Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Investor Presentation (September 2012)
24 slides from Customers Bancorp's investor presentation, Sep 4, 2012
Slide 1: 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 statemen
Slide 2: 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 3: Pro Forma Capitalization
Pro Forma Capitalization (1) Book value and tangible book value per share estimates based on 6/30/2012 basic shares outstanding of ~11.3 million, plus ~1.1 million shares issued after 6/30/2012 raising a total of ~$15 million, plus ~3.4 million shares assumed to be issued in this $50 million private
Slide 4: Introduction
Introduction § Best returns for shareholders when cycle is turning § Goal is 15%+ average annual returns for shareholders § We needed four elements to execute – A bank charter – Very experienced and motivated management team – Unique and clear strategy – Superior execution
Slide 5: Company Overview
Company Overview § Pro forma $3bn institution with 21 sales offices(1) § Average deposits per branch exceeding $125 million (2) § Operating in key Mid-Atlantic markets – Southeastern Pennsylvania (Bucks, Berks, Chester and Delaware counties) – New York (Westchester county) – New Jersey (Mercer count
Slide 6: Management Track Record
Management Track Record Sovereign Cumulative Shareholder Returns with Jay Sidhu as March 1989 CEO: - December 2006 1,474% Dec-06 Source: SNL Financial.
Slide 7: Seasoned Management Team
Seasoned Management Team § Experienced and cohesive management team with an average tenure of 30 years experience – 9 out of 14 senior executives previously worked at Sovereign § ~20% ownership by management and insiders
Slide 8: High Quality Independent Board of Directors
High Quality Independent Board of Directors (1) (1) Bhanu Choudhrie’s appointment to the Board of Directors is pending regulatory approval.
Slide 9: Execution Timeline
Execution Timeline § Jay Sidhu joins $270 million § Enhanced credit and risk § Recruited proven lending asset Customers Bank (FKA management teams New Century Bank) § Developed infrastructure for § Built out Consumer and Multi- organic growth family lending platforms § Identified existing credit pro
Slide 10: Critical Success Factors
Critical Success Factors § Superior credit quality § Revenues = 2x Expenses; resulting in 0.90% to 1.00% ROA and double digit ROE § Focus on doing a few things very well § Strong risk management Culture – ERM (Enterprise Risk Management) process in place – Extensive review of all risks at board and
Slide 11: Deposit Strategy - High Touch, High Tech
Deposit Strategy - High Touch, High Tech § Organic deposit growth of 100% over past 3 years Concierge Banking Sales Force Pricing Technology § Takes banker to the § Experienced § Low cost banking § Implementation of customer’s home or bankers who own model allows for more technology suite allows off
Slide 12: Delivering Organic Growth - Deposits
Delivering Organic Growth - Deposits Deposits per Branch Cost of Deposits CAGR: 50% Deposit Growth DDA Growth CAGR: 99% CAGR: 97% Source: Company documents
Slide 13: Lending Strategy - Local Lending Plus Specialty Niche
Lending Strategy - Local Lending Plus Specialty Niche Commercial Lending Consumer Lending Specialty Lending Small Business § Warehouse Lending Real Estate Secured Lending § Target companies with less than § Diversify earning assets and § Select home equity and $5.0 million annual revenue revenue str
Slide 14: Delivering Organic Growth - Loans
Delivering Organic Growth - Loans ($ in millions) Loans HFI (excludes Warehouse Summary Loans)* $856 § Experienced C&I team acquired from $772 local and regional banks $696 $552 $509 $513 § Centralized credit committee approval for all loans § CRE from C&I customers included in CRE loans § Average C
Slide 15: Top Warehouse Lending Platform
Top 10 Warehouse Lending Platform § Exit by larger players has created opportunity to provide liquidity at attractive spreads § Warehouse segment led by professionals with over 25+ years experience in the sector § Low-risk lending business due to high quality collateral and no put back risk to Custo
Slide 16: Strong Asset Quality
Strong Asset Quality § Clean bank with strong risk management - less than 1% of NPAs from non-FDIC covered and acquired loans § Proactively addressing all credit issues from legacy and acquired portfolios ($ in ($ in millions) millions) Non-Covered Nonperforming Assets Originated Nonperforming Asset
Slide 17: Key Financial Targets
Key Financial Targets Criteria Target Q3 2012 Pre- Q4 2012 Release (1) Target Return on Equity 10% or greater 10% 10% or greater Return on Assets .90% to 1.00% .70% .90% to 1.00% Net Interest Margin 3.00% to 3.25% 3.05% 3.00% to 3.25% Efficiency Ratio 50% 60% 50% Loan-to-Deposit 90% to 100% 100% 90%
Slide 18: Strong Income Growth
Strong Income Growth Adjusted PTPP Earnings (1) Revenue Growth (2) Loan-to-Deposit (%) (3) Core EPS (4) (1)Adjusted PTPP earnings is calculated as: Core income + estimated income taxes at 35% + provision expense. PTPP excludes non-recurring income and expense items. (2)Revenue = Net interest income
Slide 19: Increasing Profitability
Increasing Profitability Net Interest Margin (%) Adjusted PTPP/Average Assets (1) Core ROAA (%) (2) Core ROAE (%) (3) (1)Adjusted PTPP Earnings is calculated as: Core income + estimated income taxes at 35% + provision expense. PTPP excludes non-recurring income and expense items. (2)Core income is n
Slide 20: Enhancing Shareholder Value
Enhancing Shareholder Value § 43% increase in tangible book value per share in the past 8 quarters § Acacia acquisition is expected to grow tangible book value by ~$0.92 per share (1) 43% $14.98 BV/Share $9.66 $12.52 $12.61 $13.02 $13.99 $15.12 Estimated Acacia Acquisition Impact Source: SNL Financi
Slide 21: Experienced Acquirer
Experienced Acquirer § Completed two FDIC-assisted acquisitions with total assets of ~$300 million and pre-tax total bargain purchase gain of ~$40M § Completed one $135 million asset whole bank deal accretive to earnings and book value within three months § Announced two other accretive acquisitions
Slide 22: Acquisition Opportunities
Acquisition Opportunities § 86 stressed banks with ~$33 billion in assets in our target markets – Significantly larger pool of smaller healthy banks that cannot generate double digit ROE § Limited competition to acquire these banks § Disciplined M&A strategy focused on TBV, earnings, and capital acc
Slide 23: Appendix
—_—_— Customers¥ Bancorp, Inc. Appendix —==——
Slide 24: Asset Quality
Asset Quality Asset Quality by Loan Type: 6/30/12 Source: Company documents Note: Held-for-Sale Loan balance is $284 million as of Q2 2012 (1) Includes Consumer, Mortgage and Manufactured loan types
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