Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Investor Day (May 2014)
149 slides from Customers Bancorp's investor day presentation, May 14, 2014
Slide 1: Customers Bancorp, Inc. Effortless Banking
Customers Bancorp, Inc. Effortless Banking Building a Unique High Performing Banking Model
Slide 2: Overall Corporate Strategy
Overall Corporate Strategy Jay Sidhu
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation as well as other written or oral communications made from time to time by us, may contain certain forward- looking information within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These stateme
Slide 4: Forward-Looking Statements
Forward-Looking Statements • changes in estimates of future loan loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; • the integration of the Bank’s recent FDIC-assisted acquisitions may present unforeseen challenges; • inflation, i
Slide 5: Forward-Looking Statements
Forward-Looking Statements This presentation also includes estimated guidance regarding our fully diluted earnings per share for the years 2014 and 2015, which we have previously disclosed and is subject to the assumptions and qualifications included in that previous disclosure. The guidance consist
Slide 6: My Agenda
My Agenda 1. The changing face of banks in the United States 2. Our approach in positioning bank to take advantage of this changing environment 3. Customers Bancorp: Where we started and where we are headed 4. Organic growth vs. M&A growth 5. Why Bank Mobile is an additional vertical 6. What investo
Slide 7: Highly Experienced Management Team
Highly Experienced Management Team
Slide 8: The U.S. Banking Industry
The U.S. Banking Industry
Slide 9: U.S. Banking Sector Analysis
U.S. Banking Sector Analysis Source: FDIC, SNL Financial as of 12/31/2013 Banking Market Key Market Statistics
Slide 10: Total U.S. Depository Institutions
Total U.S. Depository Institutions U.S. Banking Industry Continues to Consolidate…Biggest declines in banks below $500 million
Slide 11: Number of US Banks & Thrifts by Asset Size
Number of US Banks & Thrifts by Asset Size Number of Banks & Thrifts Headquartered in DE, MD, NJ, NY, PA and VA by Asset Size …And Further Consolidation Expected With Over 90% of Remaining U.S. Banks Less Than $1B in Assets Source: SNL Financial 5,832 1,000 2,000 3,000 4,000 5,000 6,000 7,000 <$1B $
Slide 12: U.S. Banks Show Improvement Across Operating, Credit and Capital Metrics
Since the End of the Crisis, U.S. Banks Have Also Shown Meaningful Improvement Across Operating, Credit and Capital Performance Metrics ___________________________ Source: SNL Financial. Median performance metrics for top 50 U.S. banks. 1. Nonperforming assets defined by SNL Financial as nonaccrual
Slide 13: Customers Has Outperformed or Kept Pace With Median US Banks
Efficiency Ratio Net Interest Margin ROAA NPAs / Assets (1) Loan HFI Growth TCE / TA Customers Bancorp, Inc. Has Already Out Performed The Median Or Kept Pace With The Improvement of US Banks ___________________________ Source: SNL Financial and Company Documents. Median performance metrics for top
Slide 14: Smaller Banks Lacking Scale to Get to 1.0% ROA
Return on Average Equity Efficiency Ratio NPAs Return on Average Assets Source: SNL Financial on an LTM basis as of 4Q2013 Smaller Banks Lacking Scale to Get to 1.0% ROA
Slide 15: Smaller Banks Lacking Scale to Get to 1.0% ROA
Return on Average Equity Efficiency Ratio NPAs Return on Average Assets Source: SNL Financial on an LTM basis as of 4Q2013 Smaller Banks Lacking Scale to Get to 1.0% ROA
Slide 16: Higher Profitability Key Driver in Premium Tangible Book Multiple
Besides Size, Higher Profitability Key Driver in Premium Tangible Book Value Multiple Source: SNL Financial. Note: All banks with assets between $1.0 billion - $20.0 billion and Texas Ratios less than 75%. Excludes merger targets and MHCs. P/TBV as of 3/14/2014. ROATCE LTM as of most recent quarter
Slide 17: Taking Advantage Of This Changing Environment
Taking Advantage Of This Changing Environment Organic vs. M&A Growth Strategies
Slide 18: Stages in a Typical Market Recovery Cycle
Stages in a Typical Market Recovery Cycle We are here Where We are in the Cycle Market Decline Assisted Transactions Alternative Structures: • Reorg/Recap • Earnouts • Bankruptcy (363 / Pre- Pack Structures) • Good Bank / Bad Bank Traditional M&A Lower valuations, distressed targets with higher cred
Slide 19: Banks and Thrifts with Assets Less than $750 Million
Public and Private Banks and Thrifts with Assets Less than $750 Million Customers Bancorp’s Headquarters Public Companies’ Headquarters Private Companies’ Headquarters Potential M&A Target For CUBI Source: SNL Financial. Data as of most recent quarter available. Excludes merger targets. Eastern PA d
Slide 20: Role of CEO and Board
Role of CEO and Board … Especially in this environment 1. Absolute clarity of your vision , strategy , goals and tactics ; there must be absolute alignment between board and management 2. Become a master of your internal environment § What’s going on inside your bank 3. Be a master of your external
Slide 21: Impediments to Growth and How We Deal With Them
Impediments to Growth External Forces Business Issues Model for Shareholder Value Creation Issues facing Boards & CEO’s How Do We Deal With these Issues • Role of traditional bank branches changing very rapidly • Mobile banking fastest growing channel • Banks of all sizes revisiting their business s
Slide 22: The Thesis on Current U.S. Banking Environment
Credit Improving - Though Banks Face a Number of Operational Headwinds Capital Accumulation Continues To ROI Continues to Trend Below 10% Despite Being Modestly Higher Than Pre-Recession 1 Critical to Have a Winning Business Model Relationship Banks Fee Income Leaders Innovators § Innovator / disrup
Slide 23: Customers Bank
Customers Bank Executing on Building a Unique High Performing Banking Model #1 in USA in Organic Top Line Growth in 2013 & 2012 * Excludes banks below $1 billion in assets
Slide 24: Investment Proposition
Investment Proposition § ~$5.0 billion asset bank § Well capitalized at 11% + total risk based capital and 9% + tier 1 leverage § Target market from Boston to Washington D.C. along interstate 95 § ROA goal of 1% + and ROE of 12% + within 3-5 years § 3.00% net interest margin goal; Targeting efficien
Slide 25: Investment Proposition
Investment Proposition § Over half of the loan portfolio will re-price within one year § 40% of loans have an average life of 3.8 years § ~ 20% of deposits are non-interest bearing § Extending liabilities at this time § $150 million in forward starting swaps § Current share price ($21.85) is 13.0x e
Slide 26: Execution Timeline
Execution Timeline § We invested in and took control of a $270 million asset Customers Bank (FKA New Century Bank) § Identified existing credit problems, adequately reserved and recapitalized the bank § Actively worked out very extensive loan problems § Recruited experienced management team § Enhanc
Slide 27: What Customers Bank Stands For
What Customers Bank Stands For Vision ( our dream) “We want to build a highly successful bank that makes our customers say “WOW” Mission (the path) “We achieve our Visions by taking pride in delivering”: • Absolutely memorable service to our customers • High-touch personal or private banking support
Slide 28: Disciplined Model for Increasing Shareholder Value
Disciplined Model for Increasing Shareholder Value § Strong organic revenue growth + scalable infrastructure = sustainable double digit EPS growth and increased shareholder value § A clear and simple risk management driven business strategy § Build tangible book value per share each quarter via earn
Slide 29: Banking Strategy
Banking Strategy Consumer Banking Strategy • Principal focus is getting deposits in a highly efficient and unique model while meeting the needs of all the communities in our assessment area • Introduce Bank Mobile and Prepaid business for Gen Y and under-banked; strategic partnerships for credit ser
Slide 30: Consumer Deposit Strategy - High Touch, High Tech
Cost of Funds + Branch Operating Expense - Fees = ALL-IN-Cost < Competitors Technology Pricing Sales Force Concierge Banking Consumer Deposit Strategy - High Touch, High Tech § Organic deposit growth goals of 20%+ a year from consumers § Implementation of technology suite allows for unique product o
Slide 31: Deposits: Organic Growth With Controlled Costs
Total Deposit Growth ($mm) Average DDA Growth ($mm) Cost of Deposits Deposits: Organic Growth With Controlled Costs Source: Company data. Customers strategies of single point of contact and recruiting known teams in target markets produce rapid deposit growth with low total cost
Slide 32: Customers Bank Advantage
All Consumer Products All Business Products All Non-Credit Products Client Makes One Call Client Private / Personal Bankers Concierge Bankers Loan Portfolio Mix ($mm) Customers Bank Advantage Single Point of Contact High Touch / High Tech § Creation of solid foundation for future earnings
Slide 33: Business Banking Strategy: Privately Held Business
Banking Privately Held Business Business Banking Loan and Deposit Growth ($B) Business Banking Strategy Small Business § Target companies with less than $5.0 million annual revenue § Principally SBA loans originated by small business relationship managers or branch network § Current focus PA & NJ ma
Slide 34: Banking High Net Worth Families
Banking High Net Worth Families Multi-Family and Non-Owner Occupied Commercial Real Estate Banking Strategy § Focus on families that have income producing real estate in their portfolios § Private banking approach § Multi Family and non owner occupied income CRE loan products § Focus Markets: New Yo
Slide 35: Banking Mortgage Companies
Banking Mortgage Companies Mortgage Warehouse Banking Strategy § Private banking focused on mortgage companies with $5 to $10 million equity § Lower interest rate and credit risk line of business § ~75 strong warehouse clients § All warehouse loans classified as held for sale § All deposits are non-
Slide 36: Core Net Income
Core Net Income (1) These Deposit and Lending Strategies Results in Disciplined & Profitable Growth Source: SNL Financial and Company data. • Strategy execution has produced superior growth in revenues and earnings
Slide 37: Tangible Book Value Growth
Tangible Book Value Growth Strong Growth Provides for Shareholder Value Creation § Per share tangible book value up 31% since December 2010 § Focused on continuous growth of TBV aligns executive management compensation with shareholder value creation § Any tangible book value dilution from acquisiti
Slide 38: Key Financial Targets for the Next 3-5 Years
Criteria 3 -5 Year Targets Year EPS Expectations Key Financial Targets for the Next 3-5 Years Focus in future years • Single point of contact model - “High touch supported by high tech” • Only superior credit quality niches • Above average organic growth • Expense management Earnings per share growt
Slide 39: Startling Facts About Banks
Startling Facts About Banks § Banks each year charge $32 billion in over draft fees - that’s allowing or creating over 1 billion over drafts each year….Why?? § Payday lenders charge consumers another $7 billion in fees § That’s more than 3x what America spends on Breast Cancer and Lung Cancer combin
Slide 40: Customers Bank Views Itself As A Marketing Company
Customers Bank Views Itself As A Marketing Company With A Bank Charter
Slide 41: bankmobile Always on
6 wi = §F bankmobile Always on.
Slide 42: Mobile Banking - Creating a Virtual Bank for the Future
Mobile Banking - Creating a Virtual Bank for the Future § New banking vertical supplementing Consumer and Community Banking § Marketing Strategy § Target technology dependent <35 years old and larger depositors >50 years old segments § Reach markets through Affinity Banking Groups § Revenue generati
Slide 43: Summary
Summary § Strong high performing ~$5.0 billion bank with significant growth opportunities § “High touch, high tech” processes and technologies result in superior growth, returns and efficiencies § Shareholder value results from the combination of increasing tangible book value with strong and consis
Slide 44: High Performance Regional Banks
High Performance Regional Banks MRQ Profitability Capitalization Asset Quality Market Trading Name State Assets ($MM) Core ROAA Core ROAE Effic. Ratio TCE/TCA Tier 1 Ratio Leverage Ratio Total Capital Ratio NPA's/ Assets (1) Reserves/N PL's Market Cap ($MM) Price/TBV Price/LTM EPS OFG Bancorp PR $7,
Slide 45: Operating Strategies
Customers Bank Operating Strategies Richard A. Ehst
Slide 46: Operating Strategies
Operating Strategies Critical Success Factors - Driver of Consistent High Performance Talent & Execution of SPOC • Creating an exceptional customer experience at a low cost. Asset Quality • Maintain exceptional underwriting standards. Master of External Environment • Develop keen awareness of extern
Slide 47: Branch Lite Community Banking Model
Branch Lite Community Banking Model Warren Taylor
Slide 48: Deposit Strategy
Concierge Banking Sales Force Pricing Technology Deposit Strategy Primary Goal - Low cost core deposits from consumers and commercial in Southeast PA, NY, and NJ. § Takes banker to the customer’s home or office, 12 hours a day, 7 days a week § Appointment banking approach § Customer access to privat
Slide 49: Results: Deposits
Results Deposits in Millions
Slide 50: Branch Growth
Customers Bancorp, Inc. LS Branch Growth $831 $800 $700 $600 $555 $500 @ Start $400 ™ 2013 $306 $300 $268 $200 $16 $16 $11 $100 | 0 so DeNovo 2010 NCB 2009 Berkshire 2011 USA Bank 2010
Slide 51: Wyomissing Office
Wyomissing Office 1.19% All-In Cost $163 Million in deposits $22.6 million in DDAs
Slide 52: Hamilton, NJ Office
Hamilton, NJ Office Low Overhead Rent $24,000 / yr $134 million in deposits
Slide 53: Conclusion
Conclusion • Effortless banking coupled with: • Maintaining extremely low overhead • Hiring the best bankers in the market • Providing a better value proposition for customers • Service designed to build relationships and loyal customers. • Convenience via technology that enables customers to manage
Slide 54: Banking Privately Owned Businesses
Banking to Private Owned Business’ George Maroulis Steve Issa Tim Romig
Slide 55: CB Private & Commercial Banking
CB Private & Commercial Banking New York Metropolitan Division George Maroulis gmaroulis@cbpcb.com 212.843.2490
Slide 56: Overview of CB Private & Commercial Banking
Overview of CB Private & Commercial Banking Vision/Mission of Division v Our mission is to grow organically to $1 Billion in earning assets and liabilities, respectively, within 4 - 5 years; and build a highly successful bank that makes our customers say “wow!” v Provide absolutely memorable service
Slide 57: New York Metro Footprint
New York Metro Footprint CBPCB’s New York Metro (NYM) Division v NYM’s primary footprint is our assessment area v NYM’s secondary footprint is defined as the Federal Reserve Bank’s Second District v Banking Groups follow their clients beyond the primary marketing area Primary Market Secondary Market
Slide 58: New York Metro Opportunity
New York Metro Opportunity Compete By Being Unique v Execute on a unique operating model that affords us to compete in overbanked yet underserved markets by being different v Game changing method of interacting with your clients/customers using a high-tech, high-touch model via a single point of con
Slide 59: Execution: Single Point of Contact
Execution Single Point of Contact v Aligns the interests of shareholders, clients, team members & management v “Bank within a bank” model yields a superior efficiency ratio over time v Can be integrated into current sales & client management structure v Deeper and more profitable and “sticky” relati
Slide 60: New York Metro Deposits
With just in-market and in approximately of operation, we are of our $1 billion in deposits by 2017 ! New York Metro Deposits Division Sourced & Manages More Deposits than 4,634 Institutions in the US ² ¹ The Division’s deposit gathering activities occur solely out of the Bank’s Rye Brook Branch loc
Slide 61: Commercial & High Net Worth Lending
Commercial & High Net Worth Lending What We Primarily Do in C&I: v Commercial and Industrial (C&I) lending to the middle market ¹ including primary, bi-lateral, club, assignments, syndicated facilities and other direct lending v Business Banking ² C&I lending v Owner-occupied commercial mortgages v
Slide 62: Why Customers Bank?
Why Customers Bank? Talent in the marketplace is attracted to Customers Bank because of our: Culture: v At the core of the company is a culture built on trust and teamwork—NO SILOS Values: v Shared values that puts customers/clients first v Mutual respect among all whom we deal v Practicing the high
Slide 63: Current Banking Groups
Current Banking Groups ¹ The regional Chief Lending Officer (CLO) and the credit staff are locally based at the Division’s NYC office. CBPCB’s CLO reports directly to the Bank’s Chief Credit Officer located in Phoenixville, PA. This setup permits the Division to be very responsive to client credit r
Slide 64: Experienced Team
Experienced Team Over 275 years of experience forged at premiere institutions
Slide 65: Why Buy Banks When Seasoned Banking Groups May Be Recruited?
Why Buy Banks When Seasoned Banking Group May Be Recruited? v Growth by sourcing seasoned & established Banking Groups from competitors. v Branch based talent sourced in branches with >$100mm in footings v Each new location can house several groups v Phase 1, 2015 plan: grow to six groups v Phase 2,
Slide 66: Slide 66
Slide 67: New England Commercial & Specialty Lending
New England Commercial & Specialty Lending
Slide 68: Team Overview
Team Overview Ø Currently have 2 commercial offices in NE; Providence, RI and Boston, MA and recently opened Specialty group in PA. A total of 18 team members, that provide full commercial banking services in each location. Ø Majority of the team has worked together for over 15 years with a successf
Slide 69: Steve Issa and NE Commercial Team
Steve Issa - EVP, Serving as NE Market president & Managing Director of Commercial & Specialty Lending § Over 35 years of experience in Commercial Banking in Northeast. § Former EVP & Managing Director of Commercial & Specialty Banking at Flagstar Bank, prior to that Sovereign & Fleet Bank. Paula Pa
Slide 70: NE Commercial Banking 2013 Accomplishments
§ Seamless transition to Customers Bank in Q2 2013 with 100% customer and team member retention. § Total middle market relationships grew by 40% since March, $215MM from $150MM, despite a 78% turndown rate. § 2013 fees totaled $500K . § Instituted a bank wide SWAP program working with Treasury, Fina
Slide 71: NE Commercial Banking Strategic Plan
NE Commercial Banking Strategic Plan to $1Billion GOAL over next 3-4 years § Continue to deliver profitable growth with solid profit margins, strong fee income, relatively flat expenses, steady deposit growth, while maintaining a strong credit culture. § Plan to grow net loan outstanding's on an ann
Slide 72: NE Commercial Banking Strengths & Opportunities
NE Commercial Banking Strengths & Opportunities § Local decisioning and authority with a Senior credit officers that reside in each market. § Maintain excellent rapport with credit risk admin teams. § Deal screen prepared on each deal to provide quick level of interest. § Quick response time with mu
Slide 73: Right DNA
Right DNA NE Commercial Banking
Slide 74: Pennsylvania and New Jersey Banking Private Owned Business
Pennsylvania and New Jersey Banking Private Owned Business
Slide 75: Strategic Vision
Investor Day May 2014 Strategic Vision • Porters model of competitive advantage employing both Cost Leadership and Differentiation to achieve superior financial results. • Strategically located branches and loan production offices in high performing markets. • Leverage technology to cost effectively
Slide 76: Target Market
Investor Day May 2014 Target Market • “Mutual Fund” approach to target client base. • Average size of credit relationship $2.5 to $7.0 million • Broad spectrum of business and industries, no concentrations • Clients that need “Value Add” in a relationship • Price important but willing to pay up for
Slide 77: Strengths
Investor Day May 2014 Strengths: • Highly skilled team members that can execute the Single point of contact strategy. Private Relationship Managers that add value, not just order takers. • The Commercial Banking staff has an average of 20 years experience in commercial banking. • Technology as a way
Slide 78: Pennsylvania and New Jersey Where Do We Stand Today
Investor Day May 2014 Pennsylvania and New Jersey Where Do We Stand Today Current Infrastructure and Talent: The Commercial Banking function in Southeastern Pennsylvania and New Jersey is presently broken down into four (4) regional sales teams and a small business portfolio management/SBA Guaranty
Slide 79: 2013 Production Highlights
Investor Day May 2014 Pennsylvania and New Jersey Where Do We Stand Today 2013 Production Highlights: • Originated $265.4 million in new commercial and small business loans. • Increased outstanding Loan balances $126 million dollars . • Generated a Gain on sale of SBA Guaranty Loans of $1.0 million
Slide 80: Pennsylvania and New Jersey as a One Billion Dollar Market
Investor Day May 2014 Pennsylvania and New Jersey as a One Billion Dollar Market • The goal is to make Pennsylvania and New Jersey a $1.0 billion dollar market in three to five years. • Execution of the Single Point of Contact Strategy, a unique market strategy • Drive business referrals from center
Slide 81: SBA and Government Guaranty Lending
Investor Day May 2014 SBA and Government Guaranty Lending • Customers Bank generated SBA 7-A loans totaling $13.2 million with a gain on sale of $1.0 million in 2013 • Customers Bank ranked in top 10 percent nationwide of 2,344 SBA lenders and number 10 in the Philadelphia District, in total SBA gua
Slide 82: New Market Expansion
Investor Day May 2014 New Market Expansion We will look to be opportunistic and hire teams of experienced commercial lenders in contiguous markets with the below two markets being identified as expansion opportunities. Mercer County New Jersey: We are already in this market form a retail branch pers
Slide 83: Customers Bancorp, Inc.
Customers Bancorp, Inc. Customers Bancorp, Inc.
Slide 84: Banking to High Net Worth Families
Banking to High Net Worth Families Christopher McGowan Jonathan Lewis
Slide 85: Banking to High Net Worth Families Team
Banking to High Net Worth Families Ken Keiser - EVP, Director of Multi-Family and Investment CRE Lending • Over thirty-seven (37) years as a banking professional including: • Eight (8) years as SVP and Market Manager responsible for CRE Lending in Sovereign Bank’s Central PA region • Twenty-five (25
Slide 86: Banking High Net Worth Families
Banking The High Net Worth Families ( Individuals and Family Offices) • 4 of the top 10 MSA’s are within our core market and house some of the oldest real estate families in the US, primarily NYC and Philadelphia. • These folks are our target customer for 3 reasons: geography, reputation, net worth
Slide 87: Banking High Net Worth Families
Banking The High Net Worth Families ( Individuals and Family Offices) • Typical entry to this client base is through a multifamily real estate loan. $4-$7MM average size located in the 5- boroughs of NYC and Philadelphia. • The Customers Unique 5 Point Approach - build on relationships, speed, flexi
Slide 88: High Net Worth Families
High Net Worth Families Three years ago We were given the task of Building Lasting Relationships with High Net Worth Families Phase I-Planting ( CRE has been the initial tool to make introductions) • Meet • Set Expectations • Communicate • Exceed Expectations When our customers speak to their friend
Slide 89: Results
Results Phase 2-Polination Our Results • $121.5 Million of Loans in first 6 months of 2011 • $399 Million in 2012 • $836 Million in 2013. In the last quarter of 2013 we ramped up to meet Bank needs. • $623 Million in the Q1 2014. • Total deposits currently $75 Million growing at $7 Million per month
Slide 90: Harvesting Relationships
Harvesting Relationships Phase 3-Harvesting • Follow up with customers • Determine other needs • Cross Sell Products-In the last 3 months we have identified over $100 million of C&I opportunities • Get Referrals Review results and repeat.
Slide 91: Who are our Customers
Who are our Customers Customer Mix • 355 Plus Transactions • 150 Different customers • Five C’s ( Character, Capability, Credit, Collateral, Cash Flow)-We are highly focused and disciplined. • We continue to be laser focused on credit quality. • Our Q1’14 efforts taught us that a thoughtful quick re
Slide 92: Banking to Mortgage Companies
Banking to Mortgage Companies Glenn Hedde
Slide 93: Banking for Mortgage Companies: State of the Industry
Annual Industry Mortgage Origination Volume -- 2006 - 2012 ($ Tril.) - Originations are estimates from the Mortgage Bankers Association Banking for Mortgage Companies State of the Industry (prior to mid-2013): • Industry enjoyed strong origination volume post-crisis driven by refinance activity due
Slide 94: Industry Quarterly Mortgage Originations
Industry Quarterly Mortgage Originations 2013 & 2014 ($ Tril.) * - Indicates forecasted periods per the Mortgage Bankers Association Banking for Mortgage Companies Current State of the Industry: • Mortgage Rate increase in mid-2013 led to 50-60% drop in volume • Profit margins shrink with excess ind
Slide 95: Banking for Mortgage Companies
Banking for Mortgage Companies Customers Bank Business Growth • Business unit grown from $0 in late 2009
Slide 96: Banking for Mortgage Companies
Banking for Mortgage Companies Key Success Factors: • Very experienced team in sales, credit and operations • Institutional Understanding/Commitment of Business • High Service model driven by single point of contact model • Strong Risk Management Controls Attractive Financial Results: • Fee Income •
Slide 97: Banking for Mortgage Companies
Banking for Mortgage Companies Differentiating Factors: • Financing mortgage servicing rights on a term basis • Warehouse Construction-to-perm loans and other salable products • Private Banking for owners of mortgage companies
Slide 98: Operating Strategies Q & A
Customers Bank Operating Strategies Q & A
Slide 99: Customers Bancorp, Inc.
Customers Bancorp, Inc.
Slide 100: Table of Contents
Table of Contents • Customers Bank Advantage……………………………………. 101 • Single Point of Contact - CRM ……………………………....... 102 • Single Point of Contact - Business Intelligence……………… 103 • High Touch supported by High Tech…………………………… 104 • Malauzai Software……………………………………………….. 105 • BOLTS Partnership…………………
Slide 101: Customers Bank Advantage
Cash Management Residential Real Estate Credit Cards Commercial Real Estate Commercial Banking Retail Branches Client Makes One Call Client Private / Personal Bankers Concierge Banking Other Products/ Services Customers Bank Advantage High Touch supported by High Tech Single Point of Contact Banking
Slide 102: Single Point of Contact - CRM
• Account Management Features : Contact records – demographic information, as well as account history. • Activity Management Features: Calendars, task assignments, Outlook integration, etc. • Customer Service Features: Case/ticket management, agent workflow tools, service resolution tools (i.e. deci
Slide 103: SPOC - Business Intelligence
SPOC - Business Intelligence Data Analytics and Distributed Data Views • Provisioning the data analytics and mobile distribution will be accomplished by QlikView (Qlik Technologies). • Leading edge provider for this service and leader in the financial services field particularly Foundation Data Ware
Slide 104: Technology Concierge Banking
Technology Concierge Banking High Touch supported by High Tech High Tech § Implementation of technology suite allows for unique product offerings: § Remote account opening § Remote & Mobile deposit capture § Mobile banking § Picture Pay § Internet Banking transition to Smart Web App High Touch § Tak
Slide 105: Malauzai Software
Malauzai Software Customers and Partners Mission - Cool SmartApps, Easily Managed and Measured 170+ Customers in Live Production with: - 15 different core systems - 3 different bill payment systems 6 Strong Business Partners - Computer Services Inc. - 460+ core customers - Catalyst Corporate Federal
Slide 106: People
People Forty+ Full-time Employees Strong Leaders — Tom Shen Co-Founder/CEO — Robb Gaynor Co-Founder/Chief Product Officer — Joe Gomez Chief Operating Officer — Lou Anne Moody Chief Sales Officer — Danny Piangerelli Co-Founder/Chief Technology Officer — Steve Reich Chief Partnership Officer Customers
Slide 107: Malauzai Software Standard Features
Malauzai Software Standard “Cool” Features • Mobile Onboarding- Sign up for a new account via a mobile device • Real-Time Account Data- Stay up-to-date with your account balances • Quick Balance- Access balances/history with the touch of a button • Picture Bill Pay- Take a picture of a bill to make
Slide 108: Malauzai Software Advanced Features
Malauzai Software Advanced “Sizzle” Features • Can I Buy?- Automated cash calendar that predicts future balances • Voice Mobile Banking- Allow end-users to talk to mobile SmartApp • Video Chat- Deliver a superior remote service experience • Gamification- Mobile rewards program to increase end-user e
Slide 109: Innovation: Can I Buy Feature
Innovation “Can I Buy” Feature This feature allows a customer to see if they can afford to buy something either today or in the future. Based on their cash available and an estimate of a future balance, a customer can make an immediate decision on what they can buy. A customer can take a picture of
Slide 110: Innovation: Voice Mobile Banking
Innovation Voice Mobile Banking Features This feature allows a customer to interact with Mobile Banking using voice commands. First, a customer will be able to hear their balances when they enter the SmartApp. Especially when the customer is in “SmarText-Mode”, the App will tell them their balance r
Slide 111: Innovation: Mobile Picture Banking
Innovation Mobile Picture Banking This set of features allows the customer to extensively use the camera to perform banking transactions. Starting with opening an account where they take a picture of their drivers license, through funding the account by taking a picture of a check, and including tak
Slide 112: Innovation: Cash Deposits Anywhere
Innovation Cash Deposits Anywhere This feature allows a customer to make a cash deposit at a merchant such as Walmart and get access to the funds Immediately. It is called MoneyPak today (as implemented by Higher One). The feature uses the GreenDot network to settle the funds. To our knowledge there
Slide 113: What is BOLTS all about
What is BOLTS all about……… • Serves Community Banks and Credit Unions in Solving Complex Technology Challenges and Helps them Bring Innovative Products and Services to the Market Faster, Better, Cheaper • Uses Process-Centric Approach to Deliver Streamlined Back Office • Develops Integrated Products
Slide 114: BOLTS Partnership
BOLTS Partnership • BOLTS team is providing integration and work-flow based framework to ensure a fully automated customer onboarding & support solution that includes: • Real-time Customer Identification, Verification & Validation • Real-time Account Provisioning (Checking and Saving with Overdraft)
Slide 115: BOLTS Partnership: Automated Onboarding Business Process
BOLTS Partnership Automated Onboarding Business Process
Slide 116: BOLTS Partnership: Customer Support & Contact Management
BOLTS Partnership Customer Support & Contact Management Solutions
Slide 117: Security: Current Threat Environment
Security Current Threat Environment • Malware • Hacking • Social Engineering • Identity Theft • Card Breaches • ACH / Wire
Slide 118: Security: Solutions & Business Partners
Security Solutions & Business Partners • Enhanced Multi-Factor Authentication • Intrusion Detection Tools • Anti-Malware & Anti-Virus Tools • Vulnerability Management • Security Administration
Slide 119: Conclusion
Conclusion Technology……… ……………….drives innovation ……………….enables a superior customer experience ……………….creates operational efficiency ……………….supports regulatory, compliance, and security mandates ……………….significantly impacts the bottom line of the organization
Slide 120: Customers Bancorp, Inc.
Customers Bancorp, Inc. Customers Bancorp, Inc.
Slide 121: BankMobile.com
BankMobile.com Warren Taylor Luvleen Sidhu
Slide 122: Banking of the Future
Banking of the Future Mobility. Simplicity. No Fees.
Slide 123: Mission
Mission 1. Effortless experience 2. Loyalty Creation 3. Win / Win Outcome
Slide 124: Opportunity
Opportunity • Capitol One, Schwab, Ally - have less than 4% of US Deposits • “Big Banks” can’t compete • Durbin interchange impact • Overhead, structure, bureaucracy • Technology lags • Value - fees, rates, service
Slide 125: Generation Y
Generation Y Gen Y What are their banking expectations?
Slide 126: Houston, we have a problem
Houston, we have a problem… Mobility has revolutionized our world… …however, banks have been slow to adapt Millennial Desperate for a Better Banking Experience (50%) indicate they are counting on start up firms to overhaul how banks work A THREE-YEAR STUDY FINDS THAT MILLENNIALS ARE LOOKING FOR WAYS
Slide 127: bankmobile is born!
bankmobile is born! • bankmobile is a virtual bank designed for the on-the-go lifestyle and specific needs of the digital consumer • Our mission is to make the frustrated millennial say “Wow! I finally found a transparent, effortless bank! • bankmobile brings all your banking to your smartphone & ta
Slide 128: Competition
Competition Customer Target Branch Density * heavy none Millennial Baby Boomers * not bank
Slide 129: How are we different?
How are we different? Mobile banking is only an add on service adding costs Low rates & High fees Product offering/pricing the same whether you open an account in a branch or on mobile device Defensive: Mobile apps are not used to attract new customers; Only to respond to demand for mobile with a co
Slide 130: Banks are looking for ways to cut their branch networks
Banks are looking for ways to cut their branch networks Branch Sales and Closings Since 12/31/12 by Top 50 Largest Banks Source: SNL Financial. Market data as of 4/30/14, operating data as of most recent quarter
Slide 131: How are we different? Virtual Banks
Internet Banks Neo Banks bankmobile How are we different? Virtual Banks • Attract age 55+, higher balance, rate sensitive customer • Not focused on creating simplistic mobile experience with innovative banking features • One of the first mobile virtual bank • Effortless, simple, superior user experi
Slide 132: Guiding principles
Guiding principles Keep it simple - with goal of NO FEES Best-in-class user experience and customer service are how we will win We need to speak with an authentic voice - absolute transparent disclosures You can’t manage what you can’t measure
Slide 133: Product Launch Plans
July 2014 October 2014 Jan 2015 & Beyond Product Launch Plans • Picture account opening • Checking account • Savings account • Real time account data • Remote check deposit • P2P payments • Picture bill pay • Traditional bill pay • Debit card management (on/off capability) • 4 digit pin • E-statemen
Slide 134: Customers Bancorp, Inc.
Customers Bancorp, Inc.
Slide 135: bankmobile strategy
Who are they? Why are they attractive? How will we do it? bankmobile strategy § Ages 18-35; Largest generation at around 84 million § Not just future customers, but influencers § Millennials rank the four largest banks among the 10 least loved brands in America § Tech savvy, tech dependent, largest
Slide 136: Channel Strategy
Channel Strategy Detail PR Target key blogs & publications. Pitch ‘mobile’ and ‘community bank’ focused message Social Media Establish FB & Twitter presence & drive traffic through commentary & questions Blog Leverage to give bankmobile a personal touch and communicate our feelings and opinions to u
Slide 137: bankmobile strategy: Affinity Marketing
Objective Partnership Structure Examples bankmobile strategy 2. Affinity Marketing § Create affinity relationships with not for profits as well as profit generating organizations § Members, followers, or customers must feel passionate about the organizations we partner with § Develop a win/win partn
Slide 138: bankmobile Revenue Model
bankmobile Revenue Model Revenue model Interchange Fees (Debit & Prepaid) Margin from Interest Bearing Deposits Margin from Non Interest Bearing Deposits Offering Credit bankmobile Advantage Banks below $10B can generate at least 2X more from interchange than banks >$10B
Slide 139: Goals
Goals Over a 5 year period, acquire ~250,000 customers Make 1.25% plus ROA Make 15% plus ROE
Slide 140: Ideas are just one thing; execution is everything
“ ideas are just one thing; execution is everything .” - Jay Sidhu, CEO Customers Bank
Slide 141: Customers Bancorp, Inc.
Customers Bancorp, Inc.
Slide 142: Future Financial Model / Risk Management
Future Financial Model/ Risk Management Robert Wahlman
Slide 143: What Makes Us Unique
What Makes Us Unique § We are building a new kind of bank using technology and relationship building to develop a new kind of customer relationship § Our innovative organic growth model is a great way to build a profitable bank and create shareholder value at a low cost o The branch lite, high touch
Slide 144: Q1 2014 Results
Q1 2014 Results • With one time items, in both revenue and expense, of ~ $3.0 million each the net change to our core earnings was immaterial.
Slide 145: Hypothetical $6.5 Billion Bank
Hypothetical $6.5 Billion Bank
Slide 146: CAMELS+ Risk Management Approach
Capital Asset Quality Liquidity Sensitivity +’s Manage- ment Earnings Model Base Case Scenario Stress Test the Base Case Model Alternative Scenarios Identify Trigger Events Mitigation Strategies/ Policies/ Procedures Customers has adopted a CAMELS+ approach to identify, measure, monitor and control
Slide 147: Enterprise Risk Management
Enterprise Risk Management Tone at the Top • Risk Management Compliance Program Board of Directors • Board Risk Committee • Board Audit Committee • Board Compliance Committee Capital Committee • Loan Committee • Management Risk Committee • Asset Liability Committee • Management Compliance Committee
Slide 148: Enterprise Risk Management
Enterprise Risk Management Tone at the Top • Risk Management Compliance Program Board of Directors • Board Risk Committee • Board Audit Committee • Board Compliance Committee Capital Committee • Loan Committee • Management Risk Committee • Asset Liability Committee • Management Compliance Committee
Slide 149: Customers Bancorp, Inc.
Customers Bancorp, Inc.