Slide 1: Highly Focused, Above Average Growth
Highly Focused, Above Average Growth Bank Holding Company Q2 Earnings Call Investor Presentation July, 2018 Member FDIC NYSE: CUBI
Slide 2: Executing On Our Unique High Performing Banking Model
Customers Bank Executing On Our Unique High Performing Banking Model 2
Slide 3: Investment Proposition
Investment Proposition Highly Focused, Innovative, Relationship Banking Based Commercial Bank Business bank with a unique private banking service model; over $11 billion in assets and growing Highly skilled teams targeting privately held businesses and high net worth families Strong Organic Growth,
Slide 4: Customers' Single Point of Contact Model
Customers’ Single Point of Contact Model Private Banking High Tech / Service High Touch Model Excellence in Branch Lite Service Experienced Strong Asset Leadership Quality Unique Private Customer Banking Model Superior Risk Centric Management Approach to Winning Model Relationship driven but never d
Slide 5: Banking Strategy – Customers Bank
Banking Strategy – Customers Bank Very Experienced Teams Exceptional Service Risk Based Incentive Compensation Business Banking Focus - ~95% of Community Business Banking Segment revenues are from commercial business units 5
Slide 6: Q2 Financial Results
Customers Bank Q2 Financial Results 6
Slide 7: Q2 2018 Key Financial Results
Q2 2018 Key Financial Results Community Business Banking Consolidated Segment GAAP Diluted Earnings Per Share (EPS) $0.62 $0.72 "Adjusted" Diluted Earnings Per Share (EPS)(1) $0.64 $0.73 GAAP Net Income Available to Common ($ millions) $20.0 $23.4 "Adjusted" Net Income Available to Common ($ million
Slide 8: Q2 Highlights and 2018 Outlook
Q2 Highlights and 2018 Outlook Q2 2018 Highlights • 21% YOY growth in C&I lending (excluding loans to mortgage companies) • Community business banking segment ROAA of 1.02% • Pristine credit quality –release of reserves reflected continued strong asset quality and better than expected resolution of
Slide 9: Q2 2018 Consolidated Results
Q2 2018 Consolidated Results GAAP vs. Adjusted EPS(1) $0.70 $0.60 $0.64 $0.64 $0.64 $0.62 $0.62 $0.58 $0.55 $0.56 $0.50 $0.48 Q2 2018 Net Income to Common Shareholders of $20.0 million, and Diluted $0.40 Earnings Per Common Share of $0.62. EPS $0.30 • 10% year-over-year growth in adjusted earnings p
Slide 10: Q2 2018 Highlights: Community Business Banking Segment
Q2 2018 Highlights: Community Business Banking Segment Community Business Bank Segment GAAP vs. Adjusted EPS(1) $0.80 $0.70 $0.73$0.72 $0.72$0.73 $0.68$0.68 Community Business Banking segment Q2 2018 profits of $0.60 $0.67$0.67 $0.64 $23.4 million ($0.72 per diluted share) $0.50 EPS $0.40 • Q2 ROAA
Slide 11: Q2 2018 NIM: -5 bps sequentially; -16 bps from Q2 2017
Q2 2018 NIM: -5 bps sequentially; -16 bps from Q2 2017 Net Interest Income FTE NIM(1) narrowed 5 bps sequentially to 2.62% $68.0 $68.3 $65.0 $67.3 $68.6 3.97% 3.97% 4.18% • ~ 4 bps headwind from seasonal decrease in BankMobile 3.80% 3.77% noninterest bearing DDA balances 2.78% 2.62% 2.79% 2.67% 2.62
Slide 12: Loan Repricing Characteristics
Loan Repricing Characteristics Loan Repricing by Segment, at June 30, 2018 • 84% of our C&I loans (including loans to mortgage companies), 43% of our CRE loans, and 17% of our Multifamily loans reprice within 1 year • The average yield on new C&I loans in Q2 2018 was 5.17%, vs. a portfolio yield of
Slide 13: Q2 2018 Loans
Q2 2018 Loans Loan Growth $12 5.0% 4.26% 4.35% 4.5% $10 3.88% 3.98% 3.76% 3.81% 4.0% $0.6 $0.3 $0.3 3.5% $8 Loans ($ in Billions) $0.4 Yield on Loans 3.0% $3.4 $6 $0.4 $3.5 $3.7 2.5% $2.9 2.0% $2.1 $4 $0.3 1.5% $3.6 $3.5 $2.9 $3.2 $1.3 1.0% $2 $2.3 $1.1 0.5% $0.9 $1.0 $1.3 $1.3 $1.2 $0 0.0% 2013 201
Slide 14: Outstanding Loan Quality Portfolio
Outstanding Loan Quality Portfolio Credit metrics remain better than peers NPL Net Charge Offs 3.00% 0.80% 2.64% 0.68% 0.70% 2.50% 2.06% 0.60% 2.00% 1.70% 1.70% 0.50% 0.48% 0.47% 0.45% 1.48% 0.42% 1.50% 1.30% 0.40% 1.18% 0.30% 0.92% 0.85% 0.30% 1.00% 0.80% 0.60% 0.19% 0.20% 0.16% 0.50% 0.30% 0.15% 0
Slide 15: Superior Operating Efficiency and Costs
Superior Operating Efficiency and Costs Our operating costs as a percentage of assets are ~125 bps lower than peers and ~175 bps lower than the industry Total Operating Costs as a % of Average Assets (1) 3.50% 3.26% 3.17% 3.13% 3.03% 3.08% 3.00% 2.87% 2.50% 2.69% 2.63% 2.60% 2.52% 2.00% 1.50% 1.00%
Slide 16: Q2 2018 Highlights: BankMobile Segment
Q2 2018 Highlights: BankMobile Segment Bank Mobile Segment GAAP vs. Adjusted EPS(1) $0.00 -$0.05 -$0.03-$0.03 BankMobile segment loss of $3.3 million (-$0.10 per diluted -$0.08 share) in Q2 2018 -$0.10 -$0.10 EPS -$0.11 • BankMobile deposits averaged $468 million in Q2 2018, a -$0.12 -$0.15 -$0.14 -
Slide 17: BankMobile Segment Expanded Financials
BankMobile Segment Expanded Financials BankMobile Segment Income Statement ($ in 000s) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Interest income $3 $3 $4 $11 $15 $7 $7 $10 $9 $9 Interest expense $7 $7 $7 $17 $20 $18 $16 $15 $16 $135 Fund Transfer Pricing $1,723
Slide 18: Update on Top Strategic Priorities
Update on Top Strategic Priorities • Grow and Successfully Divest BankMobile in 2018 • Announced during Q4, 2017 plans to spin-off BankMobile to shareholders and then merge BankMobile into Flagship Community Bank • Flagship has filed 1) an application with the FDIC for its acquisition of BankMobile’
Slide 19: Company Contacts
Contacts Company: Robert Wahlman, CFO Tel: 610-743-8074 rwahlman@customersbank.com Jay Sidhu Chairman & CEO Tel: 610-301-6476 jsidhu@customersbank.com Bob Ramsey Director of IR and Strategic Planning Tel: 484-926-7118 rramsey@customersbank.com 19
Slide 20: Forward-Looking Statements
Forward-Looking Statements This presentation, as well as other written or oral communications made from time to time by us, contains forward-looking information within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to f
Slide 21: Forward-Looking Statements
Forward-Looking Statements • timely development and acceptance of new banking products and services and perceived overall value of these products and services by users, including the products and services being developed and introduced to the market by the BankMobile division of Customers Bank; • ch
Slide 22: Forward-Looking Statements
Forward-Looking Statements • the levels of usage of other BankMobile student customers following graduation of additional product and service offerings of BankMobile or Customers Bank, including mortgages and consumer loans, and the mix of products and services used; • our ability to implement chang
Slide 23: Reconciliation of Non-GAAP Measures - Unaudited
Reconciliation of Non-GAAP Measures - Unaudited Customers believes that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our results of operations and financial condition relative to other financial institutions. These n
Slide 24: Reconciliation of Non-GAAP Measures - Unaudited
Reconciliation of Non-GAAP Measures - Unaudited Tangible Book Value per Common Share - Customers Bancorp, Inc. Consolidated ($ in thousands, except per share data) Q2 2018 Q2 2017 2017 2016 2015 2014 2013 GAAP -Total Shareholders' Equity $ 936,227 $ 910,289 $ 920,964 $ 855,872 $ 553,902 $ 443,145 $