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Customers Bancorp Reports Record Results for Full Year 2021


Record Full Year 2021 Net Income of $300.1 million, or $8.91 Per Diluted Share, Up 153% Over Full Year 2020

Record Deposit Growth of $5.5 billion, Up 48% Year-Over-Year

Q4 2021 Net Income of $98.6 million, or $2.87 Per Diluted Share, Up 87% Over Q4 2020

Q4 2021 ROAA of 2.08% and ROCE of 33.2%

Q4 2021 Loan Growth of $1.0 billion (Excluding PPP Loans and Loans to Mortgage Companies), Up 13% Over Q3 2021

Q4 2021 Tangible Book Value Increased 33% Over Q4 2020

  • Full year 2021 net income available to common shareholders was $300.1 million, or $8.91 per diluted share, up 153% over full year 2020.
  • Full year 2021 core earnings (a non-GAAP measure) were $343.6 million, or $10.20 per diluted share, up 187% over full year 2020.
  • Full year 2021 core earnings (excluding Paycheck Protection Program ("PPP") loans) (a non-GAAP measure) were $148.5 million, or $4.41 per diluted share, up 90% over full year 2020.
  • Q4 2021 net income available to common shareholders was $98.6 million, or $2.87 per diluted share, up 87% over Q4 2020.
  • Q4 2021 core earnings (a non-GAAP measure) were $100.1 million, or $2.92 per diluted share, up 83% over Q4 2020.
  • Q4 2021 ROAA was 2.08% and Core ROAA (a non-GAAP measure) was 2.11%. Q4 2020 ROAA was 1.23% and Core ROAA (a non-GAAP measure) was 1.26%.
  • Q4 2021 ROCE was 33.2% and Core ROCE (a non-GAAP measure) was 33.7%. Q4 2020 ROCE was 24.3% and Core ROCE (a non-GAAP measure) was 25.1%.
  • Adjusted pre-tax pre-provision net income (a non-GAAP measure) for Q4 2021 was $129.3 million, an increase of 66% over Q4 2020. Q4 2021 adjusted pre-tax pre-provision ROAA (a non-GAAP measure) was 2.67% compared to 1.70% for Q4 2020.
  • Q4 2021 commercial and industrial (C&I) loan growth of $742.3 million (up 29%), multifamily loan growth of $99.1 million (up 7%), and consumer loan growth of $207.5 million (up 11%) over Q3 2021.
  • Net interest margin (a non-GAAP measure) was 4.14% for Q4 2021 and 3.70% for full year 2021. Net interest margin, excluding the impact of PPP loans (a non-GAAP measure) was 3.12% for Q4 2021 and 3.16% for full year 2021. Significant excess cash balances further negatively impacted net interest margin in Q4 2021 by approximately 6 basis points.
  • Digital asset-related deposits increased by $400 million, or 27%, in Q4 2021, bringing total CBIT-related deposits to $1.9 billion by December 31, 2021.
  • Total deposits increased $5.5 billion, or 48.3% year-over-year, which included a $6.2 billion, or 130.9%, increase in demand deposits. The total cost of deposits dropped 22 basis points from the year-ago quarter.
  • Funded, directly or indirectly, about 358,000 PPP loans for $10.3 billion in total.
  • Purchased $313 million PPP loan portfolio in December 2021 at a discount further increasing deferred revenue recognition in future quarters.
  • Technology-led loans sales in Consumer and SBA Groups resulted in gains realized from the sales of consumer and SBA loans of $0.7 million and $1.8 million, respectively, in Q4 2021, bringing full year 2021 gains realized from the sales of consumer and SBA loans to $5.2 million and $6.2 million, respectively, approximately 14% higher than targeted total gains of $10 million for full year 2021.
  • Repurchased 527,789 common shares in Q4 2021 at an average price of $52.41 pursuant to a one-year common stock repurchase program to repurchase up to 3.2 million shares of common stock that was adopted in Q3 2021.
  • Q4 2021 efficiency ratio was 38.70% compared to 43.56% for Q4 2020. Q4 2021 core efficiency ratio was 38.73% compared to 42.89% in Q4 2020 (non-GAAP measures).
  • Q4 2021 provision for credit losses on loans and leases was $13.9 million compared to $13.2 million in Q3 2021. At December 31, 2021, the coverage of credit loss reserves for loans and leases held for investment, excluding PPP loans (a non-GAAP measure), was 1.53% compared to 1.65% at September 30, 2021.
  • Non-performing assets were 0.25% of total assets at December 31, 2021 compared to 0.39% at December 31, 2020. Allowance for credit losses equaled 278% of non-performing loans at December 31, 2021, compared to 204% at December 31, 2020.
  • All commercial loan deferments became current by December 31, 2021, down from a peak of $1.2 billion in July 2020.
  • Well positioned for strong core sustainable growth in 2022 and 2023 and project core earnings (excluding PPP) between $4.75 - $5.00 in 2022 and well over $6.00 in 2023.

WEST READING, Pa.--(BUSINESS WIRE)-- Customers Bancorp, Inc. (NYSE: CUBI), the parent company of Customers Bank (collectively "Customers" or "CUBI"), today reported fourth quarter 2021 ("Q4 2021") net income to common shareholders of $98.6 million, or $2.87 per diluted share, resulting in record full year 2021 ("FY 2021") net income to common shareholders of $300.1 million, or $8.91 per diluted share. Q4 2021 core earnings (a non-GAAP measure) was $100.1 million, or $2.92 per diluted share, resulting in record FY 2021 core earnings (a non-GAAP measure) of $343.6 million, or $10.20 per diluted share. Adjusted pre-tax pre-provision net income was $129.3 million for Q4 2021 and $469.8 million for FY 2021 (non-GAAP measures). Net interest margin, tax equivalent ("NIM") was 4.14% for Q4 2021 and 3.70% for FY 2021 (non-GAAP measures). Excluding PPP, NIM was 3.12% for Q4 2021 and 3.16% for FY 2021 (non-GAAP measures).

“2021 was a remarkable year for our company and we could not be prouder of our team members who executed superbly to achieve all of our exceptional accomplishments,” remarked Customers Bancorp Chairman and CEO, Jay Sidhu. “We made over $300 million in net income after taxes, provided our shareholders with approximately $73 million in BMTX stock upon divestiture of BankMobile, helped save over an estimated 1 million American jobs by supporting about 350,000 small businesses across the country through PPP program funding of over $10 billion. In October 2021, we launched a blockchain-based instant payments token that will serve a growing array of B2B clients who want the benefit of instant payments, and generated close to $2 billion of low-to-no cost core deposits in only 90 days. Following a successful soft launch in Q4 2021, we went into full launch in January 2022. Our organic growth rates remain remarkable, with our C&I loans growing 45% year-over-year and non-interest bearing deposits growing 89%. This combined with our market expansion plans, new teams and new lending verticals, and strong pipeline leave us very well positioned to support future growth. We are very excited and optimistic about our future,” Mr. Sidhu continued.

Paycheck Protection Program (PPP)

We funded, either directly or indirectly, about 256,000 PPP loans totaling $5.2 billion in 2021, bringing total PPP loans funded to approximately 358,000 and $10.3 billion. We also earned close to $350 million of deferred origination fees from the SBA through the PPP loans, which is significantly accretive to our earnings and capital levels as these loans are forgiven by the government. Through year-end 2021, we recognized about $260 million of these fees in earnings and expect most of the remaining $90 million to be recognized over the next two to three quarters.

Launch of Customers Bank Instant Token (CBITTM)

“We were thrilled to announce that CBIT on the TassatPayTM payments platform went live in October 2021. We received $1.5 billion in new non-interest bearing demand deposits at September 30, 2021 in anticipation of the soft launch, and added $400 million of demand deposits in Q4 2021. We not only developed and implemented this new technology partnership in record time, but did so following a very thorough strategic initiative process," commented Mr. Sidhu. "Following a successful soft launch in Q4 2021, we are pleased to report a full launch of CBIT in January 2022. We believe our technology, compliance and customer service and support systems are among the best in the country," concluded Mr. Sidhu.

As of December 31, 2021, $1.9 billion in core low-to-no cost demand deposits have been attracted to the Bank through this system. We expect these deposits to grow significantly in 2022, giving us an opportunity to transform our deposits into high quality, low-to-no cost, stable and growing deposit franchise.

Key Balance Sheet Trends

Commercial and industrial loans and leases increased $1.0 billion, or 45% year-over-year, to $3.3 billion, consumer installment loans increased $509.1 million, or 41% year-over-year, to $1.7 billion, commercial real estate owner occupied loans increased $82.6 million, or 14% year-over-year, to $654.9 million and construction loans increased $58.1 million, or 41% year-over-year, to $199.0 million. These increases in loans and leases were partially offset by decreases in multi-family loans of $275.0 million to $1.5 billion and commercial real estate non-owner occupied loans of $92.6 million to $1.1 billion. “Looking ahead, we see continued growth in core C&I, multi-family and consumer loans offsetting the continued expected seasonal and yield curve related decreases in loans to mortgage companies," stated Mr. Sidhu.

Total loans and leases, including PPP loans, decreased $1.3 billion, or 8.0%, to $14.6 billion at December 31, 2021 compared to the year-ago period. As expected, commercial loans to mortgage companies declined $1.3 billion to $2.4 billion compared to the year-ago period. PPP loans declined $1.3 billion to $3.3 billion at December 31, 2021 compared to the year-ago period, primarily driven by $6.5 billion in forgiveness, repayments and associated net deferred fees from the new round and earlier rounds of PPP loans, offset by current year originations and purchases. Excluding PPP loans and commercial loans to mortgage companies, total loans and leases increased $1.3 billion, or 17.6%, as the loan mix continued to improve year-over-year.

Total deposits increased $5.5 billion, or 48.3%, to $16.8 billion at December 31, 2021 compared to the year-ago period. Total demand deposits increased $6.2 billion, or 130.9%, to $10.9 billion. These increases were offset, in part, by decreases in savings deposits of $341.5 million, or 26.0%, to $1.0 billion, money market deposits of $252.4 million, or 5.5%, to $4.3 billion, and time deposits of $144.6 million, or 22.2%, to $507.3 million. The total cost of deposits declined by 22 basis points to 0.36% in Q4 2021 from 0.58% in the year-ago quarter. "Our current spot cost of deposits was approximately 30 basis points at December 31, 2021, a dramatic improvement over the prior year. Given the transformational improvements in the quality of our deposit franchise over the past year, we feel very well positioned against future interest rate hikes from a deposit repricing standpoint," stated Mr. Sidhu.

Other borrowings increased $99.0 million to $223.1 million at December 31, 2021 compared to the year-ago period from the issuance of our 2.875% fixed-to-floating rate senior notes, the proceeds of which were used to redeem all outstanding shares of our Series C and Series D Preferred Stock in Q3 2021.

Very Strong Growth in Tangible Common Equity and Tangible Book Value Per Share

Customers experienced significant improvements in regulatory capital ratios in Q4 2021 as compared to a year ago. Customers Bancorp's tangible common equity (a non-GAAP measure) increased by $339.4 million to $1.2 billion at December 31, 2021 from $885.3 million at December 31, 2020, and the tangible book value per common share (a non-GAAP measure) increased to $37.21 at December 31, 2021 from $27.92 at December 31, 2020, an increase of 33.3%. Customers remains well capitalized by all regulatory measures.

At the Customers Bancorp level, the total risk based capital ratio (estimate) and tangible common equity to tangible assets ratio ("TCE ratio"), excluding PPP loans (a non-GAAP measure), were 13.2% and 7.5%, respectively, at December 31, 2021.

Loan Portfolio Management During the COVID-19 Crisis

Over the last decade, Customers has developed a suite of commercial and retail loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s C&I, mortgage warehouse, specialty finance lines of business, and multi-family 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 healthy despite a highly adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, Customers employs a bottom-up data driven approach to analyze its commercial portfolio.

Strong commercial loan portfolio with very low concentration in COVID-19 impacted industries and CRE

  • All commercial loans previously on deferments became current by December 31, 2021, down from $73.4 million, or 0.7% of total loans and leases, excluding PPP loans (a non-GAAP measure), at September 30, 2021. Customers' commercial deferments peaked at about $1.2 billion in July 2020.
  • Exposure to industry segments and CRE significantly impacted by COVID-19 initially is not substantial.

Consumer installment, mortgage and home equity loan portfolios continue to perform well

  • Total consumer-related deferments declined to $6.1 million, or 0.1% of total loans and leases, excluding PPP loans (a non-GAAP measure), at December 31, 2021, down from $6.7 million at September 30, 2021.

Key Profitability Trends

Net Interest Income

Net interest income totaled $193.7 million in Q4 2021, a decrease of $26.2 million from Q3 2021, primarily due to lower PPP loan forgiveness from the first two rounds and the latest round, which resulted in lower net deferred loan origination fees recognized in Q4 2021. Excluding PPP loans, average interest-earning assets increased $1.4 billion. Interest-earning asset growth was driven by increases in commercial and industrial loans, consumer installment loans and investment securities, offset in part by decreases in commercial loans to mortgage companies and multi-family loans. Compared to Q3 2021, total loan yields decreased 23 basis points to 5.48% primarily resulting from a lower average balance of PPP loans in Q4 2021 driven by PPP loan forgiveness. Excluding PPP loans, the Q4 2021 total loan yield was relatively unchanged from Q3 2021. Total deposits and borrowing costs decreased by 4 basis points to 0.46% primarily due to growth in non-interest-bearing deposits and 4 basis points decrease in the cost of interest-bearing deposits to 0.50%. "As we've stated previously, it is difficult to predict net interest income in future periods because the timing of PPP forgiveness results in the accelerated recognition of net deferred fees and also affects the amount of net interest income expected to be earned while the PPP loans are held on our balance sheet," commented Mr. Sidhu.

Provision for Credit Losses

The provision for credit losses on loans and leases in Q4 2021 was $13.9 million, compared to a $13.2 million provision in Q3 2021. The provision in Q4 2021 was primarily to support the continued growth in CB Direct consumer installment loan originations. The allowance for credit losses on loans and leases represented 1.53% of total loans and leases receivable, excluding PPP loans (a non-GAAP measure) at December 31, 2021, compared to 1.65% at September 30, 2021 and 1.90% at December 31, 2020. Customers' non-performing loans at December 31, 2021 were only 0.34% of total loans and leases, an improvement from 0.45% at December 31, 2020.

Non-Interest Income

Non-interest income totaled $17.0 million for Q4 2021, a decrease of $8.6 million compared to Q3 2021. The decrease was primarily due to lower gains from the sale of investment securities and consumer installment loans of $6.1 million and $3.4 million, respectively, offset in part by an increase in gains realized from the sale of SBA loans of $0.5 million. A technology-led new initiative for selling excess consumer installment loans into securitizations was launched earlier this year. This resulted in a $0.7 million gain on sale in Q4 2021, bringing YTD December 2021 consumer loan gains to $5.2 million. The SBA gains were $1.8 million in Q4 2021, bringing the YTD December 2021 SBA gains to $6.2 million. "We were pleased with the success of this initiative in 2021, exceeding our initial target by 14%," commented Mr. Sidhu.

Non-Interest Expense

The management of non-interest expenses remains a priority at Customers. However, this will not be at the expense of not making adequate investments with new technologies to support efficient growth. Our Q4 2021 total non-interest expenses increased by $1.5 million compared to Q3 2021. The increase was primarily due to higher salaries and employee benefits of $3.7 million mostly due to increased incentives resulting from record 2021 financial performance, $1.6 million increase in occupancy expense primarily associated with the relocation of the Bank headquarters, technology and deposit servicing-related expenses of $1.8 million, and $1.2 million in charitable contributions and corporate sponsorships. These increases were offset in part by certain one-time or other transitory items in Q3 2021 including a $6.2 million make-whole fee paid to a single high-cost deposit customer and a litigation settlement amount of $1.2 million.

Taxes

Income tax expense from continuing operations decreased by $23.3 million to $13.0 million in Q4 2021 from $36.3 million in Q3 2021 primarily due to lower pre-tax income from continuing operations during Q4 2021 compared to Q3 2021 pre-tax income from continuing operations, an increase in excess tax benefits from stock option exercises, additional investments in tax credit vehicles and a reduction in the overall state tax effective rate. The effective tax rate from continuing operations for FY 2021 was 20%. Customers expects the full-year 2022 effective tax rate from continuing operations to be approximately 21% to 23%.

Net Loss From Discontinued Operations

The divestiture of BankMobile Technologies, Inc. was completed on January 4, 2021, and its historical financial results are presented as discontinued operations. An income tax expense of $1.6 million was recorded in net loss from discontinued operations in Q4 2021 resulting from the refinement of state income tax expense on the gain from the divestiture treated as a taxable asset sale for tax purposes.

BM Technologies, Inc. (BMTX)

We previously entered into a Deposit Servicing Agreement with BMTX, which was profitable at the time as we were in the early stage of building out our commercial and digital deposit franchise. However, with the advent of CBIT, which went into full launch in January 2022, we now have a low-to-no cost core deposit aggregation strategy that is expected to be far more profitable. We are preparing for the expiration of the Deposit Servicing Agreement scheduled to expire on December 31, 2022, which cost us approximately $60 million ($48 million after taxes) in 2021 and will not be renewed. The expiration of the Deposit Servicing Agreement is expected to be accretive to our 2023 earnings by $60 million (pre-tax). At December 31, 2021, $1.8 billion of deposits were serviced by BMTX, which we expect to leave the Bank by December 31, 2022.

Outlook

“Looking ahead, we have sustainable core growth and are very optimistic about the prospects of our company. We expect strong core above average low-double-digit growth in loans and deposits, improving profitability, and an efficiency ratio in the low 40s through a combination of revenue growth and prudent expense management over the next two to three years. The best-in-class tech agility of Customers Bancorp allowed us to be a major participant in the PPP program, significantly improving our capital ratios. We also incubated new lines of businesses that leverage our fintech relationships. In 2021 we launched a private instant, blockchain-based B2B payments platform with integration of digital and legacy payment rails. The platform will deliver enhanced payments functionality for our business clients and is expected to generate additional deposit growth in targeted niches, such as real estate, monetary and currency exchanges and institutional investments. We've achieved significant accretion in our capital levels over the past 12 months and our credit quality is expected to remain in line with or better than peers. We project our core earnings (excluding PPP) to be between $4.75 - $5.00 in 2022 and well over $6.00 in 2023, two to three years ahead of our previous guidance of $6.00 by 2025/2026,” concluded Mr. Sidhu.

Webcast

Date: Tuesday, January 25, 2022
Time: 9:00 AM EST

The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 4th Quarter Earnings Webcast.

You may submit questions in advance of the live webcast by emailing Customers' Communications & Marketing Director, David Patti at [email protected]; 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 a bank holding company located in West Reading, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank, a full-service bank with $19.6 billion in assets at December 31, 2021. 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 and lending services to small and medium-sized businesses, professionals, individuals and families. Services and products are available wherever permitted by law through mobile-first apps, online portals, and a network of offices and branches. Customers Bank provides blockchain-based digital payments via the Customers Bank Instant Token (CBITTM) which allows clients to make instant payments in U.S. dollars, 24 hours a day, 7 days a week, 365 days a year.

“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: the impact of the ongoing pandemic 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; 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, 2020, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank, except as may be required under applicable law.

Q4 2021 Overview

The following table presents a summary of key earnings and performance metrics for the quarter ended December 31, 2021, the preceding four quarters, and full year 2021 and 2020:

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

 

EARNINGS SUMMARY - UNAUDITED

 

 

 

(Dollars in thousands, except per share data and stock price data)

Q4

Q3

Q2

Q1

Q4

Twelve Months Ended

December 31,

 

 

2021

 

 

2021

 

2021

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Profitability Metrics:

 

Net income available to common shareholders

(from continuing and discontinued operations)

$

98,647

 

$

110,241

 

$

58,042

 

$

33,204

 

$

52,831

 

$

300,134

 

$

118,537

 

 

Per share amounts:

 

 

 

 

 

 

 

 

 

Earnings per share - basic

$

3.02

 

$

3.40

 

$

1.80

 

$

1.04

 

$

1.67

 

$

9.29

 

$

3.76

 

 

 

Earnings per share - diluted

$

2.87

 

$

3.25

 

$

1.72

 

$

1.01

 

$

1.65

 

$

8.91

 

$

3.74

 

 

 

Book value per common share (1)

$

37.32

 

$

35.24

 

$

31.94

 

$

30.13

 

$

28.37

 

$

37.32

 

$

28.37

 

 

 

CUBI stock price (1)

$

65.37

 

$

43.02

 

$

38.99

 

$

31.82

 

$

18.18

 

$

65.37

 

$

18.18

 

 

 

CUBI stock price as % of book value (1)

 

175

%

 

122

%

 

122

%

 

106

%

 

64

%

 

175

%

 

64

%

 

Average shares outstanding - basic

 

32,625,960

 

 

32,449,853

 

 

32,279,625

 

 

31,883,946

 

 

31,638,447

 

 

32,312,262

 

 

31,506,699

 

 

Average shares outstanding - diluted

 

34,320,327

 

 

33,868,553

 

 

33,741,468

 

 

32,841,711

 

 

31,959,100

 

 

33,697,547

 

 

31,727,784

 

 

Shares outstanding (1)

 

32,913,267

 

 

32,537,976

 

 

32,353,256

 

 

32,238,762

 

 

31,705,088

 

 

32,913,267

 

 

31,705,088

 

 

Return on average assets ("ROAA")

 

2.08

%

 

2.33

%

 

1.27

%

 

0.80

%

 

1.23

%

 

1.64

%

 

0.85

%

 

Return on average common equity ("ROCE")

 

33.18

%

 

40.82

%

 

23.22

%

 

14.66

%

 

24.26

%

 

28.75

%

 

14.55

%

 

Efficiency ratio

 

38.70

%

 

33.42

%

 

46.59

%

 

48.89

%

 

43.56

%

 

40.38

%

 

48.20

%

 

Non-GAAP Profitability Metrics (2):

 

 

 

 

 

 

 

 

Core earnings

$

100,095

 

$

113,876

 

$

59,303

 

$

70,308

 

$

54,588

 

$

343,582

 

$

119,526

 

 

Adjusted pre-tax pre-provision net income

$

129,335

 

$

167,215

 

$

86,467

 

$

86,769

 

$

77,896

 

$

469,786

 

$

240,198

 

 

Per share amounts:

 

 

 

 

 

 

 

 

 

Core earnings per share - diluted

$

2.92

 

$

3.36

 

$

1.76

 

$

2.14

 

$

1.71

 

$

10.20

 

$

3.77

 

 

 

Tangible book value per common share (1)

$

37.21

 

$

35.12

 

$

31.82

 

$

30.01

 

$

27.92

 

$

37.21

 

$

27.92

 

 

 

CUBI stock price as % of tangible book value (1)

 

176

%

 

122

%

 

123

%

 

106

%

 

65

%

 

176

%

 

65

%

 

Core ROAA

 

2.11

%

 

2.35

%

 

1.30

%

 

1.61

%

 

1.26

%

 

1.85

%

 

0.86

%

 

Core ROCE

 

33.67

%

 

42.16

%

 

23.72

%

 

31.03

%

 

25.06

%

 

32.91

%

 

14.67

%

 

Adjusted ROAA - pre-tax and pre-provision

 

2.67

%

 

3.36

%

 

1.80

%

 

1.90

%

 

1.70

%

 

2.45

%

 

1.54

%

 

Adjusted ROCE - pre-tax and pre-provision

 

42.82

%

 

60.81

%

 

33.27

%

 

36.80

%

 

34.20

%

 

43.88

%

 

27.76

%

 

Net interest margin, tax equivalent

 

4.14

%

 

4.59

%

 

2.98

%

 

3.00

%

 

2.78

%

 

3.70

%

 

2.71

%

 

Net interest margin, tax equivalent, excluding PPP loans

 

3.12

%

 

3.24

%

 

3.30

%

 

2.99

%

 

3.04

%

 

3.16

%

 

2.96

%

 

Core efficiency ratio

 

38.73

%

 

30.36

%

 

44.33

%

 

41.13

%

 

42.89

%

 

37.71

%

 

46.92

%

 

Asset Quality:

 

 

 

 

 

 

 

 

Net charge-offs

$

7,582

 

$

7,104

 

$

6,591

 

$

12,521

 

$

8,472

 

$

33,798

 

$

54,807

 

 

Annualized net charge-offs to average total loans and leases

 

0.21

%

 

0.17

%

 

0.16

%

 

0.33

%

 

0.21

%

 

0.22

%

 

0.41

%

 

Non-performing loans ("NPLs") to total loans and leases (1)

 

0.34

%

 

0.34

%

 

0.27

%

 

0.30

%

 

0.45

%

 

0.34

%

 

0.45

%

 

Reserves to NPLs (1)

 

277.72

%

 

252.68

%

 

269.96

%

 

264.21

%

 

204.48

%

 

277.72

%

 

204.48

%

 

Non-performing assets ("NPAs") to total assets

 

0.25

%

 

0.27

%

 

0.24

%

 

0.26

%

 

0.39

%

 

0.25

%

 

0.39

%

 

Customers Bank Capital Ratios (3):

 

 

 

 

 

 

 

 

Common equity Tier 1 capital to risk-weighted assets

 

12.13

%

 

12.77

%

 

12.40

%

 

11.75

%

 

10.62

%

 

12.13

%

 

10.62

%

 

Tier 1 capital to risk-weighted assets

 

12.13

%

 

12.77

%

 

12.40

%

 

11.75

%

 

10.62

%

 

12.13

%

 

10.62

%

 

Total capital to risk-weighted assets

 

13.46

%

 

14.16

%

 

13.77

%

 

13.11

%

 

12.06

%

 

13.46

%

 

12.06

%

 

Tier 1 capital to average assets (leverage ratio)

 

7.92

%

 

8.66

%

 

9.07

%

 

9.35

%

 

9.21

%

 

7.92

%

 

9.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Metric is a spot balance for the last day of each quarter presented.

 

(2) Non-GAAP measures exclude net loss from discontinued operations, loss on sale of foreign subsidiaries, unrealized gains (losses) on loans held for sale, investment securities gains and losses, loss on cash flow hedge derivative terminations, severance expense, merger and acquisition-related expenses, losses realized from the sale of non-QM residential mortgage loans, loss upon acquisition of interest-only GNMA securities, legal reserves, credit valuation adjustments on derivatives, risk participation agreement mark-to-market adjustments, deposit relationship adjustment fees, loss on redemption of preferred stock, goodwill and intangible assets, and PPP loans. These notable items are not included in Customers' disclosures of core earnings and other core profitability metrics. Please note that not each of the aforementioned adjustments affected the reported amount in each of the periods presented. Customers' reasons for the use of these non-GAAP measures and a detailed reconciliation between the non-GAAP measures and the comparable GAAP amounts are included at the end of this document.

 

(3) Regulatory capital ratios are estimated for Q4 2021 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected an option to delay the estimated impact of CECL on its regulatory capital over a five-year transition period ending January 1, 2025. As a result, capital ratios and amounts as of Q4 2021 exclude the impact of the increased allowance for credit losses on loans and leases and unfunded loan commitments attributed to the adoption of CECL and 25% of the quarterly provision for credit losses for subsequent quarters through Q4 2021.

 

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

December 31,

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and leases

$

198,000

 

 

$

233,097

 

 

$

153,608

 

 

$

152,117

 

 

$

145,414

 

 

$

736,822

 

 

$

512,048

 

Investment securities

 

15,202

 

 

 

8,905

 

 

 

8,327

 

 

 

7,979

 

 

 

6,777

 

 

 

40,413

 

 

 

24,206

 

Other

 

835

 

 

 

849

 

 

 

946

 

 

 

1,019

 

 

 

902

 

 

 

3,649

 

 

 

7,050

 

Total interest income

 

214,037

 

 

 

242,851

 

 

 

162,881

 

 

 

161,115

 

 

 

153,093

 

 

 

780,884

 

 

 

543,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

15,415

 

 

 

15,915

 

 

 

15,653

 

 

 

15,658

 

 

 

16,107

 

 

 

62,641

 

 

 

92,045

 

FHLB advances

 

51

 

 

 

5

 

 

 

963

 

 

 

5,192

 

 

 

5,749

 

 

 

6,211

 

 

 

21,637

 

Subordinated debt

 

2,688

 

 

 

2,689

 

 

 

2,689

 

 

 

2,689

 

 

 

2,688

 

 

 

10,755

 

 

 

10,755

 

FRB PPP liquidity facility, federal funds purchased and
other borrowings

 

2,189

 

 

 

4,350

 

 

 

4,819

 

 

 

4,845

 

 

 

5,603

 

 

 

16,203

 

 

 

15,179

 

Total interest expense

 

20,343

 

 

 

22,959

 

 

 

24,124

 

 

 

28,384

 

 

 

30,147

 

 

 

95,810

 

 

 

139,616

 

Net interest income

 

193,694

 

 

 

219,892

 

 

 

138,757

 

 

 

132,731

 

 

 

122,946

 

 

 

685,074

 

 

 

403,688

 

Provision (benefit) for credit losses on loans and leases

 

13,890

 

 

 

13,164

 

 

 

3,291

 

 

 

(2,919

)

 

 

(2,913

)

 

 

27,426

 

 

 

62,774

 

Net interest income after provision
(benefit) for credit losses on loans and
leases

 

179,804

 

 

 

206,728

 

 

 

135,466

 

 

 

135,650

 

 

 

125,859

 

 

 

657,648

 

 

 

340,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interchange and card revenue

 

84

 

 

 

83

 

 

 

84

 

 

 

85

 

 

 

91

 

 

 

336

 

 

 

646

 

Deposit fees

 

1,026

 

 

 

994

 

 

 

891

 

 

 

863

 

 

 

823

 

 

 

3,774

 

 

 

2,526

 

Commercial lease income

 

5,378

 

 

 

5,213

 

 

 

5,311

 

 

 

5,205

 

 

 

4,853

 

 

 

21,107

 

 

 

18,139

 

Bank-owned life insurance

 

1,984

 

 

 

1,988

 

 

 

2,765

 

 

 

1,679

 

 

 

1,744

 

 

 

8,416

 

 

 

7,009

 

Mortgage warehouse transactional fees

 

2,262

 

 

 

3,100

 

 

 

3,265

 

 

 

4,247

 

 

 

3,681

 

 

 

12,874

 

 

 

11,535

 

Gain (loss) on sale of SBA and other loans

 

2,493

 

 

 

5,359

 

 

 

1,900

 

 

 

1,575

 

 

 

1,689

 

 

 

11,327

 

 

 

2,009

 

Loan fees

 

2,513

 

 

 

1,909

 

 

 

1,670

 

 

 

1,436

 

 

 

1,746

 

 

 

7,527

 

 

 

5,652

 

Mortgage banking income (loss)

 

262

 

 

 

425

 

 

 

386

 

 

 

463

 

 

 

346

 

 

 

1,536

 

 

 

1,693

 

Gain (loss) on sale of investment securities

 

(49

)

 

 

6,063

 

 

 

1,812

 

 

 

23,566

 

 

 

44

 

 

 

31,392

 

 

 

20,078

 

Unrealized gain (loss) on investment securities

 

 

 

 

 

 

 

1,746

 

 

 

974

 

 

 

1,387

 

 

 

2,720

 

 

 

1,447

 

Loss on sale of foreign subsidiaries

 

 

 

 

 

 

 

(2,840

)

 

 

 

 

 

 

 

 

(2,840

)

 

 

 

Unrealized gain (loss) on derivatives

 

586

 

 

 

524

 

 

 

(439

)

 

 

2,537

 

 

 

804

 

 

 

3,208

 

 

 

(3,951

)

Loss on cash flow hedge derivative terminations

 

 

 

 

 

 

 

 

 

 

(24,467

)

 

 

 

 

 

(24,467

)

 

 

 

Other

 

452

 

 

 

(72

)

 

 

271

 

 

 

305

 

 

 

(1,125

)

 

 

957

 

 

 

(2,965

)

Total non-interest income

 

16,991

 

 

 

25,586

 

 

 

16,822

 

 

 

18,468

 

 

 

16,083

 

 

 

77,867

 

 

 

63,818

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

29,940

 

 

 

26,268

 

 

 

28,023

 

 

 

23,971

 

 

 

25,600

 

 

 

108,202

 

 

 

94,067

 

Technology, communication and bank operations

 

22,657

 

 

 

21,281

 

 

 

19,618

 

 

 

19,988

 

 

 

16,021

 

 

 

83,544

 

 

 

50,668

 

Professional services

 

7,058

 

 

 

6,871

 

 

 

6,882

 

 

 

5,877

 

 

 

4,732

 

 

 

26,688

 

 

 

13,557

 

Occupancy

 

4,336

 

 

 

2,704

 

 

 

2,482

 

 

 

2,621

 

 

 

2,742

 

 

 

12,143

 

 

 

11,362

 

Commercial lease depreciation

 

4,625

 

 

 

4,493

 

 

 

4,415

 

 

 

4,291

 

 

 

3,982

 

 

 

17,824

 

 

 

14,715

 

FDIC assessments, non-income taxes and regulatory fees

 

2,427

 

 

 

2,313

 

 

 

2,602

 

 

 

2,719

 

 

 

2,642

 

 

 

10,061

 

 

 

11,661

 

Loan servicing

 

4,361

 

 

 

4,265

 

 

 

1,700

 

 

 

437

 

 

 

879

 

 

 

10,763

 

 

 

3,431

 

Merger and acquisition related expenses

 

 

 

 

 

 

 

 

 

 

418

 

 

 

709

 

 

 

418

 

 

 

1,367

 

Loan workout

 

226

 

 

 

198

 

 

 

102

 

 

 

(261

)

 

 

123

 

 

 

265

 

 

 

3,143

 

Advertising and promotion

 

344

 

 

 

302

 

 

 

313

 

 

 

561

 

 

 

 

 

 

1,520

 

 

 

1,796

 

Deposit relationship adjustment fees

 

 

 

 

6,216

 

 

 

 

 

 

 

 

 

 

 

 

6,216

 

 

 

 

Other

 

5,574

 

 

 

5,098

 

 

 

4,686

 

 

 

1,305

 

 

 

2,503

 

 

 

16,663

 

 

 

9,209

 

Total non-interest expense

 

81,548

 

 

 

80,009

 

 

 

70,823

 

 

 

61,927

 

 

 

59,933

 

 

 

294,307

 

 

 

214,976

 

Income before income tax expense

 

115,247

 

 

 

152,305

 

 

 

81,465

 

 

 

92,191

 

 

 

82,009

 

 

 

441,208

 

 

 

189,756

 

Income tax expense

 

12,993

 

 

 

36,263

 

 

 

20,124

 

 

 

17,560

 

 

 

23,447

 

 

 

86,940

 

 

 

46,717

 

Net income from continuing operations

$

102,254

 

 

$

116,042

 

 

$

61,341

 

 

$

74,631

 

 

$

58,562

 

 

$

354,268

 

 

$

143,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations before income taxes

$

 

 

$

 

 

$

 

 

$

(20,354

)

 

$

(3,539

)

 

$

(20,354

)

 

$

(13,798

)

Income tax expense (benefit) from discontinued
operations

 

1,585

 

 

 

 

 

 

 

 

 

17,682

 

 

 

(1,222

)

 

 

19,267

 

 

 

(3,337

)

Net loss from discontinued operations

 

(1,585

)

 

 

 

 

 

 

 

 

(38,036

)

 

 

(2,317

)

 

 

(39,621

)

 

 

(10,461

)

Net income

 

100,669

 

 

 

116,042

 

 

 

61,341

 

 

 

36,595

 

 

 

56,245

 

 

 

314,647

 

 

 

132,578

 

Preferred stock dividends

 

2,022

 

 

 

2,981

 

 

 

3,299

 

 

 

3,391

 

 

 

3,414

 

 

 

11,693

 

 

 

14,041

 

Loss on redemption of preferred stock

 

 

 

 

2,820

 

 

 

 

 

 

 

 

 

 

 

 

2,820

 

 

 

 

Net income available to common shareholders

$

98,647

 

 

$

110,241

 

 

$

58,042

 

 

$

33,204

 

 

$

52,831

 

 

$

300,134

 

 

$

118,537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share from continuing
operations

$

3.07

 

 

$

3.40

 

 

$

1.80

 

 

$

2.23

 

 

$

1.74

 

 

$

10.51

 

 

$

4.09

 

Basic earnings per common share

 

3.02

 

 

 

3.40

 

 

 

1.80

 

 

 

1.04

 

 

 

1.67

 

 

 

9.29

 

 

 

3.76

 

Diluted earnings per common share from continuing
operations

 

2.92

 

 

 

3.25

 

 

 

1.72

 

 

 

2.17

 

 

 

1.73

 

 

 

10.08

 

 

 

4.07

 

Diluted earnings per common share

 

2.87

 

 

 

3.25

 

 

 

1.72

 

 

 

1.01

 

 

 

1.65

 

 

 

8.91

 

 

 

3.74

 

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET - UNAUDITED

(Dollars in thousands)

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

35,238

 

 

$

51,169

 

 

$

36,837

 

 

$

3,123

 

 

$

78,090

 

Interest earning deposits

 

482,794

 

 

 

1,000,885

 

 

 

393,663

 

 

 

512,241

 

 

 

615,264

 

Cash and cash equivalents

 

518,032

 

 

 

1,052,054

 

 

 

430,500

 

 

 

515,364

 

 

 

693,354

 

Investment securities, at fair value

 

3,817,150

 

 

 

1,866,697

 

 

 

1,526,792

 

 

 

1,441,904

 

 

 

1,210,285

 

Loans held for sale

 

16,254

 

 

 

29,957

 

 

 

34,540

 

 

 

46,106

 

 

 

79,086

 

Loans receivable, mortgage warehouse, at fair value

 

2,284,325

 

 

 

2,557,624

 

 

 

2,855,284

 

 

 

3,407,622

 

 

 

3,616,432

 

Loans receivable, PPP

 

3,250,008

 

 

 

4,957,357

 

 

 

6,305,056

 

 

 

5,178,089

 

 

 

4,561,365

 

Loans and leases receivable

 

9,018,298

 

 

 

7,970,599

 

 

 

7,772,142

 

 

 

7,536,489

 

 

 

7,575,368

 

Allowance for credit losses on loans and leases

 

(137,804

)

 

 

(131,496

)

 

 

(125,436

)

 

 

(128,736

)

 

 

(144,176

)

Total loans and leases receivable, net of allowance for
credit losses on loans and leases

 

14,414,827

 

 

 

15,354,084

 

 

 

16,807,046

 

 

 

15,993,464

 

 

 

15,608,989

 

FHLB, Federal Reserve Bank, and other restricted stock

 

64,584

 

 

 

57,184

 

 

 

39,895

 

 

 

69,420

 

 

 

71,368

 

Accrued interest receivable

 

92,239

 

 

 

93,514

 

 

 

90,009

 

 

 

83,186

 

 

 

80,412

 

Bank premises and equipment, net

 

8,890

 

 

 

9,944

 

 

 

10,391

 

 

 

10,943

 

 

 

11,225

 

Bank-owned life insurance

 

333,705

 

 

 

331,423

 

 

 

329,421

 

 

 

281,923

 

 

 

280,067

 

Goodwill and other intangibles

 

3,736

 

 

 

3,794

 

 

 

3,853

 

 

 

3,911

 

 

 

3,969

 

Other assets

 

305,611

 

 

 

310,271

 

 

 

362,661

 

 

 

371,439

 

 

 

338,438

 

Assets of discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

62,055

 

Total assets

$

19,575,028

 

 

$

19,108,922

 

 

$

19,635,108

 

 

$

18,817,660

 

 

$

18,439,248

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Demand, non-interest bearing deposits

$

4,459,790

 

 

$

4,954,331

 

 

$

2,699,869

 

 

$

2,687,628

 

 

$

2,356,998

 

Interest bearing deposits

 

12,318,134

 

 

 

12,016,694

 

 

 

11,174,070

 

 

 

9,784,812

 

 

 

8,952,931

 

Total deposits

 

16,777,924

 

 

 

16,971,025

 

 

 

13,873,939

 

 

 

12,472,440

 

 

 

11,309,929

 

Federal funds purchased

 

75,000

 

 

 

 

 

 

 

 

 

365,000

 

 

 

250,000

 

FHLB advances

 

700,000

 

 

 

 

 

 

 

 

 

850,000

 

 

 

850,000

 

Other borrowings

 

223,086

 

 

 

223,151

 

 

 

124,240

 

 

 

124,138

 

 

 

124,037

 

Subordinated debt

 

181,673

 

 

 

181,603

 

 

 

181,534

 

 

 

181,464

 

 

 

181,394

 

FRB PPP liquidity facility

 

 

 

 

 

 

 

3,865,865

 

 

 

3,284,156

 

 

 

4,415,016

 

Accrued interest payable and other liabilities

 

251,128

 

 

 

448,844

 

 

 

338,801

 

 

 

351,741

 

 

 

152,082

 

Liabilities of discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

39,704

 

Total liabilities

 

18,208,811

 

 

 

17,824,623

 

 

 

18,384,379

 

 

 

17,628,939

 

 

 

17,322,162

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

137,794

 

 

 

137,794

 

 

 

217,471

 

 

 

217,471

 

 

 

217,471

 

Common stock

 

34,722

 

 

 

33,818

 

 

 

33,634

 

 

 

33,519

 

 

 

32,986

 

Additional paid in capital

 

542,391

 

 

 

525,894

 

 

 

519,294

 

 

 

515,318

 

 

 

455,592

 

Retained earnings

 

705,732

 

 

 

607,085

 

 

 

496,844

 

 

 

438,802

 

 

 

438,581

 

Accumulated other comprehensive income (loss), net

 

(4,980

)

 

 

1,488

 

 

 

5,266

 

 

 

5,391

 

 

 

(5,764

)

Treasury stock, at cost

 

(49,442

)

 

 

(21,780

)

 

 

(21,780

)

 

 

(21,780

)

 

 

(21,780

)

Total shareholders' equity

 

1,366,217

 

 

 

1,284,299

 

 

 

1,250,729

 

 

 

1,188,721

 

 

 

1,117,086

 

Total liabilities & shareholders' equity

$

19,575,028

 

 

$

19,108,922

 

 

$

19,635,108

 

 

$

18,817,660

 

 

$

18,439,248

 

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

December 31, 2021

 

September 30, 2021

 

December 31, 2020

 

Average
Balance

Average
Yield or
Cost (%)

 

Average
Balance

Average
Yield or
Cost (%)

 

Average
Balance

Average
Yield or
Cost (%)

Assets

 

 

 

 

 

 

 

 

Interest earning deposits

$

1,568,510

0.15

%

 

$

1,279,983

0.15

%

 

$

413,381

0.12

%

Investment securities (1)

 

2,621,844

2.32

%

 

 

1,511,319

2.36

%

 

 

1,120,491

2.42

%

Loans and leases:

 

 

 

 

 

 

 

 

Commercial loans to mortgage companies

 

2,289,061

3.02

%

 

 

2,658,020

3.14

%

 

 

3,518,371

3.06

%

Multi-family loans

 

1,327,732

3.72

%

 

 

1,443,846

3.64

%

 

 

1,871,956

3.70

%

Commercial & industrial loans and leases (2)

 

3,514,186

3.71

%

 

 

3,024,620

3.76

%

 

 

2,801,172

3.96

%

Loans receivable, PPP

 

3,898,607

8.35

%

 

 

5,778,367

8.04

%

 

 

4,782,606

2.45

%

Non-owner occupied commercial real estate loans

 

1,334,184

3.80

%

 

 

1,346,629

3.73

%

 

 

1,358,541

3.80

%

Residential mortgages

 

314,551

3.68

%

 

 

325,851

3.50

%

 

 

400,771

3.80

%

Installment loans

 

1,657,049

8.96

%

 

 

1,615,411

9.21

%

 

 

1,253,679

8.50

%

Total loans and leases (3)

 

14,335,370

5.48

%

 

 

16,192,744

5.71

%

 

 

15,987,096

3.62

%

Other interest-earning assets

 

50,709

1.81

%

 

 

49,780

2.86

%

 

 

81,031

3.80

%

Total interest-earning assets

 

18,576,433

4.57

%

 

 

19,033,826

5.06

%

 

 

17,601,999

3.46

%

Non-interest-earning assets

 

637,808

 

 

 

705,514

 

 

 

573,400

 

Assets of discontinued operations

 

 

 

 

 

 

 

75,320

 

Total assets

$

19,214,241

 

 

$

19,739,340

 

 

$

18,250,719

 

Liabilities

 

 

 

 

 

 

 

 

Interest checking accounts

 

5,258,982

0.58

%

 

 

4,537,421

0.67

%

 

 

2,240,959

0.86

%

Money market deposit accounts

 

5,293,529

0.43

%

 

 

5,131,433

0.43

%

 

 

4,166,635

0.60

%

Other savings accounts

 

1,189,899

0.45

%

 

 

1,376,077

0.50

%

 

 

1,205,592

0.74

%

Certificates of deposit

 

541,528

0.51

%

 

 

614,404

0.59

%

 

 

833,689

1.30

%

Total interest-bearing deposits (4)

 

12,283,938

0.50

%

 

 

11,659,335

0.54

%

 

 

8,446,875

0.76

%

Federal funds purchased

 

815

0.15

%

 

 

%

 

 

120,891

0.10

%

FRB PPP liquidity facility

 

%

 

 

2,788,897

0.35

%

 

 

4,684,756

0.35

%

Borrowings

 

465,600

4.20

%

 

 

371,077

4.90

%

 

 

1,155,321

3.40

%

Total interest-bearing liabilities

 

12,750,353

0.63

%

 

 

14,819,309

0.62

%

 

 

14,407,843

0.83

%

Non-interest-bearing deposits (4)

 

4,817,835

 

 

 

3,335,198

 

 

 

2,543,529

 

Total deposits and borrowings

 

17,568,188

0.46

%

 

 

18,154,507

0.50

%

 

 

16,951,372

0.71

%

Other non-interest-bearing liabilities

 

328,782

 

 

 

310,519

 

 

 

162,723

 

Liabilities of discontinued operations

 

 

 

 

 

 

 

52,742

 

Total liabilities

 

17,896,970

 

 

 

18,465,026

 

 

 

17,166,837

 

Shareholders' equity

 

1,317,271

 

 

 

1,274,314

 

 

 

1,083,882

 

Total liabilities and shareholders' equity

$

19,214,241

 

 

$

19,739,340

 

 

$

18,250,719

 

Interest spread

 

4.11

%

 

 

4.56

%

 

 

2.75

%

Net interest margin

 

4.14

%

 

 

4.58

%

 

 

2.78

%

Net interest margin tax equivalent (5)

 

4.14

%

 

 

4.59

%

 

 

2.78

%

Net interest margin tax equivalent excl. PPP (6)

 

3.12

%

 

 

3.24

%

 

 

3.04

%

 

 

 

 

 

 

 

 

 

(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.

(2) Includes owner occupied commercial real estate loans.

(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.

(4) Total costs of deposits (including interest bearing and non-interest bearing) were 0.36%, 0.42% and 0.58% for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

(6) Non-GAAP tax-equivalent basis, as described in note (5) for the three months ended December 31, 2021, September 30, 2021 and December 31, 2020, 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

(Dollars in thousands)

 

 

 

 

 

 

Twelve Months Ended

 

December 31, 2021

 

December 31, 2020

 

Average Balance

Average Yield

or Cost (%)

 

Average Balance

Average Yield

or Cost (%)

Assets

 

 

 

 

 

Interest earning deposits

$

1,169,416

0.14

%

 

$

564,218

0.59

%

Investment securities (1)

 

1,753,649

2.30

%

 

 

836,815

2.89

%

Loans and leases:

 

 

 

 

 

Commercial loans to mortgage companies

 

2,699,300

3.09

%

 

 

2,668,642

3.11

%

Multi-family loans

 

1,501,878

3.77

%

 

 

2,020,640

3.85

%

Commercial & industrial loans and leases (2)

 

3,068,005

3.75

%

 

 

2,581,119

4.12

%

Loans receivable, PPP

 

5,108,192

5.46

%

 

 

3,121,157

2.10

%

Non-owner occupied commercial real estate loans

 

1,349,563

3.81

%

 

 

1,368,684

3.91

%

Residential mortgages

 

339,845

3.65

%

 

 

422,696

3.82

%

Installment loans

 

1,517,165

9.14

%

 

 

1,264,255

8.68

%

Total loans and leases (3)

 

15,583,948

4.73

%

 

 

13,447,193

3.81

%

Other interest-earning assets

 

59,308

3.48

%

 

 

85,091

4.41

%

Total interest-earning assets

 

18,566,321

4.21

%

 

 

14,933,317

3.64

%

Non-interest-earning assets

 

633,615

 

 

 

592,770

 

Assets of discontinued operations

 

 

 

 

78,714

 

Total assets

$

19,199,936

 

 

$

15,604,801

 

Liabilities

 

 

 

 

 

Interest checking accounts

$

4,006,354

0.69

%

 

$

2,098,138

0.89

%

Money market deposit accounts

 

4,933,027

0.47

%

 

 

3,657,422

0.96

%

Other savings accounts

 

1,358,708

0.56

%

 

 

1,162,472

1.44

%

Certificates of deposit

 

619,859

0.72

%

 

 

1,357,688

1.58

%

Total interest-bearing deposits (4)

 

10,917,948

0.57

%

 

 

8,275,720

1.11

%

Federal funds purchased

 

22,110

0.07

%

 

 

239,481

0.19

%

FRB PPP liquidity facility

 

2,636,925

0.35

%

 

 

2,537,744

0.35

%

Borrowings

 

610,503

3.92

%

 

 

1,265,279

3.02

%

Total interest-bearing liabilities

 

14,187,486

0.68

%

 

 

12,318,224

1.13

%

Non-interest-bearing deposits (4)

 

3,470,788

 

 

 

2,052,376

 

Total deposits and borrowings

 

17,658,274

0.54

%

 

 

14,370,600

0.97

%

Other non-interest-bearing liabilities

 

304,078

 

 

 

148,045

 

Liabilities of discontinued operations

 

 

 

 

53,916

 

Total liabilities

 

17,962,352

 

 

 

14,572,561

 

Shareholders' equity

 

1,237,584

 

 

 

1,032,240

 

Total liabilities and shareholders' equity

$

19,199,936

 

 

$

15,604,801

 

Interest spread

 

3.66

%

 

 

2.67

%

Net interest margin

 

3.69

%

 

 

2.70

%

Net interest margin tax equivalent (5)

 

3.70

%

 

 

2.71

%

Net interest margin tax equivalent excl. PPP (6)

 

3.16

%

 

 

2.96

%

 

 

 

 

 

 

(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.

(2) Includes owner occupied commercial real estate loans.

(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.

(4) Total costs of deposits (including interest bearing and non-interest bearing) were 0.44% and 0.89% for the twelve months ended December 31, 2021 and 2020, respectively.

(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the twelve months ended December 31, 2021 and 2020, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

(6) Non-GAAP tax-equivalent basis as described in note (5), for the twelve months ended December 31, 2021 and 2020, 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

PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2020

Commercial:

 

 

 

 

 

 

 

 

 

Multi-family

$

1,486,308

 

$

1,387,166

 

$

1,497,485

 

$

1,659,529

 

$

1,761,301

Loans to mortgage companies

 

2,362,438

 

 

2,626,483

 

 

2,922,217

 

 

3,463,490

 

 

3,657,350

Commercial & industrial

 

3,346,670

 

 

2,604,367

 

 

2,293,723

 

 

2,164,784

 

 

2,304,206

Commercial real estate owner occupied

 

654,922

 

 

656,044

 

 

653,649

 

 

590,093

 

 

572,338

Loans receivable, PPP

 

3,250,008

 

 

4,957,357

 

 

6,305,056

 

 

5,178,089

 

 

4,561,365

Commercial real estate non-owner occupied

 

1,121,238

 

 

1,144,643

 

 

1,206,646

 

 

1,194,832

 

 

1,213,815

Construction

 

198,981

 

 

198,607

 

 

179,198

 

 

156,837

 

 

140,905

Total commercial loans and leases

 

12,420,565

 

 

13,574,667

 

 

15,057,974

 

 

14,407,654

 

 

14,211,280

Consumer:

 

 

 

 

 

 

 

 

 

Residential

 

350,984

 

 

260,820

 

 

273,493

 

 

295,654

 

 

323,322

Manufactured housing

 

52,861

 

 

55,635

 

 

57,904

 

 

59,977

 

 

62,243

Installment

 

1,744,475

 

 

1,624,415

 

 

1,577,651

 

 

1,405,021

 

 

1,235,406

Total consumer loans

 

2,148,320

 

 

1,940,870

 

 

1,909,048

 

 

1,760,652

 

 

1,620,971

Total loans and leases

$

14,568,885

 

$

15,515,537

 

$

16,967,022

 

$

16,168,306

 

$

15,832,251

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

PERIOD END DEPOSIT COMPOSITION - UNAUDITED

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

2021

 

 

2021

 

 

2021

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

Demand, non-interest bearing

$

4,459,790

 

$

4,954,331

 

$

2,699,869

 

$

2,687,628

 

$

2,356,998

Demand, interest bearing

 

6,488,406

 

 

5,023,081

 

 

4,206,355

 

 

3,228,941

 

 

2,384,691

Total demand deposits

 

10,948,196

 

 

9,977,412

 

 

6,906,224

 

 

5,916,569

 

 

4,741,689

Savings

 

973,317

 

 

1,310,343

 

 

1,431,756

 

 

1,483,482

 

 

1,314,817

Money market

 

4,349,073

 

 

5,090,121

 

 

4,908,809

 

 

4,406,508

 

 

4,601,492

Time deposits

 

507,338

 

 

593,149

 

 

627,150

 

 

665,881

 

 

651,931

Total deposits

$

16,777,924

 

$

16,971,025

 

$

13,873,939

 

$

12,472,440

 

$

11,309,929

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

ASSET QUALITY - UNAUDITED

(Dollars in thousands)

As of December 31, 2021

As of September 30, 2021

As of December 31, 2020

 

Total loans

Non
accrual
/NPLs

Allowance
for credit
losses

Total NPLs
to total
loans

Total
reserves to
total NPLs

Total loans

Non
accrual
/NPLs

Allowance
for credit
losses

Total NPLs
to total
loans

Total
reserves to
total NPLs

Total loans

Non
accrual
/NPLs

Allowance
for credit
losses

Total NPLs
to total
loans

Total
reserves to
total NPLs

 

Loan type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

$

1,486,308

$

22,654

$

4,477

1.52

%

19.76

%

$

1,369,876

$

24,524

$

4,397

1.79

%

17.93

%

$

1,761,301

$

21,728

$

12,620

1.23

%

58.08

%

Commercial & industrial (1)

 

3,424,783

 

6,096

 

12,702

0.18

%

208.37

%

 

2,673,226

 

6,951

 

10,860

0.26

%

156.24

%

 

2,289,441

 

8,453

 

12,239

0.37

%

144.79

%

Commercial real estate
owner occupied

 

654,922

 

2,475

 

3,213

0.38

%

129.82

%

 

656,044

 

2,412

 

3,617

0.37

%

149.96

%

 

572,338

 

3,411

 

9,512

0.60

%

278.86

%

Commercial real estate non-
owner occupied

 

1,121,238

 

2,815

 

6,210

0.25

%

220.60

%

 

1,144,643

 

2,845

 

7,375

0.25

%

259.23

%

 

1,196,564

 

2,356

 

19,452

0.20

%

825.64

%

Construction

 

198,981

 

 

692

%

%

 

198,607

 

 

886

%

%

 

140,905

 

 

5,871

%

%

Total commercial loans
and leases receivable

 

6,886,232

 

34,040

 

27,294

0.49

%

80.18

%

 

6,042,396

 

36,732

 

27,135

0.61

%

73.87

%

 

5,960,549

 

35,948

 

59,694

0.60

%

166.06

%

Residential

 

334,730

 

7,727

 

2,383

2.31

%

30.84

%

 

248,153

 

7,738

 

1,912

3.12

%

24.71

%

 

317,170

 

9,911

 

3,977

3.12

%

40.13

%

Manufactured housing

 

52,861

 

3,563

 

4,278

6.74

%

120.07

%

 

55,635

 

3,520

 

4,410

6.33

%

125.28

%

 

62,243

 

2,969

 

5,189

4.77

%

174.77

%

Installment

 

1,744,475

 

3,783

 

103,849

0.22

%

2745.15

%

 

1,624,415

 

3,544

 

98,039

0.22

%

2766.34

%

 

1,235,406

 

3,211

 

75,316

0.26

%

2345.56

%

Total consumer loans
receivable

 

2,132,066

 

15,073

 

110,510

0.71

%

733.17

%

 

1,928,203

 

14,802

 

104,361

0.77

%

705.05

%

 

1,614,819

 

16,091

 

84,482

1.00

%

525.03

%

Loans and leases
receivable (1)

 

9,018,298

 

49,113

 

137,804

0.54

%

280.59

%

 

7,970,599

 

51,534

 

131,496

0.65

%

255.16

%

 

7,575,368

 

52,039

 

144,176

0.69

%

277.05

%

Loans receivable, PPP

 

3,250,008

 

 

%

%

 

4,957,357

 

 

%

%

 

4,561,365

 

 

%

%

Loans receivable, mortgage
warehouse, at fair value

 

2,284,325

 

 

%

%

 

2,557,624

 

 

%

%

 

3,616,432

 

 

%

%

Total loans held for sale

 

16,254

 

507

 

3.12

%

%

 

29,957

 

507

 

1.69

%

%

 

79,086

 

18,469

 

23.35

%

%

Total portfolio

$

14,568,885

$

49,620

$

137,804

0.34

%

277.72

%

$

15,515,537

$

52,041

$

131,496

0.34

%

252.68

%

$

15,832,251

$

70,508

$

144,176

0.45

%

204.48

%

(1) Excluding loans receivable, PPP from total loans and leases receivable is a non-GAAP measure. Management believes the use of these non-GAAP measures provides additional clarity when assessing Customers' financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. Please refer to the reconciliation schedules that follow this table.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4

 

Q3

 

Q2

 

Q1

 

Q4

 

Twelve Months Ended
December 31,

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Loan type

 

 

 

 

 

 

 

 

 

 

 

 

 

Multi-family

$

 

 

$

 

 

$

 

 

$

1,132

 

 

$

 

 

$

1,132

 

 

$

 

Commercial & industrial

 

240

 

 

 

116

 

 

 

(283

)

 

 

375

 

 

 

155

 

 

 

448

 

 

 

139

 

Commercial real estate owner occupied

 

66

 

 

 

50

 

 

 

(1

)

 

 

134

 

 

 

12

 

 

 

249

 

 

 

51

 

Commercial real estate non-owner occupied

 

(14

)

 

 

943

 

 

 

(59

)

 

 

(10

)

 

 

(35

)

 

 

860

 

 

 

24,486

 

Construction

 

(3

)

 

 

(3

)

 

 

(114

)

 

 

(5

)

 

 

(6

)

 

 

(125

)

 

 

(128

)

Residential

 

(6

)

 

 

54

 

 

 

(12

)

 

 

40

 

 

 

46

 

 

 

76

 

 

 

(26

)

Installment

 

7,299

 

 

 

5,944

 

 

 

7,060

 

 

 

10,855

 

 

 

8,300

 

 

 

31,158

 

 

 

30,285

 

Total net charge-offs (recoveries)
from loans held for investment

$

7,582

 

 

$

7,104

 

 

$

6,591

 

 

$

12,521

 

 

$

8,472

 

 

$

33,798

 

 

$

54,807

 

Customers believes that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in Customers' industry. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our ongoing financial results, which we believe enhance an overall understanding of our performance and increases comparability of our period to period results. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. 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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

December 31,

Q4 2021

 

Q3 2021

 

Q2 2021

 

Q1 2021

 

Q4 2020

 

2021

 

2020

(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

$

98,647

 

$

2.87

 

 

$

110,241

 

$

3.25

 

 

$

58,042

 

$

1.72

 

 

$

33,204

 

$

1.01

 

 

$

52,831

 

$

1.65

 

 

$

300,134

 

$

8.91

 

 

$

118,537

 

$

3.74

 

Reconciling items (after tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from discontinued operations

 

1,585

 

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

38,036

 

 

1.16

 

 

 

2,317

 

 

0.07

 

 

 

39,621

 

 

1.18

 

 

 

10,461

 

 

0.33

 

Severance expense

 

 

 

 

 

 

 

 

 

 

 

1,517

 

 

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

1,517

 

 

0.05

 

 

 

 

 

 

Merger and acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

320

 

 

0.01

 

 

 

508

 

 

0.02

 

 

 

320

 

 

0.01

 

 

 

1,038

 

 

0.03

 

Legal reserves

 

 

 

 

 

 

897

 

 

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

897

 

 

0.03

 

 

 

258

 

 

0.01

 

(Gains) losses on investment securities

 

43

 

 

0.00

 

 

 

(4,591

)

 

(0.14

)

 

 

(2,694

)

 

(0.08

)

 

 

(18,773

)

 

(0.57

)

 

 

(1,419

)

 

(0.04

)

 

 

(26,015

)

 

(0.77

)

 

 

(17,412

)

 

(0.55

)

Loss on sale of foreign subsidiaries

 

 

 

 

 

 

 

 

 

 

 

2,150

 

 

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

2,150

 

 

0.06

 

 

 

 

 

 

Loss on cash flow hedge derivative terminations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,716

 

 

0.57

 

 

 

 

 

 

 

 

18,716

 

 

0.56

 

 

 

 

 

 

Derivative credit valuation adjustment

 

(180

)

 

(0.01

)

 

 

(198

)

 

(0.01

)

 

 

288

 

 

0.01

 

 

 

(1,195

)

 

(0.04

)

 

 

(448

)

 

(0.01

)

 

 

(1,285

)

 

(0.04

)

 

 

5,811

 

 

0.18

 

Risk participation agreement mark-to-market adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,080

)

 

(0.03

)

Deposit relationship adjustment fees

 

 

 

 

 

 

4,707

 

 

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,707

 

 

0.14

 

 

 

 

 

 

Loss on redemption of preferred stock

 

 

 

 

 

 

2,820

 

 

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,820

 

 

0.08

 

 

 

 

 

 

Unrealized losses on loans held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

799

 

 

0.03

 

 

 

 

 

 

 

 

1,913

 

 

0.06

 

Core earnings

$

100,095

 

$

2.92

 

 

$

113,876

 

$

3.36

 

 

$

59,303

 

$

1.76

 

 

$

70,308

 

$

2.14

 

 

$

54,588

 

$

1.71

 

 

$

343,582

 

$

10.20

 

 

$

119,526

 

$

3.77

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)

 

Core Earnings, excluding PPP - Customers Bancorp

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

December 31,

Q4 2021

 

Q3 2021

 

Q2 2021

 

Q1 2021

 

Q4 2020

 

2021

 

2020

(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

$

98,647

 

$

2.87

 

 

$

110,241

 

$

3.25

 

 

$

58,042

 

$

1.72

 

 

$

33,204

 

$

1.01

 

 

$

52,831

 

$

1.65

 

 

$

300,134

 

$

8.91

 

 

$

118,537

 

$

3.74

 

Less: PPP net income (after tax)

 

64,323

 

 

1.87

 

 

 

81,337

 

 

2.40

 

 

 

24,312

 

 

0.72

 

 

 

25,079

 

 

0.76

 

 

 

19,148

 

 

0.60

 

 

 

195,050

 

 

5.79

 

 

 

41,509

 

 

1.31

 

GAAP net income to common shareholders, excluding PPP

 

34,324

 

 

1.00

 

 

 

28,904

 

 

0.85

 

 

 

33,730

 

 

1.00

 

 

 

8,125

 

 

0.25

 

 

 

33,683

 

 

1.05

 

 

 

105,084

 

 

3.12

 

 

 

77,028

 

 

2.43

 

Reconciling items (after tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from discontinued operations

 

1,585

 

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

38,036

 

 

1.16

 

 

 

2,317

 

 

0.07

 

 

 

39,621

 

 

1.18

 

 

 

10,461

 

 

0.33

 

Severance expense

 

 

 

 

 

 

 

 

 

 

 

1,517

 

 

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

1,517

 

 

0.05

 

 

 

 

 

 

Merger and acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

320

 

 

0.01

 

 

 

508

 

 

0.02

 

 

 

320

 

 

0.01

 

 

 

1,038

 

 

0.03

 

Legal reserves

 

 

 

 

 

 

897

 

 

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

897

 

 

0.03

 

 

 

258

 

 

0.01

 

(Gains) losses on investment securities

 

43

 

 

0.00

 

 

 

(4,591

)

 

(0.14

)

 

 

(2,694

)

 

(0.08

)

 

 

(18,773

)

 

(0.57

)

 

 

(1,419

)

 

(0.04

)

 

 

(26,015

)

 

(0.77

)

 

 

(17,412

)

 

(0.55

)

Loss on sale of foreign subsidiaries

 

 

 

 

 

 

 

 

 

 

 

2,150

 

 

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

2,150

 

 

0.06

 

 

 

 

 

 

Loss on cash flow hedge derivative terminations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,716

 

 

0.57

 

 

 

 

 

 

 

 

18,716

 

 

0.56

 

 

 

 

 

 

Derivative credit valuation adjustment

 

(180

)

 

(0.01

)

 

 

(198

)

 

(0.01

)

 

 

288

 

 

0.01

 

 

 

(1,195

)

 

(0.04

)

 

 

(448

)

 

(0.01

)

 

 

(1,285

)

 

(0.04

)

 

 

5,811

 

 

0.18

 

Risk participation agreement mark-to-market adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,080

)

 

(0.03

)

Deposit relationship adjustment fees

 

 

 

 

 

 

4,707

 

 

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,707

 

 

0.14

 

 

 

 

 

 

Loss on redemption of preferred stock

 

 

 

 

 

 

2,820

 

 

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,820

 

 

0.08

 

 

 

 

 

 

Unrealized losses on loans held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

799

 

 

0.03

 

 

 

 

 

 

 

 

1,913

 

 

0.06

 

Core earnings, excluding PPP

$

35,772

 

$

1.04

 

 

$

32,539

 

$

0.96

 

 

$

34,991

 

$

1.04

 

 

$

45,229

 

$

1.38

 

 

$

35,440

 

$

1.10

 

 

$

148,532

 

$

4.41

 

 

$

78,017

 

$

2.46

 

Core Return on Average Assets - Customers Bancorp

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

December 31,

(dollars in thousands except per share data)

Q4 2021

 

Q3 2021

 

Q2 2021

 

Q1 2021

 

Q4 2020

 

 

2021

 

 

 

2020

 

GAAP net income

$

100,669

 

 

$

116,042

 

 

$

61,341

 

 

$

36,595

 

 

$

56,245

 

 

$

314,647

 

 

$

132,578

 

Reconciling items (after tax):

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from discontinued operations

 

1,585

 

 

 

 

 

 

 

 

 

38,036

 

 

 

2,317

 

 

 

39,621

 

 

 

10,461

 

Severance expense

 

 

 

 

 

 

 

1,517

 

 

 

 

 

 

 

 

 

1,517

 

 

 

 

Merger and acquisition related expenses

 

 

 

 

 

 

 

 

 

 

320

 

 

 

508

 

 

 

320

 

 

 

1,038

 

Legal reserves

 

 

 

 

897

 

 

 

 

 

 

 

 

 

 

 

 

897

 

 

 

258

 

(Gains) losses on investment securities

 

43

 

 

 

(4,591

)

 

 

(2,694

)

 

 

(18,773

)

 

 

(1,419

)

 

 

(26,015

)

 

 

(17,412

)

Loss on sale of foreign subsidiaries

 

 

 

 

 

 

 

2,150

 

 

 

 

 

 

 

 

 

2,150

 

 

 

 

Loss on cash flow hedge derivative terminations

 

 

 

 

 

 

 

 

 

 

18,716

 

 

 

 

 

 

18,716

 

 

 

 

Derivative credit valuation adjustment

 

(180

)

 

 

(198

)

 

 

288

 

 

 

(1,195

)

 

 

(448

)

 

 

(1,285

)

 

 

5,811

 

Risk participation agreement mark-to-market adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,080

)

Deposit relationship adjustment fees

 

 

 

 

4,707

 

 

 

 

 

 

 

 

 

 

 

 

4,707

 

 

 

 

Unrealized losses on loans held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

799

 

 

 

 

 

 

1,913

 

Core net income

$

102,117

 

 

$

116,857

 

 

$

62,602

 

 

$

73,699

 

 

$

58,002

 

 

$

355,275

 

 

$

133,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

$

19,214,241

 

 

$

19,739,340

 

 

$

19,306,948

 

 

$

18,525,721

 

 

$

18,250,719

 

 

$

19,199,936

 

 

$

15,604,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core return on average assets

 

2.11

%

 

 

2.35

%

 

 

1.30

%

 

 

1.61

%

 

 

1.26

%

 

 

1.85

%

 

 

0.86

%

Adjusted Net Income and Adjusted ROAA - Pre-
Tax Pre-Provision - Customers Bancorp

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

December 31,

(dollars in thousands except per share data)

Q4 2021

 

Q3 2021

 

Q2 2021

 

Q1 2021

 

Q4 2020

 

 

2021

 

 

 

2020

 

GAAP net income

$

100,669

 

 

$

116,042

 

 

$

61,341

 

 

$

36,595

 

 

$

56,245

 

 

$

314,647

 

 

$

132,578

 

Reconciling items:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

12,993

 

 

 

36,263

 

 

 

20,124

 

 

 

17,560

 

 

 

23,447

 

 

 

86,940

 

 

 

46,717

 

Provision (benefit) for credit losses on loans and leases

 

13,890

 

 

 

13,164

 

 

 

3,291

 

 

 

(2,919

)

 

 

(2,913

)

 

 

27,426

 

 

 

62,774

 

Provision (benefit) for credit losses on unfunded commitments

 

352

 

 

 

669

 

 

 

45

 

 

 

(1,286

)

 

 

(968

)

 

 

(220

)

 

 

(1,100

)

Severance expense

 

 

 

 

 

 

 

2,004

 

 

 

 

 

 

 

 

 

2,004

 

 

 

 

Net loss from discontinued operations

 

1,585

 

 

 

 

 

 

 

 

 

38,036

 

 

 

2,317

 

 

 

39,621

 

 

 

10,461

 

Merger and acquisition related

 

 

 

 

 

 

 

 

 

 

418

 

 

 

709

 

 

 

418

 

 

 

1,367

 

Legal reserves

 

 

 

 

1,185

 

 

 

 

 

 

 

 

 

 

 

 

1,185

 

 

 

320

 

(Gains) losses on investment securities

 

49

 

 

 

(6,063

)

 

 

(3,558

)

 

 

(24,540

)

 

 

(1,431

)

 

 

(34,112

)

 

 

(21,525

)

Loss on sale of foreign subsidiaries

 

 

 

 

 

 

 

2,840

 

 

 

 

 

 

 

 

 

2,840

 

 

 

 

Loss on cash flow hedge derivative terminations

 

 

 

 

 

 

 

 

 

 

24,467

 

 

 

 

 

 

24,467