SOURCE: Customers Bancorp, Inc.

Customers Bancorp, Inc.

April 14, 2016 16:15 ET

Customers Bancorp Reports First Quarter 2016 Net Income up 17.6% Over Prior Year

WYOMISSING, PA--(Marketwired - April 14, 2016) -

  • Q1 2016 Net Income of $16.4 Million Up 17.6% Over Q1 2015
  • Q1 2016 Fully Diluted Earnings Per Share of $0.57 Up 16.3% Over Q1 2015
  • Q1 2016 Return on Assets of 0.85%; Return on Common Equity of 12.8%
  • Q1 2016 Tangible Book Value Per Share Increased 12.6% Over Q1 2015
  • Strong Loan and Deposit Growth Continues
  • Exceptional Asset Quality With NPLs Only 0.20% of Total Loans
  • Strong Reserves for Loan Losses With Total Reserves 242% of NPLs
  • BankMobile Division Continues to Show Strong Growth; Anticipating Combination With Higher One Disbursement Business in Second Quarter of 2016

Customers Bancorp, Inc. (NYSE: CUBI), the parent company of Customers Bank (collectively "Customers"), reported net income to common shareholders of $16.4 million for the first quarter of 2016 ("Q1 2016") compared to net income to common shareholders of $14.0 million for the first quarter of 2015 ("Q1 2015"), an increase of $2.5 million, or 17.6%. Fully diluted earnings per share for Q1 2016 was $0.57 compared to $0.49 fully diluted earnings per share for Q1 2015, an increase of $0.08 per share, or 16.3%. Average fully diluted shares for Q1 2016 were 28.8 million compared to average fully diluted shares of 28.3 million for Q1 2015.

"Customers is very pleased to report a strong first quarter. The first quarter of 2016 was a difficult quarter for the banking industry with share prices decreasing by more than 10% for many publicly-traded banks, and a general expectation by investors of lower profits and increasing non-performing loans for the industry," stated Jay Sidhu, Chairman and CEO of Customers. "In contrast," Mr. Sidhu continued, "Customers has selected lower credit risk business segments to which it lends and has maintained strong underwriting standards to build a loan portfolio that we believe has significantly stronger credit quality than the banking industry as a whole with non-performing loans as a percentage of total loans well below our peer group and industry average. Our first quarter of 2016 results of $0.57 earnings per share with non-performing loans of only 0.20% of total loans reflects both our conservative lending practices and continued focus on positive operating leverage and risk management. Customers is off to a strong start to 2016 and continues to expect full year operating earnings of $2.40 to $2.50 per share from our core banking operations with total assets remaining below $10 billion."

Other financial highlights for Q1 2016 compared to Q1 2015 include:

  • Q1 2016 net interest income of $57.6 million increased $11.3 million, or 24.4%, from net interest income for Q1 2015 as average loan and security balances increased $1.7 billion, offset in part by a 2 basis point decrease in net interest margin to 2.88%.
    • Multi-family average loan balances increased $855 million, commercial loan average balances increased $428 million and mortgage banking average balances increased $275 million.
    • Net interest margin declined 2 basis points as the increased yields on the mortgage warehouse portfolio were offset by lower yields on the commercial loan portfolio and higher rates on short term borrowings used to fund the mortgage warehouse portfolio.
  • Customers reported a $2.0 million provision for loan losses in Q1 2016 compared to a $3.0 million provision for loan losses in Q1 2015. The Q1 2016 provision for loan losses included provisions for loan growth net of qualitative considerations of $0.8 million and impairment measured on specific loans of $1.4 million, offset in part by increased estimated cash flows expected to be collected on purchased credit-impaired loans of $0.3 million.
  • Q1 2016 non-interest income of $5.5 million decreased $0.2 million from Q1 2015 as a result of higher gains on sales of loans realized in Q1 2015. There were no sales of multi-family loans in Q1 2016.
  • Non-interest expenses in Q1 2016 of $33.9 million increased $6.4 million, or 23.4%, from non-interest expenses in Q1 2015. The increases in salary and benefits, regulatory assessments and fees, professional services, technology, and occupancy expenses resulted largely from the increases in resources and services necessary to support a $9.0 billion bank. The $6.4 million increase in non-interest expense compares with an $11.3 million increase in net interest income, creating positive operating leverage.
  • Customers achieved a return on average assets of 0.85% in Q1 2016 compared to 0.84% in Q1 2015, and achieved a return on average common equity of 12.85% in Q1 2016 compared to 12.48% in Q1 2015.
  • Total loans, including commercial loans held for sale, increased $1.8 billion, or 29.2%, to $7.9 billion as of March 31, 2016 compared to total loans as of March 31, 2015 of $6.1 billion. Multi-family loan balances increased $1.1 billion to $3.2 billion, commercial loans excluding lines of credit to mortgage companies increased $0.3 billion to $1.1 billion, commercial lines of credit to mortgage banking companies increased $0.3 billion to $1.9 billion, and non-owner occupied real estate loan balances increased $0.1 billion to $1.1 billion.
  • Total deposits increased $1.6 billion, or 32.4%, to $6.5 billion as of March 31, 2016 compared to total deposits of $4.9 billion as of March 31, 2015. Non-interest bearing demand deposits grew $108.8 million to $779.6 million, a 16.2% increase. Money market account balances were up $928 million to $3.2 billion as of March 31, 2016 compared to March 31, 2015, a 41.7% increase, and certificates of deposit accounts increased $536 million to $2.4 billion as of March 31, 2016, a 29.3% increase. The increase in deposits, combined with increases in borrowings and capital, provides the funding necessary for growing the loan portfolio, while helping Customers manage interest rate risk.
  • The Q1 2016 efficiency ratio was 53.74% compared to a 52.75% Q1 2015 efficiency ratio. Q1 2016 operating expenses includes BankMobile and Higher One disbursement business acquisition related net expenses of $1.9 million. Customers would have achieved an efficiency ratio from core banking operations of 50.7% excluding the BankMobile and Higher One disbursement acquisition related expenses. 
  • Pre-tax and pre-provision return on average assets reached 1.40% in Q1 2016 compared to 1.47% in Q1 2015. Pre-tax and pre-provision return on average common equity was 21.87% in Q1 2016 compared to 22.01% in Q1 2015. The small decline in pre-tax and pre-provision profitability in 2016 compared to 2015 reflects the increased costs related to the BankMobile operations and planned Higher One disbursement business acquisition.
  • Capital levels continue to exceed the "well-capitalized" threshold established by regulation at the bank and exceed the applicable Basel III regulatory thresholds for the holding company and the bank.
  • Customers issued $25 million of non-cumulative perpetual preferred stock paying a 6.5% dividend on January 29, 2016. The proceeds from the capital raise were used to support Customers' balance sheet growth and other general corporate purposes. 
  • Total Tier1 equity increased $142.9 million from March 31, 2015 to March 31, 2016, an increase in capital of 31.42% over the year.
  • The tangible book value per common share continued to increase, reaching $19.08 at March 31, 2016, compared to $16.94 at March 31, 2015, an increase of 12.6% year-over-year.

Q1 2016 compared to Q4 2015:

Customers' Q1 2016 net income to common shareholders of $16.4 million decreased $0.4 million, or 2.2%, from net income to common shareholders of $16.8 million for the fourth quarter of 2015 ("Q4 2015"). The $0.4 million decrease in Q1 2016 compared to Q4 2015 net income to common shareholders resulted primarily from increases in net interest income of $4.2 million to $57.6 million, and a decrease in provisions for loan losses of $4.2 million to $2.0 million being more than offset by a $3.9 million decline in non-interest income to $5.5 million, increased operating expenses of $2.4 million to $33.9 million, and a $2.1 million increase in income tax expense to $9.5 million. Discussing these changes further:

  • The $4.2 million increase in net interest income in Q1 2016 resulted from a combination of a $0.6 billion higher average loan balance in Q1 2016 as a result of loan growth, and a 5 basis point increase in net interest margin in Q1 2016 compared to Q4 2015.
  • The $4.2 million decrease in provision for loan losses in Q1 2016 resulted primarily from the $3.0 million Q4 2015 provision for losses resulting from the fraud identified in July of 2015. As of December 31, 2015 the entire balance of the fraudulent loan had been charged-off while Customers continues its efforts to recover the funds.
  • The $3.9 million decline in non-interest income in Q1 2016 resulted principally from Q4 2015 receipt of a $2.4 million benefit received on a bank-owned life insurance policy and a $0.9 million swap premium fee.
  • The increase in operating expenses of $2.4 million in Q1 2016 compared to Q4 2015 resulted largely from operating expenses related to headcount increases and general growth of our business. In addition, Customers accrued approximately $1.2 million related to legal matters. 

Other financial highlights for Q1 2016 compared to Q4 2015 include:

  • Net interest margin in Q1 2016 of 2.88% increased approximately 5 basis points compared to the net interest margin for Q4 2015 of 2.83%. The net interest margin increase resulted from an increase in 8 basis points in yield on earning assets, largely due to higher yields on the mortgage warehouse portfolio due to the increase in short term rates during December 2015, offset by an increase in average borrowing costs of 3 basis points. 
  • Customers did not sell any multi-family loans during Q1 2016. Multi-family loan sales of approximately $45.4 million, with a gain of $0.5 million, were closed in Q4 2015.

The following table presents a summary of key earnings and performance metrics for the quarter ended March 31, 2016 and the preceding four quarters, respectively:

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES    
EARNINGS SUMMARY - UNAUDITED    
           
(Dollars in thousands, except per-share data)          
  Q1 Q4 Q3 Q2 Q1
  2016 2015 2015 2015 2015
           
Net income available to common shareholders $ 16,413   $ 16,780   $ 14,309   $ 11,049   $ 13,952  
Basic earnings per common share ("EPS") $ 0.61   $ 0.62   $ 0.53   $ 0.41   $ 0.52  
Diluted EPS $ 0.57   $ 0.58   $ 0.50   $ 0.39   $ 0.49  
Average common shares outstanding - basic   26,945,062     26,886,694     26,872,787     26,839,799     26,777,389  
Average common shares outstanding - diluted   28,783,101     28,912,644     28,741,129     28,680,664     28,337,803  
Shares outstanding period end   27,037,005     26,901,801     26,882,383     26,871,745     26,824,039  
                     
Return on average assets   0.85 %   0.91 %   0.82 %   0.65 %   0.84 %
Return on average common equity   12.85 %   13.46 %   11.83 %   9.44 %   12.48 %
Return on average assets - pre-tax and pre-provision (1)   1.40 %   1.60 %   1.39 %   1.54 %   1.47 %
Return on average common equity - pre-tax and pre-provision (2)   21.87 %   24.35 %   20.53 %   22.87 %   22.01 %
Net interest margin, tax equivalent   2.88 %   2.83 %   2.79 %   2.73 %   2.90 %
Efficiency ratio   53.74 %   50.11 %   54.00 %   48.40 %   52.75 %
Non-performing loans (NPLs) to total loans (including held-for-sale loans)   0.20 %   0.15 %   0.27 %   0.16 %   0.19 %
Reserves to non-performing loans   242.10 %   341.71 %   197.01 %   369.90 %   293.61 %
Net charge-offs (recoveries) $ (455 ) $ 4,322   $ 5,657   $ 999   $ 1,001  
                     
Tier 1 equity to average tangible assets   7.15 %   7.16 %   7.27 %   7.36 %   6.72 %
Tangible common equity to average tangible assets (3)   6.17 %   6.37 %   6.49 %   6.54 %   6.71 %
Tangible book value per common share (period end) (4) $ 19.08   $ 18.39   $ 17.81   $ 17.28   $ 16.94  
Period end stock price $ 23.63   $ 27.22   $ 25.70   $ 26.89   $ 24.36  
                     
(1) Calculated as net income available to common shareholders, plus provision for loan loss and income tax expense divided by average total assets.
(2) Calculated as net income available to common shareholders, plus provision for loan loss and income tax expense divided by average common equity.
(3) Calculated as total equity less preferred stock and goodwill and other intangibles divided by total average assets less average goodwill and other intangibles.
(4) Calculated as total equity less preferred stock and goodwill and other intangibles divided by common shares outstanding at period end.
 

Capital

Customers recognizes the importance of not only being well capitalized in the current environment but to have adequate capital buffers to absorb any unexpected shocks. "Our tangible capital ratios came under pressure at March 31 this quarter due to a surge in the usage of lines of credit to mortgage companies (mortgage warehouse) on March 31 by about $300 million. We will control our asset growth over the next 18 months to two years by staying below $10 billion in assets. Over this time, we expect to demonstrate our business model's ability to gain new student demand deposit accounts and become the bank of choice for graduating students. Limiting our growth and possible future gains from our strategic alternatives for BankMobile should be significantly accretive to our capital ratios," stated Mr. Sidhu.

BankMobile

The growth of customer accounts and customer engagement continued at BankMobile. As previously announced, BankMobile now has more than 100,000 checking account customers, and will have approximately 2.1 million customers at the end of the second quarter of 2016, principally millennials, after completing our acquisition of Higher One's disbursement business. "We are very focused on continuing to build out BankMobile's technology software platform, integrating the Higher One disbursement business with the BankMobile business, developing and beginning to execute plans to continue to attract about 500,000 or more new millennial customers to its customer base each year and improve their engagement as a banking customer so they stay a BankMobile customer at graduation. This is a huge opportunity for us, marking an inflection point in BankMobile's development. We are committed to making BankMobile the primary bank for all our student customers and moving with them as they evolve to young professionals," stated Mr. Sidhu. "On April 4, the Higher One shareholders approved the sale to Customers and once the acquisition has been completed, our software and disbursement business to over 750 colleges and universities across America is expected to be a growth business. We have plans to increase our market share in providing software solutions to up to 1,000 campuses in the U.S. within three years," Mr. Sidhu continued.

Providing High Net Worth Families Loans for Their Multi-Family Holdings

Multi-family lending generally to high net worth families in New York City has been a growth business for Customers. Customers believes its portfolio is of strong credit quality and will perform well even under a stressed scenario. Here are some unique characteristics of Customers' multi-family loan portfolio:

  • Principally concentrated in New York City and principally to high net worth families;
  • Average loan size is between $4 million - $6 million;
  • Annual debt service coverage ratio is 138%;
  • Median loan-to-value is 70%;
  • All loans are individually stressed with an increase of 1% and 2% to the cap rate and an increase of 1.5% and 3% in interest rates;
  • All properties are inspected prior to a loan being granted and monitored thereafter on an annual basis by dedicated portfolio managers;
  • Customers to date has never experienced more than a 30 day delinquency on any of the multi-family loans that it has originated; and
  • Credit approval process is independent of customer sales and portfolio management process.

Asset Quality and Interest Rate Risk

Risk management is a critical component of how Customers creates long-term shareholder value. Two of the most important risks of banking to be understood and managed in an uncertain economy are asset quality and interest rate risk.

Asset quality risks must be diligently addressed during good economic times with prudent underwriting standards so that when the economy deteriorates the bank's capital is sufficient to absorb all losses without threatening its ability to operate and serve its community and other constituents. "Customers adopted prudent underwriting standards in 2009 and has not compromised those standards in the last six years," stated Mr. Sidhu. "Customers' non-performing loans at March 31, 2016 were only 0.20% of total loans, compared to our peer group non-performing loans of approximately 1.05% of total loans, and industry average non-performing loans of about 2.00% of total loans. Our expectation is superior asset quality performance in good times and in difficult years. We have no direct exposure to oil and gas or business investments in fracking," said Mr. Sidhu.

Interest rate risk is another critical element for banks to manage. An unexpected shift in interest rates can have a devastating effect on a bank's profitability for multiple years. Banks can position their assets and liabilities to speculate on future interest rate changes with the hope of gaining earnings by guessing the next movement in interest rates. "Customers' objective is to manage the estimated effect of future interest rate changes, up or down, to a neutral effect on net interest income, so not speculating on whether interest rates go up or down or the yield curve shifts," said Mr. Sidhu. "This allows our team members to focus on generating earnings from the business of banking, aggregating deposits and making loans to customers in the communities we serve," concluded Mr. Sidhu.

Diversified Loan Portfolio

Customers is a Business Bank that principally focuses on four lending activities; commercial and industrial loans to privately held businesses, multi-family loans principally to high net worth families, selected commercial real estate loans, and commercial loans and banking services to privately held mortgage companies. Commercial and industrial loans, including owner-occupied commercial real estate loans, and non-owner-occupied commercial real estate loans, were approximately $1.1 billion each at March 31, 2016. Multi-family loans or loans to high net worth families and mortgage warehouse loans, also considered commercial loans, were approximately $3.2 billion and $2.0 billion, respectively, at March 31, 2016. Consumer and residential mortgage loans make up only about 5% of the loan portfolio.

Conference Call

Date: Thursday, April 14, 2016

Time: 5:00 PM ET

US Dial-in: (888) 554-1419

International Dial-in: (719) 457-2650

Participant Code: 426555

Please dial in at least 10 minutes before the start of the call to ensure timely participation. Slides accompanying the presentation will be available on the Company's website at http://customersbank.com/investor relations.php prior to the call. A playback of the call will be available beginning April 14, 2016 at 8:00 pm ET until 8:00 pm on May 14, 2016. To listen, call within the United States (888) 203-1112 or (719) 457-0820 when calling internationally. Please use the replay pin number 1026264.

Investor Day

Customers plans to host an investor day event on June 3, 2016 in New York to discuss Customers Bancorp, Inc.'s performance and plans for the next few years, and the strategic alternatives for BankMobile.

Institutional Background

Customers Bancorp, Inc. is a bank holding company located in Wyomissing, Pennsylvania engaged in banking and related business through its bank subsidiary, Customers Bank. Customers Bank is a community-based, full-service bank with assets of approximately $9.0 billion that was named one of Forbes magazine's 2016 100 Best Banks in America (there are over 6,200 banks in the United States). 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, New York, Rhode Island, New Hampshire, Massachusetts 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. BankMobile is a division of Customers Bank, offering state of the art high tech digital banking services with high level of personal customer service.

Customers Bancorp, Inc. voting common shares are listed on the New York Stock Exchange under the symbol CUBI. Additional information about Customers Bancorp, Inc. can be found on the Company's website, www.customersbank.com.

"Safe Harbor" Statement

In addition to historical information, this press release may contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Customers Bancorp, Inc.'s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words "may," "could," "should," "pro forma," "looking forward," "would," "believe," "expect," "anticipate," "estimate," "intend," "plan," or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.'s control). Numerous competitive, economic, regulatory, legal and technological factors, among others, could cause Customers Bancorp, Inc.'s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. In addition, important factors relating to the previously disclosed proposed acquisition of the disbursements business of Higher One and Customer Bancorp's previously announced plans to combine its BankMobile business with the acquired business also could cause Customers Bancorp's actual results to differ from those in the forward-looking statements. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management's current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.'s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K for the year ended December 31, 2015. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank.

 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED - UNAUDITED
(Dollars in thousands, except per share data)          
  Q1   Q4   Q1
  2016   2015   2015
Interest income:          
  Loans receivable, including fees $ 54,472   $ 50,095   $ 43,093
  Loans held for sale   14,106     13,125     10,900
  Investment securities   3,709     3,506     2,363
  Other   1,111     987     2,362
    Total interest income   73,398     67,713     58,718
                 
Interest expense:                
  Deposits   10,212     9,289     7,526
  Other borrowings   1,606     1,573     1,488
  FHLB advances   2,268     1,698     1,689
  Subordinated debt   1,685     1,685     1,685
    Total interest expense   15,771     14,245     12,388
      Net interest income   57,627     53,468     46,330
  Provision for loan losses   1,980     6,173     2,964
      Net interest income after provision for loan losses   55,647     47,295     43,366
                 
Non-interest income:                
  Mortgage warehouse transactional fees   2,548     2,530     2,273
  Bank-owned life insurance   1,123     3,599     1,061
  Gain on sale of loans   644     859     1,231
  Deposit fees   255     253     179
  Mortgage loans and banking income (expense)   165     135     151
  Gain (loss) on sale of investment securities   26     -     -
  Other   733     2,044     838
    Total non-interest income   5,494     9,420     5,733
                 
Non-interest expense:                
  Salaries and employee benefits   17,332     15,396     13,952
  FDIC assessments, taxes, and regulatory fees   4,030     3,233     3,278
  Professional services   2,657     3,664     1,913
  Technology, communication and bank operations   2,643     2,805     2,531
  Occupancy   2,325     2,199     2,101
  Loan workout   418     586     269
  Other real estate owned   287     491     884
  Advertising and promotion   256     368     347
  Other   3,957     2,772     2,190
    Total non-interest expense   33,905     31,514     27,465
  Income before tax expense   27,236     25,201     21,634
  Income tax expense   9,537     7,415     7,682
      Net income   17,699     17,786     13,952
      Preferred stock dividend   1,286     1,006     -
      Net income available to common shareholders $ 16,413   $ 16,780   $ 13,952
                 
  Basic earnings per common share $ 0.61   $ 0.62   $ 0.52
  Diluted earnings per common share $ 0.57   $ 0.58   $ 0.49
                   
                   
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEET - UNAUDITED  
(Dollars in thousands)    
  March 31,   December 31,   March 31,
  2016   2015   2015
ASSETS          
Cash and due from banks $ 63,849     $ 53,550     $ 68,216  
Interest-earning deposits   198,789       211,043       265,607  
  Cash and cash equivalents   262,638       264,593       333,823  
Investment securities available for sale, at fair value   556,165       560,253       396,194  
Loans held for sale   1,969,280       1,797,064       1,758,084  
Loans receivable   5,907,315       5,453,479       4,337,851  
Allowance for loan losses   (37,605 )     (35,647 )     (33,566 )
  Total loans receivable, net of allowance for loan losses   5,869,710       5,417,832       4,304,285  
FHLB, Federal Reserve Bank, and other restricted stock   92,269       90,841       81,798  
Accrued interest receivable   21,206       19,939       15,702  
FDIC loss sharing receivable   -       -       3,427  
Bank premises and equipment, net   12,444       11,531       11,061  
Bank-owned life insurance   158,339       157,211       154,821  
Other real estate owned   5,106       5,057       13,127  
Goodwill and other intangibles   3,648       3,651       3,661  
Other assets   88,077       70,233       53,562  
    Total assets $ 9,038,882     $ 8,398,205     $ 7,129,545  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Demand, non-interest bearing $ 779,568     $ 653,679     $ 670,771  
Interest-bearing deposits   5,699,047       5,255,822       4,222,550  
  Total deposits   6,478,615       5,909,501       4,893,321  
Federal funds purchased   80,000       70,000       -  
FHLB advances   1,633,700       1,625,300       1,545,000  
Other borrowings   86,624       86,457       85,958  
Subordinated debt   108,709       108,685       108,612  
Accrued interest payable and other liabilities   51,985       44,360       38,703  
    Total liabilities   8,439,633       7,844,303       6,671,594  
                 
Preferred stock   79,677       55,569       -  
Common stock   27,567       27,432       27,356  
Additional paid in capital   364,647       362,607       357,523  
Retained earnings   140,924       124,511       82,373  
Accumulated other comprehensive loss   (5,333 )     (7,984 )     (1,047 )
Treasury stock, at cost   (8,233 )     (8,233 )     (8,254 )
    Total shareholders' equity   599,249       553,902       457,951  
      Total liabilities & shareholders' equity $ 9,038,882     $ 8,398,205     $ 7,129,545  
 
 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN (UNAUDITED)
(Dollars in thousands)          
  Three months ended
  March 31,   December 31,   March 31,
  2016   2015   2015
  Average Balance Average yield or cost (%)   Average Balance Average yield or cost (%)   Average Balance Average yield or cost (%)
  Assets                
Interest earning deposits $ 184,368 0.53%   $ 199,142 0.32%   $ 283,613 0.25%
Investment securities   562,459 2.64%     541,541 2.59%     406,600 2.32%
Loans held for sale   1,563,399 3.63%     1,572,068 3.31%     1,367,301 3.23%
Loans receivable   5,679,383 3.86%     5,120,113 3.88%     4,361,664 4.00%
Other interest-earning assets   80,135 4.34%     70,689 4.68%     75,068 11.80%
Total interest earning assets   8,069,744 3.66%     7,503,553 3.58%     6,494,246 3.66%
Non-interest earning assets   294,489       268,168       281,321  
    Total assets $ 8,364,233     $ 7,771,721     $ 6,775,567  
                       
  Liabilities                      
Total interest bearing deposits (1) $ 5,476,146 0.75%   $ 5,170,461 0.71%   $ 4,121,262 0.74%
Borrowings   1,480,828 1.51%     1,292,625 1.52%     1,467,535 1.33%
Total interest bearing liabilities   6,956,974 0.91%     6,463,086 0.87%     5,588,797 0.90%
Non-interest bearing deposits (1)   777,573       714,988       708,901  
Total deposits & borrowings   7,734,547 0.82%     7,178,074 0.79%     6,297,698 0.80%
Other non-interest bearing liabilities   43,677       43,358       24,542  
    Total liabilities   7,778,224       7,221,432       6,322,240  
  Shareholders' equity   586,009       550,289       453,327  
    Total liabilities and shareholders' equity $ 8,364,233     $ 7,771,721     $ 6,775,567  
                       
Net interest margin     2.87%       2.83%       2.89%
Net interest margin tax equivalent     2.88%       2.83%       2.90%
                       
(1) Total costs of deposits (including interest bearing and non-interest bearing) were 0.66%, 0.63% and 0.63% for the three months ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.
 
 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN COMPOSITION (UNAUDITED)
           
(Dollars in thousands) March 31,   December 31,   March 31,
  2016   2015   2015
           
Commercial:          
  Multi-Family $ 3,237,855   $ 2,948,696   $ 2,134,933
  Mortgage warehouse   1,988,657     1,797,753     1,717,739
  Commercial & Industrial (1)   1,112,290     1,068,597     814,867
  Commercial Real Estate- Non-Owner Occupied   1,052,162     956,255     943,317
  Construction   103,061     87,240     66,405
    Total commercial loans   7,494,025     6,858,541     5,677,261
                 
Consumer:                
  Residential   268,075     274,470     292,203
  Manufactured housing   110,830     113,490     121,622
  Other consumer   3,474     3,708     4,101
    Total consumer loans   382,379     391,668     417,926
    Deferred costs and unamortized premiums, net   191     334     748
      Total loans $ 7,876,595   $ 7,250,543   $ 6,095,935
                 
(1) Commercial & industrial loans, including owner occupied commercial real estate.
 
 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION (UNAUDITED)
(Dollars in thousands)   March 31,     December 31,     March 31,
    2016     2015     2015
                 
Demand, non-interest bearing $ 779,568   $ 653,679   $ 670,771
Demand, interest bearing   133,539     127,215     127,047
Savings   41,309     41,600     36,123
Money market   3,153,870     2,739,411     2,225,516
Time deposits   2,370,329     2,347,596     1,833,864
Total deposits $ 6,478,615   $ 5,909,501   $ 4,893,321
                 
                 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES  
ASSET QUALITY (UNAUDITED)  
  As of March 31, 2016   As of December 31, 2015   As of March 31, 2015  

Loan Type
Total Loans   Non Accrual /NPLs   Total Credit Reserves   NPLs/Total Loans     Total Reserves to Total NPLs   Total Loans   Non Accrual /NPLs   Total Credit Reserves   NPLs/Total Loans     Total Reserves to Total NPLs   Total Loans   Non Accrual /NPLs   Total Credit Reserves   NPLs/Total Loans     Total Reserves to Total NPLs  
Originated Loans                                                                                    
Multi-Family $ 3,204,625   $ -   $ 12,135   - %   - % $ 2,903,814   $ -   $ 12,016   - %   - % $ 2,049,029   $ -   $ 8,196   - %   - %
Commercial & Industrial (1)   1,044,325     6,838     10,058   0.65 %   147.09 %   990,621     2,760     8,864   0.28 %   321.16 %   761,193     1,852     6,025   0.24 %   325.32 %
Commercial Real Estate- Non-Owner Occupied   1,003,667     271     4,073   0.03 %   1,502.95 %   906,544     788     3,706   0.09 %   470.30 %   851,355     901     7,821   0.11 %   868.04 %
Residential   115,532     32     2,082   0.03 %   6,506.25 %   113,858     32     1,992   0.03 %   6,225.00 %   157,109     160     1,393   0.10 %   870.63 %
Construction   102,827     -     1,264   - %   - %   87,006     -     1,074   - %   - %   62,343     -     468   - %   - %
Other consumer   600     -     7   - %   - %   712     -     9   - %   - %   942     -     6   - %   - %
Total Originated Loans   5,471,576     7,141     29,619   0.13 %   414.77 %   5,002,555     3,580     27,661   0.07 %   772.65 %   3,881,971     2,913     23,909   0.08 %   820.77 %
Loans Acquired                                                                                    
Bank Acquisitions   202,080     6,616     7,518   3.27 %   113.63 %   206,971     4,743     7,492   2.29 %   157.96 %   137,552     7,835     9,163   5.70 %   116.95 %
Loan Purchases   233,468     2,357     1,875   1.01 %   79.55 %   243,619     2,448     1,653   1.00 %   67.52 %   317,580     1,047     1,559   0.33 %   148.90 %
Total Acquired Loans   435,548     8,973     9,393   2.06 %   104.68 %   450,590     7,191     9,145   1.60 %   127.17 %   455,132     8,882     10,722   1.95 %   120.72 %
Deferred Origination Fees/Unamortized Premium/Discounts   191     -     -   - %   - %   334     -     -   - %   - %   748     -     -   - %   - %
Total Loans Held for Investment   5,907,315     16,114     39,012   0.27 %   242.10 %   5,453,479     10,771     36,806   0.20 %   341.71 %   4,337,851     11,795     34,631   0.27 %   293.61 %
Total Loans Held for Sale   1,969,280     -     -   - %   - %   1,797,064     -     -   - %   - %   1,758,084     -     -   - %   - %
Total Portfolio $ 7,876,595   $ 16,114   $ 39,012   0.20 %   242.10 % $ 7,250,543   $ 10,771   $ 36,806   0.15 %   341.71 % $ 6,095,935   $ 11,795   $ 34,631   0.19 %   293.61 %
                                                                                     
(1) Commercial & industrial loans, including owner occupied commercial real estate.  
   
   
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS (UNAUDITED)
           
  For the Quarter Ended
  Q1   Q4   Q1
(Dollars in thousands) 2016   2015   2015
Originated Loans          
Multi-Family $ -     $ -     $ -  
Commercial & Industrial (1)   -       4,558       5  
Commercial Real Estate- Non-Owner Occupied   -       -       -  
Residential   -       -       -  
Construction   -       -       -  
Other consumer   3       -       (2 )
Total Originated Loans   3       4,558       3  
Loans Acquired                
Bank Acquisitions   (458 )     (215 )     989  
Loan Purchases   -       (21 )     9  
Total Acquired Loans   (458 )     (236 )     998  
Deferred Origination Fees/Unamortized Premium/Discounts   -       -       -  
Total Loans Held for Investment   (455 )     4,322       1,001  
Total Loans Held for Sale   -       -       -  
Total Portfolio $ (455 )   $ 4,322     $ 1,001  
                 
(1) Commercial & industrial loans, including owner occupied commercial real estate.
                 

Contact Information

  • Jay Sidhu
    Chairman & CEO
    610-935-8693

    Richard Ehst
    President & COO
    610-917-3263

    Investor Contact:
    Robert Wahlman
    CFO
    610-743-8074