Customers Bancorp Reports Full Year 2019 Net Income up 13% Over Full Year 2018 and Fourth Quarter 2019 Net Income up 68% Over Fourth Quarter 2018
Customers Bancorp, Inc. (NYSE: CUBI) the parent company of Customers Bank and its operating division BankMobile (collectively “Customers” or "CUBI"), today reported record fourth quarter 2019 ("Q4 2019") net income to common shareholders of $23.9 million, or $0.75 per diluted share, up from $23.5 million in third quarter 2019 ("Q3 2019") and $14.2 million in fourth quarter 2018 ("Q4 2018"). Core earnings for Q4 2019 totaled $24.3 million, or $0.76 per diluted share, up from $23.0 million in Q3 2019 and $17.0 million in Q4 2018 (non-GAAP measures). Q4 2019 core earnings per diluted share was up 43% over Q4 2018 core earnings per diluted share (non-GAAP measures). Net interest margin, tax equivalent ("NIM") (a non-GAAP measure), expanded 6 basis points during Q4 2019 to 2.89%. Full year 2019 ("FY 2019") net income to common shareholders was $64.9 million, or $2.05 per diluted share, up from full year 2018 ("FY 2018") net income to common shareholders of $57.2 million, or $1.78 per diluted share. Core earnings for FY 2019 totaled $71.2 million, or $2.25 per diluted share, compared to core earnings of $78.5 million, or $2.43 per diluted share, for FY 2018 (non-GAAP measures). FY 2019 NIM expanded 17 basis points to 2.75% from FY 2018 NIM of 2.58% (non-GAAP measures).
(Dollars in thousands, except earnings per share amounts)
Net Income to Common Shareholders (GAAP)
Q4 2019
EPS
Q4 2018
EPS
FY 2019
EPS
FY 2018
EPS
Customers Bank Business Banking
$
22,218
$
0.70
$
17,521
$
0.55
$
69,751
$
2.20
$
70,698
$
2.19
BankMobile
1,693
0.05
(3,274)
(0.10)
(4,883)
(0.15)
(13,462)
(0.42)
Consolidated
$
23,911
$
0.75
$
14,247
$
0.44
$
64,868
$
2.05
$
57,236
$
1.78
Core Earnings (Non-GAAP Measure)
Q4 2019
EPS
Q4 2018
EPS
FY 2019
EPS
FY 2018
EPS
Customers Bank Business Banking
$
22,503
$
0.71
$
19,911
$
0.62
$
75,235
$
2.38
$
88,633
$
2.75
BankMobile
1,769
0.06
(2,919)
(0.09)
(4,034)
(0.13)
(10,150)
(0.31)
Consolidated
$
24,272
$
0.76
$
16,992
$
0.53
$
71,202
$
2.25
$
78,483
$
2.43
Total assets were $11.5 billion at December 31, 2019, compared to $11.7 billion at September 30, 2019 and $9.8 billion at December 31, 2018. Total assets at December 31, 2019 reflected a change in management's strategy to expand beyond $10 billion in assets during the quarter. Loan mix improved year-over-year, as commercial and industrial ("C&I") loans and leases, excluding commercial loans to mortgage companies, increased $487 million, or 26%. Commercial loans to mortgage companies increased $844 million, or 58%, year-over-year as the continued low interest rate environment resulted in a higher 2019 year-end balance than historically experienced. Other consumer loans increased $1.1 billion year-over-year. Multi-family loans decreased $893 million, or 27%, year-over-year, consistent with management's strategy to reduce its overall exposure in this loan portfolio. Total deposits increased $1.5 billion, or 21%, year-over-year, which included a $653 million, or 34%, increase in demand deposits. The BankMobile segment reported Q4 2019 GAAP earnings per diluted share of $0.05, an increase of $0.15 from a loss per diluted share of $(0.10) in Q4 2018 and the second consecutive quarter of segment profitability. NIM (a non-GAAP measure) expanded 6 basis points from Q3 2019 to 2.89% in Q4 2019 and up 32 basis points over Q4 2018; this marks our fifth consecutive quarter of NIM expansion from the trough of 2.47% reported in Q3 2018. Core earnings in Q4 2019 was impacted by a $0.8 million ($0.02 per diluted share) loss realized from the sale of non-qualifying ("non-QM") residential mortgage loans and a $0.3 million ($0.01 per diluted share) gain on investment securities. Core earnings in FY 2019 was impacted by a loss upon acquisition of interest-only GNMA securities of $7.5 million ($0.18 per diluted share), $2.3 million ($0.06 per diluted share) of gains on investment securities, $2 million ($0.05 per diluted share) of legal reserve accruals, a $0.8 million ($0.02 per diluted share) loss realized from the sale of non-QM residential mortgage loans and $0.5 million ($0.01 per diluted share) of severance expense. The return on average assets ("ROAA") was 0.97% in Q4 2019, up from 0.95% in Q3 2019 and 0.71% in Q4 2018. Core ROAA (a non-GAAP measure) was 0.98% in Q4 2019, up from 0.94% in Q3 2019 and 0.82% in Q4 2018. The pre-tax and pre-provision adjusted ROAA (a non-GAAP measure) for Q4 2019 was 1.59%, up from 1.38% in Q3 2019 and 1.12% in Q4 2018. The return on average common equity ("ROCE") was 11.58 % in Q4 2019 compared to 11.81% in Q3 2019 and up from 7.58% in Q4 2018. Core ROCE (a non-GAAP measure) was 11.76% in Q4 2019, up from 11.59% in Q3 2019 and 9.05% in Q4 2018. Asset quality remains strong. Non-performing loans were only 0.21% of total loans and leases at December 31, 2019 and reserves equaled 265% of non-performing loans. Net charge-offs were only $4.4 million, or 18 basis points of average total loans and leases on an annualized basis, during Q4 2019. Reflecting changes in loan mix, the provision for loan losses was $9.7 million in Q4 2019, compared to $4.4 million in Q3 2019 and $1.4 million in Q4 2018. Q4 2019 book value per common share was $26.66 and tangible book value per common share (a non-GAAP measure) was $26.17. Tangible book value per common share has increased at a compound annual growth rate of about 10% over the past five years. On December 9, 2019, Customers Bancorp completed a public offering of $74.8 million of its 15-year fixed rate 5.375% Subordinated Notes due 2034, which qualifies as Tier 2 capital. $50 million of the net proceeds from that offering were contributed to Customers Bank as qualifying Tier 1 capital. Based on the January 17, 2020 closing price of $22.56, Customers Bancorp common equity is trading at 0.86x tangible book value of $26.17 (a non-GAAP measure) and 7.9x the 2020 consensus EPS estimate of $2.84.
Jay Sidhu, CEO and Chairman of Customers Bancorp, Inc. stated, "We are pleased to report that we ended Q4 2019 with record earnings, superior asset quality, strong control in expenses, and our fifth consecutive quarter of net interest margin expansion, a reflection of improved loan mix, core deposit growth, disciplined pricing strategy and absolute focus on efficiency improvement and risk management. We are also excited that BankMobile attained profitability for the second consecutive quarter and its White Label banking strategy has already generated over $80 million of very low-cost deposits to Customers, a number that is expected to grow over time."
Status Report on Strategic Priorities Articulated at Analyst Day in October 2018
Improve Profitability: Target a 2.75% NIM by Q4 2019 and a 1.25% Core ROAA in 2-3 years
As stated during our 2018 Analysts Day in October 2018, Customers expects to remain focused on growing its core businesses, while improving margins, capital and profitability. Through favorable mix shifts in both assets and liabilities, while maintaining its superior credit quality culture and extreme focus on productivity improvement, Customers improved the overall quality of its balance sheet and deposit franchise, expanded its net interest margin, enhanced liquidity and remains relatively neutral to interest rate changes. The strategies articulated at the 2018 Analysts Day in October 2018 and subsequent 2019 progress are summarized below:
Target ROAA in top quartile of peer group, which we expect will equate to a ROAA of 1.25% or higher over the next 2-3 years. ROAA was 0.97% in Q4 2019, up significantly from Q4 2018 ROAA of 0.71%. The pre-tax and pre-provision adjusted ROAA (a non-GAAP measure) was 1.59% for Q4 2019, up from 1.12% in Q4 2018. Achieve NIM expansion to 2.75% or greater by Q4 2019, with a full year 2019 NIM above 2.70%, through an expected shift in asset and funding mix. Actual results are materially better. NIM was 2.89% in Q4 2019, up from 2.83% in Q3 2019 and 2.57% in Q4 2018. FY 2019 NIM was 2.75%, up from FY 2018 NIM of 2.58%. Since Q3 2018, Customers effectively restructured its balance sheet resulting in NIM expansion of 42 basis points (non-GAAP measures). BankMobile growth and maturity was expected with profitability achieved by year end 2019. BankMobile reached profitability in Q3 2019 and maintained profitability in Q4 2019. BankMobile is expected to remain profitable in 2020. Expense control. Customers' efficiency ratio was 56.98% in Q4 2019, down from 61.58% in Q3 2019 and 69.99% in Q4 2018. Customers' efficiency ratio for FY 2019 was 65.15%, down from 65.35% for FY 2018. Growth in core deposits and good quality higher-yielding loans. Demand Deposit Accounts ("DDAs") grew 34% year-over-year. Lower yielding multi-family loans decreased by $893 million, or 27%, year-over-year and were replaced by higher yielding C&I loans and leases and other consumer loans, which had net growth of $487 million and $1.1 billion year-over-year, respectively. Maintain strong credit quality and superior risk management. Non-Performing Loans ("NPLs") were only 0.21% of total loans and leases at December 31, 2019. Reserves to NPLs at December 31, 2019 were 265%, an improvement from 147% at December 31, 2018. The Bank is relatively neutral to interest rate changes at December 31, 2019. We remain very focused on a strong Risk Management culture throughout the company. Evaluate opportunities to redeem our preferred stock as it becomes callable. Redeeming all of the preferred stock as it becomes callable would result in an increase to our diluted earnings per share by approximately $0.46 annually. Customers will continue to analyze the best ways to execute this strategy over the next two years, subject to liquidity and capital needs.Focus on Capital Allocation
The tangible common equity to tangible assets ratio (a non-GAAP measure) was 7.13% and the estimated common equity Tier 1 capital to risk-weighted assets ratio was 8.00% at December 31, 2019, while the leverage ratio was 9.26%. Capital ratios increased from Q3 2019. Customers Bancorp, Inc. also raised $74.8 million in 15-year fixed rate subordinated notes during Q4 2019, $50.0 million of which was contributed to Customers Bank as qualifying Tier 1 capital with the remaining net proceeds retained by Customers Bancorp increasing its liquidity position. Mr. Sidhu stated, "As capital builds, we will evaluate the best uses for our excess capital, which may include calling our preferred equity as it becomes callable, starting in 2020."
BankMobile Segment Update
BankMobile, a division of Customers Bank, operates a branchless digital bank offering low cost banking services to over two million Americans, with approximately 1.1 million active deposit customers. Customers reported in Q4 2018 that it expects to retain BankMobile for up to a 2-3 year period, but will regularly evaluate the best options for BankMobile.
BankMobile deposits averaged $543 million in Q4 2019, with an average cost of just 0.21%, and Q4 2019 revenues were $22.3 million and FY 2019 revenues were $86.4 million. The Q4 2019 segment earnings increased to $1.7 million, or $0.05 per diluted share, compared to a net loss of $3.3 million, or $(0.10) per diluted share in Q4 2018, principally due to an increase in net interest income, partially offset by an increase in provision for loan losses. BankMobile had its second consecutive quarter of profitability and is expected to remain profitable in 2020. "We remain in the investment mode for our white label and other unique Banking as a Service ("BaaS") strategic opportunities for BankMobile," stated Luvleen Sidhu, President and Chief Executive Officer of BankMobile. "The profitability improvement has come from increasing revenues from our student banking business while watching our expenses. We are very optimistic about our longer term opportunities to supplement this profitability and growth with continued expansion of our BaaS business," Luvleen Sidhu concluded. "Since Customers Bancorp, Inc. decided to cross the $10 billion asset mark at December 31, 2019, Customers will explore all strategic options for BankMobile in 2020," concluded Jay Sidhu, Customers Bancorp, Inc. CEO and Chairman.
Q4 2019 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended December 31, 2019, the preceding four quarters, and the twelve months ended December 31, 2019 and 2018, respectively:
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED
(Dollars in thousands, except per share data and stock price data)
Q4
Q3
Q2
Q1
Q4
Twelve Months Ended
December 31,
2019
2019
2019
2019
2018
2019
2018
GAAP Profitability Metrics:
Net income available to common shareholders
$
23,911
$
23,451
$
5,681
$
11,825
$
14,247
$
64,868
$
57,236
Per share amounts:
Earnings per share - basic
$
0.76
$
0.75
$
0.18
$
0.38
$
0.45
$
2.08
$
1.81
Earnings per share - diluted
$
0.75
$
0.74
$
0.18
$
0.38
$
0.44
$
2.05
$
1.78
Book value per common share (1)
$
26.66
$
25.66
$
24.80
$
24.44
$
23.85
$
26.66
$
23.85
CUBI stock price (1)
$
23.81
$
20.74
$
21.00
$
18.31
$
18.20
$
23.81
$
18.20
CUBI stock price as % of book value (1)
89
%
81
%
85
%
75
%
76
%
89
%
76
%
Average shares outstanding - basic
31,306,813
31,223,777
31,154,292
31,047,191
31,616,740
31,183,841
31,570,118
Average shares outstanding - diluted
31,876,341
31,644,728
31,625,741
31,482,867
32,051,030
31,646,216
32,233,098
Shares outstanding (1)
31,336,791
31,245,776
31,202,023
31,131,247
31,003,028
31,336,791
31,003,028
Return on average assets ("ROAA")
0.97
%
0.95
%
0.36
%
0.64
%
0.71
%
0.74
%
0.69
%
Return on average common equity ("ROCE")
11.58 %
11.81
%
2.96
%
6.38
%
7.58
%
8.30
%
7.90
%
Efficiency ratio
56.98 %
61.58
%
77.32
%
68.32
%
69.99
%
65.15
%
65.35
%
Non-GAAP Profitability Metrics (2):
Core earnings
$
24,272
$
23,024
$
12,083
$
11,823
$
16,992
$
71,202
$
78,483
Per share amounts:
Core earnings per share - diluted
$
0.76
$
0.73
$
0.38
$
0.38
$
0.53
$
2.25
$
2.43
Tangible book value per common share (1)
$
26.17
$
25.16
$
24.30
$
23.92
$
23.32
$
26.17
$
23.32
CUBI stock price as % of tangible book value (1)
91
%
82
%
86
%
77
%
78
%
91
%
78
%
Net interest margin, tax equivalent
2.89
%
2.83
%
2.64
%
2.59
%
2.57
%
2.75
%
2.58
%
Tangible common equity to tangible assets (1)
7.13
%
6.71
%
6.79
%
7.35
%
7.36
%
7.13
%
7.36
%
Core ROAA
0.98
%
0.94
%
0.61
%
0.64
%
0.82
%
0.80
%
0.89
%
Core ROCE
11.76
%
11.59
%
6.31
%
6.38
%
9.05
%
9.11
%
10.83
%
Adjusted pre-tax pre-provision net income
$
45,238
$
39,178
$
25,446
$
25,036
$
27,957
$
134,895
$
124,410
Adjusted ROAA - pre-tax and pre-provision
1.59
%
1.38
%
0.98
%
1.04
%
1.12
%
1.26
%
1.19
%
Adjusted ROCE - pre-tax and pre-provision
20.16
%
17.91
%
11.39
%
11.57
%
12.96
%
15.40
%
15.18
%
Core efficiency ratio
56.45
%
59.51
%
69.90
%
68.32
%
66.18
%
62.96
%
63.23
%
Asset Quality:
Net charge-offs
$
4,362
$
1,761
$
637
$
1,060
$
2,154
$
7,821
$
3,685
Annualized net charge-offs to average total loans and leases
0.18
%
0.07
%
0.03
%
0.05
%
0.10
%
0.08
%
0.04
%
Non-performing loans ("NPLs") to total loans and leases (1)
0.21
%
0.17
%
0.15
%
0.26
%
0.32
%
0.21
%
0.32
%
Reserves to NPLs (1)
264.67
%
290.38
%
330.36
%
194.15
%
147.16
%
264.67
%
147.16
%
Regulatory Ratios (3):
Common equity Tier 1 capital to risk-weighted assets
8.00
%
7.81
%
8.04
%
8.91
%
8.96
%
8.00
%
8.96
%
Tier 1 capital to risk-weighted assets
10.11
%
9.95
%
10.32
%
11.47
%
11.58
%
10.11
%
11.58
%
Total capital to risk-weighted assets
12.21
%
11.36
%
11.76
%
12.92
%
13.00
%
12.21
%
13.00
%
Tier 1 capital to average assets (leverage ratio)
9.26
%
9.01
%
9.51
%
10.01
%
9.66
%
9.26
%
9.66
%
(1) Metric is a spot balance for the last day of each quarter presented.
(2) Non-GAAP measures exclude investment securities gains and losses, severance expense, merger and acquisition-related expenses, losses realized from the sale of lower-yielding multi-family loans, losses realized from the sale of non-QM residential mortgage loans, loss upon acquisition of interest-only GNMA securities, legal reserves and goodwill and intangible assets. These notable items are not included in Customers' disclosures of core earnings and other core profitability metrics. Please note that not each of the aforementioned adjustments affected the reported amount in each of the periods presented. 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 Q4 2019.
Net Interest Income
FY 2019 net interest income was $277.3 million, up almost $20 million from $257.9 million for FY 2018. Net interest income totaled $77.6 million in Q4 2019, an increase of $1.9 million from Q3 2019, primarily due to an increase in the average balance of non-interest bearing deposits of about $150 million and a 16 basis point decline in the cost of interest-bearing liabilities. Compared to Q3 2019, total loan yields decreased 11 basis points to 4.68%. The cost of interest-bearing deposits in Q4 2019 decreased by 18 basis points due to two Federal Reserve interest rate cuts in September 2019 and October 2019. Borrowing costs increased 5 basis points to 2.91% due to the issuance of $25 million in five-year 4.5% senior notes in September 2019 and $74.8 million in 15-year 5.375% subordinated notes in December 2019, partially offset by two Federal Reserve interest rate cuts in September 2019 and October 2019.
Q4 2019 net interest income increased $16.1 million from Q4 2018, primarily due to 32 basis points of NIM (a non-GAAP measure) expansion and a $1.2 billion increase in average interest-earning assets. Compared to Q4 2018, total loan yields increased 31 basis points to 4.68%. Given Federal Reserve interest rate hikes in 2018 and interest rate cuts in the second half of 2019, the cost of interest-bearing liabilities remained flat at 2.17%.
Total loans and leases increased $1.5 billion, or 17.6%, to $10.1 billion at December 31, 2019 compared to the year-ago period. Mortgage warehouse loans increased $844 million to $2.3 billion, C&I loans and leases increased $487 million to $2.4 billion, commercial real estate non-owner occupied loans increased $98 million to $1.2 billion and other consumer loans increased $1.1 billion to $1.2 billion. These increases were offset in part by planned decreases in multi-family loans of $893 million to $2.4 billion and residential mortgages of $190 million to $378 million.
Total deposits increased $1.5 billion, or 21.1%, to $8.6 billion at December 31, 2019 compared to the year-ago period. Total demand deposits increased $653 million, or 33.9%, to $2.6 billion, savings deposits increased $535 million, or 139.0%, to $919 million, and money market deposits increased $385 million, or 12.4%, to $3.5 billion. These increases were offset in part by a decrease in time deposits of $66 million, or 3.8%, to $1.7 billion. In July 2018, Customers launched a new digital, on-line savings banking product with a goal of gathering retail deposits. At December 31, 2019, this new product generated $863 million in retail deposits, an increase of $330 million since September 30, 2019.
Provision, Credit Quality and Risk Management
The provision for loan and lease losses totaled $24.2 million for FY 2019, up from $5.6 million in FY 2018, while NPLs to total loans and leases improved to 0.21% at December 31, 2019 from 0.32% at December 31, 2018. The provision for loan and lease losses totaled $9.7 million in Q4 2019, compared to $4.4 million in Q3 2019 and $1.4 million in Q4 2018. The Q4 2019 provision expense included $5.0 million for quarter-over-quarter changes in the mix of the loan portfolio and $0.5 million for specifically identified loans. Net charge-offs for Q4 2019 were $4.4 million, or 18 basis points of average loans and leases on an annualized basis, compared to net charge-offs of $1.8 million, or 7 basis points in Q3 2019, and $2.2 million, or 10 basis points in Q4 2018.
Risk management is a critical component of how Customers creates long-term shareholder value, and Customers believes that asset quality is one of the most important risks in banking to be understood and managed. Customers believes that asset quality risks must be diligently addressed during good economic times with prudent underwriting standards so that when the economy deteriorates the bank's capital is sufficient to absorb all losses without threatening its ability to operate and serve its community and other constituents. "Customers' non-performing loans at December 31, 2019 were only 0.21% of total loans and leases, compared to our peer group non-performing loans of approximately 0.74% in the most recent period available, and industry average non-performing loans of 1.03% in the most recent period available. Our expectation is superior asset quality performance in good times and in difficult years," said Mr. Sidhu.
Non-Interest Income
Non-interest income totaled $80.9 million for FY 2019, an increase of $21.9 million compared to FY 2018. Non-interest income totaled $25.8 million in Q4 2019, an increase of $2.4 million compared to Q3 2019. The increase in non-interest income primarily resulted from increases of $2.8 million in gains on sales of SBA loans, $2.4 million in other non-interest income and $0.8 million in commercial lease income, partially offset by decreases of $1.0 million in gains on sales of investment securities, $1.0 million in unrealized gains on investment securities, $0.9 million in mortgage banking income and $0.4 million in interchange and card revenue. The increase in gains on sales of SBA loans resulted from a strategic shift to no longer retain all SBA loans on our balance sheet in Q4 2019. The increase in other non-interest income primarily resulted from derivative transactions and the increase in commercial lease income resulted from the continued growth of our Equipment Finance Group. The decrease in gain on sales of investment securities resulted from the gain realized from the sale of $95 million of corporate bonds during Q3 2019. The decrease in unrealized gains on investment securities primarily resulted from a smaller improvement in the fair values of the interest-only GNMA securities and equity securities issued by a foreign entity during Q4 2019. The decrease in mortgage banking income primarily resulted from a $0.8 million loss realized from the sale of $230 million of non-QM residential mortgage loans in Q4 2019. The decrease in interchange and card revenue primarily resulted from a seasonal decrease in activity at BankMobile, coinciding with the end of the academic semester.
Non-Interest Expense
Non-interest expense totaled $231.9 million for FY 2019, an increase of $11.7 million compared to FY 2018. Non-interest expense totaled $58.7 million in Q4 2019, a decrease of $0.9 million compared to Q3 2019. The decrease in non-interest expense in Q4 2019 primarily resulted from decreases of $2.6 million in provision for operating losses, $1.9 million in professional services and $1.9 million in other non-interest expense, partially offset by increases of $3.3 million in FDIC assessments, $1.6 million in technology and $0.5 million in salaries and employee benefits. The decrease in the provision for operating losses primarily resulted from an internet-based organized crime ring which targeted BankMobile checking accounts in Q3 2019. The decrease in professional services primarily resulted from successful concentrated cost savings initiatives in Q4 2019. The decrease in other non-interest expense primarily resulted from legal reserve accruals totaling $2.0 million recognized in Q3 2019 for previously disclosed legal matters. The increase in FDIC assessments primarily resulted from a $2.6 million small bank assessment credit provided by the FDIC in Q3 2019 related to Customers' contribution to the growth of the FDIC's deposit insurance fund since July 2016. The increase in technology primarily resulted from continued investment in Customers' digital transformation initiatives. The increase in salaries and employee benefits primarily resulted from an increase in full-time equivalents.
Taxes
Customers' effective tax rate was 21.3% for Q4 2019, compared to 22.9% for Q3 2019 and 22.2% for Q4 2018. The decrease in the effective tax rate from Q3 2019 and Q4 2018 was primarily driven by strategic initiatives to lower Customers' effective tax rate through effective use of available tax credits and changes in the apportionment of revenues to states with lower tax costs. Customers expects the full-year 2020 effective tax rate to be approximately 22% to 24%.
Significantly Lowering Commercial Real Estate Concentration
Customers' total commercial real estate ("CRE") loan exposures subject to regulatory concentration guidelines of $3.7 billion as of December 31, 2019 included construction loans of $0.1 billion, multi-family loans of $2.4 billion, and non-owner occupied commercial real estate loans of $1.1 billion, which represent 294% of total risk-based capital on a combined basis, a reduction from a 361% commercial real estate concentration as of December 31, 2018. Customers' loans subject to regulatory CRE concentration guidelines had a 3 year cumulative reduction of 16.0% as of the end of Q4 2019, a deceleration from cumulative growth of 10.6% a year ago.
Customers' loans collateralized by multi-family properties were approximately 23.8% of Customers' total loan portfolio and approximately 191% of total risk-based capital at December 31, 2019, down from approximately 38.4% and 270%, respectively, at December 31, 2018. Following are some key characteristics of Customers' multi-family loan portfolio:
Mostly concentrated in New York City with an emphasis on properties subject to some type of rent control; and principally to high net worth families; Current average loan size is approximately $6.9 million; Current weighted average annual debt service coverage ratio is 1.51x; Current weighted average loan-to-value for the portfolio is 60.1%; All loans are individually stressed with an increase of 1% and 2% to the cap rate and an increase of 1.5% and 3% in loan interest rates; All properties are inspected prior to a loan being granted and inspected thereafter on an annual basis by dedicated portfolio managers or outside inspectors; and Credit approval process is independent of customer sales and portfolio management process.Recap of 2019 and Looking Ahead to 2020 and Beyond
Mr. Sidhu stated, "Customers' core earnings per share was $2.25 for 2019, in line with our internal expectations and higher than targets we had made public. After diligent consideration and analysis, we decided to end 2019 with total assets above $10 billion. This decision reflects our desire and optimism to continue to grow the Customers Bank Business Banking segment while giving careful consideration to the future strategic options for our BankMobile segment."
Looking ahead to 2020, Mr. Sidhu continued "Customers is projecting core earnings per share of $3.00 for 2020 with continued improvement in all profitability metrics." Mr. Sidhu continued, "In addition, management and our Board of Directors have been actively engaged in developing a vision and strategy for 2025 and are pleased to make public our confidence in achieving $6 per share in annual core earnings by the end of 2025."
Conference Call
Date:
Thursday, January 23, 2020
Time:
9:00 AM EST
US Dial-in:
+1 (800) 368-1029
International Dial-in:
+1 (334) 777-6981
Participant Code:
094854
Please dial in at least 10 minutes before the start of the call to ensure timely participation. Slides accompanying the presentation will be available on Customers' website at https://www.customersbank.com/investor-relations/ prior to the call.
Please submit any questions you have regarding the earnings in advance to rramsey@customersbank.com and the executives will address them on the call. Customers will also open the lines to questions following management's presentation of the fourth quarter results. A playback of the call will be available beginning January 23, 2020 at 12:00 PM EST until 12:00 PM EST on February 22, 2020. To listen, call within the United States +1 (888) 203-1112, or +1 (719) 457-0820 when calling internationally. Please use the replay passcode 3422011.
Institutional Background
Customers Bancorp, Inc. is a bank holding company located in Wyomissing, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank. Customers Bank is a community-based, full-service bank with assets of approximately $11.5 billion at December 31, 2019. A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender that provides a range of banking services to small and medium-sized businesses, professionals, individuals and families through offices in Pennsylvania, Illinois, New York, Rhode Island, Massachusetts, New Hampshire and New Jersey. Committed to fostering customer loyalty, Customers Bank uses a High Tech/High Touch strategy that includes use of industry-leading technology to provide customers better access to their money, as well as Concierge Banking® by appointment at customers’ homes or offices 12 hours a day, seven days a week. Customers Bank offers a continually expanding portfolio of loans to small businesses, multi-family projects, mortgage companies and consumers.
Customers Bancorp, Inc.'s voting common shares are listed on the New York Stock Exchange under the symbol CUBI. Additional information about Customers Bancorp, Inc. can be found on the Company’s website, 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,'' 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 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. In addition, important factors relating to the acquisition of the Disbursements business, the combination of Customers' BankMobile business with the acquired Disbursements business, the implementation of Customers Bancorp, Inc.'s strategy to retain BankMobile for 2-3 years, the possibility that the expected benefits of retaining BankMobile for 2-3 years may not be achieved, or the possible effects on Customers' results of operations if BankMobile is never divested could cause Customers Bancorp's actual results to differ from those in the forward-looking statements. 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, 2018, 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.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data)
Twelve Months Ended
Q4
Q3
Q2
Q1
Q4
December 31,
2019
2019
2019
2019
2018
2019
2018
Interest income:
Loans and leases
$
116,365
$
118,444
$
103,567
$
93,116
$
94,248
$
431,491
$
373,234
Investment securities
5,125
5,867
6,481
6,241
6,277
23,713
33,209
Other
2,505
2,407
1,902
1,718
2,778
8,535
11,508
Total interest income
123,995
126,718
111,950
101,075
103,303
463,739
417,951
Interest expense:
Deposits
35,992
38,267
35,980
31,225
34,029
141,464
110,808
FHLB advances
6,056
7,563
7,607
5,293
3,662
26,519
31,043
Subordinated debt
1,930
1,684
1,684
1,684
1,684
6,983
6,737
Other borrowings
2,424
3,469
2,000
3,569
2,404
11,463
11,486
Total interest expense
46,402
50,983
47,271
41,771
41,779
186,429
160,074
Net interest income
77,593
75,735
64,679
59,304
61,524
277,310
257,877
Provision for loan and lease losses
9,689
4,426
5,346
4,767
1,385
24,227
5,642
Net interest income after provision for loan and lease losses
67,904
71,309
59,333
54,537
60,139
253,083
252,235
Non-interest income:
Interchange and card revenue
6,506
6,869
6,760
8,806
7,568
28,941
30,695
Deposit fees
3,616
3,642
3,348
2,209
2,099
12,815
7,824
Commercial lease income
3,839
3,080
2,730
2,401
1,982
12,051
5,354
Bank-owned life insurance
1,795
1,824
1,836
1,816
1,852
7,272
7,620
Mortgage warehouse transactional fees
1,983
2,150
1,681
1,314
1,495
7,128
7,158
Gain (loss) on sale of SBA and other loans
2,770
—
—
—
(110)
2,770
3,294
Mortgage banking income (loss)
(635)
283
250
167
73
66
606
Loss upon acquisition of interest-only GNMA securities
—
—
(7,476)
—
—
(7,476)
—
Gain (loss) on sale of investment securities
—
1,001
—
—
—
1,001
(18,659)
Unrealized gain (loss) on investment securities
310
1,333
(347)
2
(101)
1,299
(1,634)
Other
5,629
3,187
3,254
3,003
5,019
15,071
16,740
Total non-interest income
25,813
23,369
12,036
19,718
19,877
80,938
58,998
Non-interest expense:
Salaries and employee benefits
27,697
27,193
26,920
25,823
26,706
107,632
104,841
Technology, communication and bank operations
10,370
8,755
12,402
11,953
11,531
43,481
44,454
Professional services
6,470
8,348
5,718
4,573
5,674
25,109
20,237
Occupancy
3,470
3,661
3,064
2,903
2,933
13,098
11,809
Commercial lease depreciation
2,840
2,459
2,252
1,923
1,550
9,473
4,388
FDIC assessments, non-income taxes, and regulatory fees
2,492
(777)
2,157
1,988
1,892
5,861
8,642
Provision for operating losses
1,415
3,998
2,446
1,779
1,685
9,638
5,616
Advertising and promotion
899
976
1,360
809
917
4,044
2,446
Merger and acquisition related expenses
100
—
—
—
470
100
4,391
Loan workout
230
495
643
320
360
1,687
2,183
Other real estate owned (income) expenses
247
108
(14)
57
285
398
449
Other
2,510
4,376
2,634
1,856
3,042
11,380
10,723
Total non-interest expense
58,740
59,592
59,582
53,984
57,045
231,901
220,179
Income before income tax expense
34,977
35,086
11,787
20,271
22,971
102,120
91,054
Income tax expense
7,451
8,020
2,491
4,831
5,109
22,793
19,359
Net income
27,526
27,066
9,296
15,440
17,862
79,327
71,695
Preferred stock dividends
3,615
3,615
3,615
3,615
3,615
14,459
14,459
Net income available to common shareholders
$
23,911
$
23,451
$
5,681
$
11,825
$
14,247
$
64,868
$
57,236
Basic earnings per common share
$
0.76
$
0.75
$
0.18
$
0.38
$
0.45
$
2.08
$
1.81
Diluted earnings per common share
$
0.75
$
0.74
$
0.18
$
0.38
$
0.44
$
2.05
$
1.78
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2019
2019
2019
2019
2018
ASSETS
Cash and due from banks
$
33,095
$
12,555
$
24,757
$
41,723
$
17,696
Interest-earning deposits
179,410
169,663
71,038
75,939
44,439
Cash and cash equivalents
212,505
182,218
95,795
117,662
62,135
Investment securities, at fair value
595,876
608,714
708,359
678,142
665,012
Loans held for sale
486,328
502,854
5,697
1,602
1,507
Loans receivable, mortgage warehouse, at fair value
2,245,758
2,438,530
2,001,540
1,480,195
1,405,420
Loans and leases receivable
7,318,988
7,336,237
7,714,106
7,264,049
7,138,074
Allowance for loan and lease losses
(56,379)
(51,053)
(48,388)
(43,679)
(39,972)
Total loans and leases receivable, net of allowance for loan and lease losses
9,508,367
9,723,714
9,667,258
8,700,565
8,503,522
FHLB, Federal Reserve Bank, and other restricted stock
84,214
81,853
101,947
80,416
89,685
Accrued interest receivable
38,072
38,412
38,506
35,716
32,955
Bank premises and equipment, net
9,389
14,075
10,095
10,542
11,063
Bank-owned life insurance
272,546
270,526
268,682
266,740
264,559
Other real estate owned
173
204
1,076
976
816
Goodwill and other intangibles
15,195
15,521
15,847
16,173
16,499
Other assets
298,052
285,699
269,165
235,360
185,672
Total assets
$
11,520,717
$
11,723,790
$
11,182,427
$
10,143,894
$
9,833,425
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, non-interest bearing deposits
$
1,343,391
$
1,569,918
$
1,380,698
$
1,372,358
$
1,122,171
Interest-bearing deposits
7,305,545
7,355,767
6,805,079
6,052,960
6,020,065
Total deposits
8,648,936
8,925,685
8,185,777
7,425,318
7,142,236
Federal funds purchased
538,000
373,000
406,000
388,000
187,000
FHLB advances
850,000
1,040,800
1,262,100
1,025,832
1,248,070
Other borrowings
123,630
123,528
99,055
123,963
123,871
Subordinated debt
181,115
109,050
109,026
109,002
108,977
Accrued interest payable and other liabilities
126,241
132,577
129,064
93,406
66,455
Total liabilities
10,467,922
10,704,640
10,191,022
9,165,521
8,876,609
Preferred stock
217,471
217,471
217,471
217,471
217,471
Common stock
32,617
32,526
32,483
32,412
32,252
Additional paid in capital
444,218
441,499
439,067
436,713
434,314
Retained earnings
381,519
357,608
334,157
328,476
316,651
Accumulated other comprehensive loss
(1,250)
(8,174)
(9,993)
(14,919)
(22,663)
Treasury stock, at cost
(21,780)
(21,780)
(21,780)
(21,780)
(21,209)
Total shareholders' equity
1,052,795
1,019,150
991,405
978,373
956,816
Total liabilities & shareholders' equity
$
11,520,717
$
11,723,790
$
11,182,427
$
10,143,894
$
9,833,425
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Three Months Ended
December 31, 2019
September 30, 2019
December 31, 2018
Average
Balance
Average
Yield or
Cost (%)
Average
Balance
Average
Yield or
Cost (%)
Average
Balance
Average
Yield or
Cost (%)
Assets
Interest earning deposits
$
150,382
2.21%
$
100,343
3.26%
$
185,145
2.24%
Investment securities (1)
584,955
3.50%
652,142
3.60%
697,474
3.60%
Loans and leases:
Commercial loans to mortgage companies
2,158,626
4.16%
2,103,612
4.58%
1,409,197
5.03%
Multi-family loans
2,654,919
3.96%
2,929,650
3.91%
3,445,267
3.76%
Commercial and industrial loans and leases (2)
2,318,313
4.79%
2,159,067
5.24%
1,823,189
4.93%
Non-owner occupied commercial real estate loans
1,325,630
4.55%
1,294,246
4.57%
1,224,750
4.40%
Residential mortgages
631,370
4.05%
729,603
4.11%
599,797
4.02%
Other consumer loans
765,765
9.11%
600,256
9.47%
60,210
9.26%
Total loans and leases (3)
9,854,623
4.68%
9,816,434
4.79%
8,562,410
4.37%
Other interest-earning assets
86,770
7.63%
98,279
6.39%
73,091
9.41%
Total interest-earning assets
10,676,730
4.61%
10,667,198
4.72%
9,518,120
4.31%
Non-interest-earning assets
580,477
591,946
429,247
Total assets
$
11,257,207
$
11,259,144
$
9,947,367
Liabilities
Interest checking accounts
$
1,152,349
1.65%
$
1,014,590
1.83%
$
767,154
1.60%
Money market deposit accounts
3,190,543
2.01%
3,100,975
2.22%
3,391,542
2.08%
Other savings accounts
722,487
2.09%
561,790
2.19%
350,304
1.99%
Certificates of deposit
2,012,497
2.21%
2,227,817
2.34%
2,141,598
2.11%
Total interest-bearing deposits (4)
7,077,876
2.02%
6,905,172
2.20%
6,650,598
2.03%
Borrowings
1,424,550
2.91%
1,770,459
2.86%
983,540
3.13%
Total interest-bearing liabilities
8,502,426
2.17%
8,675,631
2.33%
7,634,138
2.17%
Non-interest-bearing deposits (4)
1,580,050
1,431,810
1,261,330
Total deposits and borrowings
10,082,476
1.83%
10,107,441
2.00%
8,895,468
1.86%
Other non-interest-bearing liabilities
138,242
146,347
89,202
Total liabilities
10,220,718
10,253,788
8,984,670
Shareholders' equity
1,036,489
1,005,356
962,697
Total liabilities and shareholders' equity
$
11,257,207
$
11,259,144
$
9,947,367
Interest spread
2.78%
2.71%
2.45%
Net interest margin
2.89%
2.82%
2.57%
Net interest margin tax equivalent (5)
2.89%
2.83%
2.57%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 1.65%, 1.82% and 1.71% for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Twelve Months Ended
December 31, 2019
December 31, 2018
Average Balance
Average Yield
or Cost (%)
Average Balance
Average Yield
or Cost (%)
Assets
Interest earning deposits
$
103,833
2.68%
$
217,168
1.90%
Investment securities (1)
653,694
3.63%
1,005,688
3.30%
Loans and leases:
Commercial loans to mortgage companies
1,799,489
4.58%
1,610,168
4.92%
Multi-family loans
2,982,185
3.87%
3,549,511
3.82%
Commercial and industrial loans and leases (2)
2,111,181
5.08%
1,743,696
4.72%
Non-owner occupied commercial real estate loans
1,243,236
4.53%
1,257,545
4.32%
Residential mortgages
694,889
4.15%
497,772
4.05%
Other consumer loans
445,166
9.28%
20,028
8.78%
Total loans and leases (3)
9,276,146
4.65%
8,678,720
4.30%
Other interest-earning assets
90,035
6.39%
110,223
6.71%
Total interest-earning assets
10,123,708
4.58%
10,011,799
4.17%
Non-interest-earning assets
543,962
406,303
Total assets
$
10,667,670
$
10,418,102
Liabilities
Interest checking accounts
$
955,630
1.82%
$
630,335
1.49%
Money market deposit accounts
3,151,328
2.18%
3,417,779
1.77%
Other savings accounts
538,375
2.12%
135,994
1.67%
Certificates of deposit
1,943,361
2.26%
2,066,896
1.87%
Total interest-bearing deposits (4)
6,588,694
2.15%
6,251,004
1.77%
Borrowings
1,523,171
2.95%
1,951,921
2.52%
Total interest-bearing liabilities
8,111,865
2.30%
8,202,925
1.95%
Non-interest-bearing deposits (4)
1,430,149
1,189,638
Total deposits and borrowings
9,542,014
1.95%
9,392,563
1.70%
Other non-interest-bearing liabilities
126,325
83,563
Total liabilities
9,668,339
9,476,126
Shareholders' equity
999,331
941,976
Total liabilities and shareholders' equity
$
10,667,670
$
10,418,102
Interest spread
2.63%
2.47%
Net interest margin
2.74%
2.58%
Net interest margin tax equivalent (5)
2.75%
2.58%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 1.76% and 1.49% for the twelve months ended December 31, 2019 and December 31, 2018, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for both the year ended December 31, 2019 and 2018, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
SEGMENT REPORTING - UNAUDITED
(Dollars in thousands, except per share amounts)
The following tables present Customers' business segment results for the three and twelve months ended December 31, 2019 and 2018:
Three Months Ended December 31, 2019
Three Months Ended December 31, 2018
Customers
Bank
Business
Banking
BankMobile
Consolidated
Customers
Bank
Business
Banking
BankMobile
Consolidated
Interest income (1)
$
112,212
$
11,783
$
123,995
$
98,129
$
5,174
$
103,303
Interest expense
46,111
291
46,402
41,592
187
41,779
Net interest income
66,101
11,492
77,593
56,537
4,987
61,524
Provision for loan and lease losses
6,846
2,843
9,689
(200)
1,585
1,385
Non-interest income
14,964
10,849
25,813
9,352
10,525
19,877
Non-interest expense
41,494
17,246
58,740
38,778
18,267
57,045
Income (loss) before income tax expense (benefit)
32,725
2,252
34,977
27,311
(4,340)
22,971
Income tax expense (benefit)
6,892
559
7,451
6,175
(1,066)
5,109
Net income (loss)
25,833
1,693
27,526
21,136
(3,274)
17,862
Preferred stock dividends
3,615
—
3,615
3,615
—
3,615
Net income (loss) available to common shareholders
$
22,218
$
1,693
$
23,911
$
17,521
$
(3,274)
$
14,247
Basic earnings (loss) per common share
$
0.71
$
0.05
$
0.76
$
0.55
$
(0.10)
$
0.45
Diluted earnings (loss) per common share
$
0.70
$
0.05
$
0.75
$
0.55
$
(0.10)
$
0.44
(1) Amounts reported include funds transfer pricing of $0.7 million and $3.8 million for the three months ended December 31, 2019 and 2018, respectively, credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
Twelve Months Ended December 31, 2019
Twelve Months Ended December 31, 2018
Customers
Bank
Business
Banking
BankMobile
Consolidated
Customers
Bank
Business
Banking
BankMobile
Consolidated
Interest income (2)
$
422,094
$
41,645
$
463,739
$
400,948
$
17,003
$
417,951
Interest expense
185,513
916
186,429
159,674
400
160,074
Net interest income
236,581
40,729
277,310
241,274
16,603
257,877
Provision for loan and lease losses
10,091
14,136
24,227
2,928
2,714
5,642
Non-interest income
35,268
45,670
80,938
17,499
41,499
58,998
Non-interest expense
153,333
78,568
231,901
146,946
73,233
220,179
Income (loss) before income tax expense (benefit)
108,425
(6,305)
102,120
108,899
(17,845)
91,054
Income tax expense (benefit)
24,215
(1,422)
22,793
23,742
(4,383)
19,359
Net income (loss)
84,210
(4,883)
79,327
85,157
(13,462)
71,695
Preferred stock dividends
14,459
—
14,459
14,459
—
14,459
Net income (loss) available to common shareholders
$
69,751
$
(4,883)
$
64,868
$
70,698
$
(13,462)
$
57,236
Basic earnings (loss) per common share
$
2.24
$
(0.16)
$
2.08
$
2.24
$
(0.43)
$
1.81
Diluted earnings (loss) per common share
$
2.20
$
(0.15)
$
2.05
$
2.19
$
(0.42)
$
1.78
As of December 31, 2019 and 2018
Goodwill and other intangibles
$
3,629
$
11,566
$
15,195
$
3,629
$
12,870
$
16,499
Total assets (3)
$
10,990,550
$
530,167
$
11,520,717
$
9,688,146
$
145,279
$
9,833,425
Total deposits
$
8,247,836
$
401,100
$
8,648,936
$
6,766,378
$
375,858
$
7,142,236
Total non-deposit liabilities (3)
$
1,789,329
$
29,657
$
1,818,986
$
1,719,225
$
15,148
$
1,734,373
(2) Amounts reported include funds transfer pricing of $8.8 million and $15.7 million for the twelve months ended December 31, 2019 and 2018, respectively, credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
(3) Amounts reported exclude inter-segment receivables.
The following tables present Customers' business segment results for the quarter ended December 31, 2019, the preceding four quarters, and the twelve months ended December 31, 2019 and 2018, respectively:
Customers Bank Business Banking:
Twelve Months Ended
December 31,
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
Interest income (1)
$
112,212
$
113,995
$
103,014
$
92,871
$
98,129
$
422,094
$
400,948
Interest expense
46,111
50,734
47,061
41,605
41,592
185,513
159,674
Net interest income
66,101
63,261
55,953
51,266
56,537
236,581
241,274
Provision for loan and lease losses
6,846
2,475
(2,206)
2,976
(200)
10,091
2,928
Non-interest income (loss)
14,964
11,757
970
7,577
9,352
35,268
17,499
Non-interest expense
41,494
38,347
38,107
35,384
38,778
153,333
146,946
Income before income tax expense
32,725
34,196
21,022
20,483
27,311
108,425
108,899
Income tax expense
6,892
7,814
4,629
4,880
6,175
24,215
23,742
Net income
25,833
26,382
16,393
15,603
21,136
84,210
85,157
Preferred stock dividends
3,615
3,615
3,615
3,615
3,615
14,459
14,459
Net income available to common shareholders
$
22,218
$
22,767
$
12,778
$
11,988
$
17,521
$
69,751
$
70,698
Basic earnings per common share
$
0.71
$
0.73
$
0.41
$
0.39
$
0.55
$
2.24
$
2.24
Diluted earnings per common share
$
0.70
$
0.72
$
0.40
$
0.38
$
0.55
$
2.20
$
2.19
(1) Amounts reported include funds transfer pricing of $0.7 million, $0.3 million, $2.2 million, $5.6 million and $3.8 million for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. Amounts reported also include funds transfer pricing of $8.8 million and $15.7 million for the twelve months ended December 31, 2019 and 2018, respectively. These amounts are credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
BankMobile:
Twelve Months Ended
December 31,
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
Interest income (2)
$
11,783
$
12,723
$
8,936
$
8,204
$
5,174
$
41,645
$
17,003
Interest expense
291
249
210
166
187
916
400
Net interest income
11,492
12,474
8,726
8,038
4,987
40,729
16,603
Provision for loan and lease losses
2,843
1,951
7,552
1,791
1,585
14,136
2,714
Non-interest income
10,849
11,612
11,066
12,141
10,525
45,670
41,499
Non-interest expense
17,246
21,245
21,475
18,600
18,267
78,568
73,233
Loss before income tax expense or benefit
2,252
890
(9,235)
(212)
(4,340)
(6,305)
(17,845)
Income tax benefit
559
206
(2,138)
(49)
(1,066)
(1,422)
(4,383)
Net loss available to common shareholders
$
1,693
$
684
$
(7,097)
$
(163)
$
(3,274)
$
(4,883)
$
(13,462)
Basic loss per common share
$
0.05
$
0.02
$
(0.23)
$
(0.01)
$
(0.10)
$
(0.16)
$
(0.43)
Diluted loss per common share
$
0.05
$
0.02
$
(0.22)
$
(0.01)
$
(0.10)
$
(0.15)
$
(0.42)
Deposit balances (3)
Disbursements business deposits
$
319,263
$
598,064
$
409,683
$
615,710
$
370,690
White label deposits
81,837
67,541
46,514
11,046
5,168
Total deposits
$
401,100
$
665,605
$
456,197
$
626,756
$
375,858
(2) Amounts reported include funds transfer pricing of $0.7 million, $0.3 million, $2.2 million, $5.6 million and $3.8 million for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. Amounts reported also include funds transfer pricing of $8.8 million and $15.7 million for the twelve months ended December 31, 2019 and 2018, respectively. These amounts are credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
(3) As of December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2019
2019
2019
2019
2018
Commercial:
Multi-family
$
2,392,146
$
2,800,018
$
3,017,531
$
3,212,312
$
3,285,297
Mortgage warehouse
2,305,953
2,549,286
2,054,307
1,535,343
1,461,810
Commercial & industrial
2,381,792
2,252,843
2,131,790
1,983,081
1,894,887
Commercial real estate non-owner occupied
1,223,529
1,268,557
1,176,575
1,107,336
1,125,106
Construction
118,418
61,200
59,811
53,372
56,491
Total commercial loans and leases
8,421,838
8,931,904
8,440,014
7,891,444
7,823,591
Consumer:
Residential
378,470
631,866
654,556
626,668
568,068
Manufactured housing
70,398
72,616
75,597
77,778
79,731
Other consumer
1,178,283
643,553
552,839
153,153
74,035
Total consumer loans
1,627,151
1,348,035
1,282,992
857,599
721,834
Deferred (fees)/costs and unamortized (discounts)/premiums, net
2,085
(2,318)
(1,663)
(3,197)
(424)
Total loans and leases
$
10,051,074
$
10,277,621
$
9,721,343
$
8,745,846
$
8,545,001
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2019
2019
2019
2019
2018
Demand, non-interest bearing
$
1,343,391
$
1,569,918
$
1,380,698
$
1,372,358
$
1,122,171
Demand, interest bearing
1,235,292
1,139,675
925,180
811,490
803,948
Savings
919,214
591,336
529,532
417,346
384,545
Money market
3,482,505
3,201,883
2,912,266
3,265,823
3,097,391
Time deposits
1,668,534
2,422,873
2,438,101
1,558,301
1,734,181
Total deposits
$
8,648,936
$
8,925,685
$
8,185,777
$
7,425,318
$
7,142,236
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)
As of December 31, 2019
As of September 30, 2019
As of December 31, 2018
Total
loans
Non
accrual
/NPLs
Total
credit
reserves
Total
NPLs to
total
loans
Total
reserves to
total NPLs
Total
loans
Non
accrual
/NPLs
Total
credit
reserves
Total
NPLs to
total loans
Total
reserves to
total NPLs
Total loans
Non
accrual
/NPLs
Total
credit
reserves
Total
NPLs to
total loans
Total
reserves to
total NPLs
Loan type
Multi-family
$
1,909,274
$
4,117
$
6,157
0.22
%
149.55
%
$
2,300,244
$
—
$
7,498
—
%
—
%
$
3,285,297
$
1,155
$
11,462
0.04
%
992.38
%
Commercial & industrial (1)
2,441,987
6,494
17,791
0.27
%
273.96
%
2,363,599
7,382
18,765
0.31
%
254.20
%
1,951,277
18,801
15,465
0.96
%
82.26
%
Commercial real estate non-owner occupied
1,223,529
76
6,243
0.01
%
8214.47
%
1,268,557
83
6,440
0.01
%
7759.04
%
1,125,106
129
6,093
0.01
%
4723.26
%
Construction
118,418
—
1,262
—
%
—
%
61,200
—
658
—
%
—
%
56,491
—
624
—
%
—
%
Total commercial loans and leases receivable
5,693,208
10,687
31,453
0.19
%
294.31
%
5,993,600
7,465
33,361
0.12
%
446.90
%
6,418,171
20,085
33,644
0.31
%
167.51
%
Residential
375,014
6,128
3,218
1.63
%
52.51
%
628,786
6,093
4,083
0.97
%
67.01
%
566,561
5,605
3,654
0.99
%
65.19
%
Manufactured housing
70,398
1,655
1,178
2.35
%
71.18
%
72,616
1,567
1,051
2.16
%
67.07
%
79,731
1,693
633
2.12
%
37.39
%
Other consumer
1,178,283
1,551
20,648
0.13
%
1331.27
%
643,553
1,140
12,582
0.18
%
1103.68
%
74,035
111
2,529
0.15
%
2278.38
%
Total consumer loans receivable
1,623,695
9,334
25,044
0.57
%
268.31
%
1,344,955
8,800
17,716
0.65
%
201.32
%
720,327
7,409
6,816
1.03
%
92.00
%
Deferred (fees) costs and unamortized (discounts) premiums, net
2,085
—
—
—
%
—
%
(2,318
)
—
—
—
%
—
%
(424
)
—
—
—
%
—
%
Loans and leases receivable
7,318,988
20,021
56,497
0.27
%
282.19
%
7,336,237
16,265
51,077
0.22
%
314.03
%
7,138,074
27,494
40,460
0.39
%
147.16
%
Loans receivable, mortgage warehouse, at fair value
2,245,758
—
—
—
%
—
%
2,438,530
—
—
—
%
—
%
1,405,420
—
—
—
%
—
%
Total loans held for sale
486,328
1,325
—
0.27
%
—
%
502,854
1,325
—
0.26
%
—
%
1,507
—
—
—
%
—
%
Total portfolio
$
10,051,074
$
21,346
$
56,497
0.21
%
264.67
%
$
10,277,621
$
17,590
$
51,077
0.17
%
290.38
%
$
8,545,001
$
27,494
$
40,460
0.32
%
147.16
%
(1) Commercial & industrial loans, including owner occupied commercial real estate loans.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)
Twelve Months Ended
December 31,
Q4
Q3
Q2
Q1
Q4
2019
2019
2019
2019
2018
2019
2018
Loan type
Multi-family
$
—
$
—
$
(7
)
$
541
$
—
$
534
$
—
Commercial & industrial (1)
(225
)
15
(186
)
(239
)
1,457
(635
)
1,740
Commercial real estate non-owner occupied
(8
)
(8
)
(114
)
(6
)
(10
)
(136
)
(246
)
Residential
181
(5
)
61
33
52
270
390
Other consumer
4,414
1,759
883
731
655
7,787
1,801
Total net charge-offs (recoveries) from loans held for investment
$
4,362
$
1,761
$
637
$
1,060
$
2,154
$
7,820
$
3,685
(1) Commercial & industrial loans, including owner occupied commercial real estate.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED
Customers believes 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 Customers' 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. Although non-GAAP financial measures are frequently used in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results of operations or financial condition as reported under GAAP.
The following tables present reconciliations of GAAP to non-GAAP measures disclosed within this document.
Core Earnings - Customers Bancorp
Twelve Months Ended
December 31,
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
(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
$
23,911
$
0.75
$
23,451
$
0.74
$
5,681
$
0.18
$
11,825
$
0.38
$
14,247
$
0.44
$
64,868
$
2.05
$
57,236
$
1.78
Reconciling items (after tax):
Severance expense
—
—
—
—
373
0.01
—
—
1,421
0.04
373
0.01
1,421
0.04
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
5,682
0.18
—
—
—
—
5,682
0.18
—
—
Merger and acquisition related expenses
76
—
—
—
—
—
—
—
355
0.01
76
—
3,312
0.10
Losses on sale of multi-family loans
—
—
—
—
—
—
—
—
868
0.03
—
—
868
0.03
Legal reserves
—
—
1,520
0.05
—
—
—
—
—
—
1,520
0.05
—
—
(Gains) losses on investment securities
(310
)
(0.01
)
(1,947
)
(0.06
)
347
0.01
(2
)
—
101
—
(1,912
)
(0.06
)
15,646
0.49
Losses on sale of non-QM residential mortgage loans
595
0.02
—
—
—
—
—
—
—
—
595
0.02
—
—
Core earnings
$
24,272
$
0.76
$
23,024
$
0.73
$
12,083
$
0.38
$
11,823
$
0.38
$
16,992
$
0.53
$
71,202
$
2.25
$
78,483
$
2.43
Core Return on Average Assets - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
GAAP net income
$
27,526
$
27,066
$
9,296
$
15,440
$
17,862
$
79,327
$
71,695
Reconciling items (after tax):
Severance expense
—
—
373
—
1,421
373
1,421
Loss upon acquisition of interest-only GNMA securities
—
—
5,682
—
—
5,682
—
Merger and acquisition related expenses
76
—
—
—
355
76
3,312
Losses on sale of multi-family loans
—
—
—
—
868
—
868
Legal reserves
—
1,520
—
—
—
1,520
—
(Gains) losses on investment securities
(310
)
(1,947
)
347
(2
)
101
(1,912
)
15,646
Losses on sale of non-QM residential mortgage loans
595
—
—
—
—
595
—
Core net income
$
27,887
$
26,639
$
15,698
$
15,438
$
20,607
$
85,661
$
92,942
Average total assets
$
11,257,207
$
11,259,144
$
10,371,842
$
9,759,529
$
9,947,367
$
10,667,670
$
10,418,102
Core return on average assets
0.98
%
0.94
%
0.61
%
0.64
%
0.82
%
0.80
%
0.89
%
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
GAAP net income
$
27,526
$
27,066
$
9,296
$
15,440
$
17,862
$
79,327
$
71,695
Reconciling items:
Income tax expense
7,451
8,020
2,491
4,831
5,109
22,793
19,359
Provision for loan and lease losses
9,689
4,426
5,346
4,767
1,385
24,227
5,642
Severance expense
—
—
490
—
1,869
490
1,869
Loss upon acquisition of interest-only GNMA securities
—
—
7,476
—
—
7,476
—
Merger and acquisition related expenses
100
—
—
—
470
100
4,391
Losses on sale of multi-family loans
—
—
—
—
1,161
—
1,161
Legal reserves
—
2,000
—
—
—
2,000
—
(Gains) losses on investment securities
(310
)
(2,334
)
347
(2
)
101
(2,300
)
20,293
Losses on sale of non-QM residential mortgage loans
782
—
—
—
—
782
—
Adjusted net income - pre-tax pre-provision
$
45,238
$
39,178
$
25,446
$
25,036
$
27,957
$
134,895
$
124,410
Average total assets
$11,257,207
$
11,259,144
$10,371,842
$9,759,529
$
9,947,367
$
10,667,670
$
10,418,102
Adjusted ROAA - pre-tax pre-provision
1.59
%
1.38
%
0.98
%
1.04
%
1.12
%
1.26
%
1.19
%
Core Return on Average Common Equity - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
GAAP net income to common shareholders
$
23,911
$
23,451
$
5,681
$
11,825
$
14,247
$
64,868
$
57,236
Reconciling items (after tax):
Severance expense
—
—
373
—
1,421
373
1,421
Loss upon acquisition of interest-only GNMA securities
—
—
5,682
—
—
5,682
—
Merger and acquisition related expenses
76
—
—
—
355
76
3,312
Losses on sale of multi-family loans
—
—
—
—
868
—
868
Legal reserves
—
1,520
—
—
—
1,520
—
(Gains) losses on investment securities
(310
)
(1,947
)
347
(2
)
101
(1,912
)
15,646
Losses on sale of non-QM residential mortgage loans
595
—
—
—
—
595
—
Core earnings
$
24,272
$
23,024
$
12,083
$
11,823
$
16,992
$
71,202
$
78,483
Average total common shareholders' equity
$
819,018
$
787,885
$
768,592
$
751,133
$
745,226
$
781,860
$
724,505
Core return on average common equity
11.76
%
11.59
%
6.31
%
6.38
%
9.05
%
9.11
%
10.83
%
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Adjusted ROCE - Pre-Tax Pre-Provision - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
GAAP net income to common shareholders
$
23,911
$
23,451
$
5,681
$
11,825
$
14,247
$
64,868
$
57,236
Reconciling items:
Income tax expense
7,451
8,020
2,491
4,831
5,109
22,793
19,359
Provision for loan and lease losses
9,689
4,426
5,346
4,767
1,385
24,227
5,642
Severance expense
—
—
490
—
1,869
490
1,869
Loss upon acquisition of interest-only GNMA securities
—
—
7,476
—
—
7,476
—
Merger and acquisition related expenses
100
—
—
—
470
100
4,391
Losses on sale of multi-family loans
—
—
—
—
1,161
—
1,161
Legal reserves
—
2,000
—
—
—
2,000
—
(Gains) losses on investment securities
(310
)
(2,334
)
347
(2
)
101
(2,300
)
20,293
Losses on sale of non-QM residential mortgage loans
782
—
—
—
—
782
—
Pre-tax pre-provision adjusted net income available to common shareholders
$
41,623
$
35,563
$
21,831
$
21,421
$
24,342
$
120,436
$
109,951
Average total common shareholders' equity
$
819,018
$
787,885
$
768,592
$
751,133
$
745,226
$
781,860
$
724,505
Adjusted ROCE - pre-tax pre-provision
20.16
%
17.91
%
11.39
%
11.57
%
12.96
%
15.40
%
15.18
%
Net Interest Margin, Tax Equivalent - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
GAAP net interest income
$
77,593
$
75,735
$
64,679
$
59,304
$
61,524
$
277,310
$
257,877
Tax-equivalent adjustment
187
184
183
181
171
735
685
Net interest income tax equivalent
$
77,780
$
75,919
$
64,862
$
59,485
$
61,695
$
278,045
$
258,562
Average total interest earning assets
$
10,676,730
$
10,667,198
$
9,851,150
$
9,278,413
$
9,518,120
$
10,123,708
$
10,011,799
Net interest margin, tax equivalent
2.89
%
2.83
%
2.64
%
2.59
%
2.57
%
2.75
%
2.58
%
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Core Efficiency Ratio - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
GAAP net interest income
$
77,593
$
75,735
$
64,679
$
59,304
$
61,524
$
277,310
$
257,877
GAAP non-interest income
$
25,813
$
23,369
$
12,036
$
19,718
$
19,877
$
80,938
$
58,998
Loss upon acquisition of interest-only GNMA securities
—
—
7,476
—
—
7,476
—
(Gains) losses on investment securities
(310
)
(2,334
)
347
(2
)
101
(2,300
)
20,293
Losses on sale of multi-family loans
—
—
—
—
1,161
—
1,161
Losses on sale of non-QM residential mortgage loans
782
—
—
—
—
782
—
Core non-interest income
26,285
21,035
19,859
19,716
21,139
86,896
80,452
Core revenue
$
103,878
$
96,770
$
84,538
$
79,020
$
82,663
$
364,206
$
338,329
GAAP non-interest expense
$
58,740
$
59,592
$
59,582
$
53,984
$
57,045
$
231,901
$
220,179
Severance expense
—
—
(490
)
—
(1,869
)
(490
)
(1,869
)
Legal reserves
—
(2,000
)
—
—
—
(2,000
)
—
Merger and acquisition related expenses
(100
)
—
—
—
(470
)
(100
)
(4,391
)
Core non-interest expense
$
58,640
$
57,592
$
59,092
$
53,984
$
54,706
$
229,311
$
213,919
Core efficiency ratio (1)
56.45
%
59.51
%
69.90
%
68.32
%
66.18
%
62.96
%
63.23
%
(1) Core efficiency ratio calculated as core non-interest expense divided by core revenue.
Tangible Common Equity to Tangible Assets - Customers Bancorp
(dollars in thousands except per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
GAAP - Total shareholders' equity
$
1,052,795
$
1,019,150
$
991,405
$
978,373
$
956,816
Reconciling items:
Preferred stock
(217,471
)
(217,471
)
(217,471
)
(217,471
)
(217,471
)
Goodwill and other intangibles
(15,195
)
(15,521
)
(15,847
)
(16,173
)
(16,499
)
Tangible common equity
$
820,129
$
786,158
$
758,087
$
744,729
$
722,846
Total assets
$
11,520,717
$
11,723,790
$
11,182,427
$
10,143,894
$
9,833,425
Reconciling items:
Goodwill and other intangibles
(15,195
)
(15,521
)
(15,847
)
(16,173
)
(16,499
)
Tangible assets
$
11,505,522
$
11,708,269
$
11,166,580
$
10,127,721
$
9,816,926
Tangible common equity to tangible assets
7.13
%
6.71
%
6.79
%
7.35
%
7.36
%
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Tangible Book Value per Common Share - Customers Bancorp
(dollars in thousands except share and per share data)
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
GAAP - Total shareholders' equity
$
1,052,795
$
1,019,150
$
991,405
$
978,373
$
956,816
Reconciling Items:
Preferred stock
(217,471)
(217,471)
(217,471)
(217,471)
(217,471)
Goodwill and other intangibles
(15,195)
(15,521)
(15,847)
(16,173)
(16,499)
Tangible common equity
$
820,129
$
786,158
$
758,087
$
744,729
$
722,846
Common shares outstanding
31,336,791
31,245,776
31,202,023
31,131,247
31,003,028
Tangible book value per common share
$
26.17
$
25.16
$
24.30
$
23.92
$
23.32
Tangible Book Value per Common Share - CAGR - Customers Bancorp
(dollars in thousands except share and per share data)
Q4 2019
Q4 2018
Q4 2017
Q4 2016
Q4 2015
Q4 2014
GAAP - Total shareholders' equity
$
1,052,795
$
956,816
$
920,964
$
855,872
$
553,902
$
443,145
Reconciling Items:
Preferred stock
(217,471)
(217,471)
(217,471)
(217,471)
(55,569)
—
Goodwill and other intangibles
(15,195)
(16,499)
(16,295)
(17,621)
(3,651)
(3,664)
Tangible common equity
$
820,129
$
722,846
$
687,198
$
620,780
$
494,682
$
439,481
Common shares outstanding
31,336,791
31,003,028
31,382,503
30,289,917
26,901,801
26,745,529
Tangible book value per common share
$
26.17
$
23.32
$
21.90
$
20.49
$
18.39
$
16.43
CAGR
9.76
%
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Core Earnings - Customers Bank Business Banking Segment
Twelve Months Ended
December 31,
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
(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
$
22,218
$
0.70
$
22,767
$
0.72
$
12,778
$
0.40
$
11,988
$
0.38
$
17,521
$
0.55
$
69,751
$
2.20
$
70,698
$
2.19
Reconciling items (after tax):
Severance expense
—
—
—
—
359
0.01
—
—
1,421
0.04
359
0.01
1,421
0.04
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
5,682
0.18
—
—
—
—
5,682
0.18
—
—
Losses on sale of multi-family loans
—
—
—
—
—
—
—
—
868
0.03
—
—
868
0.03
Legal reserves
—
—
760
0.02
—
—
—
—
—
—
760
0.02
—
—
(Gains) losses on investment securities
(310)
(0.01)
(1,947)
(0.06)
347
0.01
(2)
—
101
—
(1,912)
(0.06)
15,646
0.49
Losses on sale of non-QM residential mortgage loans
595
0.02
—
—
—
—
—
—
—
—
595
0.02
—
—
Core earnings
$
22,503
$
0.71
$
21,580
$
0.68
$
19,166
$
0.61
$
11,986
$
0.38
$
19,911
$
0.62
$
75,235
$
2.38
$
88,633
$
2.75
Core Earnings (Loss) - BankMobile Segment
Twelve Months Ended
December 31,
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
2019
2018
(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 loss to common shareholders
$
1,693
$
0.05
$
684
$
0.02
$
(7,097)
$
(0.22)
$
(163)
$
(0.01)
$
(3,274)
$
(0.10)
$
(4,883)
$
(0.15)
$
(13,462)
$
(0.42)
Reconciling items (after tax):
Severance expense
—
—
—
—
13
—
—
—
—
—
13
—
—
—
Legal reserves
—
—
760
0.02
—
—
—
—
—
—
760
0.02
—
—
Merger and acquisition related expenses
76
—
—
—
—
—
—
—
355
0.01
76
—
3,312
0.10
Core loss
$
1,769
$
0.06
$
1,444
$
0.05
$
(7,084)
$
(0.22)
$
(163)
$
(0.01)
$
(2,919)
$
(0.09)
$
(4,034)
$
(0.13)
$
(10,150)
$
(0.31)
View source version on businesswire.com: https://www.businesswire.com/news/home/20200122005837/en/