SOURCE: Customers Bancorp, Inc.

Customers Bancorp, Inc.

October 28, 2015 17:15 ET

Customers Bancorp Reports Record Third Quarter and Nine Months Net Income

WYOMISSING, PA--(Marketwired - October 28, 2015) -

  • Q3 2015 Net Income up 23% and EPS up 19% over Q3 2014
  • Q3 2015 Net Income of $0.50 Per Fully Diluted Share
  • Nine Months 2015 Net Income up 31% and EPS up 27% over Nine Months 2014
  • Tangible Book Value up 12.8% from Q3 2014 to $17.81 Per Share
  • Deposits Grew by 35% and Loans Grew by 18% from Q3 2014
  • Asset Quality Remains Very Strong
  • BankMobile Expected to Meet its 1-Year Customer Acquisition Goal
  • 2016 Fully Diluted EPS Estimated to be Between $2.40 and $2.50

Customers Bancorp, Inc. (NYSE: CUBI), the parent company of Customers Bank (collectively "Customers"), reported net income to common shareholders of $14.3 million for third quarter of 2015 ("Q3 2015") compared to net income to common shareholders of $11.7 million for third quarter of 2014 ("Q3 2014"), an increase of $2.6 million, or 23%. Fully diluted earnings per share for Q3 2015 was $0.50 compared to $0.42 fully diluted earnings per share for Q3 2014, an increase of $0.08 per share, or 19%. Average fully diluted shares for Q3 2015 were 28.7 million compared to average fully diluted shares for Q3 2014 of 28.0 million.

Customers also reported earnings of $39.3 million for the first nine months of 2015 compared to earnings of $30.0 million in the first nine months of 2014, an increase of $9.3 million, or 31%. Fully diluted earnings per share for the first nine months of 2015 was $1.37 compared to $1.08 for the first nine months of 2014, an increase of $0.29 per share, or 27%. Customers' 2015 earnings for the first nine months of 2015 includes a $6.0 million pre-tax provision for loan losses related to a fraudulent loan recorded in the second quarter of 2015.

Commenting on the record net income levels for the third quarter and nine months of 2015, Jay Sidhu, Chairman and CEO of Customers stated, "Customers is very pleased to report record earnings, $0.50 per share net income for the third quarter of 2015. As a company we set ambitious performance goals, build strategies to achieve those goals, and work hard to execute our plans. While maintaining superior risk management discipline, we continue to track toward achieving both our short-term and long-term goals. We believe we will report in excess of $1.00 per share in earnings for the second half of 2015, we expect to earn between $2.40 and $2.50 per share in 2016, and achieve our goals of reaching about a 1.0% return on assets, and 12.0% return on common equity in the next two years."

Other financial and business highlights for Q3 2015 include:

  • Customers achieved a return on assets of 0.82% in Q3 2015 compared to 0.77% in Q3 2014, and achieved a return on common equity of 11.83% in Q3 2015 compared to 10.97% in Q3 2014, as earnings increased in Q3 2015.
  • Total loans, including loans held for sale, increased $1.0 billion, or 18%, to $6.5 billion as of September 30, 2015 compared to total loans as of September 30, 2014 of $5.5 billion. Loans to mortgage companies increased $469 million, commercial and industrial loans (including owner occupied commercial real estate) increased $194 million, multi-family loans increased $287 million, non-owner occupied commercial real estate loans increased $84 million, and consumer loans decreased $40 million over the prior year.
  • Total deposits increased $1.5 billion, or 35%, to $5.8 billion as of September 30, 2015 compared to total deposits of $4.3 billion as of September 30, 2014. Demand deposits increased $154 million, money market deposits increased $537 million and CDs increased $806 million over the prior year.
  • Customers reported a $2.1 million provision for loan losses in Q3 2015.
  • Non-performing loans totaled $17.8 million as of September 30, 2015, or 0.27% of total loans, compared to $14.0 million as of September 30, 2014, or 0.25% of total loans. The increase in the amount of non-performing loans reflects the $3.7 million net remaining balance of the fraudulent loan reported in Q2 2015 ($9.0 million original loan balance less $5.3 million charged off during Q3 2015). The total credit reserve for loan losses was 197% of the non-performing loan balance as of September 30, 2015.
  • The Q3 2015 efficiency ratio was 54.0% compared to a 54.5% Q3 2014 efficiency ratio. The Q3 2015 efficiency ratio includes $1.6 million of net expense for BankMobile. Excluding BankMobile net expenses, the efficiency ratio would have been 51.2% for Q3 2015.
  • Capital levels continue to exceed the "well-capitalized" thresholds established by regulation at both the holding company and bank.
  • Consistent with Customers' stated intent to moderate balance sheet growth, Customers maintained total assets of $7.6 billion during Q3 2015 compared to Q2 2015, improving its capital ratios.
  • The tangible book value per common share continued to increase, reaching $17.81 at September 30, 2015, compared to $16.43 at December 31, 2014 and $15.79 at September 30, 2014, an increase of 12.8% year-over-year.

Q3 2015 compared to Q2 2015:

Customers' Q3 2015 net income available to common shareholders of $14.3 million increased $3.3 million, or 30%, from earnings of $11.0 million for the second quarter of 2015 ("Q2 2015"). The increase in Q3 2015 compared to Q2 2015 earnings resulted primarily from recording a $6.0 million pre-tax provision for loan losses in Q2 2015 related to the identification of a fraudulent loan (considering the effect of income taxes, the effect of the provision for loan losses related to the fraudulent loan was to decrease net income $3.9 million in Q2 2015). During Q3 2015, Customers charged-off $5.3 million of the $9.0 million loan balance.

Other financial highlights for Q3 2015 compared to Q2 2015 include:

  • Net interest margin in Q3 2015 of 2.79% increased approximately 6 basis points compared to the net interest margin for Q2 2015 of 2.73%. The net interest margin increase resulted primarily from continued discipline in pricing and an increase of $1.0 million in prepayment fees on multi-family loans in Q3 2015.
  • Q3 2015 non-interest expense of $30.3 million was up approximately $4.6 million from Q2 2015 primarily due to net benefits received in Q2 2015 of $0.6 million from real estate owned sales and valuation adjustments compared to net costs in Q3 2015 of $1.7 million resulting primarily from the non-guaranteed portion of losses recognized on REO valuation adjustments, and reduction of the Pennsylvania shares tax expense (expense was reduced $2.3 million) in Q2 2015.
  • Customers continued its planned strategy to moderate its balance sheet growth, with total assets largely unchanged as of September 30, 2015 compared to June 30, 2015 at $7.6 billion. Total loans, including loans held for sale, also remained flat as of September 30, 2015 compared to June 30, 2015 at $6.5 billion, with increases in commercial and industrial loans (including owner occupied commercial real estate) of $48 million, non-owner occupied real estate loans of $17 million and multi-family loans of $136 million offset by a decrease in loans to mortgage companies of $266 million.
  • Deposits increased during Q3 2015 by $308 million, or 5.6%, to $5.8 billion.
  • Customers sold approximately $36 million of multi-family loans at approximately a 1.0% gain during Q3 2015. There were no multi-family loan sales during Q2 2015.

The following table presents a summary of key earnings metrics for the three quarters ending September 30, 2015, June 30, 2015 and September 30, 2014:

          
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES         
EARNINGS SUMMARY - UNAUDITED         
          
(Dollars in thousands, except per-share data)         
  Q3  Q2  Q3 
  2015  2015  2014 
             
Net income available to common shareholders $14,309  $11,049  $11,662 
Basic earnings per common share ("EPS") $0.53  $0.41  $0.44 
Diluted EPS $0.50  $0.39  $0.42 
Average common shares outstanding - basic  26,872,787   26,839,799   26,730,347 
Average common shares outstanding - diluted  28,741,129   28,680,664   27,984,840 
             
Return on average assets  0.82%  0.65%  0.77%
Return on average common equity  11.83%  9.44%  10.97%
Net interest margin, tax equivalent  2.79%  2.73%  2.79%
Efficiency ratio  54.00%  48.40%  54.50%
Non-performing loans to total loans (including held-for-sale and FDIC-covered loans)  0.27%  0.16%  0.25%
Reserves to non-performing loans (NPLs)  197.01%  369.90%  246.40%
Net charge-offs $5,657  $999  $325 
             
Tangible book value per common share (period end) (1) $17.81  $17.28  $15.79 
Period end stock price $25.70  $26.89  $17.96 
             
(1) Calculated as total equity less preferred stock and goodwill and other intangibles divided by common shares outstanding at period end. 
  

Net Interest Margin

Net interest margin ("NIM") was flat at 2.79% in Q3 2015 compared to Q3 2014, and increased 6 basis points from Q2 2015, as Customers maintained its NIM over a period in which the industry NIM has been rapidly contracting. The flat NIM of Q3 2015 compared to Q3 2014 resulted from a 6 basis point reduction in portfolio yields offset by an increase in prepayment fees on multi-family loans and FHLB dividends of $1.3 million, or approximately 6 basis points. The 6 basis point NIM increase in Q3 2015 compared to Q2 2015 resulted from higher prepayment fees on multi-family loans of $1.0 million. As the multi-family loan portfolio that was built largely in 2013 and 2014 seasons, it is expected that prospectively Customers will receive prepayment fees regularly.

Non-Interest Income

Q3 2015 non-interest income of $6.2 million increased $1.1 million compared to non-interest income of $5.1 million in Q3 2014, and decreased $0.2 million compared to non-interest income of $6.4 million in Q2 2015. The $1.1 million increase in Q3 2015 non-interest income compared to Q3 2014 non-interest income resulted primarily from a $0.6 million increase in mortgage warehouse transactional fees as a result of higher processing volume and a $0.4 million gain realized from the sale of multi-family loans. The $0.2 million Q3 2015 decrease in non-interest income compared to Q2 2015 resulted primarily from a $0.6 million credit valuation adjustment for derivative counterparty risk as the value of derivative receivable increased, offset in part by the $0.4 million gain realized from the sale of multi-family loans. Customers anticipates that it will continue with a low level of multi-family loan sales for the next several quarters.

Non-Interest Expense

Q3 2015 operating expenses of $30.3 million increased $5.6 million, or 22.8%, compared to Q3 2014, and increased $4.6 million compared to Q2 2015 operating expenses of $25.7 million. The Q3 2015 compared to Q3 2014 operating expense increase of $5.6 million resulted primarily from the $1.0 billion growth in Customers' loan portfolio, requiring increased staffing for loan origination and administrative support, higher occupancy expense, and technology fees (up $3.1 million), a $1.1 million increase in other real estate owned expense primarily resulting from the non-guaranteed portion of losses recognized on write-downs of REO in Q3 2015 and a $1.0 million increase in professional services primarily for consulting fees paid for loan reviews, legal services, and outsourcing of certain accounting and internal audit work and other expenses. The $4.6 million increase in Q3 2015 compared to Q2 2015 non-interest expenses resulted from a $2.3 million increase in other real estate owned expense reflecting the non-guaranteed portion of losses recognized on REO valuation adjustments in Q3 2015 compared to a net recovery of previous REO charge-offs and expenses in Q2 2015, and $2.3 million for reduction of the Pennsylvania shares tax expense estimate (expense was reduced $2.3 million) during Q2 2015.

Provision for Loan Losses and Asset Quality

The Q3 2015 provision for loan losses of $2.1 million includes a $1.2 million provision for third quarter net growth in the held-for-investment loan portfolio (predominately multi-family loans) of approximately $250 million. Non-performing loans as of September 30, 2015 were 0.27% of total loans. The September 30, 2015 total credit reserves of $35.0 million was 197% of total non-performing loans.

Other real estate owned decreased approximately $4.9 million in Q3 2015 to $8.4 million primarily due to valuation adjustments recorded on real estate properties covered by the Federal Deposit Insurance Corporation's purchase and assumption agreement based on agreed upon sales prices for properties under contract or current valuations. Total non-performing assets of $26.2 million as of September 30, 2015 was 0.34% of total assets.

Customers separates its loan portfolio into "covered" and "non-covered" loans for purposes of analyzing and managing asset quality. Covered loans are those loans that are covered by FDIC purchase and assumption, or loss sharing, agreements, and for which Customers is reimbursed 80% of allowable incurred losses. The FDIC guarantees of covered non-single family loans expired during Q3 2015, although the FDIC guarantees of residential mortgage loans will continue through Q3 2017. All non-single family loans have been reviewed and risk rated based on Customers' underwriting standards, and any estimated losses have been submitted to the FDIC for reimbursement. Guaranteed residential mortgage loans still covered under the FDIC guarantee totaled $13.8 million as of September 30, 2015.

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 in the New York City area, selected commercial real estate 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 $900 million and $1.0 billion, respectively at September 30, 2015. Multi-family loans and mortgage warehouse loans, also considered commercial loans, were approximately $2.5 billion and $1.7 billion, respectively, at September 30, 2015.

Looking Ahead

"Building on the record third quarter earnings, we believe the fourth quarter of 2015 is positioned to be a strong quarter, and Customers expects to report in excess of $0.50 earnings per share for the period," Mr. Sidhu said. "We have worked hard to position our Company to meet its financial targets irrespective of the slope of the yield curve or level of short term rates and to sustain profitable operations when the markets are stressed," stated Mr. Sidhu. "We will continue our focus on our core businesses at Customers, growing commercial loans and core deposits, as we look to build our franchise value by building an exceptional business bank. BankMobile development also remains on plan. We expect to attract about 25,000 new customers within the first 12 months of operation of BankMobile," Sidhu concluded.

Conference Call

Date: Thursday, October 29, 2015

Time: 10:00 am ET

US Dial-in: 1-800-254-2821

International Dial-in: 1-913-312-1450

Conference ID: 370158

Webcast: http://public.viavid.com/index.php?id=116371

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.

Institutional Background

Customers Bancorp, Inc. is a bank holding company located in Wyomissing, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank. Customers Bank is a community-based, full-service bank with assets of approximately $7.6 billion. A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank 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.

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. 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, 2014 and subsequently filed quarterly reports on Form 10-Q. 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)           
   Q3   Q2   Q3
   2015   2015   2014
Interest income:              
 Loans receivable, including fees  $46,291   $42,801   $39,640
 Loans held for sale   14,006    13,522    8,503
 Investment securities   2,283    2,253    2,361
 Other   1,156    1,107    794
  Total interest income   63,736    59,683    51,298
               
Interest expense:              
 Deposits   9,022    8,145    6,179
 Other borrowings   1,539    1,496    1,494
 FHLB advances   1,556    1,799    1,711
 Subordinated debt   1,685    1,685    1,700
  Total interest expense   13,802    13,125    11,084
   Net interest income   49,934    46,558    40,214
 Provision for loan losses   2,094    9,335    5,035
   Net interest income after provision for loan losses   47,840    37,223    35,179
               
Non-interest income:              
 Mortgage warehouse transactional fees   2,792    2,799    2,154
 Gain on sale of loans   1,131    827    695
 Bank-owned life insurance   1,177    1,169    976
 Deposit fees   265    247    192
 Mortgage loans and banking income   167    287    212
 Gain (loss) on sale of investment securities   (16 )  (69 )  -
 Other   655    1,133    873
  Total non-interest income   6,171    6,393    5,102
               
Non-interest expense:              
 Salaries and employee benefits   14,981    14,448    12,070
 FDIC assessments, taxes, and regulatory fees   3,222    995    3,320
 Professional services   2,673    2,792    1,671
 Technology, communication and bank operations   2,422    2,838    2,297
 Occupancy   2,169    2,199    2,119
 Other real estate owned expense (income)   1,722    (580 )  603
 Advertising and promotion   330    429    261
 Loan workout expense (income)   285    (13 )  388
 Other   2,503    2,552    1,950
  Total non-interest expense   30,307    25,660    24,679
 Income before tax expense   23,704    17,956    15,602
  Income tax expense   8,415    6,400    3,940
   Net income   15,289    11,556    11,662
   Preferred stock dividend   980    507    -
   Net income available to common shareholders  $14,309   $11,049   $11,662
               
Basic earnings per common share  $0.53   $0.41   $0.44
Diluted earnings per common share  $0.50   $0.39   $0.42
            
            
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED - UNAUDITED
(Dollars in thousands, except per share data)       
   September 30,   September 30,
   2015   2014
Interest income:         
 Loans receivable, including fees  $132,185   $103,216
 Loans held for sale   38,428    20,301
 Investment securities   6,899    7,944
 Other   4,625    1,805
  Total interest income   182,137    133,266
          
Interest expense:         
 Deposits   24,693    17,321
 Other borrowings   4,523    3,834
 FHLB advances   5,044    3,348
 Subordinated debt   5,055    1,826
  Total interest expense   39,315    26,329
   Net interest income   142,822    106,937
 Provision for loan losses   14,393    12,288
   Net interest income after provision for loan losses   128,429    94,649
          
Non-interest income:         
 Mortgage warehouse transactional fees   7,864    6,128
 Bank-owned life insurance   3,407    2,646
 Gain on sale of loans   3,189    1,266
 Deposit fees   691    618
 Mortgage loans and banking income   605    2,175
 Gain (loss) on sale of investment securities   (85 )  3,191
 Other   2,626    3,298
  Total non-interest income   18,297    19,322
          
Non-interest expense:         
 Salaries and employee benefits   43,381    33,012
 FDIC assessments, taxes, and regulatory fees   7,495    8,529
 Professional services   7,378    5,834
 Technology, communications and bank operations   7,791    6,767
 Occupancy   6,469    6,061
 Other real estate owned   2,026    1,845
 Advertising and promotion   1,106    1,104
 Loan workout   541    1,306
 Other   7,245    6,592
  Total non-interest expense   83,432    71,050
 Income before tax expense   63,294    42,921
  Income tax expense   22,497    12,885
   Net income   40,797    30,036
   Preferred stock dividend   1,487    -
   Net income available to common shareholders  $39,310   $30,036
          
Basic earnings per common share  $1.47   $1.12
Diluted earnings per common share  $1.37   $1.08
        
        
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEET - UNAUDITED  
(Dollars in thousands)             
   September 30,   December 31,   September 30,  
   2015   2014   2014  
ASSETS                
Cash and due from banks  $80,475   $62,746   $89,728  
Interest-earning deposits   302,924    308,277    241,578  
 Cash and cash equivalents   383,399    371,023    331,306  
Investment securities available for sale, at fair value   418,945    416,685    409,303  
Loans held for sale   1,730,002    1,435,459    1,395,720  
Loans receivable   4,769,102    4,312,173    4,110,135  
Allowance for loan losses   (33,823 )  (30,932 )  (31,083 )
 Total loans receivable, net of allowance for loan losses   4,735,279    4,281,241    4,079,052  
FHLB, Federal Reserve Bank, and other restricted stock   63,514    82,002    81,772  
Accrued interest receivable   16,512    15,205    13,744  
FDIC loss sharing receivable   202    2,320    5,995  
Bank premises and equipment, net   11,567    10,810    11,147  
Bank-owned life insurance   156,909    138,676    137,575  
Other real estate owned   8,433    15,371    17,755  
Goodwill and other intangibles   3,654    3,664    3,667  
Other assets   71,055    52,914    45,399  
  Total assets  $7,599,471   $6,825,370   $6,532,435  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Demand, non-interest bearing  $777,478   $546,436   $697,415  
Interest-bearing deposits   5,007,716    3,986,102    3,586,725  
 Total deposits   5,785,194    4,532,538    4,284,140  
Federal funds purchased   50,000    -    -  
FHLB advances   985,900    1,618,000    1,594,500  
Other borrowings   88,250    88,250    88,250  
Subordinated debt   110,000    110,000    112,000  
Accrued interest payable and other liabilities   42,149    33,437    27,746  
  Total liabilities   7,061,493    6,382,225    6,106,636  
                 
Preferred stock   55,569    -    -  
Common stock   27,413    27,278    27,267  
Additional paid in capital   360,903    355,822    354,561  
Retained earnings   107,731    68,421    55,245  
Accumulated other comprehensive loss   (5,405 )  (122 )  (3,020 )
Treasury stock, at cost   (8,233 )  (8,254 )  (8,254 )
   Total shareholders' equity   537,978    443,145    425,799  
Total liabilities & shareholders' equity  $7,599,471   $6,825,370   $6,532,435  
             
             
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN (UNAUDITED)
(Dollars in thousands)            
   Three Months Ended September 30,
   2015     2014   
   Average Balance  Average yield or cost (%)  Average Balance  Average yield or cost (%)
Assets              
Interest earning deposits  $312,286  0.26  $244,013  0.25
Investment securities   377,157  2.42   421,213  2.24
Loans held for sale   1,720,863  3.23   1,014,068  3.33
Loans receivable   4,648,986  3.95   3,977,407  3.96
Other interest-earning assets   67,299  5.62   83,313  3.05
Total interest earning assets   7,126,591  3.55   5,740,014  3.55
Non-interest earning assets   260,659      238,223   
  Total assets  $7,387,250     $5,978,237   
               
Liabilities              
Total interest bearing deposits (1)  $4,938,317  0.72  $3,268,502  0.75
Borrowings   1,218,242  1.56   1,674,576  1.17
Total interest bearing liabilities   6,156,559  0.89   4,943,078  0.89
Non-interest bearing deposits (1)   675,455      596,497   
Total deposits & borrowings   6,832,014  0.80   5,539,575  0.79
Other non-interest bearing liabilities   19,998      16,596   
  Total liabilities   6,852,012      5,556,171   
 Shareholders' equity   535,238      422,066   
  Total liabilities and shareholders' equity  $7,387,250     $5,978,237   
               
Net interest margin      2.78      2.78
Net interest margin tax equivalent      2.79      2.79
               
(1) Total costs of deposits (including interest bearing and non-interest bearing) were 0.64% and 0.63% for the three months ended September 30, 2015 and 2014, respectively.
 
 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN (UNAUDITED)
(Dollars in thousands)            
   Nine Months Ended September 30,
   2015     2014   
   Average Balance  Average yield or cost (%)  Average Balance  Average yield or cost (%)
Assets              
Interest earning deposits  $295,485  0.26  $214,215  0.25
Investment securities   389,253  2.36   461,708  2.29
Loans held for sale   1,594,942  3.22   787,509  3.45
Loans receivable   4,472,704  3.95   3,458,930  3.99
Other interest-earning assets   73,368  7.40   61,961  3.03
Total interest earning assets   6,825,752  3.57   4,984,323  3.57
Non-interest earning assets   268,799      220,389   
  Total assets  $7,094,551     $5,204,712   
               
Liabilities              
Total interest bearing deposits (1)  $4,489,241  0.74  $3,028,465  0.76
Borrowings   1,399,478  1.40   1,136,675  1.06
Total interest-bearing liabilities   5,888,719  0.89   4,165,140  0.84
Non-interest-bearing deposits (1)   684,466      615,956   
Total deposits & borrowings   6,573,185  0.80   4,781,096  0.74
Other non-interest bearing liabilities   26,025      14,963   
  Total liabilities   6,599,210      4,796,059   
 Shareholders' equity   495,341      408,653   
  Total liabilities and shareholders' equity  $7,094,551     $5,204,712   
               
Net interest margin      2.80      2.87
Net interest margin tax equivalent      2.80      2.88
               
(1) Total costs of deposits (including interest bearing and non-interest bearing) were 0.63% and 0.64% for the nine months ended September 30, 2015 and 2014, respectively.
 
 
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES        
Asset Quality as of September 30, 2015 (Unaudited)         
(Dollars in thousands)          
                   
Loan Type  Total Loans  Non Accrual /NPLs  Other Real Estate Owned  Non Performing Assets (NPAs)  Allowance for loan losses  Cash Reserve  Total Credit Reserves  NPLs / Total Loans  Total Reserves to Total NPLs
                                      
New Century Originated Loans                                     
Legacy  $43,084  $1,608  $2,811  $4,419  $1,219   -  $1219  3.73 % 75.81 %
Troubled debt restructurings (TDRs)   2,094   931   -   931   59   -   59  44.46 % 6.34 %
Total New Century Originated Loans   45,178   2,539   2,811   5,350   1,278   -   1,278  5.62 % 50.33 %
                                      
Originated Loans                                     
Multi-Family   2,399,387   -   -   -   9,206   -   9,206  - % - %
Commercial & Industrial (1)   844,814   6,283   151   6,434   10,187   -   10,187  0.74 % 162.14 %
Commercial Real Estate- Non-Owner Occupied   860,225   3,947   -   3,947   3,521   -   3,521  0.46 % 89.21 %
Residential   109,730   8   -   8   1,876   -   1,876  0.01 % 23,450.00 %
Construction   89,382   -   -   -   1,106   -   1,106  - % - %
Other Consumer   152   -   -   -   8   -   8  - % - %
TDRs   540   -   -   -   5   -   5  - % - %
Total Originated Loans   4,304,230   10,238   151   10,389   25,909   -   25,909  0.24 % 253.07 %
                                      
Acquired Loans                                     
Covered   12,702   1,187   516   1,703   112   -   112  9.34 % 9.44 %
Non-Covered   353,723   1,126   4,955   6,081   482   1,209   1,691  0.32 % 150.18 %
TDRs Covered   522   -   -   -   -   -   -  - % - %
TDRs Non-Covered   7,498   2,692   -   2,692   -   -   -  35.90 % - %
Total Acquired Loans   374,445   5,005   5,471   10,476   594   1,209   1,803  1.34 % 36.02 %
                                      
Acquired Purchased Credit-impaired Loans                                     
Covered   626   -   -   -   284   -   284  - % - %
Non-Covered   44,100   -   -   -   5,758   -   5,758  - % - %
                                      
Total Acquired Purchased Credit-impaired Loans   44,726   -   -   -   6,042   -   6,042  - % - %
Deferred Origination Fees/Unamortized Premium/Discounts, net   523   -   -   -   -   -   -  - % - %
Total Loans Held for Investment   4,769,102   17,782   8,433   26,215   33,823   1,209   35,032  0.37 % 197.01 %
Total Loans Held for Sale   1,730,002   -   -   -   -   -   -  - % - %
Total Portfolio  $6,499,104  $17,782  $8,433  $26,215  $33,823  $1,209  $35,032  0.27 % 197.01 %
(1) Commercial & industrial loans, including owner occupied commercial real estate.

Contact Information

  • Contacts:
    Jay Sidhu
    Chairman & CEO
    610-935-8693

    Richard Ehst
    President & COO
    610-917-3263

    Investor Contact:
    Robert Wahlman
    CFO
    610-743-8074