Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Q3 2024 Earnings Presentation
37 slides from Customers Bancorp's earnings presentation, Nov 1, 2024
Slide 1: Investor Presentation: Q3 2024
Let’s take on tomorrow. Investor Presentation: Q3 2024 October 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Let’s take on tomorrow. 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 s
Slide 3: Key Highlights
Key Highlights Let’s take on tomorrow. Let’s take on tomorrow. Accretive Net Interest Income & Operational Excellence & Robust Loan Growth Deposit Remix Net Interest Margin (NIM) Strategic Investments $1.1 billion of deposit inflows from Bucking the industry trend with Net interest income and net Co
Slide 4: Our Priorities Remain Unchanged
Our Priorities Remain Unchanged Let’s take on tomorrow. Selectively pursue disciplined growth by focusing on holistic and strategic relationships that create franchise value Focus on further strengthening our balance sheet, improving liquidity, Let’s take on tomorrow. capital ratios and margins ©202
Slide 5: What Makes Customers Bank Unique?
What Makes Customers Bank Unique? Let’s take on tomorrow. Ranked #1 among banks with $10 billion to $50 billion in assets CULTURE Client Centric Entrepreneurial Consistent Focus Culture Banking Recruiter of Top Entrepreneurs Talent ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED FOCUS Target Top
Slide 6: Q3'24 Earnings Review: Financial Highlights
Q3’24 EARNINGS REVIEW Financial Highlights Let’s take on tomorrow. Q3’24 Q3’24 (vs. Q2’24) Highlights Profitability Balance Sheet Credit Diluted EPS Core EPS1,2 3.06% $21.5B 0.22% $1.31 $1.34 vs. 3.29% +2% -01 bps ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED NIM Total Assets NPA Ratio Net Inc
Slide 7: Continued Execution of Deposit Franchise Transformation
ACCRETIVE DEPOSIT REMIX Continued Execution of Deposit Franchise Transformation Let’s take on tomorrow. Total Deposits New Banking Team Deposits1 $ billions $ millions $18.2 $1,396 $17.9 $18.0 $17.7 $18.1 $4.8 $4.5 $4.7 $4.4 $4.7 536 (25%) (26%) +$546 $850 $5.8 $5.6 $5.7 $5.9 $5.6 $635 169 +$1,301 $
Slide 8: Venture Banking: Team Lift-Out Strategy Driving Franchise Value
ACCRETIVE DEPOSIT REMIX Venture Banking: Team Lift-Out Strategy Driving Franchise Value Let’s take on tomorrow. Deposits: $2B+ Deposits: $860M Loans: $1B+ Deposits: $95M Loans: $871M Loans: $538M Deposits to Loans: ~2:1+ Deposits to Loans: ~1:1 ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED Dep
Slide 9: Commercial Banking: Team Hires On-Track for Continued Success
ACCRETIVE DEPOSIT REMIX Commercial Banking: Team Hires On-Track for Continued Success Let’s take on tomorrow. Deposits: $536M Deposits: $2B+ Loans: $180M Loans: $500M+ ~3:1 ~4:1 Key Highlights Deposits to Loans: Deposits to Loans: • $2.0+ billion deposit pipeline Number of Accounts ©2024 CUSTOMERS B
Slide 10: Industry Leading Loan Growth of 16% Across The Franchise
ROBUST LOAN GROWTH Industry Leading Loan Growth of 16% With Contributions Across The Franchise Let’s take on tomorrow. Loans - HFI Loans – HFI Growth QoQ $ billions $ billions • Added 175+ new lending relationships Corporate & Specialized Banking $346 • Strong pipelines creating continued opportunit
Slide 11: Net Interest Margin in Q3'24 Impacted by Several Items
NET INTEREST INCOME & NET INTEREST MARGIN Net Interest Margin in Q3’24 Impacted by Several Items from Q2’24 Let’s take on tomorrow. Net Interest Income Net Interest Margin $ millions percent $167.7 $158.5 3.29% -0.12% -0.07% -0.04% 3.06% ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED Q2’24 Q3’2
Slide 12: Meaningful Positive NII and NIM Drivers Going Forward
NET INTEREST INCOME & NET INTEREST MARGIN Meaningful Positive NII and NIM Drivers Going Forward Let’s take on tomorrow. Estimated Net Interest Income Drivers1 $ millions $1.5-2.5 billion deposit remix repriced lower by 200-250 bps $30-$62 Time deposit maturities of $680 million repriced lower by 100
Slide 13: Industry-Leading Efficiency
OPERATIONAL EFFICIENCY AND STRATEGIC INVESTMENTS Industry-Leading Efficiency Let’s take on tomorrow. Core Non-Interest Expense1 Core Non-Interest Expense1 / Average Assets $ millions percent • ~$3 million increase2 in core non-interest expense incurred in Q3’24 from • CUBI’s core non-interest expens
Slide 14: 2025 Operational Excellence Initiative
OPERATIONAL EFFICIENCY AND STRATEGIC INVESTMENTS 2025 Operational Excellence Initiative Target of $20+ Million Annually Let’s take on tomorrow. Fees Treasury management fee income from clients using instant payments and other products Expense initiatives ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RE
Slide 15: Tangible Book Value Approaching $53 Per Share
TANGIBLE BOOK VALUE GROWTH Tangible Book Value Approaching $53 Per Share Let’s take on tomorrow. Tangible Book Value1 per share $56.34 • Tangible book value1 increased by $2.26 in Q3’24 (18% annualized) $3.38 ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED • Tangible book value1 has more than 15
Slide 16: Strong Capital Levels Provide Significant Flexibility
STRONG CAPITAL AND LIQUIDITY Strong Capital Levels Provide Significant Flexibility Let’s take on tomorrow. Q3’23 Q4’23 Q1’24 Q2’24 Q3’241 CET1 Risk-Based Capital percent 12.2% 12.6% ` 12.8% 12.5% 11.3% 11.5%+ • TCE/TA3 up over 120 bps YoY and stable QoQ inclusive of share repurchase and balance shee
Slide 17: Robust Liquidity Position with ~183% Coverage of Uninsured Deposits
STRONG CAPITAL AND LIQUIDITY Robust Liquidity Position with Approximately 183% Coverage of Uninsured Deposits Let’s take on tomorrow. Immediately Available Liquidity Loans-HFI to Deposits $ billions Q3’24, percent $8.3 $8.3 88% $3.0 $3.1 76% $1.0 $1.0 ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESER
Slide 18: Credit Metrics Remain Stable
MAINTAINING SUPERIOR CREDIT QUALITY Credit Metrics Remain Stable Let’s take on tomorrow. Q3’23 Q4’23 Q1’23 Q2’24 Q3’24 NPAs % of Total Assets Q3’24, percent NPAs % of Total Assets 0.36% percent 0.22% 0.14% 0.13% 0.17% 0.23% 0.22% CUBI Regional Bank Peers1 Commercial NCOs CRE % of Loans-HFI percent p
Slide 19: Concluding Perspectives
Concluding Perspectives Let’s take on tomorrow. Let’s take on tomorrow. Deposit Franchise Transformation Robust Loan Growth New banking teams1 have remixed nearly 10% of deposit franchise 16% annualized loan growth contrasting with industry trends $536 million of deposits and more than 3,000 account
Slide 20: Analyst Coverage
ANALYST COVERAGE B. Riley Securities, Inc. Piper Sandler Companies Hal Goetsch Frank Schiraldi D.A. Davidson Companies Raymond James Peter Winter Steve Moss Hovde Group Stephens Inc. David Bishop Matt Breese Keefe, Bruyette & Woods Inc. Wedbush Securities Inc. Kelly Motta David Chiaverini Maxim Grou
Slide 21: Appendix
APPENDIX SSeeeeseeaeoeS& SSeeeseeesSe28e& SSeeeseeese28& SeSeeaaeoeeee28& SEeeeeeeoeeSe2&
Slide 22: Customers Bancorp Company Overview
Customers Bancorp Company Overview Let’s take on tomorrow. Portsmouth Boston Providence Corporate & Specialized Banking Customers Bancorp, Inc. NYC Community Banking Chicago PA NYSE: CUBI Bay Reno Denver Area Washington, D.C. Raleigh/Durham Southern California Headquarters West Reading, PA Dallas Au
Slide 23: Sustainable Organic Growth Increasing Revenue, EPS and TBVPS
Demonstrated Sustainable Organic Growth Increasing Revenue, EPS and TBVPS at 15%+ CAGR Over the Last Five Years Let’s take on tomorrow. Total Revenue CAGR Diluted EPS CAGR FY’18-FY’23, percent FY’18-FY’23, percent 19% 33% 12% 7% ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED CUBI Top Quartile C
Slide 24: Consumer Installment Loans – Portfolio Credit Metrics
Consumer Installment Loans – Portfolio Credit Metrics Let’s take on tomorrow. Weighted average life of ~2.3 years FICO Score 1 Debt to Income Ratio 1 Borrower Income Average FICO Score1 ~746 Average DTI1 ~20% Average Borrower Income ~$101k 660-679 700-749 0-9.99% 40 – 49.99% <$50K >$100K 680-699 750
Slide 25: Securities Portfolio Generating Attractive Returns
Securities Portfolio Generating Attractive Returns with Minimal Credit and Duration Risk Let’s take on tomorrow. Investment Securities – AFS Investment Securities – HTM percent, Q3’24 percent, Q3’24 • Spot yield: 5.23% • Spot yield: 4.31% • Effective duration: 2.0 years • Effective duration: 3.5 yea
Slide 26: Selected 2024 Proxy Peers
Selected 2024 Proxy Peers Let’s take on tomorrow. • Ameris • Fulton • Associated • Independent • Atlantic Union • Old National • BankUnited • Pinnacle • Commerce • Sandy Spring ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED • Community Bank System • TowneBank • FB Financial • United • First Bus
Slide 27: Robust Sources of Liquidity
Robust Sources of Liquidity Let’s take on tomorrow. Liquidity Sources ($000's) 3Q 24 2Q 24 QoQ Change Cash and Cash Equivalents $3,088,620 $3,048,586 $40,034 FHLB Available Borrowing Capacity $986,770 $966,409 $20,361 FRB Available Borrowing Capacity $4,180,824 $4,283,486 ($102,662) Investments (MV
Slide 28: Allowance for Credit Losses for Loans and Leases
Allowance for Credit Losses for Loans and Leases Let’s take on tomorrow. ($ in thousands) September 30, 2024 June 30, 2024 Lifetime Loss Amortized Cost1 Allowance for Credit Losses Amortized Cost1 Allowance for Credit Losses Lifetime Loss Rate3 Rate2 Loans and Leases Receivable: Commercial: Commerci
Slide 29: Reconciliation of Non-GAAP Measures - Unaudited
Reconciliation of Non-GAAP Measures - Unaudited Let’s take on tomorrow. 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 fi
Slide 30: Core Earnings and Adjusted Core Earnings
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Core Earnings and Adjusted Core Earnings - Customers Bancorp Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 (dollars in thousands, except per share data) USD Per share USD Per share USD Per share USD Per share USD Per share GA
Slide 31: Core Return on Average Assets
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Core Return on Average Assets and Adjusted Core Return on Average Assets - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 GAAP net income $ 46,743 $ 58,085 $ 49,72
Slide 32: Core Return on Average Common Equity
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Core Return on Average Common Equity and Adjusted Core Return on Average Common Equity - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 GAAP net income to common s
Slide 33: Core Pre-Tax Pre-Provision Net Income and ROAA
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Core Pre-Tax Pre-Provision Net Income and ROAA and Adjusted Core Pre-Tax Pre-Provision Net Income and ROAA - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 GAAP ne
Slide 34: Core Efficiency Ratio
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Core Efficiency Ratio and Adjusted Core Efficiency Ratio - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 GAAP net interest income $ 158,545 $ 167,653 $ 160,385 $
Slide 35: Core Non-Interest Expense to Average Total Assets
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Core Non-Interest Expense to Average Total Assets and Adjusted Core Non-Interest Expense to Average Total Assets - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 G
Slide 36: Tangible Common Equity to Tangible Assets
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Tangible Common Equity to Tangible Assets - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 GAAP total shareholders' equity $ 1,801,180 $ 1,746,865 $ 1,691,617 $ 1,
Slide 37: Tangible Book Value per Common Share
Reconciliation of Non-GAAP Measures – Unaudited (Contd.) Let’s take on tomorrow. Tangible Book Value per Common Share - Customers Bancorp (dollars in thousands except per share data) Q3 2024 Q4 2023 Q4 2022 Q4 2021 Q4 2020 Q4 2019 Q4 2018 ©2024 CUSTOMERS BANCORP, INC. / ALL RIGHTS RESERVED GAAP tota