Customers Bancorp Reports Results for Second Quarter 2024
WEST READING, Pa.--(BUSINESS WIRE)-- Customers Bancorp, Inc. (NYSE:CUBI):
Second Quarter 2024 Highlights
- Q2 2024 net income available to common shareholders was $54.3 million, or $1.66 per diluted share; ROAA was 1.11% and ROCE was 13.85%.
- Q2 2024 core earnings*1 were $48.6 million, or $1.49 per diluted share; Core ROAA* was 1.00% and Core ROCE* was 12.39%.
- CET 1 ratio of 12.8%2 at June 30, 2024, compared to 12.6% at March 31, 2024, above the approximately 11.5% target.
- TCE / TA ratio* of 7.7% at June 30, 2024, compared to 7.3% at March 31, 2024, above the approximately 7.5% target.
- Total loans and leases grew by $375.8 million in Q2 2024 from Q1 2024 or 11% annualized.
- Q2 2024 net interest margin, tax equivalent (“NIM”) was 3.29%, compared to Q1 2024 NIM of 3.10%, due to higher loan balances and lower cost of deposits.
- Q2 2024 deposit inflows from commercial customers of $0.6 billion, along with excess cash, funded the paydown of $0.5 billion of higher-cost consumer deposits and $0.3 billion of maturing wholesale CDs. Total deposits decreased by $283.3 million in Q2 2024 from Q1 2024 with significant continued positive mix shift.
- Total estimated insured deposits were 76%3 of total deposits at June 30, 2024, with immediately available liquidity covering estimated uninsured deposits3 by approximately 193%.
- Total borrowings declined by $176.6 million in Q2 2024 from Q1 2024 or 11.8%
- Non-performing assets were $47.4 million, or 0.23% of total assets, at June 30, 2024 compared to 0.17% at March 31, 2024. Allowance for credit losses on loans and leases equaled 280% of non-performing loans at June 30, 2024, compared to 374% at March 31, 2024.
- Q2 2024 provision for credit losses on loans and leases was $17.9 million compared to $16.0 million in Q1 2024 and the coverage of credit loss reserves for loans and leases held for investment was 1.08%. The coverage of credit loss reserves for loans and leases held for investment decreased modestly from 1.12% in Q1 2024.
- Q2 2024 book value per share and tangible book value per share* both grew by approximately $1.52, or 3.1% over Q1 2024, driven by strong quarterly earnings and a decrease in AOCI losses of $0.9 million over the same time period. Tangible book value per share* is $50.70 at June 30, 2024.
- Adopted a one-year common stock repurchase program to repurchase up to 497,509 shares.
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* |
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. |
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1 |
Excludes pre-tax unrealized gain on equity method investments purchased at a discount in Q2 2024 of $11.0 million, severance expense of $2.6 million, loss on investment securities of $0.7 million, FDIC special assessment expense of $0.2 million and derivative credit valuation adjustment of $0.1 million. |
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2 |
Regulatory capital ratios as of June 30, 2024 are estimates. |
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3 |
Uninsured deposits (estimate) of $5.8 billion to be reported on the Bank’s call report, less deposits of $1.3 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $143.6 million. |
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CEO Commentary
“Customers Bancorp delivered another strong performance in the second quarter of 2024, continuing to deliver on our strategic priorities to grow our franchise value, our margins and our loans and low-cost deposits,” said Customers Bancorp Chairman and CEO Jay Sidhu. “We are pleased to share that actions we took over the last six quarters have enabled us to exceed our 11.5% CET1 and 7.5% TCE / TA ratio* targets. We are now positioned for strategic, relationship-based loan and deposit growth as we demonstrated this quarter. We have strong momentum as we pursue phase two of our deposit transformation – remixing existing higher-cost business unit deposits*1 and brokered deposits into lower-cost and granular deposits. We had a robust pipeline within our existing businesses which has been materially enhanced by the 10 new banking teams that joined Customers in April. In the quarter, we utilized deposit growth from commercial customers of $0.6 billion and existing excess cash to runoff $0.5 billion of higher-cost consumer deposits and repay $0.3 billion in wholesale CDs. Business unit deposit*1 gross inflows were, once again, broad-based with more than 20 different channels increasing balances and roughly half contributing $25 million or more. Our 10 new deposit focused banking teams, with only two months of client activity, have opened more than 1,000 new deposit accounts for more than 700 customers in the quarter. Our deposit pipelines continue to grow with an extraordinary conversion ratio. Our net interest margin expanded by 19 basis points in the second quarter to 3.29% outpacing current industry trends. This expansion was a function of improvements in both the asset and liability components of the balance sheet. Capital levels continued to build as evidenced by a 40 basis point increase in our TCE / TA ratio*. In June, our Board of Directors authorized a share repurchase program providing an additional capital deployment tool that can be utilized. Enhanced by the addition of our new banking teams, we believe we are extremely well-positioned to continue to strengthen our deposit franchise, improve our profitability, and maintain our already strong capital ratios,” stated Jay Sidhu.
“Our Q2 2024 GAAP earnings were $54.3 million, or $1.66 per diluted share, and core earnings* were $48.6 million, or $1.49 per diluted share. At June 30, 2024, our deposit base was well diversified, with approximately 76%2 of total deposits insured. We maintain a strong liquidity position, with $8.3 billion of liquidity immediately available, which covers approximately 193% of uninsured deposits2 and our loan to deposit ratio was 77%. We continue to focus loan production where we have a holistic and primary relationship. Total loans and leases grew by $357.7 million driven by strong commercial loan growth of $396.1 million primarily in our Corporate and Specialized verticals. Our loan pipeline continued to build during the second quarter, and we remain confident in the 10% – 15% loan growth outlook previously provided. We continue to build liquidity and capital to support the needs of our customers. At June 30, 2024, we had $3.0 billion of cash on hand leading to prudent balance sheet and liquidity management. Asset quality remains strong with our NPA ratio at just 0.23% of total assets and reserve levels are robust at 280% of total non-performing loans at the end of Q2 2024. Our exposure to the higher risk commercial real estate office sector is minimal, representing approximately 1% of the loan portfolio. Continued execution on our strategic priorities has positioned us favorably for success in 2024 from a capital, credit, liquidity, interest rate risk and earnings perspective. We will remain disciplined, but opportunistic, with our balance sheet capacity to manage risk and maintain robust capital levels. Tangible Book Value per share* grew to $50.70. We are excited and optimistic about the opportunities we had in the first half of 2024, which have been enhanced by the addition of the new banking teams,” Jay Sidhu continued.
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* |
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. |
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1 |
Total deposits excluding wholesale CDs and BMTX student-related deposits. |
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2 |
Uninsured deposits (estimate) of $5.8 billion to be reported on the Bank’s call report, less deposits of $1.3 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $143.6 million. |
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Financial Highlights
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(Dollars in thousands, except per share data) |
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At or Three Months Ended |
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Increase (Decrease) |
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June 30, 2024 |
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March 31, 2024 |
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Profitability Metrics: |
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Net income available for common shareholders |
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$ |
54,300 |
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$ |
45,926 |
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$ |
8,374 |
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18.2 |
% |
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Diluted earnings per share |
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$ |
1.66 |
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$ |
1.40 |
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$ |
0.26 |
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18.6 |
% |
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Core earnings* |
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$ |
48,567 |
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$ |
46,532 |
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$ |
2,035 |
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4.4 |
% |
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Adjusted core earnings* |
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$ |
48,567 |
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$ |
55,137 |
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$ |
(6,570 |
) |
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(11.9 |
)% |
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Core earnings per share* |
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$ |
1.49 |
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$ |
1.42 |
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$ |
0.07 |
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4.9 |
% |
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Adjusted core earnings per share* |
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$ |
1.49 |
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$ |
1.68 |
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$ |
(0.19 |
) |
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(11.3 |
)% |
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Return on average assets (“ROAA”) |
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1.11 |
% |
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0.94 |
% |
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0.17 |
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Core ROAA* |
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1.00 |
% |
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0.95 |
% |
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0.05 |
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Adjusted core ROAA* |
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1.00 |
% |
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1.11 |
% |
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(0.11 |
) |
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Return on average common equity (“ROCE”) |
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13.85 |
% |
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12.08 |
% |
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1.77 |
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Core ROCE* |
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12.39 |
% |
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12.24 |
% |
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0.15 |
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Adjusted core ROCE* |
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12.39 |
% |
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14.50 |
% |
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(2.11 |
) |
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Core pre-tax pre-provision net income* |
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$ |
89,220 |
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$ |
83,674 |
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$ |
5,546 |
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6.6 |
% |
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Adjusted core pre-tax pre-provision net income* |
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$ |
89,220 |
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$ |
94,988 |
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$ |
(5,768 |
) |
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(6.1 |
)% |
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Net interest margin, tax equivalent |
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3.29 |
% |
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3.10 |
% |
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0.19 |
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Yield on loans (Loan yield) |
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7.17 |
% |
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7.05 |
% |
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0.12 |
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Cost of deposits |
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3.40 |
% |
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3.45 |
% |
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(0.05 |
) |
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Efficiency ratio |
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51.87 |
% |
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54.58 |
% |
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(2.71 |
) |
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Core efficiency ratio* |
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53.47 |
% |
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54.24 |
% |
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(0.77 |
) |
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Adjusted core efficiency ratio* |
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53.47 |
% |
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48.02 |
% |
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5.45 |
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Non-interest expense to average total assets |
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1.98 |
% |
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1.87 |
% |
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0.11 |
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Core non-interest expense to average total assets* |
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1.93 |
% |
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1.86 |
% |
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0.07 |
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Adjusted core non-interest expense to average total assets* |
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1.93 |
% |
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1.65 |
% |
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0.28 |
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Balance Sheet Trends: |
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Total assets |
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$ |
20,942,975 |
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$ |
21,347,367 |
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$ |
(404,392 |
) |
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(1.9 |
)% |
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Total cash and investment securities |
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$ |
6,523,036 |
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$ |
7,338,025 |
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$ |
(814,989 |
) |
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(11.1 |
)% |
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Total loans and leases |
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$ |
13,632,639 |
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$ |
13,256,871 |
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$ |
375,768 |
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2.8 |
% |
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Non-interest bearing demand deposits |
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$ |
4,474,862 |
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$ |
4,688,880 |
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$ |
(214,018 |
) |
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(4.6 |
)% |
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Total deposits |
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$ |
17,678,093 |
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$ |
17,961,383 |
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$ |
(283,290 |
) |
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(1.6 |
)% |
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Capital Metrics: |
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Common Equity |
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$ |
1,609,071 |
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$ |
1,553,823 |
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$ |
55,248 |
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3.6 |
% |
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Tangible Common Equity* |
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$ |
1,605,442 |
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$ |
1,550,194 |
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$ |
55,248 |
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3.6 |
% |
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Common Equity to Total Assets |
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7.7 |
% |
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7.3 |
% |
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|
0.4 |
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Tangible Common Equity to Tangible Assets* |
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7.7 |
% |
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|
7.3 |
% |
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|
0.4 |
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Book Value per common share |
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$ |
50.81 |
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$ |
49.29 |
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$ |
1.52 |
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3.1 |
% |
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Tangible Book Value per common share* |
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$ |
50.70 |
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$ |
49.18 |
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$ |
1.52 |
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|
3.1 |
% |
|
Common equity Tier 1 capital ratio (1) |
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12.8 |
% |
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12.6 |
% |
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|
0.2 |
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Total risk based capital ratio (1) |
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15.8 |
% |
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|
15.9 |
% |
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(0.1 |
) |
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(1) Regulatory capital ratios as of June 30, 2024 are estimates. |
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* 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. |
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Financial Highlights
|
(Dollars in thousands, except per share data) |
|
At or Three Months Ended |
|
Increase (Decrease) |
|
Six Months Ended |
|
Increase (Decrease) |
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|
June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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Profitability Metrics: |
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Net income available for common shareholders |
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$ |
54,300 |
|
|
$ |
44,007 |
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|
$ |
10,293 |
|
|
23.4 |
% |
|
$ |
100,226 |
|
|
$ |
94,272 |
|
|
$ |
5,954 |
|
|
6.3 |
% |
|
Diluted earnings per share |
|
$ |
1.66 |
|
|
$ |
1.39 |
|
|
$ |
0.27 |
|
|
19.4 |
% |
|
$ |
3.06 |
|
|
$ |
2.95 |
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$ |
0.11 |
|
|
3.7 |
% |
|
Core earnings* |
|
$ |
48,567 |
|
|
$ |
52,163 |
|
|
$ |
(3,596 |
) |
|
(6.9 |
)% |
|
$ |
95,099 |
|
|
$ |
103,306 |
|
|
$ |
(8,207 |
) |
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(7.9 |
)% |
|
Adjusted core earnings* |
|
$ |
48,567 |
|
|
$ |
52,163 |
|
|
$ |
(3,596 |
) |
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(6.9 |
)% |
|
$ |
103,704 |
|
|
$ |
103,306 |
|
|
$ |
398 |
|
|
0.4 |
% |
|
Core earnings per share* |
|
$ |
1.49 |
|
|
$ |
1.65 |
|
|
$ |
(0.16 |
) |
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(9.7 |
)% |
|
$ |
2.90 |
|
|
$ |
3.22 |
|
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$ |
(0.32 |
) |
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(9.9 |
)% |
|
Adjusted core earnings per share* |
|
$ |
1.49 |
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|
$ |
1.65 |
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$ |
(0.16 |
) |
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(9.7 |
)% |
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$ |
3.16 |
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$ |
3.22 |
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$ |
(0.06 |
) |
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(1.9 |
)% |
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Return on average assets (“ROAA”) |
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|
1.11 |
% |
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|
0.88 |
% |
|
|
0.23 |
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|
1.02 |
% |
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|
0.96 |
% |
|
|
0.06 |
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Core ROAA* |
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|
1.00 |
% |
|
|
1.03 |
% |
|
|
(0.03 |
) |
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|
0.98 |
% |
|
|
1.04 |
% |
|
|
(0.06 |
) |
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Adjusted core ROAA* |
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|
1.00 |
% |
|
|
1.03 |
% |
|
|
(0.03 |
) |
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|
|
|
1.06 |
% |
|
|
1.04 |
% |
|
|
0.02 |
|
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Return on average common equity (“ROCE”) |
|
|
13.85 |
% |
|
|
13.22 |
% |
|
|
0.63 |
|
|
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|
12.98 |
% |
|
|
14.57 |
% |
|
|
(1.59 |
) |
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||
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Core ROCE* |
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|
12.39 |
% |
|
|
15.67 |
% |
|
|
(3.28 |
) |
|
|
|
|
12.32 |
% |
|
|
15.97 |
% |
|
|
(3.65 |
) |
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Adjusted core ROCE* |
|
|
12.39 |
% |
|
|
15.67 |
% |
|
|
(3.28 |
) |
|
|
|
|
13.43 |
% |
|
|
15.97 |
% |
|
|
(2.54 |
) |
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Core pre-tax pre-provision net income* |
|
$ |
89,220 |
|
|
$ |
96,833 |
|
|
$ |
(7,613 |
) |
|
(7.9 |
)% |
|
$ |
172,894 |
|
|
$ |
186,115 |
|
|
$ |
(13,221 |
) |
|
(7.1 |
)% |
|
Adjusted core pre-tax pre-provision net income* |
|
$ |
89,220 |
|
|
$ |
96,833 |
|
|
$ |
(7,613 |
) |
|
(7.9 |
)% |
|
$ |
184,208 |
|
|
$ |
186,115 |
|
|
$ |
(1,907 |
) |
|
(1.0 |
)% |
|
Net interest margin, tax equivalent |
|
|
3.29 |
% |
|
|
3.15 |
% |
|
|
0.14 |
|
|
|
|
|
3.20 |
% |
|
|
3.06 |
% |
|
|
0.14 |
|
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||
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Yield on loans (Loan yield) |
|
|
7.17 |
% |
|
|
6.83 |
% |
|
|
0.34 |
|
|
|
|
|
7.11 |
% |
|
|
6.77 |
% |
|
|
0.34 |
|
|
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||
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Cost of deposits |
|
|
3.40 |
% |
|
|
3.11 |
% |
|
|
0.29 |
|
|
|
|
|
3.43 |
% |
|
|
3.22 |
% |
|
|
0.21 |
|
|
|
||
|
Efficiency ratio |
|
|
51.87 |
% |
|
|
49.25 |
% |
|
|
2.62 |
|
|
|
|
|
53.16 |
% |
|
|
48.51 |
% |
|
|
4.65 |
|
|
|
||
|
Core efficiency ratio* |
|
|
53.47 |
% |
|
|
47.84 |
% |
|
|
5.63 |
|
|
|
|
|
53.85 |
% |
|
|
47.49 |
% |
|
|
6.36 |
|
|
|
||
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Adjusted core efficiency ratio* |
|
|
53.47 |
% |
|
|
47.84 |
% |
|
|
5.63 |
|
|
|
|
|
50.79 |
% |
|
|
47.49 |
% |
|
|
3.30 |
|
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||
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Non-interest expense to average total assets |
|
|
1.98 |
% |
|
|
1.65 |
% |
|
|
0.33 |
|
|
|
|
|
1.93 |
% |
|
|
1.60 |
% |
|
|
0.33 |
|
|
|
||
|
Core non-interest expense to average total assets* |
|
|
1.93 |
% |
|
|
1.65 |
% |
|
|
0.28 |
|
|
|
|
|
1.89 |
% |
|
|
1.59 |
% |
|
|
0.30 |
|
|
|
||
|
Adjusted core non-interest expense to average total assets* |
|
|
1.93 |
% |
|
|
1.65 |
% |
|
|
0.28 |
|
|
|
|
|
1.79 |
% |
|
|
1.59 |
% |
|
|
0.20 |
|
|
|
||
|
Balance Sheet Trends: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Total assets |
|
$ |
20,942,975 |
|
|
$ |
22,028,565 |
|
|
$ |
(1,085,590 |
) |
|
(4.9 |
)% |
|
|
|
|
|
|
|
|
|||||||
|
Total cash and investment securities |
|
$ |
6,523,036 |
|
|
$ |
7,238,422 |
|
|
$ |
(715,386 |
) |
|
(9.9 |
)% |
|
|
|
|
|
|
|
|
|||||||
|
Total loans and leases |
|
$ |
13,632,639 |
|
|
$ |
13,910,907 |
|
|
$ |
(278,268 |
) |
|
(2.0 |
)% |
|
|
|
|
|
|
|
|
|||||||
|
Non-interest bearing demand deposits |
|
$ |
4,474,862 |
|
|
$ |
4,490,198 |
|
|
$ |
(15,336 |
) |
|
(0.3 |
)% |
|
|
|
|
|
|
|
|
|||||||
|
Total deposits |
|
$ |
17,678,093 |
|
|
$ |
17,950,431 |
|
|
$ |
(272,338 |
) |
|
(1.5 |
)% |
|
|
|
|
|
|
|
|
|||||||
|
Capital Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Common Equity |
|
$ |
1,609,071 |
|
|
$ |
1,318,858 |
|
|
$ |
290,213 |
|
|
22.0 |
% |
|
|
|
|
|
|
|
|
|||||||
|
Tangible Common Equity* |
|
$ |
1,605,442 |
|
|
$ |
1,315,229 |
|
|
$ |
290,213 |
|
|
22.1 |
% |
|
|
|
|
|
|
|
|
|||||||
|
Common Equity to Total Assets |
|
|
7.7 |
% |
|
|
6.0 |
% |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Tangible Common Equity to Tangible Assets* |
|
|
7.7 |
% |
|
|
6.0 |
% |
|
|
1.7 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Book Value per common share |
|
$ |
50.81 |
|
|
$ |
42.16 |
|
|
$ |
8.65 |
|
|
20.5 |
% |
|
|
|
|
|
|
|
|
|||||||
|
Tangible Book Value per common share* |
|
$ |
50.70 |
|
|
$ |
42.04 |
|
|
$ |
8.66 |
|
|
20.6 |
% |
|
|
|
|
|
|
|
|
|||||||
|
Common equity Tier 1 capital ratio (1) |
|
|
12.8 |
% |
|
|
10.3 |
% |
|
|
2.5 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total risk based capital ratio (1) |
|
|
15.8 |
% |
|
|
13.2 |
% |
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(1) Regulatory capital ratios as of June 30, 2024 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, 2024 |
|
% of Total |
|
March 31, 2024 |
|
% of Total |
|
June 30, 2023 |
|
% of Total |
||||||
|
Loans and Leases Held for Investment |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial & industrial: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Specialized lending |
$ |
5,528,745 |
|
41.7 |
% |
|
$ |
5,104,405 |
|
39.6 |
% |
|
$ |
5,534,832 |
|
40.0 |
% |
|
Other commercial & industrial (1) |
|
1,092,146 |
|
8.2 |
|
|
|
1,113,517 |
|
8.6 |
|
|
|
1,240,908 |
|
9.0 |
|
|
Mortgage finance |
|
1,122,812 |
|
8.5 |
|
|
|
1,071,146 |
|
8.3 |
|
|
|
1,108,598 |
|
8.0 |
|
|
Multifamily |
|
2,067,332 |
|
15.6 |
|
|
|
2,123,675 |
|
16.5 |
|
|
|
2,151,734 |
|
15.6 |
|
|
Commercial real estate owner occupied |
|
805,779 |
|
6.1 |
|
|
|
806,278 |
|
6.3 |
|
|
|
842,042 |
|
6.1 |
|
|
Commercial real estate non-owner occupied |
|
1,202,606 |
|
9.1 |
|
|
|
1,182,084 |
|
9.2 |
|
|
|
1,211,091 |
|
8.8 |
|
|
Construction |
|
163,409 |
|
1.2 |
|
|
|
185,601 |
|
1.3 |
|
|
|
212,214 |
|
1.5 |
|
|
Total commercial loans and leases |
|
11,982,829 |
|
90.4 |
|
|
|
11,586,706 |
|
89.8 |
|
|
|
12,301,419 |
|
89.0 |
|
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Residential |
|
481,503 |
|
3.6 |
|
|
|
482,537 |
|
3.8 |
|
|
|
487,199 |
|
3.5 |
|
|
Manufactured housing |
|
35,901 |
|
0.3 |
|
|
|
37,382 |
|
0.3 |
|
|
|
41,664 |
|
0.3 |
|
|
Installment: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Personal |
|
474,481 |
|
3.6 |
|
|
|
492,892 |
|
3.8 |
|
|
|
752,470 |
|
5.4 |
|
|
Other |
|
282,201 |
|
2.1 |
|
|
|
299,714 |
|
2.3 |
|
|
|
250,047 |
|
1.8 |
|
|
Total installment loans |
|
756,682 |
|
5.7 |
|
|
|
792,606 |
|
6.1 |
|
|
|
1,002,517 |
|
7.2 |
|
|
Total consumer loans |
|
1,274,086 |
|
9.6 |
|
|
|
1,312,525 |
|
10.2 |
|
|
|
1,531,380 |
|
11.0 |
|
|
Total loans and leases held for investment |
$ |
13,256,915 |
|
100.0 |
% |
|
$ |
12,899,231 |
|
100.0 |
% |
|
$ |
13,832,799 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Loans Held for Sale |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Residential |
$ |
2,684 |
|
0.7 |
% |
|
$ |
870 |
|
0.2 |
% |
|
$ |
1,234 |
|
1.6 |
% |
|
Installment: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Personal |
|
125,598 |
|
33.4 |
|
|
|
137,755 |
|
38.5 |
|
|
|
76,874 |
|
98.4 |
|
|
Other |
|
247,442 |
|
65.9 |
|
|
|
219,015 |
|
61.3 |
|
|
|
— |
|
— |
|
|
Total installment loans |
|
373,040 |
|
99.3 |
|
|
|
356,770 |
|
99.8 |
|
|
|
76,874 |
|
98.4 |
|
|
Total loans held for sale |
$ |
375,724 |
|
100.0 |
% |
|
$ |
357,640 |
|
100.0 |
% |
|
$ |
78,108 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total loans and leases portfolio |
$ |
13,632,639 |
|
|
|
$ |
13,256,871 |
|
|
|
$ |
13,910,907 |
|
|
|||
(1) Includes PPP loans of $38.3 million, $52.0 million and $188.8 million as of June 30, 2024, March 31, 2024 and June 30, 2023, respectively.
Loans and Leases Held for Investment
Loans and leases held for investment were $13.3 billion at June 30, 2024, up $357.7 million, or 2.8%, from March 31, 2024. Specialized lending increased $424.3 million, or 8.3% quarter-over-quarter, to $5.5 billion. Mortgage finance loans increased $51.7 million, or 4.8% quarter-over-quarter due to higher seasonal mortgage activity. Non-owner occupied commercial real estate loans increased modestly by $20.5 million, or 1.7% to $1.2 billion. Multifamily loans decreased $56.3 million, or 2.7% to $2.1 billion. Construction loans decreased $22.2 million, or 12.0% to $163.4 million. Other commercial and industrial loans decreased $21.4 million, or 1.9% quarter-over-quarter, to $1.1 billion. Consumer installment loans held for investment decreased $35.9 million, or 4.5% quarter-over-quarter, to $756.7 million due to the continued build out of the held-for-sale strategy and de-risking of the held-for-investment loan portfolio.
Loans and leases held for investment of $13.3 billion at June 30, 2024 were down $575.9 million, or 4.2%, year-over-year, largely driven by reduced balances in consumer installment loans of $245.8 million, or 24.5% year-over-year, other commercial and industrial loans of $148.8 million, which included a decrease in PPP loans primarily from guarantee payments, multifamily loans of $84.4 million, construction loans of $48.8 million and owner-occupied commercial real estate loans of $36.3 million.
Loans Held for Sale
Loans held for sale increased $18.1 million quarter-over-quarter, and were $375.7 million at June 30, 2024 due to the continued build out of the held-for-sale strategy in 2024.
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, 2024 |
|
March 31, 2024 |
|
|
June 30, 2024 |
|
June 30, 2023 |
|
||||||||||||||
|
Allowance for credit losses on loans and leases |
$ |
132,436 |
|
|
$ |
133,296 |
|
|
$ |
(860 |
) |
|
$ |
132,436 |
|
|
$ |
139,656 |
|
|
$ |
(7,220 |
) |
|
Provision (benefit) for credit losses on loans and leases |
$ |
17,851 |
|
|
$ |
15,953 |
|
|
$ |
1,898 |
|
|
$ |
17,851 |
|
|
$ |
22,363 |
|
|
$ |
(4,512 |
) |
|
Net charge-offs from loans held for investment |
$ |
18,711 |
|
|
$ |
17,968 |
|
|
$ |
743 |
|
|
$ |
18,711 |
|
|
$ |
15,564 |
|
|
$ |
3,147 |
|
|
Annualized net charge-offs to average loans and leases |
|
0.56 |
% |
|
|
0.55 |
% |
|
|
|
|
0.56 |
% |
|
|
0.42 |
% |
|
|
||||
|
Coverage of credit loss reserves for loans and leases held for investment |
|
1.08 |
% |
|
|
1.12 |
% |
|
|
|
|
1.08 |
% |
|
|
1.09 |
% |
|
|
||||
Net charge-offs increased modestly with $18.7 million in Q2 2024, compared to $18.0 million in Q1 2024 and $15.6 million in Q2 2023.
Provision (benefit) for Credit Losses
|
|
Three Months Ended |
|
Increase (Decrease) |
|
Three Months Ended |
|
Increase (Decrease) |
|||||||||||||
|
(Dollars in thousands) |
June 30, 2024 |
|
March 31, 2024 |
|
|
June 30, 2024 |
|
June 30, 2023 |
|
|||||||||||
|
Provision (benefit) for credit losses on loans and leases |
$ |
17,851 |
|
$ |
15,953 |
|
$ |
1,898 |
|
|
$ |
17,851 |
|
$ |
22,363 |
|
|
$ |
(4,512 |
) |
|
Provision (benefit) for credit losses on available for sale debt securities |
|
270 |
|
|
1,117 |
|
|
(847 |
) |
|
|
270 |
|
|
1,266 |
|
|
|
(996 |
) |
|
Provision for credit losses |
|
18,121 |
|
|
17,070 |
|
|
1,051 |
|
|
|
18,121 |
|
|
23,629 |
|
|
|
(5,508 |
) |
|
Provision (benefit) for credit losses on unfunded commitments |
|
1,594 |
|
|
430 |
|
|
1,164 |
|
|
|
1,594 |
|
|
(304 |
) |
|
|
1,898 |
|
|
Total provision for credit losses |
$ |
19,715 |
|
$ |
17,500 |
|
$ |
2,215 |
|
|
$ |
19,715 |
|
$ |
23,325 |
|
|
$ |
(3,610 |
) |
The provision for credit losses on loans and leases in Q2 2024 was $17.9 million, compared to $16.0 million in Q1 2024. The higher provision in Q2 2024 was primarily due to an increase in commercial and industrial loan balances held for investment, partially offset by slight improvements in macroeconomic forecasts and by lower balances in consumer installment loans held for investment.
The provision for credit losses on available for sale investment securities in Q2 2024 was $0.3 million, compared to provision of $1.1 million in Q1 2024.
The provision for credit losses on loans and leases in Q2 2024 was $17.9 million, compared to $22.4 million in Q2 2023. The lower provision in Q2 2024 compared to the year ago period was primarily due to slight improvements in macroeconomic forecasts and by lower balances in consumer installment loans held for investment.
The provision for credit losses on available for sale investment securities in Q2 2024 was $0.3 million compared to provision of $1.3 million in Q2 2023.
Asset Quality
The following table presents asset quality metrics as of the dates indicated:
|
(Dollars in thousands) |
June 30, 2024 |
|
March 31, 2024 |
|
Increase (Decrease) |
|
June 30, 2024 |
|
June 30, 2023 |
|
Increase (Decrease) |
||||||||||||
|
Non-performing assets (“NPAs”): |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Nonaccrual / non-performing loans (“NPLs”) |
$ |
47,380 |
|
|
$ |
35,654 |
|
|
$ |
11,726 |
|
|
$ |
47,380 |
|
|
$ |
28,244 |
|
|
$ |
19,136 |
|
|
Non-performing assets |
$ |
47,444 |
|
|
$ |
35,753 |
|
|
$ |
11,691 |
|
|
$ |
47,444 |
|
|
$ |
28,380 |
|
|
$ |
19,064 |
|
|
NPLs to total loans and leases |
|
0.35 |
% |
|
|
0.27 |
% |
|
|
|
|
0.35 |
% |
|
|
0.20 |
% |
|
|
||||
|
Reserves to NPLs |
|
279.52 |
% |
|
|
373.86 |
% |
|
|
|
|
279.52 |
% |
|
|
494.46 |
% |
|
|
||||
|
NPAs to total assets |
|
0.23 |
% |
|
|
0.17 |
% |
|
|
|
|
0.23 |
% |
|
|
0.13 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loans and leases (1) risk ratings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial loans and leases |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Pass |
$ |
10,500,922 |
|
|
$ |
10,095,611 |
|
|
$ |
405,311 |
|
|
$ |
10,500,922 |
|
|
$ |
10,667,619 |
|
|
$ |
(166,697 |
) |
|
Special Mention |
|
170,014 |
|
|
|
194,365 |
|
|
|
(24,351 |
) |
|
|
170,014 |
|
|
|
166,468 |
|
|
|
3,546 |
|
|
Substandard |
|
270,898 |
|
|
|
282,163 |
|
|
|
(11,265 |
) |
|
|
270,898 |
|
|
|
272,301 |
|
|
|
(1,403 |
) |
|
Total commercial loans and leases |
|
10,941,834 |
|
|
|
10,572,139 |
|
|
|
369,695 |
|
|
|
10,941,834 |
|
|
|
11,106,388 |
|
|
|
(164,554 |
) |
|
Consumer loans |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Performing |
|
1,256,816 |
|
|
|
1,293,457 |
|
|
|
(36,641 |
) |
|
|
1,256,816 |
|
|
|
1,508,208 |
|
|
|
(251,392 |
) |
|
Non-performing |
|
17,270 |
|
|
|
19,068 |
|
|
|
(1,798 |
) |
|
|
17,270 |
|
|
|
23,172 |
|
|
|
(5,902 |
) |
|
Total consumer loans |
|
1,274,086 |
|
|
|
1,312,525 |
|
|
|
(38,439 |
) |
|
|
1,274,086 |
|
|
|
1,531,380 |
|
|
|
(257,294 |
) |
|
Loans and leases receivable (1) |
$ |
12,215,920 |
|
|
$ |
11,884,664 |
|
|
$ |
331,256 |
|
|
$ |
12,215,920 |
|
|
$ |
12,637,768 |
|
|
$ |
(421,848 |
) |
|
(1) Risk ratings are assigned to loans and leases held for investment, and excludes loans held for sale, loans receivable, mortgage finance, at fair value and eligible PPP loans that are fully guaranteed by the Small Business Administration. |
|||||||||||||||||||||||
Over the last decade, the Bank has developed a suite of commercial loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s commercial and industrial (“C&I”), mortgage finance, corporate and specialized lending lines of business, and multifamily loans for example, are characterized by conservative underwriting standards and historically 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, management employs a bottom-up data driven approach to analyze the commercial portfolio.
Total consumer installment loans held for investment at June 30, 2024 were less than 4% of total assets and approximately 6% of total loans and leases held for investment, and were supported by an allowance for credit losses of $49.8 million. At June 30, 2024, the consumer installment portfolio had the following characteristics: average original FICO score of 738, average debt-to-income of 20% and average borrower income of $106 thousand.
Non-performing loans at June 30, 2024 increased to 0.35% of total loans and leases, compared to 0.27% at March 31, 2024 and 0.20% at June 30, 2023. The $11.7 million increase in NPLs was primarily due to one multifamily credit and one commercial loan originated under the Federal Reserve’s Main Street Lending Program moving to nonaccrual status.
Investment Securities
The investment securities portfolio, including debt securities classified as 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 the Bank’s liquidity position.
The following table presents the composition of the investment securities portfolio as of the dates indicated:
|
(Dollars in thousands) |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
|||
|
Debt securities, available for sale |
$ |
2,477,758 |
|
$ |
2,571,139 |
|
$ |
2,797,940 |
|
Equity securities |
|
33,892 |
|
|
33,729 |
|
|
26,698 |
|
Investment securities, at fair value |
|
2,511,650 |
|
|
2,604,868 |
|
|
2,824,638 |
|
Debt securities, held to maturity |
|
962,799 |
|
|
1,032,037 |
|
|
1,258,560 |
|
Total investment securities portfolio |
$ |
3,474,449 |
|
$ |
3,636,905 |
|
$ |
4,083,198 |
Customers’ securities portfolio is highly liquid, short in duration, and high in yield. At June 30, 2024, the AFS debt securities portfolio had a spot yield of 5.19%, an effective duration of approximately 2.0 years, and approximately 33% are variable rate. Additionally, 63% of the AFS securities portfolio was AAA rated at June 30, 2024. During the quarter, approximately $220 million of mostly floating rate CLOs were sold and a similar amount of fixed rate agency securities were purchased, reducing asset sensitivity and increasing high quality liquid assets.
At June 30, 2024, the HTM debt securities portfolio represented only 4.6% of total assets at June 30, 2024, had a spot yield of 4.16% and an effective duration of approximately 3.1 years. Additionally, at June 30, 2024, approximately 43% of the HTM securities were AAA rated and 46% were credit enhanced asset backed securities with no current expectation of credit losses.
Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:
|
(Dollars in thousands) |
June 30, 2024 |
|
% of Total |
|
March 31, 2024 |
|
% of Total |
|
June 30, 2023 |
|
% of Total |
||||||
|
Demand, non-interest bearing |
$ |
4,474,862 |
|
25.3 |
% |
|
$ |
4,688,880 |
|
26.1 |
% |
|
$ |
4,490,198 |
|
25.0 |
% |
|
Demand, interest bearing |
|
5,894,056 |
|
33.4 |
|
|
|
5,661,775 |
|
31.5 |
|
|
|
5,551,037 |
|
30.9 |
|
|
Total demand deposits |
|
10,368,918 |
|
58.7 |
|
|
|
10,350,655 |
|
57.6 |
|
|
|
10,041,235 |
|
55.9 |
|
|
Savings |
|
1,573,661 |
|
8.9 |
|
|
|
2,080,374 |
|
11.6 |
|
|
|
1,048,229 |
|
5.8 |
|
|
Money market |
|
3,539,815 |
|
20.0 |
|
|
|
3,347,843 |
|
18.6 |
|
|
|
2,004,264 |
|
11.2 |
|
|
Time deposits |
|
2,195,699 |
|
12.4 |
|
|
|
2,182,511 |
|
12.2 |
|
|
|
4,856,703 |
|
27.1 |
|
|
Total deposits |
$ |
17,678,093 |
|
100.0 |
% |
|
$ |
17,961,383 |
|
100.0 |
% |
|
$ |
17,950,431 |
|
100.0 |
% |
Total deposits decreased $283.3 million, or 1.6%, to $17.7 billion at June 30, 2024 as compared to the prior quarter. Savings deposits decreased $506.7 million, or 24.4%, to $1.6 billion and non-interest bearing demand deposits decreased $214.0 million, or 4.6%, to $4.5 billion. The decrease in savings deposits resulted from an intentional reduction in higher cost consumer deposits. These decreases were offset by increases in interest bearing demand deposits of $232.3 million, or 4.1%, to $5.9 billion, money market deposits of $192.0 million, or 5.7%, to $3.5 billion and time deposits of $13.2 million, or 0.6%, to $2.2 billion. The total average cost of deposits decreased by 5 basis points to 3.40% in Q2 2024 from 3.45% in the prior quarter driven by positive deposit mix shift. Total estimated uninsured deposits were $4.3 billion1, or 24% of total deposits (inclusive of accrued interest) at June 30, 2024. Customers is also highly focused on total deposits with contractual term to manage its liquidity profile and the funding of loans and securities.
Total deposits decreased $272.3 million, or 1.5%, to $17.7 billion at June 30, 2024 as compared to a year ago. Time deposits decreased $2.7 billion, or 54.8% to $2.2 billion and non-interest bearing demand deposits decreased $15.3 million, or 0.3%, to $4.5 billion. These decreases were offset by increases in money market deposits of $1.5 billion, or 76.6%, to $3.5 billion, savings deposits of $525.4 million, or 50.1%, to $1.6 billion and interest bearing demand deposits of $343.0 million, or 6.2%, to $5.9 billion. The total average cost of deposits increased by 29 basis points to 3.40% in Q2 2024 from 3.11% in the prior year primarily due to higher market interest rates, offsetting a positive shift in deposit mix.
|
1 |
Uninsured deposits (estimate) of $5.8 billion to be reported on the Bank’s call report, less deposits of $1.3 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $143.6 million. | |||||
Borrowings
The following table presents the composition of our borrowings as of the dates indicated:
|
(Dollars in thousands) |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
|||
|
FHLB advances |
$ |
1,018,349 |
|
$ |
1,195,088 |
|
$ |
2,046,142 |
|
Senior notes |
|
123,970 |
|
|
123,905 |
|
|
123,710 |
|
Subordinated debt |
|
182,370 |
|
|
182,300 |
|
|
182,091 |
|
Total borrowings |
$ |
1,324,689 |
|
$ |
1,501,293 |
|
$ |
2,351,943 |
Total borrowings decreased $176.6 million, or 11.8%, to $1.3 billion at June 30, 2024 as compared to the prior quarter. This decrease primarily resulted from net repayments of $175.0 million in FHLB advances. As of June 30, 2024, Customers’ immediately available borrowing capacity with the FRB and FHLB was approximately $7.6 billion, of which $1.0 billion of available capacity was utilized in borrowings and $1.4 billion was utilized to collateralize deposits.
Total borrowings decreased $1.0 billion, or 43.7%, to $1.3 billion at June 30, 2024 as compared to a year ago. This decrease primarily resulted from net repayments of $175.0 million, $340.0 million and $510.0 million in FHLB advances in Q2 2024, Q4 2023 and Q3 2023, respectively.
Capital
The following table presents certain capital amounts and ratios as of the dates indicated:
|
(Dollars in thousands except per share data) |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
||||||
|
Customers Bancorp, Inc. |
|
|
|
|
|
||||||
|
Common Equity |
$ |
1,609,071 |
|
|
$ |
1,553,823 |
|
|
$ |
1,318,858 |
|
|
Tangible Common Equity* |
$ |
1,605,442 |
|
|
$ |
1,550,194 |
|
|
$ |
1,315,229 |
|
|
Common Equity to Total Assets |
|
7.7 |
% |
|
|
7.3 |
% |
|
|
6.0 |
% |
|
Tangible Common Equity to Tangible Assets* |
|
7.7 |
% |
|
|
7.3 |
% |
|
|
6.0 |
% |
|
Book Value per common share |
$ |
50.81 |
|
|
$ |
49.29 |
|
|
$ |
42.16 |
|
|
Tangible Book Value per common share* |
$ |
50.70 |
|
|
$ |
49.18 |
|
|
$ |
42.04 |
|
|
Common equity Tier 1 (“CET 1”) capital ratio (1) |
|
12.8 |
% |
|
|
12.6 |
% |
|
|
10.3 |
% |
|
Total risk based capital ratio (1) |
|
15.8 |
% |
|
|
15.9 |
% |
|
|
13.2 |
% |
|
(1) Regulatory capital ratios as of June 30, 2024 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 $55.2 million to $1.6 billion, and tangible common equity* increased $55.2 million to $1.6 billion, at June 30, 2024 compared to the prior quarter, respectively, primarily from earnings of $54.3 million and decreased unrealized losses on investment securities of $0.9 million (net of taxes) deferred in accumulated other comprehensive income (“AOCI”). Similarly, book value per common share increased to $50.81 from $49.29, and tangible book value per common share* increased to $50.70 from $49.18, at June 30, 2024 and March 31, 2024, respectively.
Customers Bancorp’s common equity increased $290.2 million to $1.6 billion, and tangible common equity* increased $290.2 million to $1.6 billion, at June 30, 2024 compared to a year ago, respectively, primarily from earnings of $241.4 million and decreased unrealized losses on investment securities in AOCI of $36.8 million (net of taxes). Similarly, book value per common share increased to $50.81 from $42.16, and tangible book value per common share* increased to $50.70 from $42.04, at June 30, 2024 and June 30, 2023, respectively.
At the Customers Bancorp level, the CET 1 ratio (estimate), total risk based capital ratio (estimate), common equity to total assets ratio and tangible common equity to tangible assets ratio* (“TCE / TA ratio”) were 12.8%, 15.8%, 7.7%, and 7.7%, respectively, at June 30, 2024.
At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At June 30, 2024, Tier 1 capital (estimate) and total risk based capital (estimate) were 14.2% and 15.6%, respectively.
“Even though we remain well capitalized by all regulatory measures, we are committed to maintaining our CET 1 ratio around 11.5% and our TCE / TA ratio* around 7.5% in 2024,” stated Jay Sidhu.
Key Profitability Trends
Net Interest Income
Net interest income totaled $167.7 million in Q2 2024, an increase of $7.3 million from Q1 2024. This increase was due to higher interest income of $2.3 million primarily due to higher yielding loan growth and lower interest expense of $5.0 million due to the positive liability mix shift.
“We experienced an increase in net interest income in the second quarter by executing on the loan pipelines that were generated earlier in the year. These loan pipelines remain robust and we expect they will continue to drive interest income higher throughout 2024. Against industry trends, we reported lower interest expense for the third quarter in a row. Positive drivers remain that we expect to increase interest income and decrease interest expense which will benefit net interest income and net interest margin for the remainder of the year,” stated Customers Bancorp President Sam Sidhu. “These positive drivers are bolstered by the recent team additions. Having personally completed more than 175 in person client meetings since the onboarding of our 10 new deposit-focused banking teams, it is clear we have the bankers, products and balance sheet strength to deliver for these clients. We expect the overwhelming majority of client prospects will become Customers Bank clients in the near future,” stated Sam Sidhu.
Net interest income totaled $167.7 million in Q2 2024, an increase of $2.4 million from Q2 2023. This increase was due to higher interest income of $3.9 million primarily due to interest earning deposits from higher average balances and market interest rates, and lower interest expense from lower average balances of borrowings, offset in part by higher interest expense on deposits of $12.4 million primarily resulting from increased market interest rates.
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, 2024 |
|
March 31, 2024 |
|
|
June 30, 2024 |
|
June 30, 2023 |
|
||||||||||||||
|
Commercial lease income |
$ |
10,282 |
|
|
$ |
9,683 |
|
|
$ |
599 |
|
|
$ |
10,282 |
|
|
$ |
8,917 |
|
|
$ |
1,365 |
|
|
Loan fees |
|
5,233 |
|
|
|
5,280 |
|
|
|
(47 |
) |
|
|
5,233 |
|
|
|
4,271 |
|
|
|
962 |
|
|
Bank-owned life insurance |
|
2,007 |
|
|
|
3,261 |
|
|
|
(1,254 |
) |
|
|
2,007 |
|
|
|
4,997 |
|
|
|
(2,990 |
) |
|
Mortgage finance transactional fees |
|
1,058 |
|
|
|
946 |
|
|
|
112 |
|
|
|
1,058 |
|
|
|
1,376 |
|
|
|
(318 |
) |
|
Net gain (loss) on sale of loans |
|
(238 |
) |
|
|
10 |
|
|
|
(248 |
) |
|
|
(238 |
) |
|
|
(761 |
) |
|
|
523 |
|
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,037 |
) |
|
|
5,037 |
|
|
Net gain (loss) on sale of investment securities |
|
(719 |
) |
|
|
(30 |
) |
|
|
(689 |
) |
|
|
(719 |
) |
|
|
— |
|
|
|
(719 |
) |
|
Unrealized gain on equity method investments |
|
11,041 |
|
|
|
— |
|
|
|
11,041 |
|
|
|
11,041 |
|
|
|
— |
|
|
|
11,041 |
|
|
Other |
|
2,373 |
|
|
|
2,081 |
|
|
|
292 |
|
|
|
2,373 |
|
|
|
2,234 |
|
|
|
139 |
|
|
Total non-interest income |
$ |
31,037 |
|
|
$ |
21,231 |
|
|
$ |
9,806 |
|
|
$ |
31,037 |
|
|
$ |
15,997 |
|
|
$ |
15,040 |
|
Non-interest income totaled $31.0 million for Q2 2024, an increase of $9.8 million compared to Q1 2024. The increase was primarily due to $11.0 million of unrealized gain on equity method investments purchased at a discount in Q2 2024, partially offset by a decrease in death benefits paid by insurance carriers under bank-owned life insurance policies.
Non-interest income totaled $31.0 million for Q2 2024, an increase of $15.0 million compared to Q2 2023. The increase was primarily due to $11.0 million of unrealized gain on equity method investments purchased at a discount in Q2 2024, a loss of $5.0 million realized from the sale of non-strategic short-term syndicated capital call lines of credit within our specialized lending vertical that the Bank exited completely in Q2 2023, and increases in commercial lease income of $1.4 million and loan fees of $1.0 million resulting from increased servicing-related revenue and unused line of credit fees. These increases were partially offset by a $3.0 million decrease in death benefits paid by insurance carriers under bank-owned life insurance policies.
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, 2024 |
|
March 31, 2024 |
|
|
June 30, 2024 |
|
June 30, 2023 |
|
||||||||||
|
Salaries and employee benefits |
$ |
44,947 |
|
$ |
36,025 |
|
$ |
8,922 |
|
|
$ |
44,947 |
|
$ |
33,120 |
|
$ |
11,827 |
|
|
Technology, communication and bank operations |
|
16,227 |
|
|
21,904 |
|
|
(5,677 |
) |
|
|
16,227 |
|
|
16,407 |
|
|
(180 |
) |
|
Commercial lease depreciation |
|
7,829 |
|
|
7,970 |
|
|
(141 |
) |
|
|
7,829 |
|
|
7,328 |
|
|
501 |
|
|
Professional services |
|
6,104 |
|
|
6,353 |
|
|
(249 |
) |
|
|
6,104 |
|
|
9,192 |
|
|
(3,088 |
) |
|
Loan servicing |
|
3,516 |
|
|
4,031 |
|
|
(515 |
) |
|
|
3,516 |
|
|
4,777 |
|
|
(1,261 |
) |
|
Occupancy |
|
3,120 |
|
|
2,347 |
|
|
773 |
|
|
|
3,120 |
|
|
2,519 |
|
|
601 |
|
|
FDIC assessments, non-income taxes and regulatory fees |
|
10,236 |
|
|
13,469 |
|
|
(3,233 |
) |
|
|
10,236 |
|
|
9,780 |
|
|
456 |
|
|
Advertising and promotion |
|
1,254 |
|
|
682 |
|
|
572 |
|
|
|
1,254 |
|
|
546 |
|
|
708 |
|
|
Other |
|
10,219 |
|
|
6,388 |
|
|
3,831 |
|
|
|
10,219 |
|
|
5,628 |
|
|
4,591 |
|
|
Total non-interest expense |
$ |
103,452 |
|
$ |
99,169 |
|
$ |
4,283 |
|
|
$ |
103,452 |
|
$ |
89,297 |
|
$ |
14,155 |
|
Non-interest expenses totaled $103.5 million in Q2 2024, an increase of $4.3 million compared to Q1 2024. The increase was primarily attributable to increases of $8.9 million in salaries and employee benefits primarily due to addition of 10 new banking teams, higher incentives and severance, $3.8 million in other expenses, higher FDIC assessments and software expenditures. These increases were partially offset by $11.3 million of certain one-time items related to periods prior to 2024 that were recorded in Q1 2024 resulting to the net decrease in technology, communications and bank operations and FDIC assessments, non-income taxes and regulatory fees. Excluding the impact of certain one-time items related to periods prior to 2024, severance and the FDIC special assessment, adjusted core non-interest expenses* were $100.7 million in Q2 2024, an increase of $13.4 million, compared to $87.4 million in Q1 2024.
Non-interest expenses totaled $103.5 million in Q2 2024, an increase of $14.2 million compared to Q2 2023. The increase was primarily attributable to increases of $11.8 million in salaries and employee benefits primarily due to higher headcount including the addition of 10 new banking teams, annual merit increases, incentives and severance and $4.6 million in other expenses. These increases were partially offset by a decrease of $3.1 million in professional fees.
Taxes
Income tax expense increased by $3.4 million to $19.0 million in Q2 2024 from $15.7 million in Q1 2024 primarily due to higher pre-tax income.
Income tax expense decreased by $1.7 million to $19.0 million in Q2 2024 from $20.8 million in Q2 2023 primarily due to tax expense on surrendered bank-owned life insurance policies of $4.1 million in Q2 2023, partially offset by higher pre-tax income.
The effective tax rate for Q2 2024 was 24.7%.
Outlook
“Looking forward, our strategy remains unchanged. We are focused on strengthening our deposit franchise, further improving our profitability and maintaining our strong capital ratios. Our deposit pipelines are expected to continue to improve the quality and mix of deposits, reducing higher cost business unit deposits*1 with lower cost deposits where we have a holistic and primary relationship. The addition of the new banking teams is expected to accelerate and enhance these efforts which were already well underway. We see attractive opportunities to deploy cash and securities cash flows into franchise-enhancing loan growth and our pipeline is strong. We remain confident in our ability to deliver 10% - 15% loan growth for the full year. The management of non-interest expenses remains a priority for us. We expect the investments made in recruiting the new banking teams will produce significant benefits by increasing our net interest income and net interest margin primarily through lowering our interest expense costs as well as improving the overall quality of our deposit franchise. Operating efficiency has and will continue to be a differentiator of our business model, and we will continue to only make investments that generate long-term positive operating leverage and enable the organization to operate at a mid-40’s efficiency ratio over the medium-term. We are adjusting our guidance on effective tax rate to 23% - 25% based on our growth in higher-tax jurisdictions. We remain committed to maintaining a CET 1 ratio around 11.5% and TCE / TA ratio* around 7.5% in 2024. We are highly focused on preserving superior credit quality, managing interest rate risk, maintaining robust liquidity, operating with higher capital ratios and generating positive operating leverage,” concluded 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. |
|||||
|
1 |
Total deposits excluding wholesale CDs and BMTX student-related deposits. |
|||||
Webcast
|
Date: |
Friday, July 26, 2024 |
|
|
Time: |
9:00 AM EDT |
The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com 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 [email protected].
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 nearly $21 billion in assets making it one of the 80 largest bank holding companies in the U.S. Customers Bank’s commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service distinguished by a Single Point of Contact approach. 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 specialized lending clients. Major accolades include:
- No. 1 on American Banker 2024 list of top-performing banks with $10B to $50B in assets
- No. 29 out of the 100 largest publicly traded banks in 2024 Forbes Best Banks list
- No. 52 on Investor’s Business Daily 100 Best Stocks for 2023
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, such as the FDIC special assessments, 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, 2023, 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 2024 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended June 30, 2024 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, |
|||||||||||||||||
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
GAAP Profitability Metrics: |
||||||||||||||||||||||||||||
|
Net income available to common shareholders
|
$ |
54,300 |
|
|
$ |
45,926 |
|
|
$ |
58,223 |
|
|
$ |
82,953 |
|
|
$ |
44,007 |
|
|
$ |
100,226 |
|
|
$ |
94,272 |
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Earnings per share - basic |
$ |
1.72 |
|
|
$ |
1.46 |
|
|
$ |
1.86 |
|
|
$ |
2.65 |
|
|
$ |
1.41 |
|
|
$ |
3.18 |
|
|
$ |
2.99 |
|
|
|
Earnings per share - diluted |
$ |
1.66 |
|
|
$ |
1.40 |
|
|
$ |
1.79 |
|
|
$ |
2.58 |
|
|
$ |
1.39 |
|
|
$ |
3.06 |
|
|
$ |
2.95 |
|
|
|
Book value per common share (1) |
$ |
50.81 |
|
|
$ |
49.29 |
|
|
$ |
47.73 |
|
|
$ |
45.47 |
|
|
$ |
42.16 |
|
|
$ |
50.81 |
|
|
$ |
42.16 |
|
|
|
CUBI stock price (1) |
$ |
47.98 |
|
|
$ |
53.06 |
|
|
$ |
57.62 |
|
|
$ |
34.45 |
|
|
$ |
30.26 |
|
|
$ |
47.98 |
|
|
$ |
30.26 |
|
|
|
CUBI stock price as % of book value (1) |
|
94 |
% |
|
|
108 |
% |
|
|
121 |
% |
|
|
76 |
% |
|
|
72 |
% |
|
|
94 |
% |
|
|
72 |
% |
|
Average shares outstanding - basic |
|
31,649,715 |
|
|
|
31,473,424 |
|
|
|
31,385,043 |
|
|
|
31,290,581 |
|
|
|
31,254,125 |
|
|
|
31,561,569 |
|
|
|
31,535,103 |
|
|
|
Average shares outstanding - diluted |
|
32,699,149 |
|
|
|
32,854,534 |
|
|
|
32,521,787 |
|
|
|
32,175,084 |
|
|
|
31,591,142 |
|
|
|
32,776,842 |
|
|
|
31,965,997 |
|
|
|
Shares outstanding (1) |
|
31,667,655 |
|
|
|
31,521,931 |
|
|
|
31,440,906 |
|
|
|
31,311,254 |
|
|
|
31,282,318 |
|
|
|
31,667,655 |
|
|
|
31,282,318 |
|
|
|
Return on average assets (“ROAA”) |
|
1.11 |
% |
|
|
0.94 |
% |
|
|
1.16 |
% |
|
|
1.57 |
% |
|
|
0.88 |
% |
|
|
1.02 |
% |
|
|
0.96 |
% |
|
|
Return on average common equity (“ROCE”) |
|
13.85 |
% |
|
|
12.08 |
% |
|
|
15.93 |
% |
|
|
23.97 |
% |
|
|
13.22 |
% |
|
|
12.98 |
% |
|
|
14.57 |
% |
|
|
Net interest margin, tax equivalent |
|
3.29 |
% |
|
|
3.10 |
% |
|
|
3.31 |
% |
|
|
3.70 |
% |
|
|
3.15 |
% |
|
|
3.20 |
% |
|
|
3.06 |
% |
|
|
Efficiency ratio |
|
51.87 |
% |
|
|
54.58 |
% |
|
|
49.08 |
% |
|
|
41.01 |
% |
|
|
49.25 |
% |
|
|
53.16 |
% |
|
|
48.51 |
% |
|
|
Non-GAAP Profitability Metrics (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Core earnings |
$ |
48,567 |
|
|
$ |
46,532 |
|
|
$ |
61,633 |
|
|
$ |
83,294 |
|
|
$ |
52,163 |
|
|
$ |
95,099 |
|
|
$ |
103,306 |
|
|
|
Core pre-tax pre-provision net income |
$ |
89,220 |
|
|
$ |
83,674 |
|
|
$ |
101,884 |
|
|
$ |
128,564 |
|
|
$ |
96,833 |
|
|
$ |
172,894 |
|
|
$ |
186,115 |
|
|
|
Per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Core earnings per share - diluted |
$ |
1.49 |
|
|
$ |
1.42 |
|
|
$ |
1.90 |
|
|
$ |
2.59 |
|
|
$ |
1.65 |
|
|
$ |
2.90 |
|
|
$ |
3.22 |
|
|
|
Tangible book value per common share (1) |
$ |
50.70 |
|
|
$ |
49.18 |
|
|
$ |
47.61 |
|
|
$ |
45.36 |
|
|
$ |
42.04 |
|
|
$ |
50.70 |
|
|
$ |
42.04 |
|
|
|
CUBI stock price as % of tangible book value (1) |
|
95 |
% |
|
|
108 |
% |
|
|
121 |
% |
|
|
76 |
% |
|
|
72 |
% |
|
|
95 |
% |
|
|
72 |
% |
|
Core ROAA |
|
1.00 |
% |
|
|
0.95 |
% |
|
|
1.22 |
% |
|
|
1.57 |
% |
|
|
1.03 |
% |
|
|
0.98 |
% |
|
|
1.04 |
% |
|
|
Core ROCE |
|
12.39 |
% |
|
|
12.24 |
% |
|
|
16.87 |
% |
|
|
24.06 |
% |
|
|
15.67 |
% |
|
|
12.32 |
% |
|
|
15.97 |
% |
|
|
Core pre-tax pre-provision ROAA |
|
1.71 |
% |
|
|
1.58 |
% |
|
|
1.90 |
% |
|
|
2.32 |
% |
|
|
1.79 |
% |
|
|
1.64 |
% |
|
|
1.76 |
% |
|
|
Core pre-tax pre-provision ROCE |
|
21.79 |
% |
|
|
21.01 |
% |
|
|
26.82 |
% |
|
|
36.04 |
% |
|
|
28.01 |
% |
|
|
21.41 |
% |
|
|
27.68 |
% |
|
|
Core efficiency ratio |
|
53.47 |
% |
|
|
54.24 |
% |
|
|
46.70 |
% |
|
|
41.04 |
% |
|
|
47.84 |
% |
|
|
53.85 |
% |
|
|
47.49 |
% |
|
|
Asset Quality: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net charge-offs |
$ |
18,711 |
|
|
$ |
17,968 |
|
|
$ |
17,322 |
|
|
$ |
17,498 |
|
|
$ |
15,564 |
|
|
$ |
36,679 |
|
|
$ |
34,215 |
|
|
|
Annualized net charge-offs to average total loans and leases |
|
0.56 |
% |
|
|
0.55 |
% |
|
|
0.51 |
% |
|
|
0.50 |
% |
|
|
0.42 |
% |
|
|
0.56 |
% |
|
|
0.46 |
% |
|
|
Non-performing loans (“NPLs”) to total loans and leases (1) |
|
0.35 |
% |
|
|
0.27 |
% |
|
|
0.21 |
% |
|
|
0.22 |
% |
|
|
0.20 |
% |
|
|
0.35 |
% |
|
|
0.20 |
% |
|
|
Reserves to NPLs (1) |
|
279.52 |
% |
|
|
373.86 |
% |
|
|
499.12 |
% |
|
|
466.11 |
% |
|
|
494.46 |
% |
|
|
279.52 |
% |
|
|
494.46 |
% |
|
|
Non-performing assets (“NPAs”) to total assets |
|
0.23 |
% |
|
|
0.17 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
|
0.13 |
% |
|
|
0.23 |
% |
|
|
0.13 |
% |
|
|
Customers Bank Capital Ratios (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Common equity Tier 1 capital to risk-weighted assets |
|
14.2 |
% |
|
|
14.16 |
% |
|
|
13.77 |
% |
|
|
12.97 |
% |
|
|
11.96 |
% |
|
|
14.2 |
% |
|
|
11.96 |
% |
|
|
Tier 1 capital to risk-weighted assets |
|
14.2 |
% |
|
|
14.16 |
% |
|
|
13.77 |
% |
|
|
12.97 |
% |
|
|
11.96 |
% |
|
|
14.2 |
% |
|
|
11.96 |
% |
|
|
Total capital to risk-weighted assets |
|
15.6 |
% |
|
|
15.82 |
% |
|
|
15.28 |
% |
|
|
14.45 |
% |
|
|
13.38 |
% |
|
|
15.6 |
% |
|
|
13.38 |
% |
|
|
Tier 1 capital to average assets (leverage ratio) |
|
9.2 |
% |
|
|
8.82 |
% |
|
|
8.71 |
% |
|
|
8.25 |
% |
|
|
8.00 |
% |
|
|
9.2 |
% |
|
|
8.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(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 2024 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, 2024, our regulatory capital ratios reflected 25%, or $15.4 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, |
||||||||||||||||
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Loans and leases |
$ |
224,265 |
|
|
$ |
217,999 |
|
|
$ |
239,453 |
|
|
$ |
271,107 |
|
|
$ |
241,745 |
|
|
$ |
442,264 |
|
|
$ |
485,957 |
|
|
Investment securities |
|
47,586 |
|
|
|
46,802 |
|
|
|
51,074 |
|
|
|
54,243 |
|
|
|
48,026 |
|
|
|
94,388 |
|
|
|
95,342 |
|
|
Interest earning deposits |
|
45,506 |
|
|
|
52,817 |
|
|
|
44,104 |
|
|
|
43,800 |
|
|
|
27,624 |
|
|
|
98,323 |
|
|
|
38,019 |
|
|
Loans held for sale |
|
13,671 |
|
|
|
12,048 |
|
|
|
8,707 |
|
|
|
4,664 |
|
|
|
11,149 |
|
|
|
25,719 |
|
|
|
22,850 |
|
|
Other |
|
3,010 |
|
|
|
2,111 |
|
|
|
2,577 |
|
|
|
2,526 |
|
|
|
1,616 |
|
|
|
5,121 |
|
|
|
2,937 |
|
|
Total interest income |
|
334,038 |
|
|
|
331,777 |
|
|
|
345,915 |
|
|
|
376,340 |
|
|
|
330,160 |
|
|
|
665,815 |
|
|
|
645,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposits |
|
148,784 |
|
|
|
153,725 |
|
|
|
150,307 |
|
|
|
145,825 |
|
|
|
136,375 |
|
|
|
302,509 |
|
|
|
280,305 |
|
|
FHLB advances |
|
13,437 |
|
|
|
13,485 |
|
|
|
18,868 |
|
|
|
26,485 |
|
|
|
24,285 |
|
|
|
26,922 |
|
|
|
34,655 |
|
|
FRB advances |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,286 |
|
|
Subordinated debt |
|
2,734 |
|
|
|
2,689 |
|
|
|
2,688 |
|
|
|
2,689 |
|
|
|
2,689 |
|
|
|
5,423 |
|
|
|
5,378 |
|
|
Other borrowings |
|
1,430 |
|
|
|
1,493 |
|
|
|
1,546 |
|
|
|
1,568 |
|
|
|
1,540 |
|
|
|
2,923 |
|
|
|
3,311 |
|
|
Total interest expense |
|
166,385 |
|
|
|
171,392 |
|
|
|
173,409 |
|
|
|
176,567 |
|
|
|
164,889 |
|
|
|
337,777 |
|
|
|
329,935 |
|
|
Net interest income |
|
167,653 |
|
|
|
160,385 |
|
|
|
172,506 |
|
|
|
199,773 |
|
|
|
165,271 |
|
|
|
328,038 |
|
|
|
315,170 |
|
|
Provision for credit losses |
|
18,121 |
|
|
|
17,070 |
|
|
|
13,523 |
|
|
|
17,856 |
|
|
|
23,629 |
|
|
|
35,191 |
|
|
|
43,232 |
|
|
Net interest income after provision for credit losses |
|
149,532 |
|
|
|
143,315 |
|
|
|
158,983 |
|
|
|
181,917 |
|
|
|
141,642 |
|
|
|
292,847 |
|
|
|
271,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Commercial lease income |
|
10,282 |
|
|
|
9,683 |
|
|
|
9,035 |
|
|
|
8,901 |
|
|
|
8,917 |
|
|
|
19,965 |
|
|
|
18,243 |
|
|
Loan fees |
|
5,233 |
|
|
|
5,280 |
|
|
|
5,926 |
|
|
|
6,029 |
|
|
|
4,271 |
|
|
|
10,513 |
|
|
|
8,261 |
|
|
Bank-owned life insurance |
|
2,007 |
|
|
|
3,261 |
|
|
|
2,160 |
|
|
|
1,973 |
|
|
|
4,997 |
|
|
|
5,268 |
|
|
|
7,644 |
|
|
Mortgage finance transactional fees |
|
1,058 |
|
|
|
946 |
|
|
|
927 |
|
|
|
1,018 |
|
|
|
1,376 |
|
|
|
2,004 |
|
|
|
2,450 |
|
|
Net gain (loss) on sale of loans |
|
(238 |
) |
|
|
10 |
|
|
|
(91 |
) |
|
|
(348 |
) |
|
|
(761 |
) |
|
|
(228 |
) |
|
|
(761 |
) |
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5,037 |
) |
|
|
— |
|
|
|
(5,037 |
) |
|
Net gain (loss) on sale of investment securities |
|
(719 |
) |
|
|
(30 |
) |
|
|
(145 |
) |
|
|
(429 |
) |
|
|
— |
|
|
|
(749 |
) |
|
|
— |
|
|
Unrealized gain on equity method investments |
|
11,041 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,041 |
|
|
|
— |
|
|
Other |
|
2,373 |
|
|
|
2,081 |
|
|
|
860 |
|
|
|
631 |
|
|
|
2,234 |
|
|
|
4,454 |
|
|
|
3,318 |
|
|
Total non-interest income |
|
31,037 |
|
|
|
21,231 |
|
|
|
18,672 |
|
|
|
17,775 |
|
|
|
15,997 |
|
|
|
52,268 |
|
|
|
34,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Salaries and employee benefits |
|
44,947 |
|
|
|
36,025 |
|
|
|
33,965 |
|
|
|
33,845 |
|
|
|
33,120 |
|
|
|
80,972 |
|
|
|
65,465 |
|
|
Technology, communication and bank operations |
|
16,227 |
|
|
|
21,904 |
|
|
|
16,887 |
|
|
|
15,667 |
|
|
|
16,407 |
|
|
|
38,131 |
|
|
|
32,996 |
|
|
Commercial lease depreciation |
|
7,829 |
|
|
|
7,970 |
|
|
|
7,357 |
|
|
|
7,338 |
|
|
|
7,328 |
|
|
|
15,799 |
|
|
|
15,203 |
|
|
Professional services |
|
6,104 |
|
|
|
6,353 |
|
|
|
9,820 |
|
|
|
8,569 |
|
|
|
9,192 |
|
|
|
12,457 |
|
|
|
16,788 |
|
|
Loan servicing |
|
3,516 |
|
|
|
4,031 |
|
|
|
3,779 |
|
|
|
3,858 |
|
|
|
4,777 |
|
|
|
7,547 |
|
|
|
9,438 |
|
|
Occupancy |
|
3,120 |
|
|
|
2,347 |
|
|
|
2,320 |
|
|
|
2,471 |
|
|
|
2,519 |
|
|
|
5,467 |
|
|
|
5,279 |
|
|
FDIC assessments, non-income taxes and regulatory fees |
|
10,236 |
|
|
|
13,469 |
|
|
|
13,977 |
|
|
|
8,551 |
|
|
|
9,780 |
|
|
|
23,705 |
|
|
|
12,508 |
|
|
Advertising and promotion |
|
1,254 |
|
|
|
682 |
|
|
|
850 |
|
|
|
650 |
|
|
|
546 |
|
|
|
1,936 |
|
|
|
1,595 |
|
|
Legal settlement expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,096 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Other |
|
10,219 |
|
|
|
6,388 |
|
|
|
4,812 |
|
|
|
4,421 |
|
|
|
5,628 |
|
|
|
16,607 |
|
|
|
10,158 |
|
|
Total non-interest expense |
|
103,452 |
|
|
|
99,169 |
|
|
|
93,767 |
|
|
|
89,466 |
|
|
|
89,297 |
|
|
|
202,621 |
|
|
|
169,430 |
|
|
Income before income tax expense |
|
77,117 |
|
|
|
65,377 |
|
|
|
83,888 |
|
|
|
110,226 |
|
|
|
68,342 |
|
|
|
142,494 |
|
|
|
136,626 |
|
|
Income tax expense |
|
19,032 |
|
|
|
15,651 |
|
|
|
21,796 |
|
|
|
23,470 |
|
|
|
20,768 |
|
|
|
34,683 |
|
|
|
35,331 |
|
|
Net income |
|
58,085 |
|
|
|
49,726 |
|
|
|
62,092 |
|
|
|
86,756 |
|
|
|
47,574 |
|
|
|
107,811 |
|
|
|
101,295 |
|
|
Preferred stock dividends |
|
3,785 |
|
|
|
3,800 |
|
|
|
3,869 |
|
|
|
3,803 |
|
|
|
3,567 |
|
|
|
7,585 |
|
|
|
7,023 |
|
|
Net income available to common shareholders |
$ |
54,300 |
|
|
$ |
45,926 |
|
|
$ |
58,223 |
|
|
$ |
82,953 |
|
|
$ |
44,007 |
|
|
$ |
100,226 |
|
|
$ |
94,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Basic earnings per common share |
$ |
1.72 |
|
|
$ |
1.46 |
|
|
$ |
1.86 |
|
|
$ |
2.65 |
|
|
$ |
1.41 |
|
|
$ |
3.18 |
|
|
$ |
2.99 |
|
|
Diluted earnings per common share |
|
1.66 |
|
|
|
1.40 |
|
|
|
1.79 |
|
|
|
2.58 |
|
|
|
1.39 |
|
|
|
3.06 |
|
|
|
2.95 |
|
|
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||
|
CONSOLIDATED BALANCE SHEET - UNAUDITED |
|||||||||||||||||||
|
(Dollars in thousands) |
|||||||||||||||||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
||||||||||
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash and due from banks |
$ |
45,045 |
|
|
$ |
51,974 |
|
|
$ |
45,210 |
|
|
$ |
68,288 |
|
|
$ |
54,127 |
|
|
Interest earning deposits |
|
3,003,542 |
|
|
|
3,649,146 |
|
|
|
3,801,136 |
|
|
|
3,351,686 |
|
|
|
3,101,097 |
|
|
Cash and cash equivalents |
|
3,048,587 |
|
|
|
3,701,120 |
|
|
|
3,846,346 |
|
|
|
3,419,974 |
|
|
|
3,155,224 |
|
|
Investment securities, at fair value |
|
2,511,650 |
|
|
|
2,604,868 |
|
|
|
2,405,640 |
|
|
|
2,773,207 |
|
|
|
2,824,638 |
|
|
Investment securities held to maturity |
|
962,799 |
|
|
|
1,032,037 |
|
|
|
1,103,170 |
|
|
|
1,178,370 |
|
|
|
1,258,560 |
|
|
Loans held for sale |
|
375,724 |
|
|
|
357,640 |
|
|
|
340,317 |
|
|
|
150,368 |
|
|
|
78,108 |
|
|
Loans and leases receivable |
|
12,254,204 |
|
|
|
11,936,621 |
|
|
|
11,963,855 |
|
|
|
12,600,548 |
|
|
|
12,826,531 |
|
|
Loans receivable, mortgage finance, at fair value |
|
1,002,711 |
|
|
|
962,610 |
|
|
|
897,912 |
|
|
|
962,566 |
|
|
|
1,006,268 |
|
|
Allowance for credit losses on loans and leases |
|
(132,436 |
) |
|
|
(133,296 |
) |
|
|
(135,311 |
) |
|
|
(139,213 |
) |
|
|
(139,656 |
) |
|
Total loans and leases receivable, net of allowance for credit losses on loans and leases |
|
13,124,479 |
|
|
|
12,765,935 |
|
|
|
12,726,456 |
|
|
|
13,423,901 |
|
|
|
13,693,143 |
|
|
FHLB, Federal Reserve Bank, and other restricted stock |
|
92,276 |
|
|
|
100,067 |
|
|
|
109,548 |
|
|
|
126,098 |
|
|
|
126,240 |
|
|
Accrued interest receivable |
|
112,788 |
|
|
|
120,123 |
|
|
|
114,766 |
|
|
|
123,984 |
|
|
|
119,501 |
|
|
Bank premises and equipment, net |
|
7,019 |
|
|
|
7,253 |
|
|
|
7,371 |
|
|
|
7,789 |
|
|
|
8,031 |
|
|
Bank-owned life insurance |
|
293,108 |
|
|
|
293,400 |
|
|
|
292,193 |
|
|
|
291,670 |
|
|
|
290,322 |
|
|
Goodwill and other intangibles |
|
3,629 |
|
|
|
3,629 |
|
|
|
3,629 |
|
|
|
3,629 |
|
|
|
3,629 |
|
|
Other assets |
|
410,916 |
|
|
|
361,295 |
|
|
|
366,829 |
|
|
|
358,162 |
|
|
|
471,169 |
|
|
Total assets |
$ |
20,942,975 |
|
|
$ |
21,347,367 |
|
|
$ |
21,316,265 |
|
|
$ |
21,857,152 |
|
|
$ |
22,028,565 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||
|
Demand, non-interest bearing deposits |
$ |
4,474,862 |
|
|
$ |
4,688,880 |
|
|
$ |
4,422,494 |
|
|
$ |
4,758,682 |
|
|
$ |
4,490,198 |
|
|
Interest bearing deposits |
|
13,203,231 |
|
|
|
13,272,503 |
|
|
|
13,497,742 |
|
|
|
13,436,682 |
|
|
|
13,460,233 |
|
|
Total deposits |
|
17,678,093 |
|
|
|
17,961,383 |
|
|
|
17,920,236 |
|
|
|
18,195,364 |
|
|
|
17,950,431 |
|
|
FHLB advances |
|
1,018,349 |
|
|
|
1,195,088 |
|
|
|
1,203,207 |
|
|
|
1,529,839 |
|
|
|
2,046,142 |
|
|
Other borrowings |
|
123,970 |
|
|
|
123,905 |
|
|
|
123,840 |
|
|
|
123,775 |
|
|
|
123,710 |
|
|
Subordinated debt |
|
182,370 |
|
|
|
182,300 |
|
|
|
182,230 |
|
|
|
182,161 |
|
|
|
182,091 |
|
|
Accrued interest payable and other liabilities |
|
193,328 |
|
|
|
193,074 |
|
|
|
248,358 |
|
|
|
264,406 |
|
|
|
269,539 |
|
|
Total liabilities |
|
19,196,110 |
|
|
|
19,655,750 |
|
|
|
19,677,871 |
|
|
|
20,295,545 |
|
|
|
20,571,913 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Preferred stock |
|
137,794 |
|
|
|
137,794 |
|
|
|
137,794 |
|
|
|
137,794 |
|
|
|
137,794 |
|
|
Common stock |
|
35,686 |
|
|
|
35,540 |
|
|
|
35,459 |
|
|
|
35,330 |
|
|
|
35,301 |
|
|
Additional paid in capital |
|
567,345 |
|
|
|
567,490 |
|
|
|
564,538 |
|
|
|
559,346 |
|
|
|
555,737 |
|
|
Retained earnings |
|
1,259,808 |
|
|
|
1,205,508 |
|
|
|
1,159,582 |
|
|
|
1,101,359 |
|
|
|
1,018,406 |
|
|
Accumulated other comprehensive income (loss), net |
|
(131,358 |
) |
|
|
(132,305 |
) |
|
|
(136,569 |
) |
|
|
(149,812 |
) |
|
|
(168,176 |
) |
|
Treasury stock, at cost |
|
(122,410 |
) |
|
|
(122,410 |
) |
|
|
(122,410 |
) |
|
|
(122,410 |
) |
|
|
(122,410 |
) |
|
Total shareholders’ equity |
|
1,746,865 |
|
|
|
1,691,617 |
|
|
|
1,638,394 |
|
|
|
1,561,607 |
|
|
|
1,456,652 |
|
|
Total liabilities and shareholders’ equity |
$ |
20,942,975 |
|
|
$ |
21,347,367 |
|
|
$ |
21,316,265 |
|
|
$ |
21,857,152 |
|
|
$ |
22,028,565 |
|
|
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||||||||||||||
|
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED |
||||||||||||||||||||||||||
|
(Dollars in thousands) |
||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
|||||||||||||||||||||
|
|
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 |
$ |
3,325,771 |
|
$ |
45,506 |
|
5.50 |
% |
|
$ |
3,865,028 |
|
$ |
52,817 |
|
5.50 |
% |
|
$ |
2,150,154 |
|
$ |
27,624 |
|
5.15 |
% |
|
Investment securities (1) |
|
3,732,565 |
|
|
47,586 |
|
5.13 |
% |
|
|
3,771,097 |
|
|
46,802 |
|
4.99 |
% |
|
|
3,949,732 |
|
|
48,026 |
|
4.86 |
% |
|
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Commercial & industrial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Specialized lending loans and leases (2) |
|
5,446,882 |
|
|
120,977 |
|
8.93 |
% |
|
|
5,268,345 |
|
|
115,590 |
|
8.82 |
% |
|
|
5,832,485 |
|
|
121,779 |
|
8.37 |
% |
|
Other commercial & industrial loans (2)(3) |
|
1,540,191 |
|
|
25,119 |
|
6.56 |
% |
|
|
1,654,665 |
|
|
26,714 |
|
6.49 |
% |
|
|
1,879,794 |
|
|
27,661 |
|
5.90 |
% |
|
Mortgage finance loans |
|
1,151,407 |
|
|
15,087 |
|
5.27 |
% |
|
|
1,033,177 |
|
|
12,830 |
|
4.99 |
% |
|
|
1,300,496 |
|
|
19,606 |
|
6.05 |
% |
|
Multifamily loans |
|
2,108,835 |
|
|
21,461 |
|
4.09 |
% |
|
|
2,121,650 |
|
|
21,255 |
|
4.03 |
% |
|
|
2,181,617 |
|
|
21,095 |
|
3.88 |
% |
|
Non-owner occupied commercial real estate loans |
|
1,396,771 |
|
|
20,470 |
|
5.89 |
% |
|
|
1,348,468 |
|
|
20,179 |
|
6.02 |
% |
|
|
1,428,086 |
|
|
19,877 |
|
5.58 |
% |
|
Residential mortgages |
|
520,791 |
|
|
5,955 |
|
4.60 |
% |
|
|
522,528 |
|
|
5,708 |
|
4.39 |
% |
|
|
535,739 |
|
|
5,735 |
|
4.28 |
% |
|
Installment loans |
|
1,186,486 |
|
|
28,867 |
|
9.79 |
% |
|
|
1,179,721 |
|
|
27,771 |
|
9.47 |
% |
|
|
1,684,215 |
|
|
37,141 |
|
8.84 |
% |
|
Total loans and leases (4) |
|
13,351,363 |
|
|
237,936 |
|
7.17 |
% |
|
|
13,128,554 |
|
|
230,047 |
|
7.05 |
% |
|
|
14,842,432 |
|
|
252,894 |
|
6.83 |
% |
|
Other interest-earning assets |
|
110,585 |
|
|
3,010 |
|
10.95 |
% |
|
|
107,525 |
|
|
2,111 |
|
7.90 |
% |
|
|
131,362 |
|
|
1,616 |
|
4.93 |
% |
|
Total interest-earning assets |
|
20,520,284 |
|
|
334,038 |
|
6.54 |
% |
|
|
20,872,204 |
|
|
331,777 |
|
6.39 |
% |
|
|
21,073,680 |
|
|
330,160 |
|
6.28 |
% |
|
Non-interest-earning assets |
|
464,919 |
|
|
|
|
|
|
463,025 |
|
|
|
|
|
|
581,055 |
|
|
|
|
||||||
|
Total assets |
$ |
20,985,203 |
|
|
|
|
|
$ |
21,335,229 |
|
|
|
|
|
$ |
21,654,735 |
|
|
|
|
||||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Interest checking accounts |
$ |
5,719,698 |
|
$ |
64,047 |
|
4.50 |
% |
|
$ |
5,538,846 |
|
$ |
61,531 |
|
4.47 |
% |
|
$ |
5,309,775 |
|
$ |
49,862 |
|
3.77 |
% |
|
Money market deposit accounts |
|
3,346,718 |
|
|
38,167 |
|
4.59 |
% |
|
|
3,233,103 |
|
|
36,811 |
|
4.58 |
% |
|
|
1,978,546 |
|
|
19,678 |
|
3.99 |
% |
|
Other savings accounts |
|
1,810,375 |
|
|
21,183 |
|
4.71 |
% |
|
|
1,753,118 |
|
|
21,399 |
|
4.91 |
% |
|
|
997,205 |
|
|
9,839 |
|
3.96 |
% |
|
Certificates of deposit |
|
2,034,605 |
|
|
25,387 |
|
5.02 |
% |
|
|
2,750,788 |
|
|
33,984 |
|
4.97 |
% |
|
|
5,020,205 |
|
|
56,996 |
|
4.55 |
% |
|
Total interest-bearing deposits (5) |
|
12,911,396 |
|
|
148,784 |
|
4.63 |
% |
|
|
13,275,855 |
|
|
153,725 |
|
4.66 |
% |
|
|
13,305,731 |
|
|
136,375 |
|
4.11 |
% |
|
Borrowings |
|
1,454,010 |
|
|
17,601 |
|
4.87 |
% |
|
|
1,506,707 |
|
|
17,667 |
|
4.72 |
% |
|
|
2,357,981 |
|
|
28,514 |
|
4.85 |
% |
|
Total interest-bearing liabilities |
|
14,365,406 |
|
|
166,385 |
|
4.66 |
% |
|
|
14,782,562 |
|
|
171,392 |
|
4.66 |
% |
|
|
15,663,712 |
|
|
164,889 |
|
4.22 |
% |
|
Non-interest-bearing deposits (5) |
|
4,701,695 |
|
|
|
|
|
|
4,620,986 |
|
|
|
|
|
|
4,258,711 |
|
|
|
|
||||||
|
Total deposits and borrowings |
|
19,067,101 |
|
|
|
3.51 |
% |
|
|
19,403,548 |
|
|
|
3.55 |
% |
|
|
19,922,423 |
|
|
|
3.32 |
% |
|||
|
Other non-interest-bearing liabilities |
|
203,714 |
|
|
|
|
|
|
264,677 |
|
|
|
|
|
|
259,111 |
|
|
|
|
||||||
|
Total liabilities |
|
19,270,815 |
|
|
|
|
|
|
19,668,225 |
|
|
|
|
|
|
20,181,534 |
|
|
|
|
||||||
|
Shareholders’ equity |
|
1,714,388 |
|
|
|
|
|
|
1,667,004 |
|
|
|
|
|
|
1,473,201 |
|
|
|
|
||||||
|
Total liabilities and shareholders’ equity |
$ |
20,985,203 |
|
|
|
|
|
$ |
21,335,229 |
|
|
|
|
|
$ |
21,654,735 |
|
|
|
|
||||||
|
Net interest income |
|
|
|
167,653 |
|
|
|
|
|
|
160,385 |
|
|
|
|
|
|
165,271 |
|
|
||||||
|
Tax-equivalent adjustment |
|
|
|
393 |
|
|
|
|
|
|
394 |
|
|
|
|
|
|
390 |
|
|
||||||
|
Net interest earnings |
|
|
$ |
168,046 |
|
|
|
|
|
$ |
160,779 |
|
|
|
|
|
$ |
165,661 |
|
|
||||||
|
Interest spread |
|
|
|
|
3.03 |
% |
|
|
|
|
|
2.84 |
% |
|
|
|
|
|
2.96 |
% |
||||||
|
Net interest margin |
|
|
|
|
3.28 |
% |
|
|
|
|
|
3.09 |
% |
|
|
|
|
|
3.14 |
% |
||||||
|
Net interest margin tax equivalent (6) |
|
|
|
|
3.29 |
% |
|
|
|
|
|
3.10 |
% |
|
|
|
|
|
3.15 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
(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 PPP loans. |
||||||||||||||||||||||||||
|
(4) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees. |
||||||||||||||||||||||||||
|
(5) Total costs of deposits (including interest bearing and non-interest bearing) were 3.40%, 3.45% and 3.11% for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively. |
||||||||||||||||||||||||||
|
(6) Tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, presented to approximate interest income as a taxable asset. |
||||||||||||||||||||||||||
|
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||
|
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED) |
|||||||||||||||||
|
(Dollars in thousands) |
|||||||||||||||||
|
|
Six Months Ended |
||||||||||||||||
|
|
June 30, 2024 |
|
June 30, 2023 |
||||||||||||||
|
|
Average Balance |
|
Interest Income or Expense |
|
Average Yield or Cost (%) |
|
Average Balance |
|
Interest Income or Expense |
|
Average Yield or Cost (%) |
||||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Interest earning deposits |
$ |
3,595,400 |
|
$ |
98,323 |
|
5.50 |
% |
|
$ |
1,535,566 |
|
$ |
38,019 |
|
4.99 |
% |
|
Investment securities (1) |
|
3,751,831 |
|
|
94,388 |
|
5.06 |
% |
|
|
3,990,265 |
|
|
95,342 |
|
4.78 |
% |
|
Loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Commercial & industrial: |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Specialized lending loans and leases (2) |
|
5,357,613 |
|
|
236,567 |
|
8.88 |
% |
|
|
5,763,708 |
|
|
225,467 |
|
7.89 |
% |
|
Other commercial & industrial loans (2)(3) |
|
1,597,428 |
|
|
51,833 |
|
6.53 |
% |
|
|
2,235,144 |
|
|
76,782 |
|
6.93 |
% |
|
Mortgage finance loans |
|
1,092,292 |
|
|
27,917 |
|
5.14 |
% |
|
|
1,281,424 |
|
|
37,018 |
|
5.83 |
% |
|
Multifamily loans |
|
2,115,243 |
|
|
42,716 |
|
4.06 |
% |
|
|
2,194,039 |
|
|
41,565 |
|
3.82 |
% |
|
Non-owner occupied commercial real estate loans |
|
1,372,619 |
|
|
40,649 |
|
5.96 |
% |
|
|
1,438,844 |
|
|
40,076 |
|
5.62 |
% |
|
Residential mortgages |
|
521,659 |
|
|
11,663 |
|
4.50 |
% |
|
|
539,304 |
|
|
11,333 |
|
4.24 |
% |
|
Installment loans |
|
1,183,104 |
|
|
56,638 |
|
9.63 |
% |
|
|
1,705,984 |
|
|
76,566 |
|
9.05 |
% |
|
Total loans and leases (4) |
|
13,239,958 |
|
|
467,983 |
|
7.11 |
% |
|
|
15,158,447 |
|
|
508,807 |
|
6.77 |
% |
|
Other interest-earning assets |
|
109,055 |
|
|
5,121 |
|
9.44 |
% |
|
|
111,446 |
|
|
2,937 |
|
5.32 |
% |
|
Total interest-earning assets |
|
20,696,244 |
|
|
665,815 |
|
6.46 |
% |
|
|
20,795,724 |
|
|
645,105 |
|
6.25 |
% |
|
Non-interest-earning assets |
|
463,972 |
|
|
|
|
|
|
559,766 |
|
|
|
|
||||
|
Total assets |
$ |
21,160,216 |
|
|
|
|
|
$ |
21,355,490 |
|
|
|
|
||||
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Interest checking accounts |
$ |
5,629,272 |
|
$ |
125,578 |
|
4.49 |
% |
|
$ |
6,396,042 |
|
$ |
120,347 |
|
3.79 |
% |
|
Money market deposit accounts |
|
3,289,911 |
|
|
74,978 |
|
4.58 |
% |
|
|
2,222,917 |
|
|
40,461 |
|
3.67 |
% |
|
Other savings accounts |
|
1,781,746 |
|
|
42,582 |
|
4.81 |
% |
|
|
910,241 |
|
|
16,125 |
|
3.57 |
% |
|
Certificates of deposit |
|
2,392,696 |
|
|
59,371 |
|
4.99 |
% |
|
|
4,763,694 |
|
|
103,372 |
|
4.38 |
% |
|
Total interest-bearing deposits (5) |
|
13,093,625 |
|
|
302,509 |
|
4.65 |
% |
|
|
14,292,894 |
|
|
280,305 |
|
3.95 |
% |
|
Federal funds purchased |
|
— |
|
|
— |
|
— |
% |
|
|
7,624 |
|
|
188 |
|
4.97 |
% |
|
Borrowings |
|
1,480,359 |
|
|
35,268 |
|
4.79 |
% |
|
|
2,074,623 |
|
|
49,442 |
|
4.81 |
% |
|
Total interest-bearing liabilities |
|
14,573,984 |
|
|
337,777 |
|
4.66 |
% |
|
|
16,375,141 |
|
|
329,935 |
|
4.06 |
% |
|
Non-interest-bearing deposits (5) |
|
4,661,341 |
|
|
|
|
|
|
3,284,416 |
|
|
|
|
||||
|
Total deposits and borrowings |
|
19,235,325 |
|
|
|
3.53 |
% |
|
|
19,659,557 |
|
|
|
3.38 |
% |
||
|
Other non-interest-bearing liabilities |
|
234,195 |
|
|
|
|
|
|
253,376 |
|
|
|
|
||||
|
Total liabilities |
|
19,469,520 |
|
|
|
|
|
|
19,912,933 |
|
|
|
|
||||
|
Shareholders’ equity |
|
1,690,696 |
|
|
|
|
|
|
1,442,557 |
|
|
|
|
||||
|
Total liabilities and shareholders’ equity |
$ |
21,160,216 |
|
|
|
|
|
$ |
21,355,490 |
|
|
|
|
||||
|
Net interest income |
|
|
|
328,038 |
|
|
|
|
|
|
315,170 |
|
|
||||
|
Tax-equivalent adjustment |
|
|
|
787 |
|
|
|
|
|
|
765 |
|
|
||||
|
Net interest earnings |
|
|
$ |
328,825 |
|
|
|
|
|
$ |
315,935 |
|
|
||||
|
Interest spread |
|
|
|
|
2.93 |
% |
|
|
|
|
|
2.86 |
% |
||||
|
Net interest margin |
|
|
|
|
3.19 |
% |
|
|
|
|
|
3.05 |
% |
||||
|
Net interest margin tax equivalent (6) |
|
|
|
|
3.20 |
% |
|
|
|
|
|
3.06 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(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 PPP loans. |
|||||||||||||||||
|
(4) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees. |
|||||||||||||||||
|
(5) Total costs of deposits (including interest bearing and non-interest bearing) were 3.43% and 3.22% for the six months ended June 30, 2024 and 2023, respectively. |
|||||||||||||||||
|
(6) Tax-equivalent basis, using an estimated marginal tax rate of 26% for the six months ended June 30, 2024 and 2023, presented to approximate interest income as a taxable asset. |
|||||||||||||||||
|
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, |
|||||
|
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|||||
|
Loans and leases held for investment |
|
|
|
|
|
|
|
|
|
|||||
|
Commercial: |
|
|
|
|
|
|
|
|
|
|||||
|
Commercial & industrial: |
|
|
|
|
|
|
|
|
|
|||||
|
Specialized lending |
$ |
5,528,745 |
|
$ |
5,104,405 |
|
$ |
5,006,693 |
|
$ |
5,422,161 |
|
$ |
5,534,832 |
|
Other commercial & industrial (1) |
|
1,092,146 |
|
|
1,113,517 |
|
|
1,162,317 |
|
|
1,252,427 |
|
|
1,240,908 |
|
Mortgage finance |
|
1,122,812 |
|
|
1,071,146 |
|
|
1,014,742 |
|
|
1,042,549 |
|
|
1,108,598 |
|
Multifamily |
|
2,067,332 |
|
|
2,123,675 |
|
|
2,138,622 |
|
|
2,130,213 |
|
|
2,151,734 |
|
Commercial real estate owner occupied |
|
805,779 |
|
|
806,278 |
|
|
797,319 |
|
|
794,815 |
|
|
842,042 |
|
Commercial real estate non-owner occupied |
|
1,202,606 |
|
|
1,182,084 |
|
|
1,177,650 |
|
|
1,178,203 |
|
|
1,211,091 |
|
Construction |
|
163,409 |
|
|
185,601 |
|
|
166,393 |
|
|
252,588 |
|
|
212,214 |
|
Total commercial loans and leases |
|
11,982,829 |
|
|
11,586,706 |
|
|
11,463,736 |
|
|
12,072,956 |
|
|
12,301,419 |
|
Consumer: |
|
|
|
|
|
|
|
|
|
|||||
|
Residential |
|
481,503 |
|
|
482,537 |
|
|
484,435 |
|
|
483,133 |
|
|
487,199 |
|
Manufactured housing |
|
35,901 |
|
|
37,382 |
|
|
38,670 |
|
|
40,129 |
|
|
41,664 |
|
Installment: |
|
|
|
|
|
|
|
|
|
|||||
|
Personal |
|
474,481 |
|
|
492,892 |
|
|
555,533 |
|
|
629,843 |
|
|
752,470 |
|
Other |
|
282,201 |
|
|
299,714 |
|
|
319,393 |
|
|
337,053 |
|
|
250,047 |
|
Total installment loans |
|
756,682 |
|
|
792,606 |
|
|
874,926 |
|
|
966,896 |
|
|
1,002,517 |
|
Total consumer loans |
|
1,274,086 |
|
|
1,312,525 |
|
|
1,398,031 |
|
|
1,490,158 |
|
|
1,531,380 |
|
Total loans and leases held for investment |
$ |
13,256,915 |
|
$ |
12,899,231 |
|
$ |
12,861,767 |
|
$ |
13,563,114 |
|
$ |
13,832,799 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Loans held for sale |
|
|
|
|
|
|
|
|
|
|||||
|
Residential |
$ |
2,684 |
|
$ |
870 |
|
$ |
1,215 |
|
$ |
1,005 |
|
$ |
1,234 |
|
Installment: |
|
|
|
|
|
|
|
|
|
|||||
|
Personal |
|
125,598 |
|
|
137,755 |
|
|
151,040 |
|
|
124,848 |
|
|
76,874 |
|
Other |
|
247,442 |
|
|
219,015 |
|
|
188,062 |
|
|
24,515 |
|
|
— |
|
Total installment loans |
|
373,040 |
|
|
356,770 |
|
|
339,102 |
|
|
149,363 |
|
|
76,874 |
|
Total loans held for sale |
$ |
375,724 |
|
$ |
357,640 |
|
$ |
340,317 |
|
$ |
150,368 |
|
$ |
78,108 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total loans and leases portfolio |
$ |
13,632,639 |
|
$ |
13,256,871 |
|
$ |
13,202,084 |
|
$ |
13,713,482 |
|
$ |
13,910,907 |
|
(1) Includes PPP loans. |
||||||||||||||
|
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
||||||||||||||
|
PERIOD END DEPOSIT COMPOSITION - UNAUDITED |
||||||||||||||
|
(Dollars in thousands) |
||||||||||||||
|
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||
|
|
2024 |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Demand, non-interest bearing |
$ |
4,474,862 |
|
$ |
4,688,880 |
|
$ |
4,422,494 |
|
$ |
4,758,682 |
|
$ |
4,490,198 |
|
Demand, interest bearing |
|
5,894,056 |
|
|
5,661,775 |
|
|
5,580,527 |
|
|
5,824,410 |
|
|
5,551,037 |
|
Total demand deposits |
|
10,368,918 |
|
|
10,350,655 |
|
|
10,003,021 |
|
|
10,583,092 |
|
|
10,041,235 |
|
Savings |
|
1,573,661 |
|
|
2,080,374 |
|
|
1,402,941 |
|
|
1,118,353 |
|
|
1,048,229 |
|
Money market |
|
3,539,815 |
|
|
3,347,843 |
|
|
3,226,395 |
|
|
2,499,593 |
|
|
2,004,264 |
|
Time deposits |
|
2,195,699 |
|
|
2,182,511 |
|
|
3,287,879 |
|
|
3,994,326 |
|
|
4,856,703 |
|
Total deposits |
$ |
17,678,093 |
|
$ |
17,961,383 |
|
$ |
17,920,236 |
|
$ |
18,195,364 |
|
$ |
17,950,431 |
|
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
|
||||||||||||||||||||||||||||||||||||||||||||
|
ASSET QUALITY - UNAUDITED |
|
||||||||||||||||||||||||||||||||||||||||||||
|
(Dollars in thousands) |
As of June 30, 2024 |
|
As of March 31, 2024 |
|
As of June 30, 2023 |
|
|||||||||||||||||||||||||||||||||||||||
|
|
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 specialized lending (1) |
$ |
6,740,992 |
|
$ |
5,488 |
|
$ |
23,721 |
|
0.08 |
% |
|
432.23 |
% |
|
$ |
6,326,458 |
|
$ |
3,608 |
|
$ |
23,003 |
|
0.06 |
% |
|
637.56 |
% |
|
$ |
6,878,070 |
|
$ |
4,441 |
|
$ |
29,092 |
|
0.06 |
% |
|
655.08 |
% |
|
|
Multifamily |
|
2,067,332 |
|
|
14,002 |
|
|
20,652 |
|
0.68 |
% |
|
147.49 |
% |
|
|
2,123,675 |
|
|
5,161 |
|
|
18,307 |
|
0.24 |
% |
|
354.72 |
% |
|
|
2,151,734 |
|
|
4,022 |
|
|
15,400 |
|
0.19 |
% |
|
382.89 |
% |
|
|
Commercial real estate owner occupied |
|
805,779 |
|
|
9,612 |
|
|
8,431 |
|
1.19 |
% |
|
87.71 |
% |
|
|
806,278 |
|
|
8,920 |
|
|
10,201 |
|
1.11 |
% |
|
114.36 |
% |
|
|
842,042 |
|
|
3,304 |
|
|
10,215 |
|
0.39 |
% |
|
309.17 |
% |
|
|
Commercial real estate non-owner occupied |
|
1,202,606 |
|
|
62 |
|
|
17,966 |
|
0.01 |
% |
|
28977.42 |
% |
|
|
1,182,084 |
|
|
62 |
|
|
18,320 |
|
0.01 |
% |
|
29548.39 |
% |
|
|
1,211,091 |
|
|
— |
|
|
13,495 |
|
— |
% |
|
— |
% |
|
|
Construction |
|
163,409 |
|
|
— |
|
|
1,856 |
|
— |
% |
|
— |
% |
|
|
185,601 |
|
|
— |
|
|
1,866 |
|
— |
% |
|
— |
% |
|
|
212,214 |
|
|
— |
|
|
2,639 |
|
— |
% |
|
— |
% |
|
|
Total commercial loans and leases receivable |
|
10,980,118 |
|
|
29,164 |
|
|
72,626 |
|
0.27 |
% |
|
249.03 |
% |
|
|
10,624,096 |
|
|
17,751 |
|
|
71,697 |
|
0.17 |
% |
|
403.90 |
% |
|
|
11,295,151 |
|
|
11,767 |
|
|
70,841 |
|
0.10 |
% |
|
602.03 |
% |
|
|
Residential |
|
481,503 |
|
|
8,179 |
|
|
5,884 |
|
1.70 |
% |
|
71.94 |
% |
|
|
482,537 |
|
|
8,089 |
|
|
6,707 |
|
1.68 |
% |
|
82.92 |
% |
|
|
487,199 |
|
|
7,306 |
|
|
6,846 |
|
1.50 |
% |
|
93.70 |
% |
|
|
Manufactured housing |
|
35,901 |
|
|
2,047 |
|
|
4,094 |
|
5.70 |
% |
|
200.00 |
% |
|
|
37,382 |
|
|
2,268 |
|
|
4,160 |
|
6.07 |
% |
|
183.42 |
% |
|
|
41,664 |
|
|
2,634 |
|
|
4,338 |
|
6.32 |
% |
|
164.69 |
% |
|
|
Installment |
|
756,682 |
|
|
5,614 |
|
|
49,832 |
|
0.74 |
% |
|
887.64 |
% |
|
|
792,606 |
|
|
6,958 |
|
|
50,732 |
|
0.88 |
% |
|
729.12 |
% |
|
|
1,002,517 |
|
|
6,537 |
|
|
57,631 |
|
0.65 |
% |
|
881.61 |
% |
|
|
Total consumer loans receivable |
|
1,274,086 |
|
|
15,840 |
|
|
59,810 |
|
1.24 |
% |
|
377.59 |
% |
|
|
1,312,525 |
|
|
17,315 |
|
|
61,599 |
|
1.32 |
% |
|
355.76 |
% |
|
|
1,531,380 |
|
|
16,477 |
|
|
68,815 |
|
1.08 |
% |
|
417.64 |
% |
|
|
Loans and leases receivable |
|
12,254,204 |
|
|
45,004 |
|
|
132,436 |
|
0.37 |
% |
|
294.28 |
% |
|
|
11,936,621 |
|
|
35,066 |
|
|
133,296 |
|
0.29 |
% |
|
380.13 |
% |
|
|
12,826,531 |
|
|
28,244 |
|
|
139,656 |
|
0.22 |
% |
|
494.46 |
% |
|
|
Loans receivable, mortgage finance, at fair value |
|
1,002,711 |
|
|
— |
|
|
— |
|
— |
% |
|
— |
% |
|
|
962,610 |
|
|
— |
|
|
— |
|
— |
% |
|
— |
% |
|
|
1,006,268 |
|
|
— |
|
|
— |
|
— |
% |
|
— |
% |
|
|
Loans held for sale |
|
375,724 |
|
|
2,376 |
|
|
— |
|
0.63 |
% |
|
— |
% |
|
|
357,640 |
|
|
588 |
|
|
— |
|
0.16 |
% |
|
— |
% |
|
|
78,108 |
|
|
— |
|
|
— |
|
— |
% |
|
— |
% |
|
|
Total portfolio |
$ |
13,632,639 |
|
$ |
47,380 |
|
$ |
132,436 |
|
0.35 |
% |
|
279.52 |
% |
|
$ |
13,256,871 |
|
$ |
35,654 |
|
$ |
133,296 |
|
0.27 |
% |
|
373.86 |
% |
|
$ |
13,910,907 |
|
$ |
28,244 |
|
$ |
139,656 |
|
0.20 |
% |
|
494.46 |
% |
|
|
(1) Includes PPP loans. |
|||||||||||||||||||||||||||||||||||||||||||||
|
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
|||||||||||||||||||||||||
|
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED |
|||||||||||||||||||||||||
|
(Dollars in thousands) |
|||||||||||||||||||||||||
|
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Six Months Ended June 30, |
||||||||||||||
|
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
2023 (1) |
|
|
2024 |
|
|
|
2023 |
|
||||
|
Loan type |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial & industrial, including specialized lending |
$ |
5,665 |
|
|
$ |
3,672 |
|
$ |
5,282 |
|
|
$ |
2,974 |
|
$ |
258 |
|
|
$ |
9,337 |
|
|
$ |
187 |
|
|
Multifamily |
|
1,433 |
|
|
|
473 |
|
|
127 |
|
|
|
1,999 |
|
|
1,448 |
|
|
|
1,906 |
|
|
|
1,448 |
|
|
Commercial real estate owner occupied |
|
— |
|
|
|
22 |
|
|
— |
|
|
|
39 |
|
|
(34 |
) |
|
|
22 |
|
|
|
(34 |
) |
|
Commercial real estate non-owner occupied |
|
— |
|
|
|
— |
|
|
(288 |
) |
|
|
— |
|
|
266 |
|
|
|
— |
|
|
|
4,500 |
|
|
Construction |
|
(7 |
) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(7 |
) |
|
|
(116 |
) |
|
Residential |
|
(20 |
) |
|
|
18 |
|
|
(1 |
) |
|
|
13 |
|
|
24 |
|
|
|
(2 |
) |
|
|
22 |
|
|
Installment |
|
11,640 |
|
|
|
13,783 |
|
|
12,202 |
|
|
|
12,473 |
|
|
13,602 |
|
|
|
25,423 |
|
|
|
28,208 |
|
|
Total net charge-offs (recoveries) from loans held for investment |
$ |
18,711 |
|
|
$ |
17,968 |
|
$ |
17,322 |
|
|
$ |
17,498 |
|
$ |
15,564 |
|
|
$ |
36,679 |
|
|
$ |
34,215 |
|
|
(1) Excludes $6.2 million of charge-offs for certain PCD loans acquired from the FDIC that were immediately 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. Subsequent recoveries and charge-offs of these PCD loans will be included in the period in which they occur. |
|||||||||||||||||||||||||
|
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 and Adjusted Core Earnings - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|||||||||||||||||||||||||
|
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
2024 |
|
2023 |
|||||||||||||||||||||||||||||
|
(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 |
$ |
54,300 |
|
$ |
1.66 |
|
|
$ |
45,926 |
$ |
1.40 |
|
$ |
58,223 |
|
$ |
1.79 |
|
$ |
82,953 |
|
$ |
2.58 |
|
$ |
44,007 |
|
$ |
1.39 |
|
$ |
100,226 |
|
$ |
3.06 |
|
|
$ |
94,272 |
$ |
2.95 |
|
Reconciling items (after tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Severance expense |
|
1,928 |
|
|
0.06 |
|
|
|
— |
|
— |
|
|
473 |
|
|
0.01 |
|
|
— |
|
|
— |
|
|
141 |
|
|
0.00 |
|
|
1,928 |
|
|
0.06 |
|
|
|
778 |
|
0.02 |
|
Impairments on fixed assets and leases |
|
— |
|
|
— |
|
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12 |
|
|
0.00 |
|
|
— |
|
|
— |
|
|
|
98 |
|
0.00 |
|
Loss on sale of capital call lines of credit |
|
— |
|
|
— |
|
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,914 |
|
|
0.12 |
|
|
— |
|
|
— |
|
|
|
3,914 |
|
0.12 |
|
(Gains) losses on investment securities |
|
561 |
|
|
0.02 |
|
|
|
57 |
|
0.00 |
|
|
(85 |
) |
|
0.00 |
|
|
492 |
|
|
0.02 |
|
|
49 |
|
|
0.00 |
|
|
618 |
|
|
0.02 |
|
|
|
0 |
|
0.00 |
|
Derivative credit valuation adjustment |
|
(44 |
) |
|
0.00 |
|
|
|
169 |
|
0.01 |
|
|
267 |
|
|
0.01 |
|
|
(151 |
) |
|
0.00 |
|
|
(101 |
) |
|
0.00 |
|
|
125 |
|
|
0.00 |
|
|
|
103 |
|
0.00 |
|
Tax on surrender of bank-owned life insurance policies |
|
— |
|
|
— |
|
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,141 |
|
|
0.13 |
|
|
— |
|
|
— |
|
|
|
4,141 |
|
0.13 |
|
FDIC special assessment |
|
138 |
|
|
0.00 |
|
|
|
380 |
|
0.01 |
|
|
2,755 |
|
|
0.08 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
518 |
|
|
0.02 |
|
|
|
— |
|
— |
|
Unrealized (gain) on equity method investments |
|
(8,316 |
) |
|
(0.25 |
) |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(8,316 |
) |
|
(0.25 |
) |
|
|
— |
|
— |
|
Core earnings |
$ |
48,567 |
|
$ |
1.49 |
|
|
$ |
46,532 |
$ |
1.42 |
|
$ |
61,633 |
|
$ |
1.90 |
|
$ |
83,294 |
|
$ |
2.59 |
|
$ |
52,163 |
|
$ |
1.65 |
|
$ |
95,099 |
|
$ |
2.90 |
|
|
$ |
103,306 |
$ |
3.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
One-time non-interest expense items recorded in 2024 (after-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
— |
|
|
|
5,405 |
|
0.16 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,405 |
|
|
0.16 |
|
|
|
— |
|
— |
|
FDIC premiums prior to 2024 |
|
— |
|
|
— |
|
|
|
3,200 |
|
0.10 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,200 |
|
|
0.10 |
|
|
|
— |
|
— |
|
Total one-time non-interest expense items |
|
— |
|
|
— |
|
|
|
8,605 |
|
0.26 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8,605 |
|
|
0.26 |
|
|
|
— |
|
— |
|
Adjusted core earnings (adjusted for one-time non-interest expense items) |
$ |
48,567 |
|
$ |
1.49 |
|
|
$ |
55,137 |
$ |
1.68 |
|
$ |
61,633 |
|
$ |
1.90 |
|
$ |
83,294 |
|
$ |
2.59 |
|
$ |
52,163 |
|
$ |
1.65 |
|
$ |
103,704 |
|
$ |
3.16 |
|
|
$ |
103,306 |
$ |
3.22 |
|
Core Return on Average Assets and Adjusted Core Return on Average Assets - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||||||
|
GAAP net income |
$ |
58,085 |
|
|
$ |
49,726 |
|
|
$ |
62,092 |
|
|
$ |
86,756 |
|
|
$ |
47,574 |
|
|
$ |
107,811 |
|
|
$ |
101,295 |
|
|
Reconciling items (after tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Severance expense |
|
1,928 |
|
|
|
— |
|
|
|
473 |
|
|
|
— |
|
|
|
141 |
|
|
|
1,928 |
|
|
|
778 |
|
|
Impairments on fixed assets and leases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
|
|
|
98 |
|
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,914 |
|
|
|
— |
|
|
|
3,914 |
|
|
(Gains) losses on investment securities |
|
561 |
|
|
|
57 |
|
|
|
(85 |
) |
|
|
492 |
|
|
|
49 |
|
|
|
618 |
|
|
|
0 |
|
|
Derivative credit valuation adjustment |
|
(44 |
) |
|
|
169 |
|
|
|
267 |
|
|
|
(151 |
) |
|
|
(101 |
) |
|
|
125 |
|
|
|
103 |
|
|
Tax on surrender of bank-owned life insurance policies |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,141 |
|
|
|
— |
|
|
|
4,141 |
|
|
FDIC special assessment |
|
138 |
|
|
|
380 |
|
|
|
2,755 |
|
|
|
— |
|
|
|
— |
|
|
|
518 |
|
|
|
— |
|
|
Unrealized (gain) on equity method investments |
|
(8,316 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,316 |
) |
|
|
— |
|
|
Core net income |
$ |
52,352 |
|
|
$ |
50,332 |
|
|
$ |
65,502 |
|
|
$ |
87,097 |
|
|
$ |
55,730 |
|
|
$ |
102,684 |
|
|
$ |
110,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
One-time non-interest expense items recorded in 2024 (after-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
|
5,405 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,405 |
|
|
|
— |
|
|
FDIC premiums prior to 2024 |
|
— |
|
|
|
3,200 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,200 |
|
|
|
— |
|
|
Total one-time non-interest expense items |
|
— |
|
|
|
8,605 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,605 |
|
|
|
— |
|
|
Adjusted core net income (adjusted for one-time non-interest expense items) |
$ |
52,352 |
|
|
$ |
58,937 |
|
|
$ |
65,502 |
|
|
$ |
87,097 |
|
|
$ |
55,730 |
|
|
$ |
111,289 |
|
|
$ |
110,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Average total assets |
$ |
20,985,203 |
|
|
$ |
21,335,229 |
|
|
$ |
21,252,273 |
|
|
$ |
21,978,010 |
|
|
$ |
21,654,735 |
|
|
$ |
21,160,216 |
|
|
$ |
21,355,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Core return on average assets |
|
1.00 |
% |
|
|
0.95 |
% |
|
|
1.22 |
% |
|
|
1.57 |
% |
|
|
1.03 |
% |
|
|
0.98 |
% |
|
|
1.04 |
% |
|
Adjusted core return on average assets (adjusted for one-time non-interest expense items) |
|
1.00 |
% |
|
|
1.11 |
% |
|
|
1.22 |
% |
|
|
1.57 |
% |
|
|
1.03 |
% |
|
|
1.06 |
% |
|
|
1.04 |
% |
|
Core Pre-Tax Pre-Provision Net Income and ROAA and Adjusted Core Pre-Tax Pre-Provision Net Income and ROAA - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||||||
|
GAAP net income |
$ |
58,085 |
|
|
$ |
49,726 |
|
|
$ |
62,092 |
|
|
$ |
86,756 |
|
|
$ |
47,574 |
|
|
$ |
107,811 |
|
|
$ |
101,295 |
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Income tax expense |
|
19,032 |
|
|
|
15,651 |
|
|
|
21,796 |
|
|
|
23,470 |
|
|
|
20,768 |
|
|
|
34,683 |
|
|
|
35,331 |
|
|
Provision (benefit) for credit losses |
|
18,121 |
|
|
|
17,070 |
|
|
|
13,523 |
|
|
|
17,856 |
|
|
|
23,629 |
|
|
|
35,191 |
|
|
|
43,232 |
|
|
Provision (benefit) for credit losses on unfunded commitments |
|
1,594 |
|
|
|
430 |
|
|
|
(136 |
) |
|
|
48 |
|
|
|
(304 |
) |
|
|
2,024 |
|
|
|
(24 |
) |
|
Severance expense |
|
2,560 |
|
|
|
— |
|
|
|
639 |
|
|
|
— |
|
|
|
182 |
|
|
|
2,560 |
|
|
|
991 |
|
|
Impairments on fixed assets and leases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
— |
|
|
|
124 |
|
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,037 |
|
|
|
— |
|
|
|
5,037 |
|
|
(Gains) losses on investment securities |
|
744 |
|
|
|
75 |
|
|
|
(114 |
) |
|
|
626 |
|
|
|
62 |
|
|
|
819 |
|
|
|
0 |
|
|
Derivative credit valuation adjustment |
|
(58 |
) |
|
|
222 |
|
|
|
361 |
|
|
|
(192 |
) |
|
|
(130 |
) |
|
|
164 |
|
|
|
129 |
|
|
FDIC special assessment |
|
183 |
|
|
|
500 |
|
|
|
3,723 |
|
|
|
— |
|
|
|
— |
|
|
|
683 |
|
|
|
— |
|
|
Unrealized (gain) on equity method investments |
|
(11,041 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,041 |
) |
|
|
— |
|
|
Core pre-tax pre-provision net income |
$ |
89,220 |
|
|
$ |
83,674 |
|
|
$ |
101,884 |
|
|
$ |
128,564 |
|
|
$ |
96,833 |
|
|
$ |
172,894 |
|
|
$ |
186,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
One-time non-interest expense items recorded in 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
|
7,106 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7,106 |
|
|
|
— |
|
|
FDIC premiums prior to 2024 |
|
— |
|
|
|
4,208 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,208 |
|
|
|
— |
|
|
Total one-time non-interest expense items |
|
— |
|
|
|
11,314 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,314 |
|
|
|
— |
|
|
Adjusted core pre-tax pre-provision net income (adjusted for one-time non-interest expense items) |
$ |
89,220 |
|
|
$ |
94,988 |
|
|
$ |
101,884 |
|
|
$ |
128,564 |
|
|
$ |
96,833 |
|
|
$ |
184,208 |
|
|
$ |
186,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Average total assets |
$ |
20,985,203 |
|
|
$ |
21,335,229 |
|
|
$ |
21,252,273 |
|
|
$ |
21,978,010 |
|
|
$ |
21,654,735 |
|
|
$ |
21,160,216 |
|
|
$ |
21,355,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Core pre-tax pre-provision ROAA |
|
1.71 |
% |
|
|
1.58 |
% |
|
|
1.90 |
% |
|
|
2.32 |
% |
|
|
1.79 |
% |
|
|
1.64 |
% |
|
|
1.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Adjusted core pre-tax pre-provision ROAA (adjusted for one-time non-interest expense items) |
|
1.71 |
% |
|
|
1.79 |
% |
|
|
1.90 |
% |
|
|
2.32 |
% |
|
|
1.79 |
% |
|
|
1.75 |
% |
|
|
1.76 |
% |
|
Core Return on Average Common Equity and Adjusted Core Return on Average Common Equity - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||||||
|
GAAP net income to common shareholders |
$ |
54,300 |
|
|
$ |
45,926 |
|
|
$ |
58,223 |
|
|
$ |
82,953 |
|
|
$ |
44,007 |
|
|
$ |
100,226 |
|
|
$ |
94,272 |
|
|
Reconciling items (after tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Severance expense |
|
1,928 |
|
|
|
— |
|
|
|
473 |
|
|
|
— |
|
|
|
141 |
|
|
|
1,928 |
|
|
|
778 |
|
|
Impairments on fixed assets and leases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
|
|
|
98 |
|
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,914 |
|
|
|
— |
|
|
|
3,914 |
|
|
(Gains) losses on investment securities |
|
561 |
|
|
|
57 |
|
|
|
(85 |
) |
|
|
492 |
|
|
|
49 |
|
|
|
618 |
|
|
|
0 |
|
|
Derivative credit valuation adjustment |
|
(44 |
) |
|
|
169 |
|
|
|
267 |
|
|
|
(151 |
) |
|
|
(101 |
) |
|
|
125 |
|
|
|
103 |
|
|
Tax on surrender of bank-owned life insurance policies |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,141 |
|
|
|
— |
|
|
|
4,141 |
|
|
FDIC special assessment |
|
138 |
|
|
|
380 |
|
|
|
2,755 |
|
|
|
— |
|
|
|
— |
|
|
|
518 |
|
|
|
— |
|
|
Unrealized (gain) on equity method investments |
|
(8,316 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,316 |
) |
|
|
— |
|
|
Core earnings |
$ |
48,567 |
|
|
$ |
46,532 |
|
|
$ |
61,633 |
|
|
$ |
83,294 |
|
|
$ |
52,163 |
|
|
$ |
95,099 |
|
|
$ |
103,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
One-time non-interest expense items recorded in 2024 (after-tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
|
5,405 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,405 |
|
|
|
— |
|
|
FDIC premiums prior to 2024 |
|
— |
|
|
|
3,200 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,200 |
|
|
|
— |
|
|
Total one-time non-interest expense items |
|
— |
|
|
|
8,605 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,605 |
|
|
|
— |
|
|
Adjusted core earnings (adjusted for one-time non-interest expense items) |
$ |
48,567 |
|
|
$ |
55,137 |
|
|
$ |
61,633 |
|
|
$ |
83,294 |
|
|
$ |
52,163 |
|
|
$ |
103,704 |
|
|
$ |
103,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Average total common shareholders’ equity |
$ |
1,576,595 |
|
|
$ |
1,529,211 |
|
|
$ |
1,449,728 |
|
|
$ |
1,373,244 |
|
|
$ |
1,335,408 |
|
|
$ |
1,552,903 |
|
|
$ |
1,304,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Core return on average common equity |
|
12.39 |
% |
|
|
12.24 |
% |
|
|
16.87 |
% |
|
|
24.06 |
% |
|
|
15.67 |
% |
|
|
12.32 |
% |
|
|
15.97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Adjusted core return on average common equity (adjusted for one-time non-interest expense items) |
|
12.39 |
% |
|
|
14.50 |
% |
|
|
16.87 |
% |
|
|
24.06 |
% |
|
|
15.67 |
% |
|
|
13.43 |
% |
|
|
15.97 |
% |
|
Core Pre-Tax Pre-Provision ROCE and Adjusted Core Pre-Tax Pre-Provision ROCE - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||||||
|
GAAP net income to common shareholders |
$ |
54,300 |
|
|
$ |
45,926 |
|
|
$ |
58,223 |
|
|
$ |
82,953 |
|
|
$ |
44,007 |
|
|
$ |
100,226 |
|
|
$ |
94,272 |
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Income tax expense |
|
19,032 |
|
|
|
15,651 |
|
|
|
21,796 |
|
|
|
23,470 |
|
|
|
20,768 |
|
|
|
34,683 |
|
|
|
35,331 |
|
|
Provision (benefit) for credit losses |
|
18,121 |
|
|
|
17,070 |
|
|
|
13,523 |
|
|
|
17,856 |
|
|
|
23,629 |
|
|
|
35,191 |
|
|
|
43,232 |
|
|
Provision (benefit) for credit losses on unfunded commitments |
|
1,594 |
|
|
|
430 |
|
|
|
(136 |
) |
|
|
48 |
|
|
|
(304 |
) |
|
|
2,024 |
|
|
|
(24 |
) |
|
Severance expense |
|
2,560 |
|
|
|
— |
|
|
|
639 |
|
|
|
— |
|
|
|
182 |
|
|
|
2,560 |
|
|
|
991 |
|
|
Impairments on fixed assets and leases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
|
|
— |
|
|
|
124 |
|
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,037 |
|
|
|
— |
|
|
|
5,037 |
|
|
(Gains) losses on investment securities |
|
744 |
|
|
|
75 |
|
|
|
(114 |
) |
|
|
626 |
|
|
|
62 |
|
|
|
819 |
|
|
|
0 |
|
|
Derivative credit valuation adjustment |
|
(58 |
) |
|
|
222 |
|
|
|
361 |
|
|
|
(192 |
) |
|
|
(130 |
) |
|
|
164 |
|
|
|
129 |
|
|
FDIC special assessment |
|
183 |
|
|
|
500 |
|
|
|
3,723 |
|
|
|
— |
|
|
|
— |
|
|
|
683 |
|
|
|
— |
|
|
Unrealized (gain) on equity method investments |
|
(11,041 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,041 |
) |
|
|
— |
|
|
Core pre-tax pre-provision net income available to common shareholders |
$ |
85,435 |
|
|
$ |
79,874 |
|
|
$ |
98,015 |
|
|
$ |
124,761 |
|
|
$ |
93,266 |
|
|
$ |
165,309 |
|
|
$ |
179,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
One-time non-interest expense items recorded in 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
|
7,106 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
7,106 |
|
|
|
— |
|
|
|
FDIC premiums prior to 2024 |
|
— |
|
|
|
4,208 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
4,208 |
|
|
|
— |
|
|
|
Total one-time non-interest expense items |
|
— |
|
|
|
11,314 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
11,314 |
|
|
|
— |
|
|
|
Adjusted core pre-tax pre-provision net income available to common shareholders |
$ |
85,435 |
|
|
$ |
91,188 |
|
|
$ |
98,015 |
|
|
$ |
124,761 |
|
|
$ |
93,266 |
|
|
$ |
176,623 |
|
|
$ |
179,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Average total common shareholders’ equity |
$ |
1,576,595 |
|
|
$ |
1,529,211 |
|
|
$ |
1,449,728 |
|
|
$ |
1,373,244 |
|
|
$ |
1,335,408 |
|
|
$ |
1,552,903 |
|
|
$ |
1,304,764 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Core pre-tax pre-provision ROCE |
|
21.79 |
% |
|
|
21.01 |
% |
|
|
26.82 |
% |
|
|
36.04 |
% |
|
|
28.01 |
% |
|
|
21.41 |
% |
|
|
27.68 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Adjusted core pre-tax pre-provision ROCE (adjusted for one-time non-interest expense items) |
|
21.79 |
% |
|
|
23.98 |
% |
|
|
26.82 |
% |
|
|
36.04 |
% |
|
|
28.01 |
% |
|
|
22.87 |
% |
|
|
27.68 |
% |
|
Core Efficiency Ratio and Adjusted Core Efficiency Ratio - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||||||
|
GAAP net interest income |
$ |
167,653 |
|
|
$ |
160,385 |
|
|
$ |
172,506 |
|
|
$ |
199,773 |
|
|
$ |
165,271 |
|
|
$ |
328,038 |
|
|
$ |
315,170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
GAAP non-interest income |
$ |
31,037 |
|
|
$ |
21,231 |
|
|
$ |
18,672 |
|
|
$ |
17,775 |
|
|
$ |
15,997 |
|
|
$ |
52,268 |
|
|
$ |
34,118 |
|
|
Loss on sale of capital call lines of credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,037 |
|
|
|
— |
|
|
|
5,037 |
|
|
(Gains) losses on investment securities |
|
744 |
|
|
|
75 |
|
|
|
(114 |
) |
|
|
626 |
|
|
|
62 |
|
|
|
819 |
|
|
|
0 |
|
|
Derivative credit valuation adjustment |
|
(58 |
) |
|
|
222 |
|
|
|
361 |
|
|
|
(192 |
) |
|
|
(130 |
) |
|
|
164 |
|
|
|
129 |
|
|
Unrealized (gain) on equity method investments |
|
(11,041 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,041 |
) |
|
|
— |
|
|
Core non-interest income |
|
20,682 |
|
|
|
21,528 |
|
|
|
18,919 |
|
|
|
18,209 |
|
|
|
20,966 |
|
|
|
42,210 |
|
|
|
39,284 |
|
|
Core revenue |
$ |
188,335 |
|
|
$ |
181,913 |
|
|
$ |
191,425 |
|
|
$ |
217,982 |
|
|
$ |
186,237 |
|
|
$ |
370,248 |
|
|
$ |
354,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
GAAP non-interest expense |
$ |
103,452 |
|
|
$ |
99,169 |
|
|
$ |
93,767 |
|
|
$ |
89,466 |
|
|
$ |
89,297 |
|
|
$ |
202,621 |
|
|
$ |
169,430 |
|
|
Severance expense |
|
(2,560 |
) |
|
|
— |
|
|
|
(639 |
) |
|
|
— |
|
|
|
(182 |
) |
|
|
(2,560 |
) |
|
|
(991 |
) |
|
Impairments on fixed assets and leases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
— |
|
|
|
(124 |
) |
|
FDIC special assessment |
|
(183 |
) |
|
|
(500 |
) |
|
|
(3,723 |
) |
|
|
— |
|
|
|
— |
|
|
|
(683 |
) |
|
|
— |
|
|
Core non-interest expense |
$ |
100,709 |
|
|
$ |
98,669 |
|
|
$ |
89,405 |
|
|
$ |
89,466 |
|
|
$ |
89,100 |
|
|
$ |
199,378 |
|
|
$ |
168,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
One-time non-interest expense items recorded in 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
|
(7,106 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,106 |
) |
|
|
— |
|
|
FDIC premiums prior to 2024 |
|
— |
|
|
|
(4,208 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,208 |
) |
|
|
— |
|
|
Total one-time non-interest expense items |
|
— |
|
|
|
(11,314 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,314 |
) |
|
|
— |
|
|
Adjusted core non-interest expense |
$ |
100,709 |
|
|
$ |
87,355 |
|
|
$ |
89,405 |
|
|
$ |
89,466 |
|
|
$ |
89,100 |
|
|
$ |
188,064 |
|
|
$ |
168,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Core efficiency ratio (1) |
|
53.47 |
% |
|
|
54.24 |
% |
|
|
46.70 |
% |
|
|
41.04 |
% |
|
|
47.84 |
% |
|
|
53.85 |
% |
|
|
47.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Adjusted core efficiency ratio (adjusted for one-time non-interest expense items) (2) |
|
53.47 |
% |
|
|
48.02 |
% |
|
|
46.70 |
% |
|
|
41.04 |
% |
|
|
47.84 |
% |
|
|
50.79 |
% |
|
|
47.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(1) Core efficiency ratio calculated as core non-interest expense divided by core revenue. |
|||||||||||||||||||||||||||
|
(2) Adjusted core efficiency ratio calculated as adjusted core non-interest expense divided by core revenue. |
|||||||||||||||||||||||||||
|
Core Non-Interest Expense to Average Total Assets and Adjusted Core Non-Interest Expense to Average Total Assets- Customers Bancorp |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|
|
2024 |
|
|
|
2023 |
|
||||||||||
|
GAAP non-interest expense |
$ |
103,452 |
|
|
$ |
99,169 |
|
|
$ |
93,767 |
|
|
$ |
89,466 |
|
|
$ |
89,297 |
|
|
$ |
202,621 |
|
|
$ |
169,430 |
|
|
Severance expense |
|
(2,560 |
) |
|
|
— |
|
|
|
(639 |
) |
|
|
— |
|
|
|
(182 |
) |
|
|
(2,560 |
) |
|
|
(991 |
) |
|
Impairments on fixed assets and leases |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
— |
|
|
|
(124 |
) |
|
FDIC special assessment |
|
(183 |
) |
|
|
(500 |
) |
|
|
(3,723 |
) |
|
|
— |
|
|
|
— |
|
|
|
(683 |
) |
|
|
— |
|
|
Core non-interest expense |
$ |
100,709 |
|
|
$ |
98,669 |
|
|
$ |
89,405 |
|
|
$ |
89,466 |
|
|
$ |
89,100 |
|
|
$ |
199,378 |
|
|
$ |
168,315 |
|
|
One-time non-interest expense items recorded in 2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Deposit servicing fees prior to 2024 |
|
— |
|
|
|
(7,106 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,106 |
) |
|
|
— |
|
|
FDIC premiums prior to 2024 |
|
— |
|
|
|
(4,208 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,208 |
) |
|
|
— |
|
|
Total one-time non-interest expense items |
|
— |
|
|
|
(11,314 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,314 |
) |
|
|
— |
|
|
Adjusted core non-interest expense |
$ |
100,709 |
|
|
$ |
87,355 |
|
|
$ |
89,405 |
|
|
$ |
89,466 |
|
|
$ |
89,100 |
|
|
$ |
188,064 |
|
|
$ |
168,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Average total assets |
$ |
20,985,203 |
|
|
$ |
21,335,229 |
|
|
$ |
21,252,273 |
|
|
$ |
21,978,010 |
|
|
$ |
21,654,735 |
|
|
$ |
21,160,216 |
|
|
$ |
21,355,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Core non-interest expense to average total assets |
|
1.93 |
% |
|
|
1.86 |
% |
|
|
1.67 |
% |
|
|
1.62 |
% |
|
|
1.65 |
% |
|
|
1.89 |
% |
|
|
1.59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Adjusted core non-interest expense to average total assets (adjusted for one-time non-interest expense items) |
|
1.93 |
% |
|
|
1.65 |
% |
|
|
1.67 |
% |
|
|
1.62 |
% |
|
|
1.65 |
% |
|
|
1.79 |
% |
|
|
1.59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Business Unit Deposits (formerly, Core Deposits, Total Deposits, excluding Wholesale CDs and BMTX student deposits) - Customers Bancorp |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
|||||
|
Total deposits |
$ |
17,678,093 |
|
$ |
17,961,383 |
|
$ |
17,920,236 |
|
$ |
18,195,364 |
|
$ |
17,950,431 |
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
|||||
|
Wholesale CDs |
|
1,545,885 |
|
|
1,809,573 |
|
|
2,970,615 |
|
|
3,713,933 |
|
|
4,651,054 |
|
BMTX student deposits |
|
— |
|
|
850 |
|
|
1,157 |
|
|
636,951 |
|
|
407,118 |
|
Business Unit Deposits (formerly, Core Deposits, Total deposits, excluding wholesale CDs and BMTX student deposits) |
$ |
16,132,208 |
|
$ |
16,150,960 |
|
$ |
14,948,464 |
|
$ |
13,844,480 |
|
$ |
12,892,259 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Tangible Common Equity to Tangible Assets - Customers Bancorp |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(Dollars in thousands, except per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
||||||||||
|
GAAP total shareholders’ equity |
$ |
1,746,865 |
|
|
$ |
1,691,617 |
|
|
$ |
1,638,394 |
|
|
$ |
1,561,607 |
|
|
$ |
1,456,652 |
|
|
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 |
$ |
1,605,442 |
|
|
$ |
1,550,194 |
|
|
$ |
1,496,971 |
|
|
$ |
1,420,184 |
|
|
$ |
1,315,229 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP total assets |
$ |
20,942,975 |
|
|
$ |
21,347,367 |
|
|
$ |
21,316,265 |
|
|
$ |
21,857,152 |
|
|
$ |
22,028,565 |
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
|
||||||||||
|
Goodwill and other intangibles |
|
(3,629 |
) |
|
|
(3,629 |
) |
|
|
(3,629 |
) |
|
|
(3,629 |
) |
|
|
(3,629 |
) |
|
Tangible assets |
$ |
20,939,346 |
|
|
$ |
21,343,738 |
|
|
$ |
21,312,636 |
|
|
$ |
21,853,523 |
|
|
$ |
22,024,936 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Tangible common equity to tangible assets |
|
7.7 |
% |
|
|
7.3 |
% |
|
|
7.0 |
% |
|
|
6.5 |
% |
|
|
6.0 |
% |
|
Tangible Book Value per Common Share - Customers Bancorp |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(Dollars in thousands, except share and per share data) |
Q2 2024 |
|
Q1 2024 |
|
Q4 2023 |
|
Q3 2023 |
|
Q2 2023 |
||||||||||
|
GAAP total shareholders’ equity |
$ |
1,746,865 |
|
|
$ |
1,691,617 |
|
|
$ |
1,638,394 |
|
|
$ |
1,561,607 |
|
|
$ |
1,456,652 |
|
|
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 |
$ |
1,605,442 |
|
|
$ |
1,550,194 |
|
|
$ |
1,496,971 |
|
|
$ |
1,420,184 |
|
|
$ |
1,315,229 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Common shares outstanding |
|
31,667,655 |
|
|
|
31,521,931 |
|
|
|
31,440,906 |
|
|
|
31,311,254 |
|
|
|
31,282,318 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Tangible book value per common share |
$ |
50.70 |
|
|
$ |
49.18 |
|
|
$ |
47.61 |
|
|
$ |
45.36 |
|
|
$ |
42.04 |
|
David W. Patti, Communications Director 610-451-9452