Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Investor Presentation (July 2015)
41 slides from Customers Bancorp's investor presentation, July 2015
Slide 1: Highly Focused, Low Risk, Above Average Growth Bank Holding Company
Highly Focused, Low Risk, Above Average Growth Bank Holding Company Investor Presenta,on July, 2015 NYSE: CUBI
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presenta>on as well as other wriAen or oral communica>ons made from >me to >me by us, may contain certain forward-‐looking informa>on within the meaning of the Securi>es Act of 1933, as amended, and the Securi>es Exchange Act of 1934, as amended. These statements rel
Slide 3: Forward-Looking Statements
Forward-Looking Statements • con>nued vola>lity in the credit and equity markets and its effect on the general economy; • the effect of changes in accoun>ng policies and prac>ces, as may be adopted by the regulatory agencies, as well as the Public Company Accoun>ng Oversight Board, the Financial Accou
Slide 4: A $7.6 billion asset business bank serving privately held businesses
A consumer bank start up, set A $7.6 billion asset business up as a division of Customers bank serving privately held Bank, serving millennials, businesses middle income families and underbanked throughout the United States
Slide 5: Customers Bank Overview
Customers Bank Overview $7.6 bn Business Bank with 21 sales offices with Branches and Loan Production Offices target market from Boston to Philadelphia Opera,ng in key Mid-‐Atlan,c and Northeast markets ! Greater New York City area (Westchester County, ManhaAan and Melville) ! Philadelphia area (Buck
Slide 6: Our Competitive Advantage: A Highly Experienced Management Team
Our Compe,,ve Advantage: A Highly Experienced Management Team Years of Banking Name Title Experience Background Jay S. Sidhu Chairman & CEO 39 Chairman and CEO of Sovereign Bank & Sovereign Bancorp, Inc. EVP, Commercial Middle Market, Regional President and Managing Director of Corporate Richard A.
Slide 7: Investment Proposition
Investment Proposi,on Strong Organic Growth, Well Capitalized, Branch Lite Bank in Attractive Markets ! $7.6 billion asset bank with only 21 sales offices ! Well capitalized at 11.1% total risk based capital (es>mated), 7.4% >er 1 leverage, and 6.1% tangible equity to tangible assets ! Target market f
Slide 8: Executing On Our Unique High Performing Banking Model
Customers Bank Executing On Our Unique High Performing Banking Model 8
Slide 9: Disciplined Model for Superior Shareholder Value Creation
Disciplined Model for Increasing Shareholder Value Disciplined Model for Superior Shareholder Value Crea,on ! Strong organic revenue growth + scalable infrastructure = sustainable double digit EPS = growth and increased shareholder value ! A very robust risk management driven business strategy ! Bui
Slide 10: Execution Timeline
Execu,on Timeline Phase I Phase II Phase III Phase IV Acquired Bank Built Strong Leveraging Innovation & Platform Foundation Infrastructure Execution ! We invested in and ! Enhanced credit and risk ! Recruited proven lending ! Single Point of Contact took control of a $270 management teams Banking m
Slide 11: Business Banking Focus - ~95% of revenues come from business segments
Banking Strategy – Customers Bank Business Banking Focus -‐ ~95% of revenues come from business segments • Loan and deposit business through these segments: • Banking Privately Held Businesses • Banking High Net Worth Families • Banking Privately Held Mortgage Companies • Selected Commercial Real E
Slide 12: Results in: Organic Growth of Deposits with Controlled Costs
Results in: Organic Growth of Deposits with Controlled Costs Customers strategies of single point of contact and recrui>ng known teams in target markets produce rapid deposit growth with low total cost Total Deposit Growth ($mm) Average DDA Growth ($mm) $6,000 $800 CAGR: 68% $708 CAGR: 83% $130 $4,5
Slide 13: Lending Strategy
Lending Strategy High Growth with Strong Credit Quality ! Continuous recruitment and retention of high quality teams ! Centralized credit committee approval for all loans ! Loans are stress tested for higher rates and a slower economy ! No losses on loans originated since new management team took ov
Slide 14: Build an Outstanding Loan Quality Portfolio
Build an Outstanding Loan Quality Portfolio Asset Quality Indicators Continue to Improve NPL Charge Offs 4.00% 3.61% 0.80% 0.69% 2.86% 3.00% 0.60% 2.25% 2.24% 0.39% 2.00% 0.40% 1.99% 0.42% 0.22% 1.51% 0.28% 1.00% 0.20% 0.29% 0.12% 1.29% 1.29% 0.22% 0.72% 0.16% 0.14%0.07% 0.03% 0.60% 0.20% 0.12% 0.00
Slide 15: C&I & Owner Occupied CRE Banking Strategy
C&I & Owner Occupied CRE Banking Strategy Banking Privately Held Business Private & Commercial Banking C&I / Owner Occupied CRE Loan and Deposit Growth ($mm) ! Target companies with up to $100 million annual revenues 2,500.0 $2,162.2 ! Very experienced teams CAGR: 36% 2,000.0 ! Two new teams with 10
Slide 16: Multi-Family Banking Strategy
Mul,-‐Family Banking Strategy Banking High Net Worth Families ! Focus on families that have income producing real estate in their portfolios Multi-Family Loan and Deposit Growth ($mm) ! Private banking approach 2 ,500.0 $2,308.4 $2,319.4 ! Focus Markets: New York & Philadelphia 2 ,000.0 MSAs ! Aver
Slide 17: Mortgage Warehouse Banking Strategy
Mortgage Warehouse Banking Strategy Banking Mortgage Companies ! Private banking focused on mortgage Mortgage Warehouse Banking Loan and Deposit companies with $5 to $10 million equity Growth ($mm) ! Very strong credit quality relationship $1,994.5 business with good fee income and deposits 2,000.0
Slide 18: Build Efficient Operations
Build Efficient Operations Staff Expense Ratio Occupancy Expense Ratio 2.00% 1.72% 1.74% 1.72% 1.75% 0.60% 0.39% 0.39% 0.37% 0.33% 1.43% 1.42% 0.40% 1.37% 0.36% 0.37% 1.00% 1.34% 0.37% 0.35% 1.03% 1.03% 0.20% 0.29% 0.84% 0.81% 0.26% 0.20% 0.19% 0.00% 0.00% 2012 2013 2014 Q2 2015 2012 2013 2014 Q2 20
Slide 19: Deposit, Lending and Efficiency Strategies Results in Disciplined & Profitable Growth
Deposit, Lending and Efficiency Strategies Results in Disciplined & Profitable Growth • Strategy execu,on has produced superior growth in revenues and core earnings Core Revenue ($mm) Net Interest Income ($mm) 2Q '15 vs. 2Q '14 2Q '15 vs. 2Q '14 Growth Growth 21% 26% $200.0 CAGR: 80% (2) $160.0 CAGR: 8
Slide 20: Risk Management
Customers Bank Risk Management 20
Slide 21: Elements of an Effective Risk Management Program
Elements of an Effective Risk Management Program 21
Slide 22: ERM Framework at Customers Bancorp, Inc.
ERM Framework at Customers Bancorp, Inc. Well Defined ERM Plan – ERM Integra,on into CAMELS +++++ 22
Slide 23: Current Banking Environment and How We are Positioned
Current Banking Environment and How We are Positioned 23
Slide 24: What We See as The Role of CEO and Board
What We See as The 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 ! Our authentic internal assessment of strengths, w
Slide 25: Banking Industry Trends... How Do We Deal with These Issues
Banking Industry Trends…… How Do We Deal with These Issues External Forces Impediments to Growth • Role of traditional bank branches • Traditional CRE lending very difficult to do changing very rapidly • Very little consumer loan growth; • Mobile banking fastest growing channel headwinds for consume
Slide 26: Our Thesis on Current U.S. Banking Environment
Our Thesis on Current U.S. Banking Environment Credit Improving – Though Banks Face a Number of Operational Headwinds ! Credit Improving ! Quality Asset Generation Remains A Challenge ! Banks are starved for interest-earning assets and exploring new asset classes, competing on price and looking into
Slide 27: Our Approach to Developing a Winning Business Model
Our Approach to Developing a Winning Business Model 1. Must focus on both “Relationship” or “High Touch” banking combined with “Highly Efficient” or “High Tech”. Strategy should be unique as to not be copied easily 2. Attract and retain best high quality talent. Business Bankers / Relationship Banke
Slide 28: bankmobile: A Division of Customers Bank
Customers Bancorp, Inc. < Back bankmobile A REVOLUTIONARY A Division Of Customers Bank 28
Slide 29: Startling Facts about Banks
Startling Facts about Banks ! Banks each year charge $32 billion in overdra` fees – that’s allowing or crea>ng over 1 billion overdra`s 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 combined !
Slide 30: Creating a Virtual Bank for the Future for Consumers
Crea,ng a Virtual Bank for the Future for Consumers ! New no fee banking, 25 bps higher interest savings, line of credit, 55,000 ATM’s, Personal Banker and more, all in the palm of your hand ! Marke>ng Strategy ! Target technology dependent younger consumers; including underserved / underbanked and
Slide 31: Building Customers to Provide Superior Returns to Investors
Building Customers to Provide Superior Returns to Investors Core Tangible BV per Share Recent Core Performance Results $17.42 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 CAGR: 13% $16.43 $16.00 $14.37 ROA 0.8% 0.8% 0.8% 0.8% 0.9% $14.00 $13.09 $12.00 $11.38 $11.54 ROE 10.0% 11.0% 11.9% 12.5% 12.5% $10.0
Slide 32: Summary
Summary ! Strong high performing $7.6 billion bank with significant growth opportuni>es ! Very experienced management team delivers strong results ! Ranked #1 overall by Bank Director Magazine in the 2012 and 2013 Growth Leader Rankings ! “High touch, high tech” processes and technologies result in s
Slide 33: Contacts
Contacts Company: Investor Rela,ons: Robert Wahlman, CFO Ted Haberfield Tel: 610-‐743-‐8074 President, MZ North America rwahlman@customersbank.com Tel: 760-‐755-‐2716 www.customersbank.com thaberfield@mzgroup.us www.mzgroup.us Jay Sidhu Chairman & CEO Tel: 610-‐301-‐6476 jsidhu@customersbank.com
Slide 34: Appendix
Appendix Customers €= Bancorp, Inc.
Slide 35: Non GAAP Reconciliation
Non GAAP Reconcilia,on CUSTOMERS BANCORP, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Reconciliation of GAAP Net Income to Core Earnings (amounts in thousands) Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Net Income Diluted EPS Net Income Diluted
Slide 36: Income Statement
Income Statement CUSTOMERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED - UNAUDITED (Dollars in thousands, except per share data) Q2 Q1 Q2 2015 2015 2014 Interest income: Loans receivable, including fees $ 42,801 $ 43,093 $ 35,220 Loans held for sal
Slide 37: Income Statement
Income Statement CUSTOMERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED - UNAUDITED (Dollars in thousands, except per share data) June 30, June 30, 2015 2014 Interest income: Loans receivable, including fees $ 85,894 $ 63,576 Loans held for sale 24,42
Slide 38: Balance Sheet
Balance Sheet CUSTOMERS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET - UNAUDITED (Dollars in thousands, except per share data) June 30, December 31, June 30, 2015 2014 2014 ASSETS Cash and due from banks $ 44,064 $ 62,746 $ 48,521 Interest-earning deposits 347,525 308,277 217,013 Cash a
Slide 39: Net Interest Margin
Net Interest Margin CUSTOMERS BANCORP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEET / NET INTEREST MARGIN (UNAUDITED) (Dollars in thousands, except per share data) Six Months Ended June 30, 2015 2014 Average yield or Average yield or Average Balance cost (%) Average Balance cost (%) Assets Interest e
Slide 40: Net Interest Margin
Net Interest Margin CUSTOMERS BANCORP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEET / NET INTEREST MARGIN (UNAUDITED) (Dollars in thousands, except per share data) Three Months Ended June 30, 2015 2014 Average yield or Average yield or Average Balance cost (%) Average Balance cost (%) Assets Interest
Slide 41: Asset Quality
Asset Quality CUSTOMERS BANCORP, INC. AND SUBSIDIARIES Asset Quality as of June 30, 2015 (Unaudited) (Dollars in thousands, except per share data) Non NPLs / Accrual / Other Real Non Performing Allowance for Cash Total Credit Total Total Reserves Loan Type Total Loans NPLs Estate Owned Assets (NPAs)
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