Customers Bancorp Reports Results for Third Quarter 2023
Customers Bancorp, Inc. (NYSE:CUBI)
Third Quarter 2023 Highlights
Q3 2023 net income available to common shareholders was $83.0 million, or $2.58 per diluted share; ROAA was 1.57% and ROCE was 23.97%. Q3 2023 core earnings* were $83.3 million, or $2.59 per diluted share; Core ROAA* was 1.57% and Core ROCE* was 24.06%. CET 1 capital ratio of 11.3%1 at September 30, 2023, compared to 10.3% at June 30, 2023, achieving goal of 11.0% - 11.5% one quarter earlier than expected. Q3 2023 net interest margin, tax equivalent (NIM) was 3.70%, an increase of 55 basis points over Q2 2023 NIM of 3.15%, largely resulting from higher than expected discount accretion on the Venture Banking portfolio acquired in Q2 2023. Total deposits grew by $244.9 million in Q3 2023 over Q2 2023 with a significant positive mix shift. Q3 2023 core deposit growth of $1.3 billion drove the repayment of maturing wholesale CDs of $937 million and callable FHLB advances of $510 million. Q3 2023 non-interest bearing deposits increased $268.5 million, or 6%, over Q2 2023. Total estimated insured deposits were 78%2 of total deposits at September 30, 2023, with immediately available liquidity covering uninsured deposits by approximately 239%. Q3 2023 adjusted pre-tax pre-provision net income* was $128.6 million; adjusted pre-tax pre-provision ROAA* was 2.32%; and adjusted pre-tax pre-provision ROCE* was 36.04%. Q3 2023 provision for credit losses on loans and leases of $17.1 million was lower compared to Q2 2023 largely driven by lower balances in loans held for investment. Non-performing assets were $30.0 million, or 0.14% of total assets, at September 30, 2023 compared to 0.13% at June 30, 2023. Allowance for credit losses on loans and leases equaled 466% of non-performing loans at September 30, 2023, compared to 494% at June 30, 2023. Q3 2023 book value per share and tangible book value per share* both grew by $3.31, or 7.9% over Q2 2023, driven by strong quarterly earnings combined with decreased AOCI losses of $18.4 million over the same time period.____________________
*
Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
1
Regulatory capital ratios as of September 30, 2023 are estimates.
2
Uninsured deposits (estimate) of $4.8 billion to be reported on the Bank's call report, less state and municipal deposits of $591.3 million collateralized by standby letters of credit from the FHLB and from our affiliates of $99.2 million.
CEO Commentary
“We are pleased to share our third quarter results as we continued to execute on our strategic priorities and delivered another strong quarter for shareholders,” said Customers Bancorp Chairman and CEO Jay Sidhu. “While the banking industry has broadly stabilized following the events earlier this year, the headwinds of higher funding costs and net interest margin compression have not subsided for most banks. We demonstrated the sustainability of our differentiated deposit strategy by growing core deposits by $1.3 billion in the third quarter resulting in $245 million in total deposit growth. The remaining liquidity inflows, and a modest amount of balance sheet cash, were used to payoff maturing wholesale CDs of $937 million and $510 million in callable FHLB advances. The core deposit growth was broad-based with 13 different channels contributing $25 million or more and benefited from the onboarding of deposits from our new Venture Banking clients. Non-interest bearing deposits as a percentage of deposits increased modestly to 26%. Our net interest margin continued to expand in the quarter in contrast to the industry headwinds. Elevated payoffs and maturities in the acquired Venture Banking portfolio resulted in outsized discount accretion which contributed to our net interest income. Capital levels continued to increase substantially during the quarter as evidenced by a 50 basis point increase in our TCE ratio* and a 100 basis point increase in our CET 1 ratio to end the quarter at 11.3%. We remain well-positioned to continue strengthening our deposit franchise, improve our profitability, and increase our Capital ratios,” stated Jay Sidhu.
“Our Q3 2023 GAAP earnings were $83.0 million, or $2.58 per diluted share, well above consensus estimates. At September 30, 2023, our deposit base was well diversified, with approximately 78%2 of total deposits insured. We maintain a strong liquidity position, with $9.7 billion of liquidity immediately available, which covers approximately 239% of uninsured deposits and our loan to deposit ratio was 75%. We continue to be selective on new loan production given the uncertain environment and our commitment to improve our capital ratios and are focusing new loan production where we have a holistic and primary relationship. We are seeing attractive new origination opportunities and we remain firmly committed to serving our clients. We have ample liquidity and capital to support their needs. At September 30, 2023, we had $3.4 billion of cash on hand, which we believe is prudent balance sheet and liquidity management in the current environment. Asset quality remains exceptional with our NPA ratio remaining roughly flat at just 0.14% of total assets and reserve levels are robust at over 465% of total non-performing loans at the end of Q3 2023. Our exposure to higher risk commercial real estate such as the office and retail sectors is minimal, each representing only 1% of the loan portfolio. Continued execution on our strategic priorities has positioned us favorably for success through the remainder of 2023 and into 2024 from a capital, credit, liquidity, interest rate risk and earnings perspective. We will remain disciplined, but opportunistic, with our balance sheet capacity to minimize risk and maintain robust capital levels. We are extremely proud of the progress we made in the quarter and are confident in our risk management capabilities and ability to provide excellent service to our clients in all operating environments. We are excited and optimistic about the opportunities ahead,” Jay Sidhu continued.
____________________
*
Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
1
Regulatory capital ratios as of September 30, 2023 are estimates.
2
Uninsured deposits (estimate) of $4.8 billion to be reported on the Bank's call report, less state and municipal deposits of $591.3 million collateralized by standby letters of credit from the FHLB and from our affiliates of $99.2 million.
Financial Highlights
(Dollars in thousands, except per share data)
At or Three Months Ended
Increase (Decrease)
September 30,
2023
June 30,
2023
Profitability Metrics:
Net income available for common shareholders
$
82,953
$
44,007
$
38,946
88.5
%
Diluted earnings per share
$
2.58
$
1.39
$
1.19
85.6
%
Core earnings*
$
83,294
$
52,163
$
31,131
59.7
%
Core earnings per share*
$
2.59
$
1.65
$
0.94
57.0
%
Return on average assets ("ROAA")
1.57
%
0.88
%
0.69
Core ROAA*
1.57
%
1.03
%
0.54
Return on average common equity ("ROCE")
23.97
%
13.22
%
10.75
Core ROCE*
24.06
%
15.67
%
8.39
Adjusted pre-tax pre-provision net income*
$
128,564
$
96,833
$
31,731
32.8
%
Net interest margin, tax equivalent
3.70
%
3.15
%
0.55
Loan yield
7.87
%
6.83
%
1.04
Cost of deposits
3.24
%
3.11
%
0.13
Efficiency ratio
41.01
%
49.25
%
(8.24
)
Core efficiency ratio*
41.04
%
47.84
%
(6.80
)
Balance Sheet Trends:
Total assets
$
21,857,152
$
22,028,565
$
(171,413
)
(0.8
)%
Total loans and leases
$
13,713,482
$
13,910,907
$
(197,425
)
(1.4
)%
Non-interest bearing demand deposits
$
4,758,682
$
4,490,198
$
268,484
6.0
%
Total deposits
$
18,195,364
$
17,950,431
$
244,933
1.4
%
Capital Metrics:
Common Equity
$
1,423,813
$
1,318,858
$
104,955
8.0
%
Tangible Common Equity*
$
1,420,184
$
1,315,229
$
104,955
8.0
%
Common Equity to Total Assets
6.5
%
6.0
%
0.5
Tangible Common Equity to Tangible Assets*
6.5
%
6.0
%
0.5
Book Value per common share
$
45.47
$
42.16
$
3.31
7.9
%
Tangible Book Value per common share*
$
45.36
$
42.04
$
3.32
7.9
%
Common equity Tier 1 capital ratio (1)
11.3
%
10.3
%
1.0
Total risk based capital ratio (1)
14.3
%
13.2
%
1.1
(1) Regulatory capital ratios as of September 30, 2023 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
Financial Highlights
(Dollars in thousands, except per share data)
At or Three Months Ended
Increase (Decrease)
Nine Months Ended
Increase (Decrease)
September 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Profitability Metrics:
Net income available for
common shareholders
$
82,953
$
61,364
$
21,589
35.2
%
$
177,225
$
192,779
$
(15,554
)
(8.1
)%
Diluted earnings per share
$
2.58
$
1.85
$
0.73
39.5
%
$
5.53
$
5.72
$
(0.19
)
(3.3
)%
Core earnings*
$
83,294
$
82,270
$
1,024
1.2
%
$
186,600
$
217,047
$
(30,447
)
(14.0
)%
Core earnings per share*
$
2.59
$
2.48
$
0.11
4.4
%
$
5.82
$
6.44
$
(0.62
)
(9.6
)%
Return on average assets ("ROAA")
1.57
%
1.24
%
0.33
1.17
%
1.34
%
(0.17
)
Core ROAA*
1.57
%
1.64
%
(0.07
)
1.22
%
1.50
%
(0.28
)
Return on average common equity ("ROCE")
23.97
%
19.33
%
4.64
17.84
%
20.58
%
(2.74
)
Core ROCE*
24.06
%
25.91
%
(1.85
)
18.79
%
23.17
%
(4.38
)
Adjusted pre-tax pre-provision
net income*
$
128,564
$
100,994
$
27,570
27.3
%
$
314,679
$
319,335
$
(4,656
)
(1.5
)%
Net interest margin, tax equivalent
3.70
%
3.16
%
0.54
3.28
%
3.38
%
(0.10
)
Loan yield
7.87
%
5.08
%
2.79
7.12
%
4.77
%
2.35
Cost of deposits
3.24
%
1.48
%
1.76
3.23
%
0.80
%
2.43
Efficiency ratio
41.01
%
50.00
%
(8.99
)
45.62
%
43.46
%
2.16
Core efficiency ratio*
41.04
%
42.57
%
(1.53
)
45.03
%
41.23
%
3.80
Balance Sheet Trends:
Total assets
$
21,857,152
$
20,367,621
$
1,489,531
7.3
%
Total loans and leases
$
13,713,482
$
15,336,688
$
(1,623,206
)
(10.6
)%
Non-interest bearing demand deposits
$
4,758,682
$
2,993,793
$
1,764,889
59.0
%
Total deposits
$
18,195,364
$
17,522,438
$
672,926
3.8
%
Capital Metrics:
Common Equity
$
1,423,813
$
1,249,137
$
174,676
14.0
%
Tangible Common Equity*
$
1,420,184
$
1,245,508
$
174,676
14.0
%
Common Equity to Total Assets
6.5
%
6.1
%
0.4
Tangible Common Equity to
Tangible Assets*
6.5
%
6.1
%
0.4
Book Value per common share
$
45.47
$
38.46
$
7.01
18.2
%
Tangible Book Value per
common share*
$
45.36
$
38.35
$
7.01
18.3
%
ratio (1)
11.3
%
9.8
%
1.5
Total risk based capital ratio (1)
14.3
%
12.5
%
1.8
(1) Regulatory capital ratios as of September 30, 2023 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
Key Balance Sheet Trends Loans and LeasesThe following table presents the composition of total loans and leases as of the dates indicated:
(Dollars in thousands)
September 30,
2023
% of
Total
June 30,
2023
% of
Total
September 30,
2022
% of
Total
Loans and Leases Held for Investment
Commercial:
Commercial industrial:
Specialty lending
$
5,422,161
40.0
%
$
5,534,832
40.0
%
$
5,103,974
33.3
%
Other commercial industrial
1,115,364
8.2
1,052,145
7.6
1,064,332
7.0
Multifamily
2,130,213
15.7
2,151,734
15.6
2,263,268
14.8
Loans to mortgage companies
1,042,549
7.7
1,108,598
8.0
1,708,587
11.1
Commercial real estate owner occupied
794,815
5.9
842,042
6.1
726,670
4.7
Loans receivable, PPP
137,063
1.0
188,763
1.4
1,154,632
7.5
Commercial real estate non-owner occupied
1,178,203
8.7
1,211,091
8.8
1,263,211
8.2
Construction
252,588
1.8
212,214
1.5
136,133
0.9
Total commercial loans and leases
12,072,956
89.0
12,301,419
89.0
13,420,807
87.5
Consumer:
Residential
483,133
3.6
487,199
3.5
465,772
3.1
Manufactured housing
40,129
0.3
41,664
0.3
46,990
0.3
Installment:
Personal
629,843
4.6
752,470
5.4
1,056,432
6.9
Other
337,053
2.5
250,047
1.8
341,463
2.2
Total installment loans
966,896
7.1
1,002,517
7.2
1,397,895
9.1
Total consumer loans
1,490,158
11.0
1,531,380
11.0
1,910,657
12.5
Total loans and leases held for investment
$
13,563,114
100.0
%
$
13,832,799
100.0
%
$
15,331,464
100.0
%
Loans Held for Sale
Commercial:
Multifamily
$
—
—
%
$
—
—
%
$
4,108
78.6
%
Commercial real estate non-owner occupied
—
—
—
—
—
—
Total commercial loans and leases
—
—
—
—
4,108
78.6
Consumer:
Residential
1,005
0.7
1,234
1.6
1,116
21.4
Installment:
Personal
124,848
83.0
76,874
98.4
—
—
Other
24,515
16.3
—
—
—
—
Total installment loans
149,363
99.3
76,874
98.4
—
—
Total consumer loans
150,368
100.0
78,108
100.0
1,116
21.4
Total loans held for sale
$
150,368
100.0
%
$
78,108
100.0
%
$
5,224
100.0
%
Total loans and leases portfolio
$
13,713,482
$
13,910,907
$
15,336,688
Loans and Leases Held for Investment
Loans and leases held for investment were $13.6 billion at September 30, 2023, down $269.7 million, or 1.9%, from June 30, 2023, consistent with our stated goal of purposely moderating loan growth and exiting non-strategic relationships. Loans held for investment decreased modestly in every category, except for relatively small increases in construction loans and in other commercial and industrial ("C") loans quarter-over-quarter. Other C loans increased $63.2 million, or 6.0% quarter-over-quarter, to $1.1 billion. Loans to mortgage companies decreased $66.0 million, or 6.0% quarter-over-quarter due to lower mortgage activity. Consumer installment loans held for investment decreased $35.6 million, or 3.6% quarter-over-quarter, to $1.0 billion as we continue to execute on our held-for-sale strategy and de-risk the held-for-investment loan portfolio in 2023.
Loans and leases held for investment of $13.6 billion at September 30, 2023 was down $1.8 billion, or 11.5%, year-over-year, largely driven by reduced balances in PPP loans of $1.0 billion, loans to mortgage companies of $666.0 million and consumer installment loans of $431.0 million, offset in part by net growth in the lower risk variable rate specialty lending verticals of $318.2 million. Consumer installment loans held for investment decreased $431.0 million, or 30.8% year-over-year, to $966.9 million as we continue to execute on our held-for-sale strategy and de-risk the held-for-investment loan portfolio in 2023.
Loans Held for Sale
Loans held for sale increased $72.3 million quarter-over-quarter, and were $150.4 million at September 30, 2023 as we continue to build out our held-for-sale strategy in 2023.
Allowance for Credit Losses on Loans and Leases
The following table presents the allowance for credit losses on loans and leases as of the dates and for the periods presented:
At or Three Months Ended
Increase
(Decrease)
At or Three Months Ended
Increase
(Decrease)
(Dollars in thousands)
September 30,
2023
June 30,
2023
September 30,
2023
September 30,
2022
Allowance for credit losses on loans and leases
$
139,213
$
139,656
$
(443
)
$
139,213
$
130,197
$
9,016
Provision (benefit) for credit losses on loans and leases
$
17,055
$
22,363
$
(5,308
)
$
17,055
$
(7,836
)
$
24,891
Net charge-offs from loans held for investment
$
17,498
$
15,564
$
1,934
$
17,498
$
18,497
$
(999
)
Annualized net charge-offs to average loans and leases
0.50
%
0.42
%
0.50
%
0.47
%
Coverage of credit loss reserves for loans and leases held for investment
1.10
%
1.09
%
1.10
%
0.95
%
Net charge-offs were relatively stable with $17.5 million in Q3 2023, compared to $15.6 million in Q2 2023 and $18.5 million in Q3 2022.
Provision (benefit) for Credit Losses
Three Months Ended
Increase
(Decrease)
Three Months Ended
Increase
(Decrease)
(Dollars in thousands)
September 30,
2023
June 30,
2023
September 30,
2023
September 30,
2022
Provision (benefit) for credit losses on loans and leases
$
17,055
$
22,363
$
(5,308
)
$
17,055
$
(7,836
)
$
24,891
Provision (benefit) for credit losses on available for sale debt securities
801
1,266
(465
)
801
(158
)
959
Provision for credit losses
17,856
23,629
(5,773
)
17,856
(7,994
)
25,850
Provision (benefit) for credit losses on unfunded commitments
48
(304
)
352
48
254
(206
)
Total provision for credit losses
$
17,904
$
23,325
$
(5,421
)
$
17,904
$
(7,740
)
$
25,644
The provision for credit losses on loans and leases in Q3 2023 was $17.1 million, compared to $22.4 million in Q2 2023 and a benefit to provision of $7.8 million in Q3 2022. The lower provision in Q3 2023 was primarily due to lower balances in loans held for investment. The benefit to provision in Q3 2022 was primarily due to the sale of $500.0 million of unsecured consumer installment loans, partially offset by loan growth and the recognition of weaker macroeconomic forecasts. The sale transaction resulted in approximately $36.8 million of release in allowance for credit losses, which was included in core earnings* in Q3 2022.
The provision for credit losses on available for sale investment securities in Q3 2023 was $0.8 million, compared to provision of $1.3 million in Q2 2023 and a benefit to provision of $0.2 million in Q3 2022.
Asset Quality
The following table presents asset quality metrics as of the dates indicated:
(Dollars in thousands)
September 30,
2023
June 30,
2023
Increase
(Decrease)
September 30,
2023
September 30,
2022
Increase
(Decrease)
Non-performing assets ("NPAs"):
Nonaccrual / non-performing loans ("NPLs")
$
29,867
$
28,244
$
1,623
$
29,867
$
27,919
$
1,948
Non-performing assets
$
29,970
$
28,380
$
1,590
$
29,970
$
27,965
$
2,005
NPLs to total loans and leases
0.22
%
0.20
%
0.22
%
0.18
%
Reserves to NPLs
466.11
%
494.46
%
466.11
%
466.34
%
NPAs to total assets
0.14
%
0.13
%
0.14
%
0.14
%
Loans and leases (1) risk ratings:
Commercial loans and leases (2)
Pass
$
10,503,731
$
10,667,619
$
(163,888
)
$
10,503,731
$
10,262,647
$
241,084
Special Mention
189,329
166,468
22,861
189,329
104,560
84,769
Substandard
280,267
272,301
7,966
280,267
329,878
(49,611
)
Total commercial loans and leases
10,973,327
11,106,388
(133,061
)
10,973,327
10,697,085
276,242
Consumer loans
Performing
1,473,493
1,508,208
(34,715
)
1,473,493
1,893,977
(420,484
)
Non-performing
16,665
23,172
(6,507
)
16,665
16,680
(15
)
Total consumer loans
1,490,158
1,531,380
(41,222
)
1,490,158
1,910,657
(420,499
)
Loans and leases receivable (1)
$
12,463,485
$
12,637,768
$
(174,283
)
$
12,463,485
$
12,607,742
$
(144,257
)
(1) Risk ratings are assigned to loans and leases held for investment, and excludes loans held for sale and loans receivable, mortgage warehouse, at fair value.
(2) Excludes loan receivable, PPP, as eligible PPP loans are fully guaranteed by the Small Business Administration.
Over the last decade, we have developed a suite of commercial loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s C, loans to mortgage companies, corporate and specialty lending lines of business, and multifamily loans for example, are characterized by conservative underwriting standards and low loss rates. Because of this emphasis, the Bank’s credit quality to date has been incredibly healthy despite an adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, we employ a bottom-up data driven approach to analyze the commercial portfolio.
Total consumer installment loans held for investment at September 30, 2023 were less than 5% of total assets and approximately 7% of total loans and leases held for investment, and were supported by an allowance for credit losses of $58.2 million. At September 30, 2023, our consumer installment portfolio had the following characteristics: average original FICO score of 734, average debt-to-income of 19% and average borrower income of $106 thousand.
Non-performing loans at September 30, 2023 remained relatively stable at 0.22% of total loans and leases, compared to 0.20% at June 30, 2023 and 0.18% at September 30, 2022.
Investment Securities
Our investment securities portfolio, including debt securities classified as available for sale ("AFS") and held to maturity ("HTM") provides periodic cash flows through regular maturities and amortization, can be used as collateral to secure additional funding, and is an important component of our liquidity position.
The following table presents the composition of our investment securities portfolio as of the dates indicated:
(Dollars in thousands)
September 30,
2023
June 30,
2023
September 30,
2022
Debt securities, available for sale
$
2,746,729
$
2,797,940
$
2,918,830
Equity securities
26,478
26,698
24,864
Investment securities, at fair value
2,773,207
2,824,638
2,943,694
Debt securities, held to maturity
1,178,370
1,258,560
886,294
Total investment securities portfolio
$
3,951,577
$
4,083,198
$
3,829,988
Critically important to performance during the recent banking crisis are the characteristics of a bank’s securities portfolio. While there may be virtually no credit risk in some of these portfolios, holding longer term and lower yielding securities is creating challenges for many banks. Our securities portfolio is highly liquid, short in duration, and high in yield. At September 30, 2023, our AFS debt securities portfolio had a spot yield of 5.43%, an effective duration of approximately 1.6 years, and approximately 48% are variable rate. Additionally, 64% of our AFS securities portfolio was AAA rated at September 30, 2023.
At September 30, 2023, our HTM debt securities portfolio represented only 5.4% of our total assets at September 30, 2023, had a spot yield of 4.34% and an effective duration of approximately 3.0 years. Additionally, at September 30, 2023, approximately 38% of our HTM securities were AAA rated and 55% were credit enhanced asset backed securities with no current expectation of credit losses.
Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:
(Dollars in thousands)
September 30,
2023
% of
Total
June 30,
2023
% of
Total
September 30,
2022
% of
Total
Demand, non-interest bearing
$
4,758,682
26.2
%
$
4,490,198
25.0
%
$
2,993,793
17.1
%
Demand, interest bearing
5,824,410
32.0
5,551,037
30.9
7,124,663
40.7
Total demand deposits
10,583,092
58.2
10,041,235
55.9
10,118,456
57.8
Savings
1,118,353
6.1
1,048,229
5.8
592,002
3.4
Money market
2,499,593
13.7
2,004,264
11.2
4,913,967
28.0
Time deposits
3,994,326
22.0
4,856,703
27.1
1,898,013
10.8
Total deposits
$
18,195,364
100.0
%
$
17,950,431
100.0
%
$
17,522,438
100.0
%
Total deposits increased $244.9 million, or 1.4%, to $18.2 billion at September 30, 2023 as compared to the prior quarter. Importantly, non-interest bearing demand deposits increased $268.5 million, or 6.0%, to $4.8 billion. Money market deposits increased $495.3 million, or 24.7%, to $2.5 billion, interest bearing demand deposits increased $273.4 million, or 4.9%, to $5.8 billion, and savings deposits increased $70.1 million, or 6.7%, to $1.1 billion. These increases were offset in part by a decrease in time deposits of $862.4 million, or 17.8%, to $4.0 billion. The total average cost of deposits increased by 13 basis points to 3.24% in Q3 2023 from 3.11% in the prior quarter largely driven by the increase in market interest rates during the third quarter. Total estimated uninsured deposits was $4.1 billion1, or 22% of total deposits (inclusive of accrued interest) at September 30, 2023. We are also highly focused on total deposits with contractual term to manage our liquidity profile and the funding of loans and securities.
Total deposits increased $672.9 million, or 3.8%, to $18.2 billion at September 30, 2023 as compared to a year ago. Non-interest bearing demand deposits increased $1.8 billion, or 59.0%, to $4.8 billion, time deposits increased $2.1 billion to $4.0 billion and savings deposits increased $526.4 million, or 88.9%, to $1.1 billion. These increases were offset in part by decreases in money market deposits of $2.4 billion, or 49.1%, to $2.5 billion and interest bearing demand deposits of $1.3 billion, or 18.3%, to $5.8 billion. The total average cost of deposits increased by 176 basis points to 3.24% in Q3 2023 from 1.48% in the prior year primarily due to higher market interest rates and a shift in deposit mix.
____________________1
Uninsured deposits (estimate) of $4.8 billion to be reported on the Bank's call report, less state and municipal deposits of $591.3 million collateralized by standby letters of credit from the FHLB and from our affiliates of $99.2 million.
Borrowings
The following table presents the composition of our borrowings as of the dates indicated:
(Dollars in thousands)
September 30,
2023
June 30,
2023
September 30,
2022
Federal funds purchased
$
—
$
—
$
365,000
FHLB advances
1,529,839
2,046,142
500,000
Senior notes
123,775
123,710
123,515
Subordinated debt
182,161
182,091
181,882
Total borrowings
$
1,835,775
$
2,351,943
$
1,170,397
Total borrowings decreased $516.2 million, or 21.9%, to $1.8 billion at September 30, 2023 as compared to the prior quarter. This decrease primarily resulted from the repayment of $510 million in callable FHLB advances. As of September 30, 2023, Customers' borrowing capacity with the FRB and FHLB was approximately $8.4 billion, of which $1.5 billion of available capacity was utilized in borrowings and $599.4 million was utilized to collateralize state and municipal deposits.
Total borrowings increased $665.4 million, or 56.9%, to $1.8 billion at September 30, 2023 as compared to a year ago. This increase primarily resulted from an increase in FHLB advances to ensure ample cash on hand given the heightened liquidity risk in the banking system, particularly among regional banks since early March 2023, net of repayments of $510 million in callable FHLB advances in Q3 2023 and federal funds purchased.
The following table presents certain capital amounts and ratios as of the dates indicated:
(Dollars in thousands except per share data)
September 30,
2023
June 30,
2023
September 30,
2022
Customers Bancorp, Inc.
Common Equity
$
1,423,813
$
1,318,858
$
1,249,137
Tangible Common Equity*
$
1,420,184
$
1,315,229
$
1,245,508
Common Equity to Total Assets
6.5
%
6.0
%
6.1
%
Tangible Common Equity to Tangible Assets*
6.5
%
6.0
%
6.1
%
Book Value per common share
$
45.47
$
42.16
$
38.46
Tangible Book Value per common share*
$
45.36
$
42.04
$
38.35
Common equity Tier 1 (CET 1) capital ratio (1)
11.3
%
10.3
%
9.8
%
Total risk based capital ratio (1)
14.3
%
13.2
%
12.5
%
(1) Regulatory capital ratios as of September 30, 2023 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
Customers Bancorp's common equity increased $105.0 million to $1.4 billion, and tangible common equity* increased $105.0 million to $1.4 billion, at September 30, 2023 compared to the prior quarter, respectively, primarily from earnings of $83.0 million and decreased unrealized losses on investment securities of $18.4 million (net of taxes) deferred in accumulated other comprehensive income ("AOCI"). Similarly, book value per common share increased to $45.47 from $42.16, and tangible book value per common share* increased to $45.36 from $42.04, at September 30, 2023 and June 30, 2023, respectively.
Customers Bancorp's common equity increased $174.7 million to $1.4 billion, and tangible common equity* increased $174.7 million to $1.4 billion, at September 30, 2023 compared to a year ago, respectively, primarily from earnings of $202.8 million and decreased unrealized losses on investment securities in AOCI of $6.3 million (net of taxes), partially offset by $45.1 million of common share repurchases. Similarly, book value per common share increased to $45.47 from $38.46, and tangible book value per common share* increased to $45.36 from $38.35, at September 30, 2023 and September 30, 2022, respectively.
At the Customers Bancorp level, the CET 1 capital ratio (estimate), total risk based capital ratio (estimate), common equity to total assets ratio and tangible common equity to tangible assets ratio* ("TCE ratio") were 11.3%, 14.3%, 6.5%, and 6.5%, respectively, at September 30, 2023.
At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At September 30, 2023, Tier 1 capital (estimate) and total risk based capital (estimate) were 13.0% and 14.5%, respectively.
“Even though we remain well capitalized by all regulatory measures, we are committed to maintaining our CET 1 capital ratio between 11.0% - 11.5% at year-end 2023. In this environment, we will continue to be selective on new loan production to ensure the strength of our balance sheet and further improve our strong capital ratios,” stated Jay Sidhu.
Key Profitability Trends
Net Interest Income
Net interest income totaled $199.8 million in Q3 2023, an increase of $34.5 million from Q2 2023, primarily due to higher interest income from variable rate lower credit risk specialty lending verticals of $35.9 million, which included the acquired Venture Banking portfolio, interest earning deposits of $16.2 million maintained in response to heightened liquidity risk in the banking system, particularly among regional banks since early March 2023, and investment securities of $6.2 million, reflecting higher average balance and market interest rates. These increases were partially offset by lower interest income on consumer installment loans of $13.0 million reflecting the impact of the sales transactions that occurred late in Q2 2023. In addition, interest expense on deposits and other borrowings increased by $11.7 million in Q3 2023 largely resulting from higher market interest rates.
“We experienced robust net interest income growth in the third quarter due to strong core business performance and outsized discount accretion recognized on the acquired loan portfolio from the FDIC. To provide some context on the outsized discount accretion, Venture Banking loans have more frequent financing needs than traditional commercial loans given ongoing capital raises and other activities of the companies. These activities were essentially paused between March and our acquisition of the loan portfolio in June. When our new Venture Banking team members were fully onboarded in July, they began addressing this backlog in earnest. We estimate approximately $27 million of interest income in Q3 2023 was attributable to outsized discount accretion,” stated Customers Bancorp President Sam Sidhu.
Net interest income totaled $199.8 million in Q3 2023, an increase of $40.7 million from Q3 2022. This increase was due to higher interest income of $140.4 million resulting from increased average balance of interest earning assets of $1.5 billion, higher market interest rates on variable rate loans, investments and interest earning deposits, and discount accretion on the acquired Venture Banking portfolio, offset in part by higher interest expenses on deposits and other borrowings of $99.7 million primarily resulting from increased market interest rates and higher average balances of other borrowings. Interest-earning asset growth was primarily driven by increases in interest earning deposits and investments, C loans and leases, mostly in the variable rate lower credit risk specialty lending verticals, offset in part by decreases in PPP loans, as the PPP program was substantially completed in Q1 2023, consumer installment loans and commercial loans to mortgage companies. Total consumer installment loans decreased in Q3 2023 as compared to Q3 2022, as installment loans held for investment decreased primarily for risk management purposes and implementation of our held-for-sale strategy.
Non-Interest Income
The following table presents details of non-interest income for the periods indicated:
Three Months Ended
Increase
(Decrease)
Three Months Ended
Increase
(Decrease)
(Dollars in thousands)
September 30,
2023
June 30,
2023
September 30,
2023
September 30,
2022
Commercial lease income
$
8,901
$
8,917
$
(16
)
$
8,901
$
7,097
$
1,804
Loan fees
6,029
4,271
1,758
6,029
3,008
3,021
Bank-owned life insurance
1,973
4,997
(3,024
)
1,973
3,449
(1,476
)
Mortgage warehouse transactional fees
1,018
1,376
(358
)
1,018
1,545
(527
)
Gain (loss) on sale of SBA and other loans
(348
)
(761
)
413
(348
)
106
(454
)
Loss on sale of capital call lines of credit
—
(5,037
)
5,037
—
—
—
Loss on sale of consumer installment loans
—
—
—
—
(23,465
)
23,465
Net gain (loss) on sale of investment securities
(429
)
—
(429
)
(429
)
(2,135
)
1,706
Other
631
2,234
(1,603
)
631
1,378
(747
)
Total non-interest income
$
17,775
$
15,997
$
1,778
$
17,775
$
(9,017
)
$
26,792
Non-interest income totaled $17.8 million for Q3 2023, an increase of $1.8 million compared to Q2 2023. The increase was primarily due to a loss of $5.0 million realized from the sale of non-strategic short-term syndicated capital call lines of credit within our Specialty Lending vertical that the Bank exited completely in Q2 2023 offset in part by decreases in death benefits paid by insurance carriers under bank-owned life insurance policies of $3.0 million.
Non-interest income totaled $17.8 million for Q3 2023, an increase of $26.8 million compared to Q3 2022. The increase was primarily due to a loss of $23.5 million realized from the sale of $500 million of consumer installment loans in Q3 2022 and an increase in loan fees of $3.0 million resulting from increased servicing-related revenue and unused line of credit fees.
Non-Interest Expense
The following table presents details of non-interest expense for the periods indicated:
Three Months Ended
Increase
(Decrease)
Three Months Ended
Increase
(Decrease)
(Dollars in thousands)
September 30,
2023
June 30,
2023
September 30,
2023
September 30,
2022
Salaries and employee benefits
$
33,845
$
33,120
$
725
$
33,845
$
31,230
$
2,615
Technology, communication and bank operations
15,667
16,407
(740
)
15,667
19,588
(3,921
)
Commercial lease depreciation
7,338
7,328
10
7,338
5,966
1,372
Professional services
8,569
9,192
(623
)
8,569
6,269
2,300
Loan servicing
3,858
4,777
(919
)
3,858
3,851
7
Occupancy
2,471
2,519
(48
)
2,471
2,605
(134
)
FDIC assessments, non-income taxes and regulatory fees
8,551
9,780
(1,229
)
8,551
2,528
6,023
Advertising and promotion
650
546
104
650
762
(112
)
Legal settlement expense
4,096
—
4,096
4,096
—
4,096
Other
4,421
5,628
(1,207
)
4,421
3,399
1,022
Total non-interest expense
$
89,466
$
89,297
$
169
$
89,466
$
76,198
$
13,268
The management of non-interest expenses remains a priority for us. However, this will not deter us from making investments in new technologies to support efficient and responsible growth in the future.
Non-interest expenses totaled $89.5 million in Q3 2023, an increase of $0.2 million compared to Q2 2023. The increase was primarily attributable to $4.1 million of expenses from a settlement with a third party PPP service provider and an increase of $0.7 million in salaries and employee benefits resulting from the onboarding of the Venture Banking team. These increases were partially offset by decreases of $1.2 million in FDIC assessments, non-income taxes and regulatory fees, $1.2 million in other expenses primarily due to lower provision for operating losses, $0.9 million in loan servicing from loan portfolios serviced by third parties, $0.7 million in technology, communication and bank operations mostly due to lower fees paid to BM Technologies and $0.6 million in professional fees.
Non-interest expenses totaled $89.5 million in Q3 2023, an increase of $13.3 million compared to Q3 2022. The increase was primarily attributable to $4.1 million of expenses from a settlement with a third party PPP service provider, and increases of $6.0 million in FDIC assessments, non-income taxes and regulatory fees resulting from higher FDIC assessment rates, $2.6 million in salaries and employee benefits primarily due to headcount, annual merit increases, incentives and stock awards, $2.3 million in professional fees mostly for technology, compliance and risk management, $1.4 million in commercial lease depreciation from growth and $1.0 million in other expenses. These increases were partially offset by a decrease of $3.9 million in deposit servicing-related expenses mostly due to lower servicing fees and the discontinuation of interchange maintenance fees paid to BM Technologies offset by higher fees paid for software as a service.
Taxes
Income tax expense increased by $2.7 million to $23.5 million in Q3 2023 from $20.8 million in Q2 2023 primarily due to higher pre-tax Income, partially offset by tax expense of $4.1 million on surrendered bank-owned life insurance policies recognized in Q2 2023 and increased Income tax credits.
Income tax expense increased by $5.6 million to $23.5 million in Q3 2023 from $17.9 million in Q3 2022 primarily due to higher pre-tax Income, partially offset by increased Income tax credits.
The effective tax rate for Q3 2023 was 21%. Customers expects the full-year 2023 effective tax rate to be approximately 22% to 24%.
Outlook
“Looking forward, our strategy and risk management principles will remain unchanged. We’re focused on managing risk, strengthening our deposit franchise, improving our profitability and increasing our capital ratios. Our deposits will be relatively flat with continued improvement in the quality of deposits, reducing higher cost wholesale deposits with lower cost core deposits. Following the robust 3.70% NIM in Q3 2023 which was boosted by the outsized discount accretion, we expect a normalization of NIM to roughly 3.20%-3.25% in Q4 2023. Core EPS (excluding PPP)* remains on track for, and will likely well exceed, our target of $6.00 per diluted share with a core return on common equity* of over 15%. Operating efficiency has and will continue to be a differentiator of our business model, and we will continue to only make investments that generate long-term positive operating leverage. We remain committed to maintaining a CET 1 ratio between 11.0%-11.5% at year-end 2023 and have also achieved the tangible book value per share target of $45.00, inclusive of the impact of AOCI, a full quarter early. We are committed to preserving superior credit quality, managing interest rate risk, maintaining robust liquidity, further improving our capital ratios and generating positive operating leverage,” concluded Sam Sidhu.
____________________
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
Webcast
Date:
Friday, October 27, 2023
Time:
9:00 AM EDT
The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 3rd Quarter Earnings Webcast.
You may submit questions in advance of the live webcast by emailing our Communications Director, David Patti at dpatti@customersbank.com; questions may also be asked during the webcast through the webcast application.
The webcast will be archived for viewing on the Customers Bank Investor Relations page and available beginning approximately two hours after the conclusion of the live event.
Institutional Background
Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation’s top-performing banking companies with about $22.0 billion in assets, making it one of the 80 largest bank holding companies in the US. Through its primary subsidiary, Customers Bank, commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service. In addition to traditional lines such as C lending, commercial real estate lending, and multifamily lending, Customers Bank also provides a number of national corporate banking services to Specialty Lending clients. Major accolades include:
#5 in top-performing banks with assets between $10 billion and $50 billion in 2023 per American Banker list; #34 out of the 100 largest publicly traded banks in 2023 per Forbes; and #64 on Fortune Magazine’s 2022 list of the 100 fastest growing companies in America.A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: www.customersbank.com.
“Safe Harbor” Statement
In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Customers Bancorp, Inc.’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “project,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.’s control). Numerous competitive, economic, regulatory, legal and technological events and factors, among others, could cause Customers Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements, including: a continuation of the recent turmoil in the banking industry, responsive measures taken by us and regulatory authorities to mitigate and manage related risks, regulatory actions taken that address related issues and the costs and obligations associated therewith, the impact of COVID-19 and its variants on the U.S. economy and customer behavior, the impact that changes in the economy have on the performance of our loan and lease portfolio, the market value of our investment securities, the continued success and acceptance of our blockchain payments system, the demand for our products and services and the availability of sources of funding, the effects of actions by the federal government, including the Board of Governors of the Federal Reserve System and other government agencies, that affect market interest rates and the money supply, actions that we and our customers take in response to these developments and the effects such actions have on our operations, products, services and customer relationships, higher inflation and its impacts, and the effects of any changes in accounting standards or policies. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K for the year ended December 31, 2022, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank, except as may be required under applicable law.
Q3 2023 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended September 30, 2023 and the preceding four quarters:
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED
(Dollars in thousands, except per share data and stock price data)
Q3
Q2
Q1
Q4
Q3
Nine Months Ended
September 30,
2023
2023
2023
2022
2022
2023
2022
GAAP Profitability Metrics:
Net income available to common shareholders
$
82,953
$
44,007
$
50,265
$
25,623
$
61,364
$
177,225
$
192,779
Per share amounts:
Earnings per share - basic
$
2.65
$
1.41
$
1.58
$
0.79
$
1.89
$
5.63
$
5.89
Earnings per share - diluted
$
2.58
$
1.39
$
1.55
$
0.77
$
1.85
$
5.53
$
5.72
Book value per common share (1)
$
45.47
$
42.16
$
41.08
$
39.08
$
38.46
$
45.47
$
38.46
CUBI stock price (1)
$
34.45
$
30.26
$
18.52
$
28.34
$
29.48
$
34.45
$
29.48
CUBI stock price as % of book value (1)
76
%
72
%
45
%
73
%
77
%
76
%
77
%
Average shares outstanding - basic
31,290,581
31,254,125
31,819,203
32,413,459
32,455,814
31,452,700
32,706,652
Average shares outstanding - diluted
32,175,084
31,591,142
32,345,017
33,075,422
33,226,607
32,036,459
33,706,864
Shares outstanding (1)
31,311,254
31,282,318
31,239,750
32,373,697
32,475,502
31,311,254
32,475,502
Return on average assets ("ROAA")
1.57
%
0.88
%
1.03
%
0.55
%
1.24
%
1.17
%
1.34
%
Return on average common equity ("ROCE")
23.97
%
13.22
%
16.00
%
8.05
%
19.33
%
17.84
%
20.58
%
Net interest margin, tax equivalent
3.70
%
3.15
%
2.96
%
2.67
%
3.16
%
3.28
%
3.38
%
Efficiency ratio
41.01
%
49.25
%
47.71
%
49.20
%
50.00
%
45.62
%
43.46
%
Non-GAAP Profitability Metrics (2):
Core earnings
$
83,294
$
52,163
$
51,143
$
39,368
$
82,270
$
186,600
$
217,047
Adjusted pre-tax pre-provision net income
$
128,564
$
96,833
$
89,282
$
81,377
$
100,994
$
314,679
$
319,335
Per share amounts:
Core earnings per share - diluted
$
2.59
$
1.65
$
1.58
$
1.19
$
2.48
$
5.82
$
6.44
Tangible book value per common share (1)
$
45.36
$
42.04
$
40.96
$
38.97
$
38.35
$
45.36
$
38.35
CUBI stock price as % of tangible book value (1)
76
%
72
%
45
%
73
%
77
%
76
%
77
%
Core ROAA
1.57
%
1.03
%
1.05
%
0.81
%
1.64
%
1.22
%
1.50
%
Core ROCE
24.06
%
15.67
%
16.28
%
12.36
%
25.91
%
18.79
%
23.17
%
Adjusted ROAA - pre-tax and pre-provision
2.32
%
1.79
%
1.72
%
1.56
%
1.95
%
1.95
%
2.14
%
Adjusted ROCE - pre-tax and pre-provision
36.04
%
28.01
%
27.33
%
24.59
%
31.01
%
30.59
%
33.40
%
Net interest margin, tax equivalent, excluding PPP loans
3.75
%
3.20
%
2.80
%
2.87
%
3.18
%
3.27
%
3.27
%
Core efficiency ratio
41.04
%
47.84
%
47.09
%
49.12
%
42.57
%
45.03
%
41.23
%
Asset Quality:
Net charge-offs
$
17,498
$
15,564
$
18,651
$
27,164
$
18,497
$
51,713
$
39,204
Annualized net charge-offs to average total loans and leases
0.50
%
0.42
%
0.49
%
0.70
%
0.47
%
0.47
%
0.36
%
Non-performing loans ("NPLs") to total loans and leases (1)
0.22
%
0.20
%
0.21
%
0.19
%
0.18
%
0.22
%
0.18
%
Reserves to NPLs (1)
466.11
%
494.46
%
405.56
%
425.95
%
466.34
%
466.11
%
466.34
%
Non-performing assets ("NPAs") to total assets
0.14
%
0.13
%
0.15
%
0.15
%
0.14
%
0.14
%
0.14
%
Customers Bank Capital Ratios (3):
Common equity Tier 1 capital to risk-weighted assets
13.0
%
11.96
%
11.31
%
11.21
%
11.42
%
13.0
%
11.42
%
Tier 1 capital to risk-weighted assets
13.0
%
11.96
%
11.31
%
11.21
%
11.42
%
13.0
%
11.42
%
Total capital to risk-weighted assets
14.5
%
13.38
%
12.64
%
12.40
%
12.65
%
14.5
%
12.65
%
Tier 1 capital to average assets (leverage ratio)
8.3
%
8.00
%
8.09
%
8.15
%
8.10
%
8.3
%
8.10
%
(1) Metric is a spot balance for the last day of each quarter presented.
(2) Customers' reasons for the use of these non-GAAP measures and a detailed reconciliation between the non-GAAP measures and the comparable GAAP amounts are included at the end of this document.
(3) Regulatory capital ratios are estimated for Q3 2023 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected to apply the CECL capital transition provisions which delayed the effects of CECL on regulatory capital for two years until January 1, 2022, followed by a three-year transition period. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million will be phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of September 30, 2023, our regulatory capital ratios reflected 50%, or $30.8 million, benefit associated with the CECL transition provisions.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data)
Nine Months Ended
Q3
Q2
Q1
Q4
Q3
September 30,
2023
2023
2023
2022
2022
2023
2022
Interest income:
Loans and leases
$
271,107
$
241,745
$
244,212
$
217,471
$
200,438
$
757,064
$
526,478
Investment securities
54,243
48,026
47,316
42,953
30,546
149,585
76,283
Interest earning deposits
43,800
27,624
10,395
6,754
2,949
81,819
4,198
Loans held for sale
4,664
11,149
11,701
1,269
19
27,514
95
Other
2,526
1,616
1,321
1,200
1,964
5,463
8,672
Total interest income
376,340
330,160
314,945
269,647
235,916
1,021,445
615,726
Interest expense:
Deposits
145,825
136,375
143,930
124,366
65,380
426,130
101,873
FHLB advances
26,485
24,285
10,370
4,464
4,684
61,140
7,000
FRB advances
—
—
6,286
—
—
6,286
—
Subordinated debt
2,689
2,689
2,689
2,688
2,689
8,067
8,067
Other borrowings
1,568
1,540
1,771
2,992
4,131
4,879
10,203
Total interest expense
176,567
164,889
165,046
134,510
76,884
506,502
127,143
Net interest income
199,773
165,271
149,899
135,137
159,032
514,943
488,583
Provision (benefit) for credit losses
17,856
23,629
19,603
28,216
(7,994
)
61,088
31,850
Net interest income after provision (benefit) for credit losses
181,917
141,642
130,296
106,921
167,026
453,855
456,733
Non-interest income:
Commercial lease income
8,901
8,917
9,326
8,135
7,097
27,144
19,584
Loan fees
6,029
4,271
3,990
4,017
3,008
14,290
8,171
Bank-owned life insurance
1,973
4,997
2,647
1,975
3,449
9,617
13,722
Mortgage warehouse transactional fees
1,018
1,376
1,074
1,295
1,545
3,468
5,443
Gain (loss) on sale of SBA and other loans
(348
)
(761
)
—
—
106
(1,109
)
3,155
Loss on sale of capital call lines of credit
—
(5,037
)
—
—
—
(5,037
)
—
Loss on sale of consumer installment loans
—
—
—
—
(23,465
)
—
(23,465
)
Net gain (loss) on sale of investment securities
(429
)
—
—
(16,937
)
(2,135
)
(429
)
(6,227
)
Legal settlement gain
—
—
—
7,519
—
—
—
Other
631
2,234
1,084
1,341
1,378
3,949
4,544
Total non-interest income
17,775
15,997
18,121
7,345
(9,017
)
51,893
24,927
Non-interest expense:
Salaries and employee benefits
33,845
33,120
32,345
29,194
31,230
99,310
83,171
Technology, communication and bank operations
15,667
16,407
16,589
18,604
19,588
48,663
66,394
Commercial lease depreciation
7,338
7,328
7,875
6,518
5,966
22,541
16,460
Professional services
8,569
9,192
7,596
6,825
6,269
25,357
20,640
Loan servicing
3,858
4,777
4,661
4,460
3,851
13,296
10,563
Occupancy
2,471
2,519
2,760
3,672
2,605
7,750
9,934
FDIC assessments, non-income taxes and regulatory fees
8,551
9,780
2,728
2,339
2,528
21,059
6,530
Advertising and promotion
650
546
1,049
1,111
762
2,245
1,430
Legal settlement expense
4,096
—
—
—
—
4,096
—
Other
4,421
5,628
4,530
5,696
3,399
14,579
11,088
Total non-interest expense
89,466
89,297
80,133
78,419
76,198
258,896
226,210
Income before Income tax expense
110,226
68,342
68,284
35,847
81,811
246,852
255,450
Income tax expense
23,470
20,768
14,563
7,136
17,899
58,801
56,127
Net income
86,756
47,574
53,721
28,711
63,912
188,051
199,323
Preferred stock dividends
3,803
3,567
3,456
3,088
2,548
10,826
6,544
Net income available to common shareholders
$
82,953
$
44,007
$
50,265
$
25,623
$
61,364
$
177,225
$
192,779
Basic earnings per common share
$
2.65
$
1.41
$
1.58
$
0.79
$
1.89
$
5.63
$
5.89
Diluted earnings per common share
2.58
1.39
1.55
0.77
1.85
5.53
5.72
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
September 30,
June 30,
March 31,
December 31,
September 30,
2023
2023
2023
2022
2022
ASSETS
Cash and due from banks
$
68,288
$
54,127
$
77,251
$
58,025
$
41,520
Interest earning deposits
3,351,686
3,101,097
1,969,434
397,781
362,945
Cash and cash equivalents
3,419,974
3,155,224
2,046,685
455,806
404,465
Investment securities, at fair value
2,773,207
2,824,638
2,926,969
2,987,500
2,943,694
Investment securities held to maturity
1,178,370
1,258,560
870,294
840,259
886,294
Loans held for sale
150,368
78,108
424,057
328,312
5,224
Loans receivable, mortgage warehouse, at fair value
962,566
1,006,268
1,247,367
1,323,312
1,569,090
Loans receivable, PPP
137,063
188,763
246,258
998,153
1,154,632
Loans and leases receivable
12,463,485
12,637,768
13,145,352
13,144,894
12,607,742
Allowance for credit losses on loans and leases
(139,213
)
(139,656
)
(130,281
)
(130,924
)
(130,197
)
Total loans and leases receivable, net of allowance for credit losses on loans and leases
13,423,901
13,693,143
14,508,696
15,335,435
15,201,267
FHLB, Federal Reserve Bank, and other restricted stock
126,098
126,240
124,733
74,196
64,112
Accrued interest receivable
123,984
119,501
123,754
123,374
107,621
Bank premises and equipment, net
7,789
8,031
8,581
9,025
6,610
Bank-owned life insurance
291,670
290,322
339,607
338,441
336,130
Goodwill and other intangibles
3,629
3,629
3,629
3,629
3,629
Other assets
358,162
471,169
374,609
400,135
408,575
Total assets
$
21,857,152
$
22,028,565
$
21,751,614
$
20,896,112
$
20,367,621
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, non-interest bearing deposits
$
4,758,682
$
4,490,198
$
3,487,517
$
1,885,045
$
2,993,793
Interest bearing deposits
13,436,682
13,460,233
14,236,100
16,271,908
14,528,645
Total deposits
18,195,364
17,950,431
17,723,617
18,156,953
17,522,438
Federal funds purchased
—
—
—
—
365,000
FHLB advances
1,529,839
2,046,142
2,052,143
800,000
500,000
Other borrowings
123,775
123,710
123,645
123,580
123,515
Subordinated debt
182,161
182,091
182,021
181,952
181,882
Accrued interest payable and other liabilities
264,406
269,539
249,168
230,666
287,855
Total liabilities
20,295,545
20,571,913
20,330,594
19,493,151
18,980,690
Preferred stock
137,794
137,794
137,794
137,794
137,794
Common stock
35,330
35,301
35,258
35,012
34,948
Additional paid in capital
559,346
555,737
552,255
551,721
549,066
Retained earnings
1,101,359
1,018,406
974,399
924,134
898,511
Accumulated other comprehensive income (loss), net
(149,812
)
(168,176
)
(156,276
)
(163,096
)
(156,126
)
Treasury stock, at cost
(122,410
)
(122,410
)
(122,410
)
(82,604
)
(77,262
)
Total shareholders' equity
1,561,607
1,456,652
1,421,020
1,402,961
1,386,931
Total liabilities and shareholders' equity
$
21,857,152
$
22,028,565
$
21,751,614
$
20,896,112
$
20,367,621
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Three Months Ended
September 30, 2023
June 30, 2023
September 30, 2022
Average
Balance
Interest
Income or
Expense
Average
Yield or
Cost (%)
Average
Balance
Interest
Income or
Expense
Average
Yield or
Cost (%)
Average
Balance
Interest
Income or
Expense
Average
Yield or
Cost (%)
Assets
Interest earning deposits
$
3,211,753
$
43,800
5.41
%
$
2,150,154
$
27,624
5.15
%
$
528,001
$
2,949
2.22
%
Investment securities (1)
4,240,116
54,243
5.12
%
3,949,732
48,026
4.86
%
3,770,922
30,546
3.24
%
Loans and leases:
Commercial industrial:
Specialty lending loans and leases (2)
5,717,252
157,671
10.94
%
5,832,485
121,779
8.37
%
5,064,730
64,753
5.07
%
Other commercial industrial loans (2)
1,613,614
28,012
6.89
%
1,672,667
26,028
6.24
%
1,585,136
18,794
4.70
%
Commercial loans to mortgage companies
1,159,698
16,916
5.79
%
1,300,496
19,606
6.05
%
1,623,624
17,092
4.18
%
Multifamily loans
2,141,384
21,292
3.94
%
2,181,617
21,095
3.88
%
2,206,953
20,427
3.67
%
Loans receivable, PPP
166,164
604
1.44
%
207,127
1,633
3.16
%
1,349,403
14,666
4.31
%
Non-owner occupied commercial real estate loans
1,425,831
21,208
5.90
%
1,428,086
19,877
5.58
%
1,372,244
15,595
4.51
%
Residential mortgages
528,022
5,965
4.48
%
535,739
5,735
4.28
%
513,694
5,008
3.87
%
Installment loans
1,147,069
24,103
8.34
%
1,684,215
37,141
8.84
%
1,938,199
44,122
9.03
%
Total loans and leases (3)
13,899,034
275,771
7.87
%
14,842,432
252,894
6.83
%
15,653,983
200,457
5.08
%
Other interest-earning assets
134,416
2,526
7.45
%
131,362
1,616
4.93
%
68,549
1,964
11.37
%
Total interest-earning assets
21,485,319
376,340
6.96
%
21,073,680
330,160
6.28
%
20,021,455
235,916
4.68
%
Non-interest-earning assets
492,691
581,055
492,911
Total assets
$
21,978,010
$
21,654,735
$
20,514,366
Liabilities
Interest checking accounts
$
5,758,215
$
58,637
4.04
%
$
5,309,775
$
49,862
3.77
%
$
6,669,787
$
33,685
2.00
%
Money market deposit accounts
2,181,184
22,983
4.18
%
1,978,546
19,678
3.99
%
5,789,991
24,348
1.67
%
Other savings accounts
1,077,298
11,582
4.27
%
997,205
9,839
3.96
%
625,908
1,818
1.15
%
Certificates of deposit
4,466,522
52,623
4.67
%
5,020,205
56,996
4.55
%
1,141,970
5,529
1.92
%
Total interest-bearing deposits (4)
13,483,219
145,825
4.29
%
13,305,731
136,375
4.11
%
14,227,656
65,380
1.82
%
Federal funds purchased
—
—
—
%
—
—
—
%
513,011
2,871
2.22
%
Borrowings
2,328,955
30,742
5.24
%
2,357,981
28,514
4.85
%
874,497
8,633
3.92
%
Total interest-bearing liabilities
15,812,174
176,567
4.43
%
15,663,712
164,889
4.22
%
15,615,164
76,884
1.95
%
Non-interest-bearing deposits (4)
4,347,977
4,258,711
3,245,963
Total deposits and borrowings
20,160,151
3.48
%
19,922,423
3.32
%
18,861,127
1.62
%
Other non-interest-bearing liabilities
306,822
259,111
255,735
Total liabilities
20,466,973
20,181,534
19,116,862
Shareholders' equity
1,511,037
1,473,201
1,397,504
Total liabilities and shareholders' equity
$
21,978,010
$
21,654,735
$
20,514,366
Net interest income
199,773
165,271
159,032
Tax-equivalent adjustment
405
390
334
Net interest earnings
$
200,178
$
165,661
$
159,366
Interest spread
3.48
%
2.96
%
3.06
%
Net interest margin
3.70
%
3.14
%
3.16
%
Net interest margin tax equivalent
3.70
%
3.15
%
3.16
%
Net interest margin tax equivalent excl. PPP (5)
3.75
%
3.20
%
3.18
%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 3.24%, 3.11% and 1.48% for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, presented to approximate interest income as a taxable asset and excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED)
(Dollars in thousands)
Nine Months Ended
September 30, 2023
September 30, 2022
Average
Balance
Interest
Income or
Expense
Average
Yield or
Cost (%)
Average
Balance
Interest
Income or
Expense
Average
Yield or
Cost (%)
Assets
Interest earning deposits
$
2,100,435
$
81,819
5.21
%
$
595,305
$
4,197
0.94
%
Investment securities (1)
4,074,464
149,585
4.90
%
3,969,809
76,283
2.56
%
Loans and leases:
Commercial industrial:
Specialty lending loans and leases (2)
5,748,053
383,138
8.91
%
3,963,180
127,304
4.29
%
Other commercial industrial loans (2)
1,663,494
79,610
6.40
%
1,496,772
46,768
4.18
%
Commercial loans to mortgage companies
1,240,403
53,934
5.81
%
1,785,495
46,713
3.50
%
Multifamily loans
2,176,294
62,857
3.86
%
1,863,915
51,506
3.69
%
Loans receivable, PPP
418,194
25,788
8.24
%
1,946,651
72,132
4.95
%
Non-owner occupied commercial real estate loans
1,434,459
61,284
5.71
%
1,331,037
40,551
4.07
%
Residential mortgages
535,502
17,298
4.32
%
482,263
13,586
3.77
%
Installment loans
1,517,632
100,669
8.87
%
1,881,160
128,013
9.10
%
Total loans and leases (3)
14,734,031
784,578
7.12
%
14,750,473
526,573
4.77
%
Other interest-earning assets
119,187
5,463
6.13
%
62,955
8,673
NM (6)
Total interest-earning assets
21,028,117
1,021,445
6.49
%
19,378,542
615,726
4.25
%
Non-interest-earning assets
537,160
526,437
Total assets
$
21,565,277
$
19,904,979
Liabilities
Interest checking accounts
$
6,181,097
$
178,984
3.87
%
$
6,286,224
$
55,059
1.17
%
Money market deposit accounts
2,208,853
63,444
3.84
%
5,128,270
36,545
0.95
%
Other savings accounts
966,539
27,707
3.83
%
732,801
3,359
0.61
%
Certificates of deposit
4,663,548
155,995
4.47
%
710,130
6,910
1.30
%
Total interest-bearing deposits (4)
14,020,037
426,130
4.06
%
12,857,425
101,873
1.06
%
Federal funds purchased
5,055
188
4.97
%
416,344
4,374
1.40
%
Borrowings
2,160,332
80,184
4.96
%
783,644
20,896
3.57
%
Total interest-bearing liabilities
16,185,424
506,502
4.18
%
14,057,413
127,143
1.21
%
Non-interest-bearing deposits (4)
3,642,832
4,206,778
Total deposits and borrowings
19,828,256
3.42
%
18,264,191
0.93
%
Other non-interest-bearing liabilities
271,387
250,783
Total liabilities
20,099,643
18,514,974
Shareholders' equity
1,465,634
1,390,005
Total liabilities and shareholders' equity
$
21,565,277
$
19,904,979
Net interest income
514,943
488,583
Tax-equivalent adjustment
1,170
843
Net interest earnings
$
516,113
$
489,426
Interest spread
3.08
%
3.32
%
Net interest margin
3.27
%
3.37
%
Net interest margin tax equivalent
3.28
%
3.38
%
Net interest margin tax equivalent excl. PPP (5)
3.27
%
3.27
%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 3.23% and 0.80% for the nine months ended September 30, 2023 and 2022, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the nine months ended September 30, 2023 and 2022, presented to approximate interest income as a taxable asset and excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
(6) Not meaningful.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands)
September 30,
June 30,
March 31,
December 31,
September 30,
2023
2023
2023
2022
2022
Loans and leases held for investment
Commercial:
Commercial industrial:
Specialty lending
$
5,422,161
$
5,534,832
$
5,519,176
$
5,412,887
$
5,103,974
Other commercial industrial
1,115,364
1,052,145
1,168,161
1,135,336
1,064,332
Multifamily
2,130,213
2,151,734
2,195,211
2,213,019
2,263,268
Loans to mortgage companies
1,042,549
1,108,598
1,374,894
1,447,919
1,708,587
Commercial real estate owner occupied
794,815
842,042
895,314
885,339
726,670
Loans receivable, PPP
137,063
188,763
246,258
998,153
1,154,632
Commercial real estate non-owner occupied
1,178,203
1,211,091
1,245,248
1,290,730
1,263,211
Construction
252,588
212,214
188,123
162,009
136,133
Total commercial loans and leases
12,072,956
12,301,419
12,832,385
13,545,392
13,420,807
Consumer:
Residential
483,133
487,199
494,815
497,952
465,772
Manufactured housing
40,129
41,664
43,272
45,076
46,990
Installment:
Personal
629,843
752,470
849,420
964,641
1,056,432
Other
337,053
250,047
419,085
413,298
341,463
Total installment loans
966,896
1,002,517
1,268,505
1,377,939
1,397,895
Total consumer loans
1,490,158
1,531,380
1,806,592
1,920,967
1,910,657
Total loans and leases held for investment
$
13,563,114
$
13,832,799
$
14,638,977
$
15,466,359
$
15,331,464
Loans held for sale
Commercial:
Multifamily
$
—
$
—
$
4,051
$
4,079
$
4,108
Commercial real estate non-owner occupied
—
—
16,000
—
—
Total commercial loans and leases
—
—
20,051
4,079
4,108
Consumer:
Residential
1,005
1,234
821
829
1,116
Installment:
Personal
124,848
76,874
307,336
133,801
—
Other
24,515
—
95,849
189,603
—
Total installment loans
149,363
76,874
403,185
323,404
—
Total consumer loans
150,368
78,108
404,006
324,233
1,116
Total loans held for sale
$
150,368
$
78,108
$
424,057
$
328,312
$
5,224
Total loans and leases portfolio
$
13,713,482
$
13,910,907
$
15,063,034
$
15,794,671
$
15,336,688
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
September 30,
June 30,
March 31,
December 31,
September 30,
2023
2023
2023
2022
2022
Demand, non-interest bearing
$
4,758,682
$
4,490,198
$
3,487,517
$
1,885,045
$
2,993,793
Demand, interest bearing
5,824,410
5,551,037
5,791,302
8,476,027
7,124,663
Total demand deposits
10,583,092
10,041,235
9,278,819
10,361,072
10,118,456
Savings
1,118,353
1,048,229
924,359
811,798
592,002
Money market
2,499,593
2,004,264
2,019,633
2,734,217
4,913,967
Time deposits
3,994,326
4,856,703
5,500,806
4,249,866
1,898,013
Total deposits
$
18,195,364
$
17,950,431
$
17,723,617
$
18,156,953
$
17,522,438
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)
As of September 30, 2023
As of June 30, 2023
As of September 30, 2022
Total
loans
Non
accrual
/NPLs
Allowance
for credit
losses
Total
NPLs to
total loans
Total
reserves to
total NPLs
Total
loans
Non
accrual
/NPLs
Allowance
for credit
losses
Total
NPLs to
total loans
Total
reserves to
total NPLs
Total
loans
Non
accrual
/NPLs
Allowance
for credit
losses
Total
NPLs to
total loans
Total
reserves to
total NPLs
Loan type
Commercial industrial, including specialty lending (1)
$
6,617,508
$
5,767
$
24,986
0.09
%
433.26
%
$
6,689,307
$
4,441
$
29,092
0.07
%
655.08
%
$
6,307,803
$
4,078
$
15,131
0.06
%
371.04
%
Multifamily
2,130,213
—
15,870
—
%
—
%
2,151,734
4,022
15,400
0.19
%
382.89
%
2,263,268
1,158
14,244
0.05
%
1230.05
%
Commercial real estate owner occupied
794,815
7,442
10,363
0.94
%
139.25
%
842,042
3,304
10,215
0.39
%
309.17
%
726,670
2,198
6,220
0.30
%
282.98
%
Commercial real estate non-owner occupied
1,178,203
—
15,819
—
%
—
%
1,211,091
—
13,495
—
%
—
%
1,263,211
—
11,332
—
%
—
%
Construction
252,588
—
3,130
—
%
—
%
212,214
—
2,639
—
%
—
%
136,133
—
1,614
—
%
—
%
Total commercial loans and leases receivable
10,973,327
13,209
70,168
0.12
%
531.21
%
11,106,388
11,767
70,841
0.11
%
602.03
%
10,697,085
7,434
48,541
0.07
%
652.96
%
Residential
483,133
6,559
6,802
1.36
%
103.70
%
487,199
7,306
6,846
1.50
%
93.70
%
465,772
6,438
5,453
1.38
%
84.70
%
Manufactured housing
40,129
2,582
4,080
6.43
%
158.02
%
41,664
2,634
4,338
6.32
%
164.69
%
46,990
2,584
4,482
5.50
%
173.45
%
Installment
966,896
7,299
58,163
0.75
%
796.86
%
1,002,517
6,537
57,631
0.65
%
881.61
%
1,397,895
6,848
71,721
0.49
%
1047.33
%
Total consumer loans receivable
1,490,158
16,440
69,045
1.10
%
419.98
%
1,531,380
16,477
68,815
1.08
%
417.64
%
1,910,657
15,870
81,656
0.83
%
514.53
%
Loans and leases receivable (1)
12,463,485
29,649
139,213
0.24
%
469.54
%
12,637,768
28,244
139,656
0.22
%
494.46
%
12,607,742
23,304
130,197
0.18
%
558.69
%
Loans receivable, PPP
137,063
—
—
—
%
—
%
188,763
—
—
—
%
—
%
1,154,632
—
—
—
%
—
%
Loans receivable, mortgage warehouse, at fair value
962,566
—
—
—
%
—
%
1,006,268
—
—
—
%
—
%
1,569,090
—
—
—
%
—
%
Total loans held for sale
150,368
218
—
0.14
%
—
%
78,108
—
—
—
%
—
%
5,224
4,615
—
88.34
%
—
%
Total portfolio
$
13,713,482
$
29,867
$
139,213
0.22
%
466.11
%
$
13,910,907
$
28,244
$
139,656
0.20
%
494.46
%
$
15,336,688
$
27,919
$
130,197
0.18
%
466.34
%
(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)
Q3
Q2
Q1
Q4
Q3
Nine Months Ended
September 30,
2023
2023 (1)
2023
2022
2022
2023
2022
Loan type
Commercial industrial, including specialty lending
$
2,974
$
258
$
(71
)
$
12,960
$
2,581
$
3,161
$
2,106
Multifamily
1,999
1,448
—
—
—
3,447
1,653
Commercial real estate owner occupied
39
(34
)
—
(2
)
—
5
(49
)
Commercial real estate non-owner occupied
—
266
4,234
972
4,831
4,500
4,982
Construction
—
—
(116
)
(10
)
(10
)
(116
)
(226
)
Residential
13
24
(2
)
7
(13
)
35
(54
)
Installment
12,473
13,602
14,606
13,237
11,108
40,681
30,792
Total net charge-offs (recoveries) from loans held for investment
$
17,498
$
15,564
$
18,651
$
27,164
$
18,497
$
51,713
$
39,204
(1) Excludes $6.2 million of charge-offs for certain PCD loans acquired from the FDIC that were immediately applied against $8.7 million of allowance for credit losses on PCD loans recognized upon the acquisition of the loan portfolio on June 15, 2023. Subsequent recoveries and charge-offs of these PCD loans will be included in the period in which they occur.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED
We believe that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our ongoing financial results, which we believe enhance an overall understanding of our performance and increases comparability of our period to period results. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. The non-GAAP measures presented are not necessarily comparable to non-GAAP measures that may be presented by other financial institutions. Although non-GAAP financial measures are frequently used in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results of operations or financial condition as reported under GAAP.
The following tables present reconciliations of GAAP to non-GAAP measures disclosed within this document.
Core Earnings - Customers Bancorp
Nine Months Ended
September 30,
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
(Dollars in thousands, except per share data)
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
GAAP net income to common shareholders
$
82,953
$
2.58
$
44,007
$
1.39
$
50,265
$
1.55
$
25,623
$
0.77
$
61,364
$
1.85
$
177,225
$
5.53
$
192,779
$
5.72
Reconciling items (after tax):
Severance expense
—
—
141
0.00
637
0.02
—
—
1,058
0.03
778
0.02
1,058
0.03
Impairments on fixed assets and leases
—
—
12
0.00
86
0.00
—
—
126
0.00
98
0.00
1,051
0.03
Loss on sale of consumer installment loans
—
—
—
—
—
—
—
—
18,221
0.55
—
—
18,221
0.54
Loss on sale of capital call lines of credit
—
—
3,914
0.12
—
—
—
—
—
—
3,914
0.12
—
—
(Gains) losses on investment securities
492
0.02
49
0.00
(49
)
0.00
13,543
0.41
1,859
0.06
492
0.02
5,383
0.16
Derivative credit valuation adjustment
(151
)
0.00
(101
)
0.00
204
0.01
202
0.01
(358
)
(0.01
)
(48
)
0.00
(1,445
)
(0.04
)
Tax on surrender of bank-owned life insurance policies
—
—
4,141
0.13
—
—
—
—
—
—
4,141
0.13
—
—
Core earnings
$
83,294
$
2.59
$
52,163
$
1.65
$
51,143
$
1.58
$
39,368
$
1.19
$
82,270
$
2.48
$
186,600
$
5.82
$
217,047
$
6.44
Nine Months Ended
September 30,
Core Earnings, excluding PPP - Customers Bancorp
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
(Dollars in thousands, except per share data)
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
USD
Per
share
GAAP net income to common shareholders
$
82,953
$
2.58
$
44,007
$
1.39
$
50,265
$
1.55
$
25,623
$
0.77
$
61,364
$
1.85
$
177,225
$
5.53
$
192,779
$
5.72
Less: PPP net income (loss) (after tax)
(11,168
)
(0.35
)
(2,068
)
(0.07
)
9,606
0.30
(5,956
)
(0.18
)
5,846
0.18
(3,630
)
(0.11
)
43,625
1.29
Net income to common shareholders, excluding PPP
94,121
2.93
46,075
1.46
40,659
1.26
31,579
0.95
55,518
1.67
180,855
5.65
149,154
4.43
Reconciling items (after tax):
Severance expense
—
—
141
0.00
637
0.02
—
—
1,058
0.03
778
0.02
1,058
0.03
Impairments on fixed assets and leases
—
—
12
0.00
86
0.00
—
—
126
0.00
98
0.00
1,051
0.03
Loss on sale of consumer installment loans
—
—
—
—
—
—
—
—
18,221
0.55
—
—
18,221
0.54
Loss on sale of capital call lines of credit
—
—
3,914
0.12
—
—
—
—
—
—
3,914
0.12
—
—
(Gains) losses on investment securities
492
0.02
49
0.00
(49
)
0.00
13,543
0.41
1,859
0.06
492
0.02
5,383
0.16
Derivative credit valuation adjustment
(151
)
0.00
(101
)
0.00
204
0.01
202
0.01
(358
)
(0.01
)
(48
)
0.00
(1,445
)
(0.04
)
Tax on surrender of bank-owned life insurance policies
—
—
4,141
0.13
—
—
—
—
—
—
4,141
0.13
—
—
Core earnings, excluding PPP
$
94,462
$
2.94
$
54,231
$
1.72
$
41,537
$
1.28
$
45,324
$
1.37
$
76,424
$
2.30
$
190,230
$
5.93
$
173,422
$
5.15
Core Return on Average Assets - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net income
$
86,756
$
47,574
$
53,721
$
28,711
$
63,912
$
188,051
$
199,323
Reconciling items (after tax):
Severance expense
—
141
637
—
1,058
778
1,058
Impairments on fixed assets and leases
—
12
86
—
126
98
1,051
Loss on sale of consumer installment loans
—
—
—
—
18,221
—
18,221
Loss on sale of capital call lines of credit
—
3,914
—
—
—
3,914
—
(Gains) losses on investment securities
492
49
(49
)
13,543
1,859
492
5,383
Derivative credit valuation adjustment
(151
)
(101
)
204
202
(358
)
(48
)
(1,445
)
Tax on surrender of bank-owned life insurance policies
—
4,141
—
—
—
4,141
—
Core net income
$
87,097
$
55,730
$
54,599
$
42,456
$
84,818
$
197,426
$
223,591
Average total assets
$
21,978,010
$
21,654,735
$
21,052,920
$
20,717,362
$
20,514,366
$
21,565,277
$
19,904,979
Core return on average assets
1.57
%
1.03
%
1.05
%
0.81
%
1.64
%
1.22
%
1.50
%
Core Return on Average Assets, excluding PPP - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net income
$
86,756
$
47,574
$
53,721
$
28,711
$
63,912
$
188,051
$
199,323
Less: PPP net income (loss) (after tax)
(11,168
)
(2,068
)
9,606
(5,956
)
5,846
(3,630
)
43,625
Net income, excluding PPP
97,924
49,642
44,115
34,667
58,066
191,681
155,698
Reconciling items (after tax):
Severance expense
—
141
637
—
1,058
778
1,058
Impairments on fixed assets and leases
—
12
86
—
126
98
1,051
Loss on sale of consumer installment loans
—
—
—
—
18,221
—
18,221
Loss on sale of capital call lines of credit
—
3,914
—
—
—
3,914
—
(Gains) losses on investment securities
492
49
(49
)
13,543
1,859
492
5,383
Derivative credit valuation adjustment
(151
)
(101
)
204
202
(358
)
(48
)
(1,445
)
Tax on surrender of bank-owned life insurance policies
—
4,141
—
—
—
4,141
—
Core net income, excluding PPP
$
98,265
$
57,798
$
44,993
$
48,412
$
78,972
$
201,056
$
179,966
Average total assets
$
21,978,010
$
21,654,735
$
21,052,920
$
20,717,362
$
20,514,366
$
21,565,277
$
19,904,979
Core return on average assets, excluding PPP
1.77
%
1.07
%
0.87
%
0.93
%
1.53
%
1.25
%
1.21
%
Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net income
$
86,756
$
47,574
$
53,721
$
28,711
$
63,912
$
188,051
$
199,323
Reconciling items:
Income tax expense
23,470
20,768
14,563
7,136
17,899
58,801
56,127
Provision (benefit) for credit losses
17,856
23,629
19,603
28,216
(7,994
)
61,088
31,850
Provision (benefit) for credit losses on unfunded commitments
48
(304
)
280
153
254
24
753
Severance expense
—
182
809
—
1,363
991
1,363
Impairments on fixed assets and leases
—
15
109
—
162
124
1,362
Loss on sale of consumer installment loans
—
—
—
—
23,465
—
23,465
Loss on sale of capital call lines of credit
—
5,037
—
—
—
5,037
—
(Gains) losses on investment securities
626
62
(62
)
16,909
2,394
626
6,965
Derivative credit valuation adjustment
(192
)
(130
)
259
252
(461
)
(63
)
(1,873
)
Adjusted net income - pre-tax pre-provision
$
128,564
$
96,833
$
89,282
$
81,377
$
100,994
$
314,679
$
319,335
Average total assets
$
21,978,010
$
21,654,735
$
21,052,920
$
20,717,362
$
20,514,366
$
21,565,277
$
19,904,979
Adjusted ROAA - pre-tax pre-provision
2.32
%
1.79
%
1.72
%
1.56
%
1.95
%
1.95
%
2.14
%
Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision, excluding PPP - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net income
$
86,756
$
47,574
$
53,721
$
28,711
$
63,912
$
188,051
$
199,323
Less: PPP net income (loss) (after tax)
(11,168
)
(2,068
)
9,606
(5,956
)
5,846
(3,630
)
43,625
Net income, excluding PPP
97,924
49,642
44,115
34,667
58,066
191,681
155,698
Reconciling items:
Income tax expense
23,470
20,768
14,563
7,136
17,899
58,801
56,127
Provision (benefit) for credit losses
17,856
23,629
19,603
28,216
(7,994
)
61,088
31,850
Provision (benefit) for credit losses on unfunded commitments
48
(304
)
280
153
254
24
753
Severance expense
—
182
809
—
1,363
991
1,363
Impairments on fixed assets and leases
—
15
109
—
162
124
1,362
Loss on sale of consumer installment loans
—
—
—
—
23,465
—
23,465
Loss on sale of capital call lines of credit
—
5,037
—
—
—
5,037
—
(Gains) losses on investment securities
626
62
(62
)
16,909
2,394
626
6,965
Derivative credit valuation adjustment
(192
)
(130
)
259
252
(461
)
(63
)
(1,873
)
Adjusted net income - pre-tax pre-provision, excluding PPP
$
139,732
$
98,901
$
79,676
$
87,333
$
95,148
$
318,309
$
275,710
Average total assets
$
21,978,010
$
21,654,735
$
21,052,920
$
20,717,362
$
20,514,366
$
21,565,277
$
19,904,979
Adjusted ROAA - pre-tax pre-provision, excluding PPP
2.52
%
1.83
%
1.53
%
1.67
%
1.84
%
1.97
%
1.85
%
Core Return on Average Common Equity - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net income to common shareholders
$
82,953
$
44,007
$
50,265
$
25,623
$
61,364
$
177,225
$
192,779
Reconciling items (after tax):
Severance expense
—
141
637
—
1,058
778
1,058
Impairments on fixed assets and leases
—
12
86
—
126
98
1,051
Loss on sale of consumer installment loans
—
—
—
—
18,221
—
18,221
Loss on sale of capital call lines of credit
—
3,914
—
—
—
3,914
—
(Gains) losses on investment securities
492
49
(49
)
13,543
1,859
492
5,383
Derivative credit valuation adjustment
(151
)
(101
)
204
202
(358
)
(48
)
(1,445
)
Tax on surrender of bank-owned life insurance policies
—
4,141
—
—
—
4,141
—
Core earnings
$
83,294
$
52,163
$
51,143
$
39,368
$
82,270
$
186,600
$
217,047
Average total common shareholders' equity
$
1,373,244
$
1,335,408
$
1,273,780
$
1,263,190
$
1,259,711
$
1,327,841
$
1,252,212
Core return on average common equity
24.06
%
15.67
%
16.28
%
12.36
%
25.91
%
18.79
%
23.17
%
Adjusted ROCE - Pre-Tax Pre-Provision - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net income to common shareholders
$
82,953
$
44,007
$
50,265
$
25,623
$
61,364
$
177,225
$
192,779
Reconciling items:
Income tax expense
23,470
20,768
14,563
7,136
17,899
58,801
56,127
Provision (benefit) for credit losses
17,856
23,629
19,603
28,216
(7,994
)
61,088
31,850
Provision (benefit) for credit losses on unfunded commitments
48
(304
)
280
153
254
24
753
Severance expense
—
182
809
—
1,363
991
1,363
Impairments on fixed assets and leases
—
15
109
—
162
124
1,362
Loss on sale of consumer installment loans
—
—
—
—
23,465
—
23,465
Loss on sale of capital call lines of credit
—
5,037
—
—
—
5,037
—
(Gains) losses on investment securities
626
62
(62
)
16,909
2,394
626
6,965
Derivative credit valuation adjustment
(192
)
(130
)
259
252
(461
)
(63
)
(1,873
)
Pre-tax pre-provision adjusted net income available to common shareholders
$
124,761
$
93,266
$
85,826
$
78,289
$
98,446
$
303,853
$
312,791
Average total common shareholders' equity
$
1,373,244
$
1,335,408
$
1,273,780
$
1,263,190
$
1,259,711
$
1,327,841
$
1,252,212
Adjusted ROCE - pre-tax pre-provision
36.04
%
28.01
%
27.33
%
24.59
%
31.01
%
30.59
%
33.40
%
Net Interest Margin, Tax Equivalent, excluding PPP - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net interest income
$
199,773
$
165,271
$
149,899
$
135,137
$
159,032
$
514,943
$
488,583
PPP net interest (income) expense
1,381
765
(14,106
)
2,791
(9,632
)
(11,960
)
(63,193
)
Tax-equivalent adjustment
405
390
375
342
334
1,170
843
Net interest income, tax equivalent, excluding PPP
$
201,559
$
166,426
$
136,168
$
138,270
$
149,734
$
504,153
$
426,233
GAAP average total interest earning assets
$
21,485,319
$
21,073,680
$
20,514,677
$
20,211,028
$
20,021,455
$
21,028,117
$
19,378,542
Average PPP loans
(166,164
)
(207,127
)
(889,235
)
(1,065,919
)
(1,349,403
)
(418,194
)
(1,946,651
)
Adjusted average total interest earning assets, excluding PPP
$
21,319,155
$
20,866,553
$
19,625,442
$
19,145,109
$
18,672,052
$
20,609,923
$
17,431,891
Net interest margin, tax equivalent, excluding PPP
3.75
%
3.20
%
2.80
%
2.87
%
3.18
%
3.27
%
3.27
%
Loan Yield, excluding PPP
Nine Months Ended
September 30,
(Dollars in thousands except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
Interest income on loans and leases
$
275,771
$
252,894
$
255,913
$
218,740
$
200,457
$
784,578
$
526,573
PPP interest income
(604
)
(1,633
)
(23,551
)
(7,249
)
(14,666
)
(25,788
)
(72,132
)
Interest income on core loans (Loans and leases, excluding PPP)
$
275,167
$
251,261
$
232,362
$
211,491
$
185,791
$
758,790
$
454,441
Average total loans and leases
$
13,899,034
$
14,842,432
$
15,477,973
$
15,388,003
$
15,653,983
$
14,734,031
$
14,750,473
Average PPP loans
(166,164
)
(207,127
)
(889,235
)
(1,065,919
)
(1,349,403
)
(418,194
)
(1,946,651
)
Adjusted average total loans and leases
$
13,732,870
$
14,635,305
$
14,588,738
$
14,322,084
$
14,304,580
$
14,315,837
$
12,803,822
Loan yield, excluding PPP
7.95
%
6.89
%
6.46
%
5.86
%
5.15
%
7.09
%
4.75
%
Core Efficiency Ratio - Customers Bancorp
Nine Months Ended
September 30,
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
2023
2022
GAAP net interest income
$
199,773
$
165,271
$
149,899
$
135,137
$
159,032
$
514,943
$
488,583
GAAP non-interest income
$
17,775
$
15,997
$
18,121
$
7,345
$
(9,017
)
$
51,893
$
24,927
Loss on sale of consumer installment loans
—
—
—
—
23,465
—
23,465
Loss on sale of capital call lines of credit
—
5,037
—
—
—
5,037
—
(Gains) losses on investment securities
626
62
(62
)
16,909
2,394
626
6,965
Derivative credit valuation adjustment
(192
)
(130
)
259
252
(461
)
(63
)
(1,873
)
Core non-interest income
18,209
20,966
18,318
24,506
16,381
57,493
53,484
Core revenue
$
217,982
$
186,237
$
168,217
$
159,643
$
175,413
$
572,436
$
542,067
GAAP non-interest expense
$
89,466
$
89,297
$
80,133
$
78,419
$
76,198
$
258,896
$
226,210
Severance expense
—
(182
)
(809
)
—
(1,363
)
(991
)
(1,363
)
Impairments on fixed assets and leases
—
(15
)
(109
)
—
(162
)
(124
)
(1,362
)
Core non-interest expense
$
89,466
$
89,100
$
79,215
$
78,419
$
74,673
$
257,781
$
223,485
Core efficiency ratio (1)
41.04
%
47.84
%
47.09
%
49.12
%
42.57
%
45.03
%
41.23
%
(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)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
GAAP total shareholders' equity
$
1,561,607
$
1,456,652
$
1,421,020
$
1,402,961
$
1,386,931
Reconciling items:
Preferred stock
(137,794
)
(137,794
)
(137,794
)
(137,794
)
(137,794
)
Goodwill and other intangibles
(3,629
)
(3,629
)
(3,629
)
(3,629
)
(3,629
)
Tangible common equity
$
1,420,184
$
1,315,229
$
1,279,597
$
1,261,538
$
1,245,508
GAAP total assets
$
21,857,152
$
22,028,565
$
21,751,614
$
20,896,112
$
20,367,621
Reconciling items:
Goodwill and other intangibles
(3,629
)
(3,629
)
(3,629
)
(3,629
)
(3,629
)
Tangible assets
$
21,853,523
$
22,024,936
$
21,747,985
$
20,892,483
$
20,363,992
Tangible common equity to tangible assets
6.5
%
6.0
%
5.9
%
6.0
%
6.1
%
Tangible Common Equity to Tangible Assets, excluding PPP - Customers Bancorp
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
GAAP total shareholders' equity
$
1,561,607
$
1,456,652
$
1,421,020
$
1,402,961
$
1,386,931
Reconciling items:
Preferred stock
(137,794
)
(137,794
)
(137,794
)
(137,794
)
(137,794
)
Goodwill and other intangibles
(3,629
)
(3,629
)
(3,629
)
(3,629
)
(3,629
)
Tangible common equity
$
1,420,184
$
1,315,229
$
1,279,597
$
1,261,538
$
1,245,508
GAAP total assets
$
21,857,152
$
22,028,565
$
21,751,614
$
20,896,112
$
20,367,621
Loans receivable, PPP
(137,063
)
(188,763
)
(246,258
)
(998,153
)
(1,154,632
)
Total assets, excluding PPP
$
21,720,089
$
21,839,802
$
21,505,356
$
19,897,959
$
19,212,989
Reconciling items:
Goodwill and other intangibles
(3,629
)
(3,629
)
(3,629
)
(3,629
)
(3,629
)
Tangible assets, excluding PPP
$
21,716,460
$
21,836,173
$
21,501,727
$
19,894,330
$
19,209,360
Tangible common equity to tangible assets, excluding PPP
6.5
%
6.0
%
6.0
%
6.3
%
6.5
%
Tangible Book Value per Common Share - Customers Bancorp
(Dollars in thousands, except share and per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
GAAP total shareholders' equity
$
1,561,607
$
1,456,652
$
1,421,020
$
1,402,961
$
1,386,931
Reconciling Items:
Preferred stock
(137,794
)
(137,794
)
(137,794
)
(137,794
)
(137,794
)
Goodwill and other intangibles
(3,629
)
(3,629
)
(3,629
)
(3,629
)
(3,629
)
Tangible common equity
$
1,420,184
$
1,315,229
$
1,279,597
$
1,261,538
$
1,245,508
Common shares outstanding
31,311,254
31,282,318
31,239,750
32,373,697
32,475,502
Tangible book value per common share
$
45.36
$
42.04
$
40.96
$
38.97
$
38.35
Core Loans (Total Loans and Leases, excluding PPP)
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Total loans and leases
$
13,713,482
$
13,910,907
$
15,063,034
$
15,794,671
$
15,336,688
Loans receivable, PPP
(137,063
)
(188,763
)
(246,258
)
(998,153
)
(1,154,632
)
Core Loans (Total loans and leases, excluding PPP)
$
13,576,419
$
13,722,144
$
14,816,776
$
14,796,518
$
14,182,056
Core Loans Held for Investment
(Total Loans and Leases Held for Investment, excluding PPP)
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Total loans and leases, held for investment
$
13,563,114
$
13,832,799
$
14,638,977
$
15,466,359
$
15,331,464
Loans receivable, PPP
(137,063
)
(188,763
)
(246,258
)
(998,153
)
(1,154,632
)
Core Loans Held for Investment
(Total loans and leases held for investment, excluding PPP)
$
13,426,051
$
13,644,036
$
14,392,719
$
14,468,206
$
14,176,832
Total Assets, excluding PPP
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Total assets
$
21,857,152
$
22,028,565
$
21,751,614
$
20,896,112
$
20,367,621
Loans receivable, PPP
(137,063
)
(188,763
)
(246,258
)
(998,153
)
(1,154,632
)
Total assets, excluding PPP
$
21,720,089
$
21,839,802
$
21,505,356
$
19,897,959
$
19,212,989
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP
(Dollars in thousands, except per share data)
Q3 2023
Q2 2023
Q1 2023
Q4 2022
Q3 2022
Loans and leases receivable
$
12,600,548
$
12,826,531
$
13,391,610
$
14,143,047
$
13,762,374
Loans receivable, PPP
(137,063
)
(188,763
)
(246,258
)
(998,153
)
(1,154,632
)
Loans and leases held for investment, excluding PPP
$
12,463,485
$
12,637,768
$
13,145,352
$
13,144,894
$
12,607,742
Allowance for credit losses on loans and leases
$
139,213
$
139,656
$
130,281
$
130,924
$
130,197
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP
1.12
%
1.11
%
0.99
%
1.00
%
1.03
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20231026731318/en/