITED
(Dollars in thousands)
Three Months Ended
June 30, 2022
March 31, 2022
June 30, 2021
Average Balance
Average Yield or Cost
(%)
Average Balance
Average Yield or Cost
(%)
Average Balance
Average Yield or Cost
(%)
Assets
Interest earning deposits
$
434,950
0.85%
$
826,240
0.16%
$
646,342
0.12%
Investment securities (1)
4,104,463
2.48%
4,036,966
2.01%
1,512,644
2.20%
Loans and leases:
Commercial loans to mortgage companies
1,898,554
3.30%
1,836,647
3.09%
2,737,629
3.09%
Multi-family loans
1,845,527
3.76%
1,531,846
3.64%
1,551,370
3.88%
Commercial & industrial loans and
leases (2)
5,577,830
3.87%
4,124,408
3.60%
2,878,045
3.59%
Loans receivable, PPP
1,863,429
4.43%
2,641,318
5.66%
6,133,184
2.69%
Non-owner occupied commercial real estate
loans
1,307,995
3.91%
1,312,210
3.77%
1,368,695
3.86%
Residential mortgages
515,612
3.81%
416,417
3.58%
346,284
3.62%
Installment loans
1,909,551
9.23%
1,794,145
9.03%
1,467,595
9.37%
Total loans and leases (3)
14,918,498
4.54%
13,656,991
4.67%
16,482,802
3.74%
Other interest-earning assets
68,025
6.09%
52,111
NM(7)
57,208
5.32%
Total interest-earning assets
19,525,936
4.03%
18,572,308
4.00%
18,698,996
3.49%
Non-interest-earning assets
530,084
557,022
607,952
Total assets
$
20,056,020
$
19,129,330
$
19,306,948
Liabilities
Interest checking accounts
6,409,617
0.85%
5,769,372
0.54%
3,503,242
0.76%
Money market deposit accounts
4,704,767
0.64%
4,880,051
0.39%
4,859,614
0.47%
Other savings accounts
695,176
0.44%
880,113
0.36%
1,456,777
0.57%
Certificates of deposit
530,180
0.65%
450,644
0.47%
658,698
0.78%
Total interest-bearing deposits (4)
12,339,740
0.74%
11,980,180
0.46%
10,478,331
0.60%
Federal funds purchased
642,747
0.89%
88,611
0.33%
71,703
0.07%
FRB PPP liquidity facility
—
—%
—
—%
3,858,733
0.35%
Borrowings
940,068
3.10%
532,610
3.80%
460,054
4.44%
Total interest-bearing
liabilities
13,922,555
0.91%
12,601,401
0.60%
14,868,821
0.65%
Non-interest-bearing deposits (4)
4,491,574
4,900,983
2,889,781
Total deposits and borrowings
18,414,129
0.69%
17,502,384
0.43%
17,758,602
0.54%
Other non-interest-bearing liabilities
259,279
237,131
328,251
Total liabilities
18,673,408
17,739,515
18,086,853
Shareholders' equity
1,382,612
1,389,815
1,220,095
Total liabilities and shareholders'
equity
$
20,056,020
$
19,129,330
$
19,306,948
Interest spread
3.35%
3.57%
2.95%
Net interest margin
3.38%
3.59%
2.98%
Net interest margin tax equivalent
(5)
3.39%
3.60%
2.98%
Net interest margin tax equivalent
excl. PPP (6)
3.32%
3.32%
3.30%
(1) For presentation in this table,
average balances and the corresponding average yields for
investment securities are based upon historical cost, adjusted for
amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial
real estate loans.
(3) Includes non-accrual loans, the effect
of which is to reduce the yield earned on loans and leases, and
deferred loan fees.
(4) Total costs of deposits (including
interest bearing and non-interest bearing) were 0.54%, 0.33% and
0.47% for the three months ended June 30, 2022, March 31, 2022 and
June 30, 2021, respectively.
(5) Non-GAAP tax-equivalent basis, using
an estimated marginal tax rate of 26% for the three months ended
June 30, 2022, March 31, 2022 and June 30, 2021, presented to
approximate interest income as a taxable asset. Management uses
non-GAAP measures to present historical periods comparable to the
current period presentation. In addition, management believes the
use of these non-GAAP measures provides additional clarity when
assessing Customers’ financial results. These disclosures should
not be viewed as substitutes for results determined to be in
accordance with U.S. GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
entities.
(6) Non-GAAP tax-equivalent basis, as
described in note (5) for the three months ended June 30, 2022,
March 31, 2022 and June 30, 2021, 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.
(7) Not meaningful.
CUSTOMERS BANCORP, INC. AND
SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST
MARGIN - UNAUDITED
(Dollars in thousands)
Six Months Ended
June 30, 2022
June 30, 2021
Average Balance
Average Yield or Cost
(%)
Average Balance
Average Yield or Cost
(%)
Assets
Interest earning deposits
$
629,514
0.40%
$
910,362
0.11%
Investment securities (1)
4,070,901
2.25%
1,435,529
2.27%
Loans and leases:
Commercial loans to mortgage companies
1,867,772
3.20%
2,928,802
3.09%
Multi-family loans
1,689,553
3.71%
1,619,891
3.84%
Commercial & industrial loans and
leases (2)
4,855,134
3.76%
2,863,268
3.78%
Loans receivable, PPP
2,250,224
5.15%
5,382,370
3.00%
Non-owner occupied commercial real estate
loans
1,310,091
3.84%
1,358,871
3.86%
Residential mortgages
466,288
3.71%
359,815
3.71%
Installment loans
1,852,167
9.13%
1,396,126
9.22%
Total loans and leases (3)
14,291,229
4.60%
15,909,143
3.88%
Other interest-earning assets
60,113
NM (7)
68,521
4.34%
Total interest-earning assets
19,051,757
4.02%
18,323,555
3.56%
Non-interest-earning assets
543,479
594,936
Total assets
$
19,595,236
$
18,918,491
Liabilities
Interest checking accounts
$
6,091,263
0.71%
$
3,099,725
0.80%
Money market deposit accounts
4,791,925
0.51%
4,648,942
0.51%
Other savings accounts
787,134
0.39%
1,435,681
0.63%
Certificates of deposit
490,632
0.57%
662,447
0.87%
Total interest-bearing deposits (4)
12,160,954
0.61%
9,846,795
0.64%
Federal funds purchased
367,210
0.82%
44,171
0.07%
FRB PPP liquidity facility
—
—%
3,899,996
0.35%
Borrowings
737,464
3.35%
805,853
3.61%
Total interest-bearing
liabilities
13,265,628
0.76%
14,596,815
0.72%
Non-interest-bearing deposits (4)
4,695,148
2,855,019
Total deposits and borrowings
17,960,776
0.56%
17,451,834
0.61%
Other non-interest-bearing liabilities
248,266
288,246
Total liabilities
18,209,042
17,740,080
Shareholders' equity
1,386,194
1,178,411
Total liabilities and shareholders'
equity
$
19,595,236
$
18,918,491
Interest spread
3.45%
2.96%
Net interest margin
3.48%
2.99%
Net interest margin tax equivalent
(5)
3.49%
2.99%
Net interest margin tax equivalent
excl. PPP (6)
3.32%
3.14%
(1) For presentation in this table,
average balances and the corresponding average yields for
investment securities are based upon historical cost, adjusted for
amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial
real estate loans.
(3) Includes non-accrual loans, the effect
of which is to reduce the yield earned on loans and leases, and
deferred loan fees.
(4) Total costs of deposits (including
interest bearing and non-interest bearing) were 0.44% and 0.50% for
the six months ended June 30, 2022 and 2021, respectively.
(5) Non-GAAP tax-equivalent basis, using
an estimated marginal tax rate of 26% for the six months ended June
30, 2022 and 2021, presented to approximate interest income as a
taxable asset. Management uses non-GAAP measures to present
historical periods comparable to the current period presentation.
In addition, management believes the use of these non-GAAP measures
provides additional clarity when assessing Customers’ financial
results. These disclosures should not be viewed as substitutes for
results determined to be in accordance with U.S. GAAP, nor are they
necessarily comparable to non-GAAP performance measures that may be
presented by other entities.
(6) Non-GAAP tax-equivalent basis as
described in note (5), for the six months ended June 30, 2022 and
2021, 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.
(7) 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,
2022
2022
2021
2021
2021
Commercial:
Commercial & industrial, including
specialty lending
$
5,637,083
$
3,921,439
$
3,346,670
$
2,604,367
$
2,293,723
Multi-family
2,012,920
1,705,027
1,486,308
1,387,166
1,497,485
Loans to mortgage companies
1,975,189
1,830,121
2,362,438
2,626,483
2,922,217
Commercial real estate owner occupied
710,577
701,893
654,922
656,044
653,649
Loans receivable, PPP
1,570,160
2,195,902
3,250,008
4,957,357
6,305,056
Commercial real estate non-owner
occupied
1,152,869
1,140,311
1,121,238
1,144,643
1,206,646
Construction
195,687
161,024
198,981
198,607
179,198
Total commercial loans and leases
13,254,485
11,655,717
12,420,565
13,574,667
15,057,974
Consumer:
Residential
460,228
469,426
350,984
260,820
273,493
Manufactured housing
48,570
50,669
52,861
55,635
57,904
Installment
1,901,070
1,897,706
1,744,475
1,624,415
1,577,651
Total consumer loans
2,409,868
2,417,801
2,148,320
1,940,870
1,909,048
Total loans and leases
$
15,664,353
$
14,073,518
$
14,568,885
$
15,515,537
$
16,967,022
CUSTOMERS BANCORP, INC. AND
SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION -
UNAUDITED
(Dollars in thousands)
June 30,
March 31,
December 31,
September 30,
June 30,
2022
2022
2021
2021
2021
Demand, non-interest bearing
$
4,683,030
$
4,594,428
$
4,459,790
$
4,954,331
$
2,699,869
Demand, interest bearing
6,644,398
5,591,468
6,488,406
5,023,081
4,206,355
Total demand deposits
11,327,428
10,185,896
10,948,196
9,977,412
6,906,224
Savings
640,062
802,395
973,317
1,310,343
1,431,756
Money market
4,254,205
4,981,077
4,349,073
5,090,121
4,908,809
Time deposits
723,024
446,192
507,338
593,149
627,150
Total deposits
$
16,944,719
$
16,415,560
$
16,777,924
$
16,971,025
$
13,873,939
CUSTOMERS BANCORP, INC. AND
SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)
As of June 30, 2022
As of March 31, 2022
As of June 30, 2021
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)
$
5,737,670
$
4,061
$
11,081
0.07 %
272.86 %
$
3,995,802
$
5,490
$
10,765
0.14 %
196.08 %
$
2,360,656
$
6,717
$
8,127
0.28 %
120.99 %
Multi-family
2,008,784
1,153
9,765
0.06 %
846.92 %
1,705,027
17,869
7,437
1.05 %
41.62 %
1,497,485
21,595
5,028
1.44 %
23.28 %
Commercial real estate owner occupied
710,577
2,913
4,745
0.41 %
162.89 %
701,893
2,191
3,841
0.31 %
175.31 %
653,649
2,688
4,464
0.41 %
166.07 %
Commercial real estate non-owner
occupied
1,152,869
—
8,880
— %
— %
1,140,311
1,302
5,955
0.11 %
457.37 %
1,206,646
—
7,374
— %
— %
Construction
195,687
—
1,179
— %
— %
161,024
—
939
— %
— %
179,198
—
2,643
— %
— %
Total commercial loans and leases
receivable
9,805,587
8,127
35,650
0.08 %
438.66 %
7,704,057
26,852
28,937
0.35 %
107.76 %
5,897,634
31,000
27,636
0.53 %
89.15 %
Residential
457,768
6,258
5,578
1.37 %
89.13 %
466,423
8,124
4,685
1.74 %
57.67 %
266,911
8,991
2,299
3.37 %
25.57 %
Manufactured housing
48,570
3,071
4,080
6.32 %
132.86 %
50,669
3,430
4,342
6.77 %
126.59 %
57,904
3,239
4,372
5.59 %
134.98 %
Installment
1,901,070
5,965
111,222
0.31 %
1864.58 %
1,897,706
4,865
107,883
0.26 %
2217.53 %
1,549,693
2,728
91,129
0.18 %
3340.51 %
Total consumer loans receivable
2,407,408
15,294
120,880
0.64 %
790.38 %
2,414,798
16,419
116,910
0.68 %
712.04 %
1,874,508
14,958
97,800
0.80 %
653.83 %
Loans and leases receivable (1)
12,212,995
23,421
156,530
0.19 %
668.33 %
10,118,855
43,271
145,847
0.43 %
337.05 %
7,772,142
45,958
125,436
0.59 %
272.94 %
Loans receivable, PPP
1,570,160
—
—
— %
— %
2,195,902
—
—
— %
— %
6,305,056
—
—
— %
— %
Loans receivable, mortgage warehouse,
at fair value
1,874,603
—
—
— %
— %
1,755,758
—
—
— %
— %
2,855,284
—
—
— %
— %
Total loans held for sale
6,595
4,643
—
70.40 %
— %
3,003
507
—
16.88 %
— %
34,540
507
—
1.47 %
— %
Total portfolio
$
15,664,353
$
28,064
$
156,530
0.18 %
557.76 %
$
14,073,518
$
43,778
$
145,847
0.31 %
333.15 %
$
16,967,022
$
46,465
$
125,436
0.27 %
269.96 %
(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,
2022
2022
2021
2021
2021
2022
2021
Loan
type
Multi-family
$
1,990
$
(337)
$
—
$
—
$
—
$
1,653
$
1,132
Commercial & industrial
(416)
(59)
240
116
(283)
(475)
92
Commercial real estate owner occupied
(42)
(7)
66
50
(1)
(49)
133
Commercial real estate non-owner
occupied
159
(8)
(14)
943
(59)
151
(69)
Construction
(103)
(113)
(3)
(3)
(114)
(216)
(119)
Residential
(39)
(2)
(6)
54
(12)
(41)
28
Installment
11,932
7,752
7,299
5,944
7,060
19,684
17,915
Total net charge-offs (recoveries) from
loans held for investment
$
13,481
$
7,226
$
7,582
$
7,104
$
6,591
$
20,707
$
19,112
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 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
(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
$
56,519
$
1.68
$
74,896
$
2.18
$
98,647
$
2.87
$
110,241
$
3.25
$
58,042
$
1.72
$
131,415
$
3.87
$
91,246
$
2.74
Reconciling items (after tax):
Net loss from discontinued operations
—
—
—
—
1,585
0.05
—
—
—
—
—
—
38,036
1.14
Severance expense
—
—
—
—
—
—
—
—
1,517
0.04
—
—
1,517
0.05
Impairments on fixed assets and leases
705
0.02
220
0.01
1,118
0.03
—
—
—
—
925
0.03
—
—
Merger and acquisition related
expenses
—
—
—
—
—
—
—
—
—
—
—
—
320
0.01
Legal reserves
—
—
—
—
—
—
897
0.03
—
—
—
—
—
—
(Gains) losses on investment
securities
2,494
0.07
1,030
0.03
43
0.00
(4,591)
(0.14)
(2,694)
(0.08)
3,524
0.10
(21,467)
(0.64)
Loss on sale of foreign subsidiaries
—
—
—
—
—
—
—
—
2,150
0.06
—
—
2,150
0.06
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
—
—
—
—
—
—
18,716
0.56
Derivative credit valuation adjustment
(351)
(0.01)
(736)
(0.02)
(180)
(0.01)
(198)
(0.01)
288
0.01
(1,087)
(0.03)
(907)
(0.03)
Deposit relationship adjustment fees
—
—
—
—
—
—
4,707
0.14
—
—
—
—
—
—
Loss on redemption of preferred stock
—
—
—
—
—
—
2,820
0.08
—
—
—
—
—
—
Core earnings
$
59,367
$
1.77
$
75,410
$
2.20
$
101,213
$
2.95
$
113,876
$
3.36
$
59,303
$
1.76
$
134,777
$
3.97
$
129,611
$
3.89
Core Earnings, excluding PPP -
Customers Bancorp
Six Months Ended
June 30,
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
(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
$
56,519
$
1.68
$
74,896
$
2.18
$
98,647
$
2.87
$
110,241
$
3.25
$
58,042
$
1.72
$
131,415
$
3.87
$
91,246
$
2.74
Less: PPP net income (after tax)
13,066
0.39
24,713
0.72
64,323
1.87
81,337
2.40
24,312
0.72
37,779
1.11
49,391
1.48
GAAP net income to common shareholders,
excluding PPP
43,453
1.29
50,183
1.46
34,324
1.00
28,904
0.85
33,730
1.00
93,636
2.76
41,855
1.26
Reconciling items (after tax):
Net loss from discontinued operations
—
—
—
—
1,585
0.05
—
—
—
—
—
—
38,036
1.14
Severance expense
—
—
—
—
—
—
—
—
1,517
0.04
—
—
1,517
0.05
Impairments on fixed assets and leases
705
0.02
220
0.01
1,118
0.03
—
—
—
—
925
0.03
—
—
Merger and acquisition related
expenses
—
—
—
—
—
—
—
—
—
—
—
—
320
0.01
Legal reserves
—
—
—
—
—
—
897
0.03
—
—
—
—
—
—
(Gains) losses on investment
securities
2,494
0.07
1,030
0.03
43
0.00
(4,591)
(0.14)
(2,694)
(0.08)
3,524
0.10
(21,467)
(0.64)
Loss on sale of foreign subsidiaries
—
—
—
—
—
—
—
—
2,150
0.06
—
—
2,150
0.06
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
—
—
—
—
—
—
18,716
0.56
Derivative credit valuation adjustment
(351)
(0.01)
(736)
(0.02)
(180)
(0.01)
(198)
(0.01)
288
0.01
(1,087)
(0.03)
(907)
(0.03)
Deposit relationship adjustment fees
—
—
—
—
—
—
4,707
0.14
—
—
—
—
—
—
Loss on redemption of preferred stock
—
—
—
—
—
—
2,820
0.08
—
—
—
—
—
—
Core earnings, excluding PPP
$
46,301
$
1.38
$
50,697
$
1.48
$
36,890
$
1.07
$
32,539
$
0.96
$
34,991
$
1.04
$
96,998
$
2.86
$
80,220
$
2.41
Core Return on Average Assets -
Customers Bancorp
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net income
$
58,650
$
76,761
$
100,669
$
116,042
$
61,341
$
135,411
$
97,936
Reconciling items (after tax):
Net loss from discontinued operations
—
—
1,585
—
—
—
38,036
Severance expense
—
—
—
—
1,517
—
1,517
Impairments on fixed assets and leases
705
220
1,118
—
—
925
—
Merger and acquisition related
expenses
—
—
—
—
—
—
320
Legal reserves
—
—
—
897
—
—
—
(Gains) losses on investment
securities
2,494
1,030
43
(4,591)
(2,694)
3,524
(21,467)
Loss on sale of foreign subsidiaries
—
—
—
—
2,150
—
2,150
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
18,716
Derivative credit valuation adjustment
(351)
(736)
(180)
(198)
288
(1,087)
(907)
Deposit relationship adjustment fees
—
—
—
4,707
—
—
—
Core net income
$
61,498
$
77,275
$
103,235
$
116,857
$
62,602
$
138,773
$
136,301
Average total assets
$
20,056,020
$
19,129,330
$
19,214,241
$
19,739,340
$
19,306,948
$
19,595,236
$
18,918,491
Core return on average assets
1.23 %
1.64 %
2.13 %
2.35 %
1.30 %
1.43 %
1.45 %
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 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net income
$
58,650
$
76,761
$
100,669
$
116,042
$
61,341
$
135,411
$
97,936
Reconciling items:
Income tax expense
18,896
19,332
12,993
36,263
20,124
38,228
37,684
Provision (benefit) for credit losses
23,847
15,997
13,890
13,164
3,291
39,844
372
Provision (benefit) for credit losses on
unfunded commitments
608
(109)
352
669
45
499
(1,241)
Severance expense
—
—
—
—
2,004
—
2,004
Net loss from discontinued operations
—
—
1,585
—
—
—
38,036
Impairments on fixed assets and leases
914
286
1,260
—
—
1,200
—
Merger and acquisition related
expenses
—
—
—
—
—
—
418
Legal reserves
—
—
—
1,185
—
—
—
(Gains) losses on investment
securities
3,232
1,339
49
(6,063)
(3,558)
4,571
(28,098)
Loss on sale of foreign subsidiaries
—
—
—
—
2,840
—
2,840
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
24,467
Derivative credit valuation adjustment
(455)
(957)
(203)
(261)
380
(1,412)
(1,182)
Deposit relationship adjustment fees
—
—
—
6,216
—
—
—
Adjusted net income - pre-tax
pre-provision
$
105,692
$
112,649
$
130,595
$
167,215
$
86,467
$
218,341
$
173,236
Average total assets
$
20,056,020
$
19,129,330
$
19,214,241
$
19,739,340
$
19,306,948
$
19,595,236
$
18,918,491
Adjusted ROAA - pre-tax pre-provision
2.11 %
2.39 %
2.70 %
3.36 %
1.80 %
2.25 %
1.85 %
Core Return on Average Common Equity -
Customers Bancorp
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net income to common shareholders
$
56,519
$
74,896
$
98,647
$
110,241
$
58,042
$
131,415
$
91,246
Reconciling items (after tax):
Net loss from discontinued operations
—
—
1,585
—
—
—
38,036
Severance expense
—
—
—
—
1,517
—
1,517
Impairments on fixed assets and leases
705
220
1,118
—
—
925
—
Merger and acquisition related
expenses
—
—
—
—
—
—
320
Legal reserves
—
—
—
897
—
—
—
(Gains) losses on investment
securities
2,494
1,030
43
(4,591)
(2,694)
3,524
(21,467)
Loss on sale of foreign subsidiaries
—
—
—
—
2,150
—
2,150
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
18,716
Derivative credit valuation adjustment
(351)
(736)
(180)
(198)
288
(1,087)
(907)
Deposit relationship adjustment fees
—
—
—
4,707
—
—
—
Loss on redemption of preferred stock
—
—
—
2,820
—
—
—
Core earnings
$
59,367
$
75,410
$
101,213
$
113,876
$
59,303
$
134,777
$
129,611
Average total common shareholders'
equity
$
1,244,819
$
1,252,022
$
1,179,478
$
1,071,566
$
1,002,624
$
1,248,400
$
960,940
Core return on average common equity
19.13 %
24.43 %
34.04 %
42.16 %
23.72 %
21.77 %
27.20 %
Adjusted ROCE - Pre-Tax Pre-Provision -
Customers Bancorp
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net income to common shareholders
$
56,519
$
74,896
$
98,647
$
110,241
$
58,042
$
131,415
$
91,246
Reconciling items:
Income tax expense
18,896
19,332
12,993
36,263
20,124
38,228
37,684
Provision (benefit) for credit losses
23,847
15,997
13,890
13,164
3,291
39,844
372
Provision (benefit) for credit losses on
unfunded commitments
608
(109)
352
669
45
499
(1,241)
Net loss from discontinued operations
—
—
1,585
—
—
—
38,036
Severance expense
—
—
—
—
2,004
—
2,004
Impairments on fixed assets and leases
914
286
1,260
—
—
1,200
—
Merger and acquisition related
expenses
—
—
—
—
—
—
418
Legal reserves
—
—
—
1,185
—
—
—
(Gains) losses on investment
securities
3,232
1,339
49
(6,063)
(3,558)
4,571
(28,098)
Loss on sale of foreign subsidiaries
—
—
—
—
2,840
—
2,840
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
24,467
Derivative credit valuation adjustment
(455)
(957)
(203)
(261)
380
(1,412)
(1,182)
Deposit relationship adjustment fees
—
—
—
6,216
—
—
—
Loss on redemption of preferred stock
—
—
—
2,820
—
—
—
Pre-tax pre-provision adjusted net income
available to common shareholders
$
103,561
$
110,784
$
128,573
$
164,234
$
83,168
$
214,345
$
166,546
Average total common shareholders'
equity
$
1,244,819
$
1,252,022
$
1,179,478
$
1,071,566
$
1,002,624
$
1,248,400
$
960,940
Adjusted ROCE - pre-tax pre-provision
33.37 %
35.89 %
43.25 %
60.81 %
33.27 %
34.62 %
34.95 %
Net Interest Margin, Tax Equivalent -
Customers Bancorp
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net interest income
$
164,852
$
164,699
$
193,694
$
219,892
$
138,757
$
329,551
$
271,488
Tax-equivalent adjustment
270
239
276
290
289
509
581
Net interest income tax equivalent
$
165,122
$
164,938
$
193,970
$
220,182
$
139,046
$
330,060
$
272,069
Average total interest earning assets
$
19,525,936
$
18,572,308
$
18,576,433
$
19,033,826
$
18,698,996
$
19,051,757
$
18,323,555
Net interest margin, tax equivalent
3.39 %
3.60 %
4.14 %
4.59 %
2.98 %
3.49 %
2.99 %
Net Interest Margin, Tax Equivalent,
excluding PPP - Customers Bancorp
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net interest income
$
164,852
$
164,699
$
193,694
$
219,892
$
138,757
$
329,551
$
271,488
PPP net interest income
(18,946)
(34,615)
(78,647)
(112,005)
(35,785)
(53,561)
(70,627)
Tax-equivalent adjustment
270
239
276
290
289
509
581
Net interest income, tax equivalent,
excluding PPP
$
146,176
$
130,323
$
115,323
$
108,177
$
103,261
$
276,499
$
201,442
GAAP average total interest earning
assets
$
19,525,936
$
18,572,308
$
18,576,433
$
19,033,826
$
18,698,996
$
19,051,757
$
18,323,555
Average PPP loans
(1,863,429)
(2,641,318)
(3,898,607)
(5,778,367)
(6,133,184)
(2,250,224)
(5,382,370)
Adjusted average total interest earning
assets
$
17,662,507
$
15,930,990
$
14,677,826
$
13,255,459
$
12,565,812
$
16,801,533
$
12,941,185
Net interest margin, tax equivalent,
excluding PPP
3.32 %
3.32 %
3.12 %
3.24 %
3.30 %
3.32 %
3.14 %
Loan Yield, excluding PPP
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
Interest income on loans and leases
$
168,941
$
157,175
$
198,000
$
233,097
$
153,608
$
326,116
$
305,725
PPP interest income
(20,572)
(36,894)
(82,086)
(117,102)
(41,137)
(57,466)
(79,969)
Interest income on core loans (Loans and
leases, excluding PPP)
$
148,369
$
120,281
$
115,914
$
115,995
$
112,471
$
268,650
$
225,756
Average loans and leases
14,918,498
13,656,991
14,335,370
16,192,744
16,482,802
14,291,229
15,909,143
Average PPP loans
(1,863,429)
(2,641,318)
(3,898,607)
(5,778,367)
(6,133,184)
(2,250,224)
(5,382,370)
Adjusted average total interest earning
assets
13,055,069
11,015,673
10,436,763
10,414,377
10,349,618
12,041,005
10,526,773
Loan yield, excluding PPP
4.56 %
4.43 %
4.41 %
4.42 %
4.36 %
4.50 %
4.32 %
Core Efficiency Ratio - Customers
Bancorp
Six Months Ended June
30,
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
2022
2021
GAAP net interest income
$
164,852
$
164,699
$
193,694
$
219,892
$
138,757
$
329,551
$
271,488
GAAP non-interest income
$
12,746
$
21,198
$
16,991
$
25,586
$
16,822
$
33,944
$
35,290
(Gains) losses on investment
securities
3,232
1,339
49
(6,063)
(3,558)
4,571
(28,098)
Derivative credit valuation adjustment
(455)
(957)
(203)
(261)
380
(1,412)
(1,182)
Loss on cash flow hedge derivative
terminations
—
—
—
—
—
—
24,467
Loss on sale of foreign subsidiaries
—
—
—
—
2,840
—
2,840
Core non-interest income
15,523
21,580
16,837
19,262
16,484
37,103
33,317
Core revenue
$
180,375
$
186,279
$
210,531
$
239,154
$
155,241
$
366,654
$
304,805
GAAP non-interest expense
$
76,205
$
73,807
$
81,548
$
80,009
$
70,823
$
150,012
$
132,750
Severance expense
—
—
—
—
(2,004)
—
(2,004)
Impairments on fixed assets and leases
(914)
(286)
(1,260)
—
—
(1,200)
—
Legal reserves
—
—
—
(1,185)
—
—
—
Merger and acquisition related
expenses
—
—
—
—
—
—
(418)
Deposit relationship adjustment fees
—
—
—
(6,216)
—
—
—
Core non-interest expense
$
75,291
$
73,521
$
80,288
$
72,608
$
68,819
$
148,812
$
130,328
Core efficiency ratio (1)
41.74 %
39.47 %
38.14 %
30.36 %
44.33 %
40.59 %
42.76 %
(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 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
GAAP total shareholders' equity
$
1,353,390
$
1,377,406
$
1,366,217
$
1,284,299
$
1,250,729
Reconciling items:
Preferred stock
(137,794)
(137,794)
(137,794)
(137,794)
(217,471)
Goodwill and other intangibles
(3,629)
(3,678)
(3,736)
(3,794)
(3,853)
Tangible common equity
$
1,211,967
$
1,235,934
$
1,224,687
$
1,142,711
$
1,029,405
GAAP total assets
$
20,251,996
$
19,163,708
$
19,575,028
$
19,108,922
$
19,635,108
Reconciling items:
Goodwill and other intangibles
(3,629)
(3,678)
(3,736)
(3,794)
(3,853)
Tangible assets
$
20,248,367
$
19,160,030
$
19,571,292
$
19,105,128
$
19,631,255
Tangible common equity to tangible
assets
5.99 %
6.45 %
6.26 %
5.98 %
5.24 %
Tangible Common Equity to Tangible
Assets, excluding PPP - Customers Bancorp
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
GAAP total shareholders' equity
$
1,353,390
$
1,377,406
$
1,366,217
$
1,284,299
$
1,250,729
Reconciling items:
Preferred stock
(137,794)
(137,794)
(137,794)
(137,794)
(217,471)
Goodwill and other intangibles
(3,629)
(3,678)
(3,736)
(3,794)
(3,853)
Tangible common equity
$
1,211,967
$
1,235,934
$
1,224,687
$
1,142,711
$
1,029,405
GAAP total assets
$
20,251,996
$
19,163,708
$
19,575,028
$
19,108,922
$
19,635,108
Loans receivable, PPP
(1,570,160)
(2,195,902)
(3,250,008)
(4,957,357)
(6,305,056)
Total assets, excluding PPP
$
18,681,836
$
16,967,806
$
16,325,020
$
14,151,565
$
13,330,052
Reconciling items:
Goodwill and other intangibles
(3,629)
(3,678)
(3,736)
(3,794)
(3,853)
Tangible assets, excluding PPP
$
18,678,207
$
16,964,128
$
16,321,284
$
14,147,771
$
13,326,199
Tangible common equity to tangible assets,
excluding PPP
6.49 %
7.29 %
7.50 %
8.08 %
7.72 %
Tangible Book Value per Common Share -
Customers Bancorp
(Dollars in thousands except share and per
share data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
GAAP total shareholders' equity
$
1,353,390
$
1,377,406
$
1,366,217
$
1,284,299
$
1,250,729
Reconciling Items:
Preferred stock
(137,794)
(137,794)
(137,794)
(137,794)
(217,471)
Goodwill and other intangibles
(3,629)
(3,678)
(3,736)
(3,794)
(3,853)
Tangible common equity
$
1,211,967
$
1,235,934
$
1,224,687
$
1,142,711
$
1,029,405
Common shares outstanding
32,449,486
32,957,847
32,913,267
32,537,976
32,353,256
Tangible book value per common share
$
37.35
$
37.50
$
37.21
$
35.12
$
31.82
Core Loans (Total Loans and Leases,
excluding PPP)
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Total loans and leases
$
15,664,353
$
14,073,518
$
14,568,885
$
15,515,537
$
16,967,022
Loans receivable, PPP
(1,570,160)
(2,195,902)
(3,250,008)
(4,957,357)
(6,305,056)
Core Loans (Loans and leases, excluding
PPP)
$
14,094,193
$
11,877,616
$
11,318,877
$
10,558,180
$
10,661,966
Total loans and leases, excluding
mortgage banking lending and PPP
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Total loans and leases
$
15,664,353
$
14,073,518
$
14,568,885
$
15,515,537
$
16,967,022
Loans to mortgage companies
(1,975,189)
(1,830,121)
(2,362,438)
(2,626,483)
(2,922,217)
Loans receivable, PPP
(1,570,160)
(2,195,902)
(3,250,008)
(4,957,357)
(6,305,056)
Total loans and leases, excluding mortgage
banking lending and PPP
$
12,119,004
$
10,047,495
$
8,956,439
$
7,931,697
$
7,739,749
Total Assets, excluding PPP
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Total assets
$
20,251,996
$
19,163,708
$
19,575,028
$
19,108,922
$
19,635,108
Loans receivable, PPP
(1,570,160)
(2,195,902)
(3,250,008)
(4,957,357)
(6,305,056)
Total assets, excluding PPP
$
18,681,836
$
16,967,806
$
16,325,020
$
14,151,565
$
13,330,052
Coverage of credit loss reserves for
loans and leases held for investment, excluding PPP
(Dollars in thousands except per share
data)
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Loans and leases receivable
$
13,783,155
$
12,314,757
$
12,268,306
$
12,927,956
$
14,077,198
Loans receivable, PPP
(1,570,160)
(2,195,902)
(3,250,008)
(4,957,357)
(6,305,056)
Loans and leases held for investment,
excluding PPP
$
12,212,995
$
10,118,855
$
9,018,298
$
7,970,599
$
7,772,142
Allowance for credit losses on loans and
leases
$
156,530
$
145,847
$
137,804
$
131,496
$
125,436
Coverage of credit loss reserves for loans
and leases held for investment, excluding PPP
1.28 %
1.44 %
1.53 %
1.65 %
1.61 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220726006164/en/
David W. Patti, Communications Director 610-451-9452
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