Customers Bancorp Reports Record Fourth Quarter 2020 Results
Customers Bancorp, Inc. (NYSE: CUBI), the parent company of Customers Bank (collectively “Customers” or "CUBI"), today reported fourth quarter 2020 ("Q4 2020") net income to common shareholders of $52.8 million or $1.65 per diluted share, up from third quarter 2020 ("Q3 2020") net income to common shareholders of $47.1 million or $1.48 per diluted share. Core earnings for Q4 2020 totaled $52.6 million or $1.65 per diluted share, up from Q3 2020 core earnings of $38.2 million or $1.20 per diluted share (non-GAAP measures). Net interest margin, tax equivalent ("NIM") expanded 28 basis points during Q4 2020 to 2.78% from 2.50% in Q3 2020 (non-GAAP measures). NIM excluding PPP loans expanded 18 basis points to 3.04% in Q4 2020 from 2.86% in Q3 2020 (non-GAAP measures). ROAA for Q4 2020 was 1.23%, up 11 basis points from Q3 2020 ROAA of 1.12%. ROCE for Q4 2020 was 24.26%, up 121 basis points from Q3 2020 ROCE of 23.05%.
Full year 2020 ("FY 2020") net income to common shareholders was $118.5 million or $3.74 per diluted share, up from full year 2019 ("FY 2019") net income to common shareholders of $64.9 million or $2.05 per diluted share. Core earnings for FY 2020 totaled $110.6 million or $3.49 per diluted share, compared to core earnings of $72.0 million or $2.28 per diluted share for FY 2019 (non-GAAP measures). FY 2020 NIM declined 4 basis points to 2.71% from FY 2019 NIM of 2.75% (non-GAAP measures). FY 2020 NIM excluding PPP loans expanded 21 basis points to 2.96% from FY 2019 NIM of 2.75% (non-GAAP measures). ROAA for FY 2020 was 0.85%, up 11 basis points from FY 2019 ROAA of 0.74%. ROCE for FY 2020 was 14.55%, up 625 basis points from FY 2019 ROCE of 8.30%.
“In a year of extraordinary circumstances, our institution rose to the challenge of supporting our team members and their families, our communities and our clients by providing outstanding customer service and responsiveness at a time when it was needed most,” remarked Customers Bancorp Chairman and CEO, Jay Sidhu. “In providing approximately 100,000 small businesses and nonprofits access to Paycheck Protection Program loans, we were able to help save thousands of jobs in the communities we serve and improve the financial position of Customers Bank at the same time. We generated record earnings in 2020, driven by expansion of NIM as well as PPP related income and expansion in our core net interest margin. We achieved these results while maintaining superior asset quality during the pandemic and significantly improving the quality of our funding mix. And in early January, as promised, we successfully completed the divestiture of BankMobile, and are pleased to provide a special distribution of BM Technologies, Inc. (BMTX) stock to our shareholders with current market value of about $75 million,” Mr. Sidhu concluded.
Key Balance Sheet Trends
Total loans and leases increased $5.8 billion, or 57.5%, to $15.8 billion at December 31, 2020 compared to the year-ago period. PPP loans originated directly or through fintech partnerships were $4.6 billion at December 31, 2020. Additionally, the loan mix improved year-over-year as commercial loans to mortgage companies increased $1.4 billion to $3.7 billion, commercial and industrial loans and leases increased $473.1 million to $2.3 billion, construction loans increased $23.3 million to $140.9 million, and commercial real estate owner occupied loans increased $20.4 million to $572.3 million. The commercial loans to mortgage companies trend has been a function of greater refinance activity due to sharply lower interest rates, an increase in home purchase volumes, and market share gains from other banks. These increases in loans and leases were partially offset by planned decreases in multi-family loans of $628.9 million to $1.8 billion and residential mortgages of $62.8 million to $323.3 million. “Looking ahead, we see continued growth in core C&I loans offsetting some of the expected decreases in loans to mortgage companies," stated Sidhu.
Total deposits increased $2.7 billion, or 30.8%, to $11.3 billion at December 31, 2020 compared to the year-ago period. Total demand deposits increased $2.2 billion, or 83.9%, to $4.7 billion, money market deposits increased $1.1 billion, or 32.1%, to $4.6 billion, and savings deposits increased $395.6 million, or 43.0%, to $1.3 billion. These increases were offset, in part, by a decrease in time deposits of $1.0 billion, or 60.9%, to $651.9 million. The total cost of deposits declined by 107 basis points to 0.58% in Q4 2020 from 1.65% in the year-ago quarter.
Customers' experienced moderate declines in regulatory capital ratios in 2020, driven by strong growth in commercial loans to mortgage companies of $1.4 billion. However, Customers Bancorp's tangible common equity (a non-GAAP measure) increased by $65.2 million to $885 million at December 31, 2020 from $820 million at December 31, 2019, and the tangible book value per common share (a non-GAAP measure) increased to $27.92 at December 31, 2020 from $26.17 at December 31, 2019. "This increase in tangible common equity and tangible book value per common share was achieved in spite of a decrease in retained earnings of $61 million recorded on January 1, 2020 upon the adoption of CECL," commented Mr. Sidhu. Customers remains well capitalized by all regulatory measures. At the Customers Bancorp level, the total risk based capital ratio (estimate) and tangible common equity to tangible assets ratio ("TCE ratio"), excluding PPP loans (a non-GAAP measure), were 11.9% and 6.4%, respectively, at December 31, 2020. At September 30, 2020, Customers Bancorp's total risk based capital ratio and TCE ratio, excluding PPP loans (a non-GAAP measure), were 11.3% and 5.9%, respectively. "As a consequence of PPP related income and a potential cyclical decline in residential mortgage activity, we expect our capital levels to increase sharply in 2021 and be in the 7.5% or higher range by December 31, 2021," commented Customers Bancorp CFO, Carla Leibold.
Loan Portfolio Management During the COVID-19 Crisis
Over the last decade, Customers has developed a suite of commercial and retail loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s multifamily, mortgage warehouse, and specialty finance lines of business, for example, are characterized by conservative underwriting standards and low loss rates. Because of this emphasis, the Bank’s credit quality to-date has been healthy despite a highly adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, Customers employs a bottom-up data driven approach to analyze its commercial portfolio.
Strong commercial loan portfolio with very low concentration in COVID-19 impacted industries and CRE
Total commercial deferments declined to $202.1 million or 1.8% of total loans and leases, excluding PPP loans (a non-GAAP measure), at December 31, 2020, down from $277 million, or 2.4% of total loans and leases, excluding PPP loans, at September 30, 2020. Of the $202.1 million in total commercial deferments, $107.4 million or 53.1% were principal only deferments. Customers' commercial deferments peaked at about $1.2 billion earlier this year. Exposure to industry segments significantly impacted by COVID-19 is not substantial. At December 31, 2020, Customers had $87 million in energy and utilities exposure; $62 million in colleges and universities (no deferments requested); $72 million in CRE retail sales exposure (mostly auto sales; with no deferments); $30 million in franchise restaurants and dining (with no deferments); and $27 million in entertainment only businesses (with no deferments). At year-end, the hospitality portfolio was $406 million or 3.6% of total loans and leases excluding PPP loans, with $126 million in deferment. Approximately 79% ($318 million) represents “flagged” facilities, with the majority of the non-flagged being high-end destination hotels in Cape May (NJ), Avalon (NJ), and Long Island (NY). The majority of the hotels, based on our recent assessment, have sufficient cash resources to get through the COVID-19 crisis and, for those who may need assistance, the Bank is working with them to bridge any potential cash flow gaps. At December 31, 2020, the healthcare portfolio was approximately $359 million, comprised predominantly of skilled nursing, which has been deemed an essential business and through a number of federal and state actions has been provided immunity from liability for COVID-19 related deaths. No deferments have been requested and there are no delinquencies. The multi-family portfolio is highly seasoned, with an average loan to value of 61% as of quarter-end. 55% of the portfolio was in New York City, of which 69% was in rent controlled/regulated properties. As of December 31, 2020, $11 million of the portfolio was on deferment. At December 31, 2020, investment CRE had a loan to value of 64%, with approximately 30% of the portfolio housed in the New York, Philadelphia, and Boston metro and surrounding markets. As of December 31, 2020, $29 million of the portfolio was on deferment.Consumer installment, mortgage and home equity loan portfolio continues to perform well
Total consumer-related deferments declined to $16.4 million, or 0.1% of total loans and leases, excluding PPP loans (a non-GAAP measure), at December 31, 2020, down from $25 million, or 0.2% of total loans and leases, excluding PPP loans, at September 30, 2020. The $1.2 billion consumer installment loan portfolio outperformed industry peers with deferments dropping to 0.8% and 30+ DPD delinquency at only 1.1%. Strong credit quality (avg. FICO at origination: 740), low concentration in at-risk job segments, and outstanding performance of CB Direct originations have resulted in solid results through the end of Q4 2020. The consumer installment portfolio has been managed to moderate growth and strengthening credit quality, by replacing run-off with CB Direct originations with strong FICO scores.Aggressively addressing non-performing assets
During January 2021, Customers sold a collateral dependent loan secured by a hotel property in Massachusetts. This loan made up approximately 24% of non-performing assets as of December 31, 2020. “We expect our credit quality to improve or stay unchanged over the next few quarters,” stated Sidhu.Key Profitability Trends
Net Interest Income
Net interest income totaled $122.9 million in Q4 2020, an increase of $15.5 million from Q3 2020, primarily due to a $480.9 million increase in average interest-earning assets. Earning assets were driven by increases in commercial loans to mortgage companies, commercial and industrial loans and leases, and investment securities. The benefit of this growth resulted in a 28 basis point linked-quarter increase in NIM (a non-GAAP measure) to 2.78%. Compared to Q3 2020, total loan yields increased 21 basis points to 3.62%. The increase is attributable to increased originations of commercial loans to mortgage companies, commercial and industrial loans and leases, and PPP loan forgiveness which accelerated the recognition of net deferred loan origination fees. This increase is partially offset by lower market interest rates due to the Federal Reserve's forecast of interest rates at zero through 2023. The cost of interest-bearing deposits in Q4 2020 decreased by 9 basis points to 0.76% due to the decline in market interest rates and strategic decisions to reallocate deposit funding to lower cost deposits. Borrowing costs decreased by 3 basis points to 0.94% primarily due to the utilization of the FRB PPP Liquidity Facility, costing 0.35%, to fund PPP loans.
Provision for Credit Losses
The provision for credit losses on loans and leases in Q4 2020, which was calculated under the CECL accounting standard effective January 1, 2020, was a $2.9 million benefit to (or release from) the provision, compared to a $13.0 million provision in Q3 2020. The decrease in Q4 2020 primarily resulted from an improvement in forecasts of macroeconomic conditions since Q3 2020. The allowance for credit losses on loans and leases represented 1.9% of total loans and leases receivable, excluding PPP loans (a non-GAAP measure) at December 31, 2020, compared to just over 2.0% at September 30, 2020, and 0.8% at December 31, 2019. Customers' non-performing loans at December 31, 2020 were only 0.45% of total loans and leases. Our Q4 2020 non-performing loans were impacted by one commercial real estate credit, which was resolved during January 2021, reducing the non performing asset ratio to 0.30% of the assets (a non-GAAP measure).
Non-Interest Income
Non-interest income totaled $23.8 million for Q4 2020, a decrease of $10.0 million compared to Q3 2020. The decrease in non-interest income primarily resulted from decreases of $11.7 million in gain on sale of investment securities, $0.7 million in mortgage banking income, $0.4 million in interchange and card revenue, and $0.7 million in other non-interest income, partially offset by increases of $1.4 million in gain on sale of SBA and other loans, a $1.1 million increase in unrealized gains on equity securities issued by a foreign entity, $0.4 million in mortgage warehouse transactional fees, and $0.3 million in commercial lease income.
The decrease in gain on sale of investment securities primarily resulted from the sale of $58.4 million of agency-guaranteed mortgage-backed securities and $70.0 million in corporate notes in Q3 2020, compared to sales of $10 million in corporate notes during Q4 2020. The decrease in mortgage banking income was mainly related to unrealized losses on derivatives. The decrease in interchange and card revenue primarily resulted from lower debit card spending volume. The decrease in other non-interest income was driven by an unrealized loss on a loan held for sale of $1.1 million during Q4 2020, partially offset by a net derivative valuation adjustment of $0.2 million due to changes in market interest rates and increased SERP income of $0.3 million. The increase in gain on sale of SBA and other loans was driven by increased sales volume. The increase in unrealized gains on equity securities issued by a foreign entity primarily resulted from an increase in the valuation of those securities. The increase in mortgage warehouse transactional fees primarily resulted from an increase in transaction volume due to continued low market interest rates. The increase in commercial lease income was driven by continued organic growth in volume.
Non-Interest Expense
Non-interest expense totaled $71.2 million for Q4 2020, an increase of $5.6 million compared to Q3 2020. The increase in non-interest expense primarily resulted from increases of $5.3 million in other non-interest expense, $1.1 million in salaries and employee benefits, $0.9 million in provision for operating losses, and $0.3 million in commercial lease depreciation, partially offset by decreases of $1.1 million in FDIC assessments, $0.7 million in loan workout expenses, and $0.4 million in occupancy expenses. The increase in other non-interest expense primarily resulted from a decrease in operating cost reimbursements from Customers' white label partnership. The increase in salaries and employee benefits was primarily due to lower stock based compensation expense in Q3 2020. The increase in provision for operating losses primarily resulted from an increase in the estimate for fraud related losses. The increase in commercial lease depreciation was driven by continued organic growth in volume. The decrease in FDIC assessments, non-income taxes and regulatory fees was a function of an increase in FDIC assessment rates due to the temporary utilization of brokered deposits to fund PPP loans in Q3 2020. The decrease in loan workout expenses primarily resulted from lower costs related to the workout of two commercial relationships in Q3 2020. The decrease in occupancy expenses primarily resulted from a decrease in rent expense as we continue to reassess our office spaces and branches.
Taxes
Income tax expense increased by $10 million to $22.2 million in Q4 2020 from $12.2 million in Q3 2020 due to higher pre-tax income and effective tax rate. The effective tax rate increased to 28.3% for Q4 2020 compared to 19.5% for Q3 2020 primarily due to a lower annual benefit from investment tax credits than what was estimated in Q3 2020. Customers expects the full-year 2021 effective tax rate to be approximately 21% to 22%.
Outlook
“Looking ahead, we are very optimistic about the prospects of our company. The ongoing digital transformation of Customers Bancorp has positioned us well to be a major participant in the second round of PPP and to incubate new lines of businesses that leverage our fintech relationships. We expect our tangible common equity and regulatory capital levels to achieve targeted levels within the next 18 months and our credit quality to remain in line with or better than peers. The financial benefits of PPP aside, we project our recurring earnings power to expand well above the $4.00 level during 2021 and remain on track to achieve $6.00 in core EPS in 2026,” concluded Mr. Sidhu.
Our updated financial guidance is as follows:
Loan growth, excluding PPP and mortgage warehouse balances, is expected to average in the mid-to-high single digits over the next several quarters. The balance of commercial loans to mortgage companies is expected to decline to $2.8-$3.2 billion at March 31, 2021 and $1.6-$2.4 billion at December 31, 2021. The Total Capital Ratio is expected to exceed 13.0% by year-end 2021. The TCE-to-TA ratio excluding PPP loans is expected to be 7.5-8.0% by year-end 2021. We project the NIM excluding PPP loans to expand into the 3.10%-3.30% range by Q4 2021. Impacted by the divestiture of BankMobile, we project non-interest income of $9.0-11.0 million and operating expenses of $59.0-$61.0 million in Q1 2021 (excluding BankMobile related severance expense). We project an effective tax rate for 2021 of 21.0%-22.0%, down from 24.7% in 2020. Our earnings trend is likely to be volatile over the next several quarters owing to our participation in PPP. We expect to earn at least $4.00 in core EPS in 2021, at least $4.50 in core EPS in 2023, and remain on track to earn $6.00 in core EPS in 2026. Our core EPS guidance includes the net interest income expected to be earned on the PPP loans.2021 NIM expansion is expected to be achieved by:
Remixing the loan portfolio away from commercial loans to mortgage companies toward other C&I categories and consumer loans. Bringing our cost of deposits to around 40 basis points during 2021.BankMobile Technologies, Inc.:
On January 4, 2021, Customers completed the previously announced divestiture of BankMobile Technologies Inc. (“BMT”), the technology arm of the BankMobile segment, to Megalith Financial Acquisition Corp., a Delaware corporation ("Megalith"). In connection with the closing of the divestiture, Megalith changed its name to “BM Technologies, Inc.” ("BMTX"). Beginning in first quarter of 2021, BMT’s historical financial results for periods prior to the divestiture will be reflected in Customers consolidated financial statements as discontinued operations. All Customers Bancorp shareholders on record on December 18, 2020 received approximately $73 million in value of BMTX stock at closing date of the transaction in the form of special distribution.Status Report on Main Strategic Priorities Articulated at Last Analysts Day
Goal #1: Top Quartile Profitability with 1.25% Core ROAA in 2-3 years.
Result: Achieved 1.22% in Core ROAA (a non-GAAP measure) in Q4 2020.
Goal #2: Achieve NIM expansion to 2.75% or greater by Q4 2019, with full year 2019 NIM above 2.70%, through an expected shift in asset and funding mix.
Result: Achieved NIM of 2.78% in Q4 2020. NIM, excluding PPP loans (a non-GAAP measure), was 3.04% in Q4 2020.
Goal #3: BankMobile growth and maturity was expected with profitability achieved by year end 2019.
Result: BankMobile was profitable, and BMT was divested on January 4, 2021 resulting in the special distribution of approximately 4.9 million shares of BMTX common stock to Customers Bancorp shareholders.
Goal #4: Efficiency improvement.
Result: Customers' efficiency ratio was 48.98% in Q4 2020, down from 50.71% in Q3 2020 and 56.98% in Q4 2019.
Goal #5: Growth in core deposits.
Result: Demand Deposit Accounts ("DDAs") grew 84% year-over-year.
Goal #6: Maintain strong credit quality and superior risk management.
Result: Non-performing loans ("NPLs") were only 0.45% of total loans and leases at December 31, 2020. NPLs decreased by $17 million in January 2021. We remain very focused on a strong Risk Management culture throughout our company.
Webcast
Date: Thursday, January 28, 2021
Time: 9:00 AM EDT
The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 4th Quarter Earnings Webcast.
The fourth quarter 2020 earnings press release will be issued after the market close on Wednesday, January 27, 2021.
You may submit questions in advance of the live webcast by emailing Customers' Communications & Marketing Director, David Patti at dpatti@customersbank.com; questions may also be asked during the webcast through the webcast application.
The webcast will be archived for viewing on the Customers Bancorp Investor Relations page and available beginning approximately two hours after the conclusion of the live event.
Institutional Background
Customers Bancorp, Inc. is a bank holding company located in West Reading, 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 $18.4 billion at December 31, 2020. 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 events and factors, among others, could cause Customers Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements, including: the adverse impact on the U.S. economy, including the markets in which we operate, of the coronavirus outbreak, and the impact of a slowing U.S. economy and increased unemployment on the performance of our loan and lease portfolio, the market value of our investment securities, 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 effect 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; and the effects of changes in accounting standards or policies, including Accounting Standards Update ("ASU") 2016-13, Financial Instruments—Credit Losses ("CECL"). 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, 2019, 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.
Q4 2020 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended December 31, 2020 and the preceding four quarters:
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED
(Dollars in thousands, except per share data and stock price data)
Q4
Q3
Q2
Q1
Q4
Year Ended
December 31,
2020
2020
2020
2020
2019
2020
2019
GAAP Profitability Metrics:
Net income available to common shareholders
$
52,831
$
47,085
$
19,137
$
(515
)
$
23,911
$
118,537
$
64,868
Per share amounts:
Earnings per share - basic
$
1.67
$
1.49
$
0.61
$
(0.02
)
$
0.76
$
3.76
$
2.08
Earnings per share - diluted
$
1.65
$
1.48
$
0.61
$
(0.02
)
$
0.75
$
3.74
$
2.05
Book value per common share (1)
$
28.37
$
26.43
$
25.08
$
23.74
$
26.66
$
28.37
$
26.66
CUBI stock price (1)
$
18.18
$
11.20
$
12.02
$
10.93
$
23.81
$
18.18
$
23.81
CUBI stock price as % of book value (1)
64
%
42
%
48
%
46
%
89
%
64
%
89
%
Average shares outstanding - basic
31,638,447
31,517,504
31,477,591
31,391,151
31,306,813
31,506,699
31,183,841
Average shares outstanding - diluted
31,959,100
31,736,311
31,625,771
31,391,151
31,876,341
31,727,784
31,646,216
Shares outstanding (1)
31,705,088
31,555,124
31,510,287
31,470,026
31,336,791
31,705,088
31,336,791
Return on average assets ("ROAA")
1.23
%
1.12
%
0.62
%
0.11
%
0.97
%
0.85
%
0.74
%
Return on average common equity ("ROCE")
24.26
%
23.05
%
9.97
%
(0.26
)%
11.58
%
14.55
%
8.30
%
Efficiency ratio
48.98
%
50.71
%
58.44
%
66.03
%
56.98
%
55.11
%
65.15
%
Non-GAAP Profitability Metrics (2):
Core earnings
$
52,648
$
38,210
$
19,174
$
603
$
23,843
$
110,634
$
72,013
Adjusted pre-tax pre-provision net income
$
74,883
$
64,176
$
50,766
$
38,595
$
44,676
$
228,420
$
135,558
Per share amounts:
Core earnings per share - diluted
$
1.65
$
1.20
$
0.61
$
0.02
$
0.75
$
3.49
$
2.28
Tangible book value per common share (1)
$
27.92
$
25.97
$
24.62
$
23.27
$
26.17
$
27.92
$
26.17
CUBI stock price as % of tangible book value (1)
65
%
43
%
49
%
47
%
91
%
65
%
91
%
Core ROAA
1.22
%
0.93
%
0.62
%
0.15
%
0.97
%
0.80
%
0.81
%
Core ROCE
24.17
%
18.71
%
9.99
%
0.30
%
11.55
%
13.58
%
9.21
%
Adjusted ROAA - pre-tax and pre-provision
1.63
%
1.43
%
1.39
%
1.34
%
1.57
%
1.46
%
1.27
%
Adjusted ROCE - pre-tax and pre-provision
32.82
%
29.74
%
24.59
%
17.41
%
19.89
%
26.31
%
15.49
%
Net interest margin, tax equivalent
2.78
%
2.50
%
2.65
%
2.99
%
2.89
%
2.71
%
2.75
%
Net interest margin, tax equivalent, excluding PPP loans
3.04
%
2.86
%
2.97
%
2.99
%
2.89
%
2.96
%
2.75
%
Core efficiency ratio
47.97
%
49.81
%
55.39
%
63.33
%
56.76
%
53.40
%
62.78
%
Asset Quality:
Net charge-offs
$
8,472
$
17,299
$
10,325
$
18,711
$
4,362
$
54,807
$
7,820
Annualized net charge-offs to average total loans and leases
0.21
%
0.45
%
0.32
%
0.79
%
0.18
%
0.41
%
0.08
%
Non-performing loans ("NPLs") to total loans and leases (1)
0.45
%
0.38
%
0.56
%
0.49
%
0.21
%
0.45
%
0.21
%
Reserves to NPLs (1)
204.48
%
244.70
%
185.36
%
296.44
%
264.67
%
204.48
%
264.67
%
Non-performing assets ("NPAs") to total assets
0.39
%
0.34
%
0.48
%
0.53
%
0.19
%
0.39
%
0.19
%
Customers Bank Capital Ratios (3):
Common equity Tier 1 capital to risk-weighted assets
10.61
%
10.12
%
10.64
%
10.60
%
11.32
%
10.61
%
11.32
%
Tier 1 capital to risk-weighted assets
10.61
%
10.12
%
10.64
%
10.60
%
11.32
%
10.61
%
11.32
%
Total capital to risk-weighted assets
12.06
%
11.62
%
12.30
%
12.21
%
12.93
%
12.06
%
12.93
%
Tier 1 capital to average assets (leverage ratio)
9.21
%
9.29
%
9.59
%
9.99
%
10.38
%
9.21
%
10.38
%
(1) Metric is a spot balance for the last day of each quarter presented.
(2) Non-GAAP measures exclude unrealized gains (losses) on loans HFS, investment securities gains and losses, severance expense, merger and acquisition-related expenses, losses realized from the sale of non-QM residential mortgage loans, loss upon acquisition of interest-only GNMA securities, legal reserves, credit valuation adjustments on derivatives, risk participation agreement mark-to-market adjustments, 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 2020 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected an option to delay the estimated impact of CECL on its regulatory capital over a five-year transition period ending January 1, 2025. As a result, capital ratios and amounts as of Q4 2020 exclude the impact of the increased allowance for credit losses on loans and leases and unfunded loan commitments attributed to the adoption of CECL and 25% of the quarterly provision for credit losses for subsequent quarters through Q4 2021.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data)
Twelve Months Ended
Q4
Q3
Q2
Q1
Q4
December 31,
2020
2020
2020
2020
2019
2020
2019
Interest income:
Loans and leases
$
145,414
$
132,107
$
118,447
$
116,080
$
116,365
$
512,048
$
431,491
Investment securities
6,777
6,297
6,155
4,977
5,125
24,206
23,713
Other
902
1,246
616
4,286
2,505
7,050
8,535
Total interest income
153,093
139,650
125,218
125,343
123,995
543,304
463,739
Interest expense:
Deposits
16,107
18,347
23,238
34,353
35,992
92,045
141,464
FHLB advances
5,749
5,762
4,736
5,390
6,056
21,637
26,519
Subordinated debt
2,688
2,689
2,689
2,689
1,930
10,755
6,983
Federal funds purchased and other borrowings
5,603
5,413
2,573
1,590
2,424
15,179
11,463
Total interest expense
30,147
32,211
33,236
44,022
46,402
139,616
186,429
Net interest income
122,946
107,439
91,982
81,321
77,593
403,688
277,310
Provision for credit losses on loans and leases
(2,913
)
12,955
20,946
31,786
9,689
62,774
24,227
Net interest income after provision for credit losses on loans and leases
125,859
94,484
71,036
49,535
67,904
340,914
253,083
Non-interest income:
Interchange and card revenue
3,671
4,081
6,478
6,809
6,506
21,039
28,941
Deposit fees
3,615
3,439
3,321
3,460
3,616
13,835
12,815
Commercial lease income
4,853
4,510
4,508
4,268
3,839
18,139
12,051
Bank-owned life insurance
1,744
1,746
1,757
1,762
1,795
7,009
7,272
Mortgage warehouse transactional fees
3,681
3,320
2,582
1,952
1,983
11,535
7,128
Gain (loss) on sale of SBA and other loans
1,689
286
23
11
2,770
2,009
2,770
Mortgage banking income (loss)
346
1,013
38
296
(635
)
1,693
66
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
(7,476
)
Gain (loss) on sale of investment securities
44
11,707
4,353
3,974
—
20,078
1,001
Unrealized gain (loss) on investment securities
1,387
238
1,200
(1,378
)
310
1,447
1,299
Other
2,745
3,453
(2,024
)
776
5,629
4,950
15,071
Total non-interest income
23,775
33,793
22,236
21,930
25,813
101,734
80,938
Non-interest expense:
Salaries and employee benefits
33,726
32,676
31,296
28,310
27,697
126,008
107,632
Technology, communication and bank operations
13,290
13,215
13,310
13,050
10,370
52,865
43,481
Professional services
7,490
7,253
4,552
7,670
6,470
26,965
25,109
Occupancy
3,188
3,632
3,025
3,032
3,470
12,877
13,098
Commercial lease depreciation
3,982
3,663
3,643
3,427
2,840
14,715
9,473
FDIC assessments, non-income taxes and regulatory fees
2,642
3,784
2,368
2,867
2,492
11,661
5,861
Provision for operating losses
2,115
1,186
1,068
912
1,415
5,281
9,638
Advertising and promotion
—
—
582
1,641
899
2,223
4,044
Merger and acquisition related expenses
996
1,035
25
50
100
2,106
100
Loan workout
123
846
1,808
366
230
3,143
1,687
Other real estate owned
52
7
12
8
247
79
398
Other
3,560
(1,736
)
1,817
5,126
2,510
8,767
11,380
Total non-interest expense
71,164
65,561
63,506
66,459
58,740
266,690
231,901
Income before income tax expense
78,470
62,716
29,766
5,006
34,977
175,958
102,120
Income tax expense
22,225
12,201
7,048
1,906
7,451
43,380
22,793
Net income
56,245
50,515
22,718
3,100
27,526
132,578
79,327
Preferred stock dividends
3,414
3,430
3,581
3,615
3,615
14,041
14,459
Net income available to common shareholders
$
52,831
$
47,085
$
19,137
$
(515
)
$
23,911
$
118,537
$
64,868
Basic earnings per common share
$
1.67
$
1.49
$
0.61
$
(0.02
)
$
0.76
$
3.76
$
2.08
Diluted earnings per common share
$
1.65
$
1.48
$
0.61
$
(0.02
)
$
0.75
$
3.74
$
2.05
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2020
2020
2020
2020
2019
ASSETS
Cash and due from banks
$
78,090
$
5,822
$
44,577
$
18,842
$
33,095
Interest earning deposits
615,264
325,594
1,022,753
237,390
179,410
Cash and cash equivalents
693,354
331,416
1,067,330
256,232
212,505
Investment securities, at fair value
1,210,285
1,133,831
681,382
712,657
595,876
Loans held for sale
79,086
26,689
464,164
450,157
486,328
Loans receivable, mortgage warehouse, at fair value
3,616,432
3,913,593
2,793,164
2,518,012
2,245,758
Loans receivable, PPP
4,561,365
4,964,105
4,760,427
—
—
Loans and leases receivable
7,575,368
7,700,892
7,272,447
7,353,262
7,318,988
Allowance for credit losses on loans and leases
(144,176
)
(155,561
)
(159,905
)
(149,283
)
(56,379
)
Total loans and leases receivable, net of allowance for credit losses on loans and leases
15,608,989
16,423,029
14,666,133
9,721,991
9,508,367
FHLB, Federal Reserve Bank, and other restricted stock
71,368
70,387
91,023
87,140
84,214
Accrued interest receivable
80,412
65,668
49,911
40,570
38,072
Bank premises and equipment, net
11,626
11,744
8,380
8,890
9,389
Bank-owned life insurance
280,067
277,826
275,842
273,576
272,546
Other real estate owned
57
131
131
131
173
Goodwill and other intangibles
14,298
14,437
14,575
14,870
15,195
Other assets
389,706
423,569
584,247
452,585
298,052
Total assets
$
18,439,248
$
18,778,727
$
17,903,118
$
12,018,799
$
11,520,717
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, non-interest bearing deposits
$
2,356,998
$
2,327,017
$
1,879,789
$
1,435,151
$
1,343,391
Interest bearing deposits
8,952,931
8,512,060
9,086,086
6,978,492
7,305,545
Total deposits
11,309,929
10,839,077
10,965,875
8,413,643
8,648,936
FRB advances
—
—
—
175,000
—
Federal funds purchased
250,000
680,000
—
705,000
538,000
FHLB advances
850,000
850,000
850,000
1,260,000
850,000
Other borrowings
124,037
123,935
123,833
123,732
123,630
Subordinated debt
181,394
181,324
181,255
181,185
181,115
FRB PPP liquidity facility
4,415,016
4,811,009
4,419,967
—
—
Accrued interest payable and other liabilities
191,786
241,891
354,341
195,603
126,241
Total liabilities
17,322,162
17,727,236
16,895,271
11,054,163
10,467,922
Preferred stock
217,471
217,471
217,471
217,471
217,471
Common stock
32,986
32,836
32,791
32,751
32,617
Additional paid in capital
455,592
452,965
450,665
446,840
444,218
Retained earnings
438,581
385,750
338,665
319,529
381,519
Accumulated other comprehensive loss
(5,764
)
(15,751
)
(9,965
)
(30,175
)
(1,250
)
Treasury stock, at cost
(21,780
)
(21,780
)
(21,780
)
(21,780
)
(21,780
)
Total shareholders' equity
1,117,086
1,051,491
1,007,847
964,636
1,052,795
Total liabilities & shareholders' equity
$
18,439,248
$
18,778,727
$
17,903,118
$
12,018,799
$
11,520,717
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Three Months Ended
December 31, 2020
September 30, 2020
December 31, 2019
Average
Balance
Average
Yield or
Cost (%)
Average
Balance
Average
Yield or
Cost (%)
Average
Balance
Average
Yield or
Cost (%)
Assets
Interest earning deposits
$
413,381
0.12%
$
686,928
0.12%
$
150,382
2.21%
Investment securities (1)
1,120,491
2.42%
950,723
2.65%
584,955
3.50%
Loans and leases:
Commercial loans to mortgage companies
3,518,371
3.06%
2,847,169
2.90%
2,158,626
4.16%
Multi-family loans
1,871,956
3.70%
1,989,074
3.72%
2,654,919
3.96%
Commercial and industrial loans and leases (2)
2,801,172
3.96%
2,599,806
3.82%
2,318,313
4.79%
Loans receivable, PPP
4,782,606
2.45%
4,909,197
1.97%
—
—%
Non-owner occupied commercial real estate loans
1,358,541
3.80%
1,388,306
3.70%
1,325,630
4.55%
Residential mortgages
400,771
3.80%
414,781
3.97%
631,370
4.05%
Installment loans
1,253,679
8.50%
1,255,505
8.37%
765,765
9.11%
Total loans and leases (3)
15,987,096
3.62%
15,403,838
3.41%
9,854,623
4.68%
Other interest-earning assets
81,031
3.80%
79,656
5.23%
86,770
7.63%
Total interest-earning assets
17,601,999
3.46%
17,121,145
3.25%
10,676,730
4.61%
Non-interest-earning assets
648,720
744,429
580,477
Total assets
$
18,250,719
$
17,865,574
$
11,257,207
Liabilities
Interest checking accounts
$
2,240,959
0.86%
$
2,370,709
0.78%
$
1,152,349
1.65%
Money market deposit accounts
4,166,635
0.60%
3,786,032
0.65%
3,190,543
2.01%
Other savings accounts
1,205,592
0.74%
1,125,273
1.06%
722,487
2.09%
Certificates of deposit
833,689
1.30%
1,344,134
1.35%
2,012,497
2.21%
Total interest-bearing deposits (4)
8,446,875
0.76%
8,626,148
0.85%
7,077,876
2.02%
FRB PPP liquidity facility
4,684,756
0.35%
4,479,036
0.35%
—
—%
Borrowings
1,276,212
3.09%
1,236,127
3.19%
1,424,550
2.91%
Total interest-bearing liabilities
14,407,843
0.83%
14,341,311
0.89%
8,502,426
2.17%
Non-interest-bearing deposits (4)
2,543,529
2,194,689
1,580,050
Total deposits and borrowings
16,951,372
0.71%
16,536,000
0.78%
10,082,476
1.83%
Other non-interest-bearing liabilities
215,465
299,526
138,242
Total liabilities
17,166,837
16,835,526
10,220,718
Shareholders' equity
1,083,882
1,030,048
1,036,489
Total liabilities and shareholders' equity
$
18,250,719
$
17,865,574
$
11,257,207
Interest spread
2.75%
2.47%
2.78%
Net interest margin
2.78%
2.50%
2.89%
Net interest margin tax equivalent (5)
2.78%
2.50%
2.89%
Net interest margin tax equivalent excl. PPP (6)
3.04%
2.86%
2.89%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 0.58%, 0.67% and 1.65% for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
(6) Non-GAAP tax-equivalent basis, as described in note (5) for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIESAVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Twelve Months Ended
December 31, 2020
December 31, 2019
Average
Balance
Average
Yield or
Cost (%)
Average
Balance
Average
Yield or
Cost (%)
Assets
Interest earning deposits
$
564,218
0.59%
$
103,833
2.68%
Investment securities (1)
836,815
2.89%
653,694
3.63%
Loans and leases:
Commercial loans to mortgage companies
2,668,642
3.11%
1,799,489
4.58%
Multi-family loans
2,020,640
3.85%
2,982,185
3.87%
Commercial and industrial loans and leases (2)
2,581,119
4.12%
2,111,181
5.08%
Loans receivable, PPP
3,121,157
2.10%
—
—%
Non-owner occupied commercial real estate loans
1,368,684
3.91%
1,243,236
4.53%
Residential mortgages
422,696
3.82%
694,889
4.15%
Installment loans
1,264,255
8.68%
445,166
9.28%
Total loans and leases (3)
13,447,193
3.81%
9,276,146
4.65%
Other interest-earning assets
85,091
4.41%
90,035
6.39%
Total interest-earning assets
14,933,317
3.64%
10,123,708
4.58%
Non-interest-earning assets
671,484
543,962
Total assets
$
15,604,801
$
10,667,670
Liabilities
Interest checking accounts
$
2,098,138
0.89%
$
955,630
1.82%
Money market deposit accounts
3,657,422
0.96%
3,151,328
2.18%
Other savings accounts
1,162,472
1.44%
538,375
2.12%
Certificates of deposit
1,357,688
1.58%
1,943,361
2.26%
Total interest-bearing deposits (4)
8,275,720
1.11%
6,588,694
2.15%
FRB PPP liquidity facility
2,537,744
0.35%
—
—%
Borrowings
1,504,760
2.57%
1,523,171
2.95%
Total interest-bearing liabilities
12,318,224
1.13%
8,111,865
2.30%
Non-interest-bearing deposits (4)
2,052,376
1,430,149
Total deposits and borrowings
14,370,600
0.97%
9,542,014
1.95%
Other non-interest-bearing liabilities
201,961
126,325
Total liabilities
14,572,561
9,668,339
Shareholders' equity
1,032,240
999,331
Total liabilities and shareholders' equity
$
15,604,801
$
10,667,670
Interest spread
2.67%
2.63%
Net interest margin
2.70%
2.74%
Net interest margin tax equivalent (5)
2.71%
2.75%
Net interest margin tax equivalent (6)
2.96%
2.75%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 0.89% and 1.76% for the twelve months ended December 31, 2020 and December 31, 2019, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the years ended December 31, 2020 and 2019, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
(6) Non-GAAP tax-equivalent basis as described in noted (5), for the years ended December 31, 2020 and 2019, excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIESSEGMENT 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, 2020 and 2019:
Three Months Ended December 31, 2020
Three Months Ended December 31, 2019
Customers
Bank Business
Banking
BankMobile
Consolidated
Customers
Bank Business
Banking
BankMobile
Consolidated
Interest income (1)
$
138,209
$
14,884
$
153,093
$
112,212
$
11,783
$
123,995
Interest expense
29,230
917
30,147
46,111
291
46,402
Net interest income
108,979
13,967
122,946
66,101
11,492
77,593
Provision for credit losses on loans and leases
(3,912
)
999
(2,913
)
6,846
2,843
9,689
Non-interest income
13,413
10,362
23,775
14,964
10,849
25,813
Non-interest expense
50,098
21,066
71,164
41,494
17,246
58,740
Income (loss) before income tax expense (benefit)
76,206
2,264
78,470
32,725
2,252
34,977
Income tax expense (benefit)
21,600
625
22,225
6,892
559
7,451
Net income (loss)
54,606
1,639
56,245
25,833
1,693
27,526
Preferred stock dividends
3,414
—
3,414
3,615
—
3,615
Net income (loss) available to common shareholders
$
51,192
$
1,639
$
52,831
$
22,218
$
1,693
$
23,911
Basic earnings (loss) per common share
$
1.62
$
0.05
$
1.67
$
0.71
$
0.05
$
0.76
Diluted earnings (loss) per common share
$
1.60
$
0.05
$
1.65
$
0.70
$
0.05
$
0.75
(1) Amounts reported include funds transfer pricing of $3.9 million and $0.7 million for the three months ended December 31, 2020 and 2019, 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, 2020
Twelve Months Ended December 31, 2019
Customers
Bank Business
Banking
BankMobile
Consolidated
Customers
Bank Business
Banking
BankMobile
Consolidated
Interest income (1)
$
490,028
$
53,276
$
543,304
$
422,094
$
41,645
$
463,739
Interest expense
137,480
2,136
139,616
185,513
916
186,429
Net interest income
352,548
51,140
403,688
236,581
40,729
277,310
Provision for credit losses on loans and leases
51,708
11,066
62,774
10,091
14,136
24,227
Non-interest income
57,834
43,900
101,734
35,268
45,670
80,938
Non-interest expense
187,153
79,537
266,690
153,333
78,568
231,901
Income (loss) before income tax expense (benefit)
171,521
4,437
175,958
108,425
(6,305
)
102,120
Income tax expense (benefit)
42,307
1,073
43,380
24,215
(1,422
)
22,793
Net income (loss)
129,214
3,364
132,578
84,210
(4,883
)
79,327
Preferred stock dividends
14,041
—
14,041
14,459
—
14,459
Net income (loss) available to common shareholders
$
115,173
$
3,364
$
118,537
$
69,751
$
(4,883
)
$
64,868
Basic earnings (loss) per common share
$
3.65
$
0.11
$
3.76
$
2.24
$
(0.16
)
$
2.08
Diluted earnings (loss) per common share
$
3.63
$
0.11
$
3.74
$
2.20
$
(0.15
)
$
2.05
As of December 31, 2020 and 2019
Goodwill and other intangibles
$
3,629
$
10,669
$
14,298
$
3,629
$
11,566
$
15,195
Total assets (2)
$
17,821,665
$
617,583
$
18,439,248
$
10,990,550
$
530,167
$
11,520,717
Total deposits
$
10,350,028
$
959,901
$
11,309,929
$
8,247,836
$
401,100
$
8,648,936
Total non-deposit liabilities (2)
$
5,982,010
$
30,223
$
6,012,233
$
1,789,329
$
29,657
$
1,818,986
(1) Amounts reported include funds transfer pricing of $9.3 million and $8.8 million for the twelve months ended December 31, 2020 and 2019, respectively, credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
(2) Amounts reported exclude inter-segment receivables and payables.
The following tables present Customers' business segment results for the quarter ended December 31, 2020, the preceding four quarters, and the twelve months ended December 31, 2020 and 2019, respectively:
Customers Bank Business Banking:
Twelve Months Ended
December 31,
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
Interest income (1)
$
138,209
$
126,648
$
112,455
$
112,717
$
112,212
$
490,028
$
422,094
Interest expense
29,230
31,718
32,856
43,678
46,111
137,480
185,513
Net interest income
108,979
94,930
79,599
69,039
66,101
352,548
236,581
Provision for credit losses on loans and leases
(3,912
)
8,699
19,623
27,298
6,846
51,708
10,091
Non-interest income
13,413
21,603
11,683
11,136
14,964
57,834
35,268
Non-interest expense
50,098
48,926
44,270
43,860
41,494
187,153
153,333
Income (loss) before income tax expense (benefit)
76,206
58,908
27,389
9,017
32,725
171,521
108,425
Income tax expense (benefit)
21,600
11,374
6,611
2,722
6,892
42,307
24,215
Net income (loss)
54,606
47,534
20,778
6,295
25,833
129,214
84,210
Preferred stock dividends
3,414
3,430
3,581
3,615
3,615
14,041
14,459
Net income (loss) available to common shareholders
$
51,192
$
44,104
$
17,197
$
2,680
$
22,218
$
115,173
$
69,751
Basic earnings (loss) per common share
$
1.62
$
1.40
$
0.55
$
0.09
$
0.71
$
3.65
$
2.24
Diluted earnings (loss) per common share
$
1.60
$
1.39
$
0.54
$
0.09
$
0.70
$
3.63
$
2.20
(1) Amounts reported include funds transfer pricing of $3.9 million, $2.2 million, $1.6 million, $1.4 million and $0.7 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively. Amounts reported also include funds transfer pricing of $9.3 million and $8.8 million for the twelve months ended December 31, 2020 and 2019, 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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
Interest income (2)
$
14,884
$
13,002
$
12,763
$
12,626
$
11,783
$
53,276
$
41,645
Interest expense
917
493
380
344
291
2,136
916
Net interest income
13,967
12,509
12,383
12,282
11,492
51,140
40,729
Provision for credit losses on loans and leases
999
4,256
1,323
4,488
2,843
11,066
14,136
Non-interest income
10,362
12,190
10,553
10,794
10,849
43,900
45,670
Non-interest expense
21,066
16,635
19,236
22,599
17,246
79,537
78,568
Income (loss) before income tax expense (benefit)
2,264
3,808
2,377
(4,011
)
2,252
4,437
(6,305
)
Income tax expense (benefit)
625
827
437
(816
)
559
1,073
(1,422
)
Net income (loss) available to common shareholders
$
1,639
$
2,981
$
1,940
$
(3,195
)
$
1,693
$
3,364
$
(4,883
)
Basic income (loss) per common share
$
0.05
$
0.09
$
0.06
$
(0.10
)
$
0.05
$
0.11
$
(0.16
)
Diluted income (loss) per common share
$
0.05
$
0.09
$
0.06
$
(0.10
)
$
0.05
$
0.11
$
(0.15
)
Deposit balances (3)
Disbursements business deposits
$
404,601
$
644,658
$
500,072
$
502,711
$
319,263
White label deposits
555,300
299,091
162,691
107,054
81,837
Total deposits
$
959,901
$
943,749
$
662,763
$
609,765
$
401,100
(2) Amounts reported include funds transfer pricing of $3.9 million, $2.2 million, $1.6 million, $1.4 million and $0.7 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively. Amounts reported also include funds transfer pricing of $9.3 million and $8.8 million for the twelve months ended December 31, 2020 and 2019, 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, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019.
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,
2020
2020
2020
2020
2019
Commercial:
Multi-family
$
1,761,301
$
1,950,300
$
2,023,571
$
2,069,077
$
2,390,204
Mortgage warehouse
3,657,350
3,947,828
2,832,112
2,573,397
2,305,784
Commercial & industrial
2,304,206
2,186,480
2,060,494
2,017,567
1,831,126
Commercial real estate owner occupied
572,338
557,595
544,772
543,945
551,948
Loans receivable, PPP
4,561,365
4,964,105
4,760,427
—
—
Commercial real estate non-owner occupied
1,213,815
1,233,882
1,262,373
1,252,826
1,222,772
Construction
140,905
122,963
128,834
115,448
117,617
Total commercial loans and leases
14,211,280
14,963,153
13,612,583
8,572,260
8,419,451
Consumer:
Residential
323,322
343,775
352,941
364,760
386,089
Manufactured housing
62,243
64,638
66,865
69,240
71,359
Installment
1,235,406
1,233,713
1,257,813
1,315,171
1,174,175
Total consumer loans
1,620,971
1,642,126
1,677,619
1,749,171
1,631,623
Total loans and leases
$
15,832,251
$
16,605,279
$
15,290,202
$
10,321,431
$
10,051,074
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2020
2020
2020
2020
2019
Demand, non-interest bearing
$
2,356,998
$
2,327,017
$
1,879,789
$
1,435,151
$
1,343,391
Demand, interest bearing
2,384,691
2,308,627
2,666,209
1,577,034
1,235,292
Total demand deposits
4,741,689
4,635,644
4,545,998
3,012,185
2,578,683
Savings
1,314,817
1,173,641
1,144,788
1,168,121
919,214
Money market
4,601,492
4,057,366
3,404,709
2,833,990
3,482,505
Time deposits
651,931
972,426
1,870,380
1,399,347
1,668,534
Total deposits
$
11,309,929
$
10,839,077
$
10,965,875
$
8,413,643
$
8,648,936
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)
As of December 31, 2020
As of September 30, 2020
As of December 31, 2019
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
Multi-family
$
1,761,301
$
21,728
$
12,620
1.23
%
58.08
%
$
1,950,300
$
11,710
$
15,026
0.60
%
128.32
%
$
1,907,331
$
4,117
$
6,157
0.22
%
149.55
%
Commercial & industrial(1)
2,289,441
8,453
12,239
0.37
%
144.79
%
2,220,715
9,633
12,926
0.43
%
134.18
%
1,891,152
4,531
16,010
0.24
%
353.34
%
Commercial real estate owner occupied
572,338
3,411
9,512
0.60
%
278.86
%
557,595
3,599
9,552
0.65
%
265.41
%
551,948
1,963
1,781
0.36
%
90.73
%
Commercial real estate non-owner occupied
1,196,564
2,356
19,452
0.20
%
825.64
%
1,215,516
2,408
20,200
0.20
%
838.87
%
1,222,772
76
6,243
0.01
%
8214.47
%
Construction
140,905
—
5,871
—
%
—
%
122,963
—
6,423
—
%
—
%
117,617
—
1,262
—
%
—
%
Total commercial loans and leases receivable
5,960,549
35,948
59,694
0.60
%
166.06
%
6,067,089
27,350
64,127
0.45
%
234.47
%
5,690,820
10,687
31,453
0.19
%
294.31
%
Residential
317,170
9,911
3,977
3.12
%
40.13
%
335,452
10,634
4,649
3.17
%
43.72
%
382,634
6,128
3,218
1.60
%
52.51
%
Manufactured housing
62,243
2,969
5,189
4.77
%
174.77
%
64,638
2,778
5,625
4.30
%
202.48
%
71,359
1,655
1,178
2.32
%
71.18
%
Installment
1,235,406
3,211
75,316
0.26
%
2345.56
%
1,233,713
3,118
81,160
0.25
%
2602.95
%
1,174,175
1,551
20,648
0.13
%
1331.27
%
Total consumer loans receivable
1,614,819
16,091
84,482
1.00
%
525.03
%
1,633,803
16,530
91,434
1.01
%
553.14
%
1,628,168
9,334
25,044
0.57
%
268.31
%
Loans and leases receivable(1)
7,575,368
52,039
144,176
0.69
%
277.05
%
7,700,892
43,880
155,561
0.57
%
354.51
%
7,318,988
20,021
56,497
0.27
%
282.19
%
Loans receivable, PPP
4,561,365
—
—
—
%
—
%
4,964,105
—
—
—
%
—
%
—
—
—
—
%
—
%
Loans receivable, mortgage warehouse, at fair value
3,616,432
—
—
—
%
—
%
3,913,593
—
—
2,245,758
—
—
Total loans held for sale
79,086
18,469
—
23.35
%
—
%
26,689
19,691
—
73.78
%
—
%
486,328
1,325
—
0.27
%
—
%
Total portfolio
$
15,832,251
$
70,508
$
144,176
0.45
%
204.48
%
$
16,605,279
$
63,571
$
155,561
0.38
%
244.70
%
$
10,051,074
$
21,346
$
56,497
0.21
%
264.67
%
(1) Excluding loans receivable, PPP from total loans and leases receivable is a non-GAAP measure. Management believes the use of these non-GAAP measures provides additional clarity when assessing Customers' financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. Please refer to the reconciliation schedules that follow this table.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)
Q4
Q3
Q2
Q1
Q4
Twelve Months Ended
December 31,
2020
2020
2020
2020
2019
2020
2019
Loan type
Multi-family
$
—
$
—
$
—
$
—
$
—
$
—
$
534
Commercial & industrial
155
(55
)
(4
)
43
(224
)
139
(518
)
Commercial real estate owner occupied
12
44
(2
)
(3
)
(1
)
51
(117
)
Commercial real estate non-owner occupied
(35
)
8,923
2,801
12,797
—
24,486
—
Construction
(6
)
(6
)
(113
)
(3
)
(8
)
(128
)
(136
)
Residential
46
(17
)
(26
)
(29
)
181
(26
)
270
Installment
8,300
8,410
7,669
5,906
4,414
30,285
7,787
Total net charge-offs (recoveries) from loans held for investment
$
8,472
$
17,299
$
10,325
$
18,711
$
4,362
$
54,807
$
7,820
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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
(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
$
52,831
$
1.65
$
47,085
$
1.48
$
19,137
$
0.61
$
(515
)
$
(0.02
)
$
23,911
$
0.75
$
118,537
$
3.74
$
64,868
$
2.05
Reconciling items (after tax):
Severance expense
171
0.01
—
—
—
—
—
—
—
—
171
0.01
373
0.01
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
—
—
—
—
—
—
5,682
0.18
Merger and acquisition related expenses
714
0.02
833
0.03
19
—
40
—
76
—
1,606
0.05
76
—
Legal reserves
—
—
258
0.01
—
—
830
0.03
—
—
1,088
0.03
1,520
0.05
(Gains) losses on investment securities
(1,419
)
(0.04
)
(9,662
)
(0.30
)
(4,543
)
(0.14
)
(1,788
)
(0.06
)
(310
)
(0.01
)
(17,412
)
(0.55
)
(1,912
)
(0.06
)
Derivative credit valuation adjustment
(448
)
(0.01
)
(304
)
(0.01
)
4,527
0.14
2,036
0.06
(429
)
(0.01
)
5,811
0.18
811
0.03
Risk participation agreement mark-to-market adjustment
—
—
—
—
(1,080
)
(0.03
)
—
—
—
—
(1,080
)
(0.03
)
—
—
Losses on sale of non-QM residential mortgage loans
—
—
—
—
—
—
—
—
595
0.02
—
—
595
0.02
Unrealized losses on loans held for sale
799
0.03
—
—
1,114
0.04
—
—
—
—
1,913
0.06
—
—
Core earnings
$
52,648
$
1.65
$
38,210
$
1.20
$
19,174
$
0.61
$
603
$
0.02
$
23,843
$
0.75
$
110,634
$
3.49
$
72,013
$
2.28
(Dollars in thousands, except per share data)
Core Return on Average Assets - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net income
$
56,245
$
50,515
$
22,718
$
3,100
$
27,526
$
132,578
$
79,327
Reconciling items (after tax):
Severance expense
171
—
—
—
—
171
373
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
5,682
Merger and acquisition related expenses
714
833
19
40
76
1,606
76
Legal reserves
—
258
—
830
—
1,088
1,520
(Gains) losses on investment securities
(1,419)
(9,662)
(4,543)
(1,788)
(310)
(17,412)
(1,912)
Derivative credit valuation adjustment
(448)
(304)
4,527
2,036
(429)
5,811
811
Risk participation agreement mark-to-market adjustment
—
—
(1,080)
—
—
(1,080)
—
Losses on sale of non-QM residential mortgage loans
—
—
—
—
595
—
595
Unrealized losses on loans held for sale
799
—
1,114
—
—
1,913
—
Core net income
$
56,062
$
41,640
$
22,755
$
4,218
$
27,458
$
124,675
$
86,472
Average total assets
$
18,250,719
$
17,865,574
$
14,675,584
$
11,573,406
$
11,257,207
$
15,604,801
$
10,667,670
Core return on average assets
1.22
%
0.93
%
0.62
%
0.15
%
0.97
%
0.80
%
0.81
%
(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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net income
$
56,245
$
50,515
$
22,718
$
3,100
$
27,526
$
132,578
$
79,327
Reconciling items:
Income tax expense
22,225
12,201
7,048
1,906
7,451
43,380
22,793
Provision for credit losses on loans and leases
(2,913
)
12,955
20,946
31,786
9,689
62,774
24,227
Provision for credit losses on unfunded commitments
(968
)
(527
)
(356
)
751
3
(1,100
)
(403
)
Severance expense
239
—
—
—
—
239
490
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
7,476
Merger and acquisition related expenses
996
1,035
25
50
100
2,106
100
Legal reserves
—
320
—
1,042
—
1,362
2,000
(Gains) losses on investment securities
(1,431
)
(11,945
)
(5,553
)
(2,596
)
(310
)
(21,525
)
(2,300
)
Derivative credit valuation adjustment
(625
)
(378
)
5,895
2,556
(565
)
7,448
1,066
Risk participation agreement mark-to-market adjustment
—
—
(1,407
)
—
—
(1,407
)
—
Losses on sale of non-QM residential mortgage loans
—
—
—
—
782
—
782
Unrealized losses on loans held for sale
1,115
—
1,450
—
—
2,565
—
Adjusted net income - pre-tax pre-provision
$
74,883
$
64,176
$
50,766
$
38,595
$
44,676
$
228,420
$
135,558
Average total assets
$
18,250,719
$
17,865,574
$
14,675,584
$
11,573,406
$
11,257,207
$
15,604,801
$
10,667,670
Adjusted ROAA - pre-tax pre-provision
1.63
%
1.43
%
1.39
%
1.34
%
1.57
%
1.46
%
1.27
%
Core Return on Average Common Equity - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net income to common shareholders
$
52,831
$
47,085
$
19,137
$
(515
)
$
23,911
$
118,537
$
64,868
Reconciling items (after tax):
Severance expense
171
—
—
—
—
171
373
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
5,682
Merger and acquisition related expenses
714
833
19
40
76
1,606
76
Legal reserves
—
258
—
830
—
1,088
1,520
(Gains) losses on investment securities
(1,419
)
(9,662
)
(4,543
)
(1,788
)
(310
)
(17,412
)
(1,912
)
Derivative credit valuation adjustment
(448
)
(304
)
4,527
2,036
(429
)
5,811
811
Risk participation agreement mark-to-market adjustment
—
—
(1,080
)
—
—
(1,080
)
—
Losses on sale of non-QM residential mortgage loans
—
—
—
—
595
—
595
Unrealized losses on loans held for sale
799
—
1,114
—
—
1,913
—
Core earnings
$
52,648
$
38,210
$
19,174
$
603
$
23,843
$
110,634
$
72,013
Average total common shareholders' equity
$
866,411
$
812,577
$
771,663
$
807,884
$
819,018
$
814,769
$
781,860
Core return on average common equity
24.17
%
18.71
%
9.99
%
0.30
%
11.55
%
13.58
%
9.21
%
(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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net income to common shareholders
$
52,831
$
47,085
$
19,137
$
(515)
$
23,911
$
118,537
$
64,868
Reconciling items:
Income tax expense
22,225
12,201
7,048
1,906
7,451
43,380
22,793
Provision for credit losses on loan and leases
(2,913)
12,955
20,946
31,786
9,689
62,774
24,227
Provision for credit losses on unfunded commitments
(968)
(527)
(356)
751
3
(1,100)
(403)
Severance expense
239
—
—
—
—
239
490
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
7,476
Merger and acquisition related expenses
996
1,035
25
50
100
2,106
100
Legal reserves
—
320
—
1,042
—
1,362
2,000
(Gains) losses on investment securities
(1,431)
(11,945)
(5,553)
(2,596)
(310)
(21,525)
(2,300)
Derivative credit valuation adjustment
(625)
(378)
5,895
2,556
(565)
7,448
1,066
Risk participation agreement mark-to-market adjustment
—
—
(1,407)
—
—
(1,407)
—
Losses on sale of non-QM residential mortgage loans
—
—
—
—
782
—
782
Unrealized losses on loans held for sale
1,115
—
1,450
—
—
2,565
—
Pre-tax pre-provision adjusted net income available to common shareholders
$
71,469
$
60,746
$
47,185
$
34,980
$
41,061
$
214,379
$
121,099
Average total common shareholders' equity
$
866,411
$
812,577
$
771,663
$
807,884
$
819,018
$
814,769
$
781,860
Adjusted ROCE - pre-tax pre-provision
32.82
%
29.74
%
24.59
%
17.41
%
19.89
%
26.31
%
15.49
%
Net Interest Margin, Tax Equivalent - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net interest income
$
122,946
$
107,439
$
91,982
$
81,321
$
77,593
$
403,688
$
277,310
Tax-equivalent adjustment
219
225
225
205
187
874
735
Net interest income tax equivalent
$
123,165
$
107,664
$
92,207
$
81,526
$
77,780
$
404,562
$
278,045
Average total interest earning assets
$
17,601,999
$
17,121,145
$
13,980,021
$
10,976,731
$
10,676,730
$
14,933,317
$
10,123,708
Net interest margin, tax equivalent
2.78
%
2.50
%
2.65
%
2.99
%
2.89
%
2.71
%
2.75
%
Net Interest Margin, Tax Equivalent, Excluding PPP - Customers Bancorp
Twelve Months Ended
December 31,
(dollars in thousands except per share data)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net interest income
$
122,946
$
107,439
$
91,982
$
81,321
$
77,593
$
403,688
$
277,310
PPP net interest income
(25,257
)
(20,018
)
(9,308
)
—
—
(54,583
)
—
Tax-equivalent adjustment
219
225
225
205
187
874
735
Net interest income, tax equivalent, excluding PPP
$
97,908
$
87,646
$
82,899
$
81,526
$
77,780
$
349,979
$
278,045
GAAP average total interest earning assets
$
17,601,999
$
17,121,145
$
13,980,021
$
10,976,731
$
10,676,730
$
14,933,317
$
10,123,708
Average PPP loans
(4,782,606
)
(4,909,197
)
(2,754,920
)
—
—
(3,121,157
)
—
Adjusted average total interest earning assets
$
12,819,393
$
12,211,948
$
11,225,101
$
10,976,731
$
10,676,730
$
11,812,160
$
10,123,708
Net interest margin, tax equivalent, excluding PPP
3.04
%
2.86
%
2.97
%
2.99
%
2.89
%
2.96
%
2.75
%
(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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
2020
2019
GAAP net interest income
$
122,946
$
107,439
$
91,982
$
81,321
$
77,593
$
403,688
$
277,310
GAAP non-interest income
$
23,775
$
33,793
$
22,236
$
21,930
$
25,813
$
101,734
$
80,938
Loss upon acquisition of interest-only GNMA securities
—
—
—
—
—
—
7,476
(Gains) losses on investment securities
(1,431
)
(11,945
)
(5,553
)
(2,596
)
(310
)
(21,525
)
(2,300
)
Derivative credit valuation adjustment
(625
)
(378
)
5,895
2,556
(565
)
7,448
1,066
Risk participation agreement mark-to-market adjustment
—
—
(1,407
)
—
—
(1,407
)
—
Losses on sale of non-QM residential mortgage loans
—
—
—
—
782
—
782
Unrealized losses on loans held for sale
1,115
—
1,450
—
—
2,565
—
Core non-interest income
22,834
21,470
22,621
21,890
25,720
88,815
87,962
Core revenue
$
145,780
$
128,909
$
114,603
$
103,211
$
103,313
$
492,503
$
365,272
GAAP non-interest expense
$
71,164
$
65,561
$
63,506
$
66,459
$
58,740
$
266,690
$
231,901
Severance expense
(239
)
—
—
—
—
(239
)
(490
)
Legal reserves
—
(320
)
—
(1,042
)
—
(1,362
)
(2,000
)
Merger and acquisition related expenses
(996
)
(1,035
)
(25
)
(50
)
(100
)
(2,106
)
(100
)
Core non-interest expense
$
69,929
$
64,206
$
63,481
$
65,367
$
58,640
$
262,983
$
229,311
Core efficiency ratio (1)
47.97
%
49.81
%
55.39
%
63.33
%
56.76
%
53.40
%
62.78
%
(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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
GAAP total shareholders' equity
$
1,117,086
$
1,051,491
$
1,007,847
$
964,636
$
1,052,795
Reconciling items:
Preferred stock
(217,471
)
(217,471
)
(217,471
)
(217,471
)
(217,471
)
Goodwill and other intangibles
(14,298
)
(14,437
)
(14,575
)
(14,870
)
(15,195
)
Tangible common equity
$
885,317
$
819,583
$
775,801
$
732,295
$
820,129
GAAP total assets
$
18,439,248
$
18,778,727
$
17,903,118
$
12,018,799
$
11,520,717
Reconciling items:
Goodwill and other intangibles
(14,298
)
(14,437
)
(14,575
)
(14,870
)
(15,195
)
Tangible assets
$
18,424,950
$
18,764,290
$
17,888,543
$
12,003,929
$
11,505,522
Tangible common equity to tangible assets
4.80
%
4.37
%
4.34
%
6.10
%
7.13
%
(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 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
GAAP total shareholders' equity
$
1,117,086
$
1,051,491
$
1,007,847
$
964,636
$
1,052,795
Reconciling Items:
Preferred stock
(217,471
)
(217,471
)
(217,471
)
(217,471
)
(217,471
)
Goodwill and other intangibles
(14,298
)
(14,437
)
(14,575
)
(14,870
)
(15,195
)
Tangible common equity
$
885,317
$
819,583
$
775,801
$
732,295
$
820,129
Common shares outstanding
31,705,088
31,555,124
31,510,287
31,470,026
31,336,791
Tangible book value per common share
$
27.92
$
25.97
$
24.62
$
23.27
$
26.17
Total Loans and Leases, excluding PPP
(dollars in thousands)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Total loans and leases
$
15,832,251
$
16,605,279
$
15,290,202
$
10,321,431
$
10,051,074
Loans receivable, PPP
(4,561,365
)
(4,964,105
)
(4,760,427
)
—
—
Loans and leases, excluding PPP
$
11,270,886
$
11,641,174
$
10,529,775
$
10,321,431
$
10,051,074
Total Assets, excluding PPP
(dollars in thousands)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Total assets
$
18,439,248
$
18,778,727
$
17,903,118
$
12,018,799
$
11,520,717
Loans receivable, PPP
(4,561,365
)
(4,964,105
)
(4,760,427
)
—
—
Total assets, excluding PPP
$
13,877,883
$
13,814,622
$
13,142,691
$
12,018,799
$
11,520,717
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP
(dollars in thousands)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Loans and leases receivable
$
12,136,733
$
12,664,997
$
12,032,874
$
7,353,262
$
7,318,988
Loans receivable, PPP
(4,561,365
)
(4,964,105
)
(4,760,427
)
—
—
Loans and leases held for investment, excluding PPP
$
7,575,368
$
7,700,892
$
7,272,447
$
7,353,262
$
7,318,988
Allowance for credit losses on loans and leases
144,176
155,561
159,905
149,283
56,379
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP
1.90
%
2.02
%
2.20
%
2.03
%
0.77
%
(Dollars in thousands, except per share data)
Tangible Common Equity to Tangible Assets, excluding PPP - Customers Bancorp
(dollars in thousands except per share data)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
GAAP total shareholders' equity
$
1,117,086
$
1,051,491
$
1,007,847
$
964,636
$
1,052,795
Reconciling items:
Preferred stock
(217,471
)
(217,471
)
(217,471
)
(217,471
)
(217,471
)
Goodwill and other intangibles
(14,298
)
(14,437
)
(14,575
)
(14,870
)
(15,195
)
Tangible common equity
$
885,317
$
819,583
$
775,801
$
732,295
$
820,129
GAAP total assets
$
18,439,248
$
18,778,727
$
17,903,118
$
12,018,799
$
11,520,717
Loans receivable, PPP
(4,561,365
)
(4,964,105
)
(4,760,427
)
—
—
Total assets, excluding PPP
$
13,877,883
$
13,814,622
$
13,142,691
$
12,018,799
$
11,520,717
Reconciling items:
Goodwill and other intangibles
(14,298
)
(14,437
)
(14,575
)
(14,870
)
(15,195
)
Tangible assets
$
13,863,585
$
13,800,185
$
13,128,116
$
12,003,929
$
11,505,522
Tangible common equity to tangible assets
6.39
%
5.94
%
5.91
%
6.10
%
7.13
%
Commercial criticized loans and leases receivable to total loans and leases, excluding PPP
(dollars in thousands)
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Special mention loans
$
250,575
$
126,361
$
105,110
$
75,838
$
111,157
Substandard loans
202,965
172,217
119,651
130,370
139,744
Doubtful loans
—
—
27,921
19,050
—
Criticized commercial loans and leases receivable
$
453,540
$
298,578
$
252,682
$
225,258
$
250,901
Total loans and leases
15,753,165
16,605,279
15,290,202
10,321,431
10,051,074
Loans receivable, PPP
(4,561,365
)
(4,964,105
)
(4,760,427
)
—
—
Total loans and leases, excluding PPP
$
11,191,800
$
11,641,174
$
10,529,775
$
10,321,431
$
10,051,074
Commercial criticized loans and leases receivable to total loans and leases, excluding PPP
4.05
%
2.56
%
2.40
%
2.18
%
2.50
%
Adjusted non-performing assets to total assets
(dollars in thousands)
Q4 2020
Non-performing assets
$
71,175
Collateral dependent loan sold in January 2021
17,251
Adjusted non-performing assets
$
53,924
Total assets
$
18,439,248
Adjusted non-performing assets to total assets
0.30
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20210127006022/en/