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Customers Bancorp Reports First Quarter 2020 Net Income of $7.0 Million, or $0.22 Per Diluted Share


Adjusted Pre-tax Pre-provision Earnings of $38.6 million, up 53% over Q1 2019
Net Interest Margin Expands by 10 basis points over Q4 2019

  • Q1 2020 GAAP earnings of $7.0 million, or $0.22 per diluted share, and core earnings of $8.1 million, or $0.26 per diluted share (non-GAAP measures).
  • Q1 2020 results include the adoption of the Current Expected Credit Loss (“CECL”) standard on January 1, 2020, resulting in a total build of credit reserves of $100.4 million and a charge to Q1 2020 earnings of $23 million. At March 31, 2020, the coverage of loss reserves to loans and leases held for investment was 2.1%, up from 0.8% at December 31, 2019.
  • Adjusted pre-tax pre-provision net income for Q1 2020 was $38.6 million, an increase of 53% over Q1 2019 pre-tax pre-provision net income of $25.3 million (non-GAAP measures).
  • Q1 2020 net interest margin expanded 10 basis points from Q4 2019 to 2.99%; our sixth consecutive quarter of net interest margin expansion. Q1 2020 net interest margin up 40 basis points over Q1 2019.
  • Net interest income increased by $3.7 million, or 4.8%, over Q4 2019 and $22.0 million, or 37.1%, over Q1 2019.
  • Total assets were $12.0 billion at March 31, 2020, compared to $10.1 billion at March 31, 2019 and $11.5 billion at December 31, 2019. Average assets were $11.6 billion for Q1 2020, compared to $9.8 billion for Q1 2019 and $11.3 billion for Q4 2019.
  • Total loans and leases increased $1.6 billion, or 18% year-over-year, driven by strong growth in mortgage warehouse loans of $1.0 billion and commercial and industrial loans and leases of $0.6 billion. Run-off of multifamily loans was replaced with an equal amount of high FICO score personal, home improvement and student refinance loans.
  • Total deposits increased $1.0 billion, or 13%, year-over-year, which included a $828 million, or 38%, increase in demand deposits.
  • Asset quality remains strong. Non-performing assets were only 0.53% of total assets at March 31, 2020 and reserves equaled 242% of non-performing loans. Net charge-offs were $5.9 million, or 25 basis points of average total loans and leases on an annualized basis, during Q1 2020.
  • Helped thousands of small businesses over the past few weeks by originating about $5 billion in SBA Payroll Protection Program loans directly or through fintech partnerships as of May 2, 2020, which is expected to add about $85 million in revenues.