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.
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
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726448179/en/
David W. Patti, Communications Director 610-451-9452
Customers Bancorp (NYSE:CUBI)
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