Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Merger or Acquisition (December 2015)
19 slides from Customers Bancorp's merger presentation, Dec 15, 2015
Slide 1: Acquisition of Student Checking Customers, New Customer Acquisition Model and Refund Management Disbursement Business
Acquisition of Student Checking Customers, New Customer Acquisition Model and Refund Management Disbursement Business Investor PresentationDecember 15, 2015NYSE: CUBI Member FDIC A division of Customers Bank
Slide 2: 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 3: Forward-Looking Statements (continued)
Forward-Looking Statements continued volatility in the credit and equity markets and its effect on the general economy;the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Acc
Slide 4: Executive Summary
Executive Summary Strategically compelling acquisition for CUBI and transformational transaction for , making it one of the top digital banks in the USBusiness to be combined with platform marking inflection point in its developmentAssume servicing of ~2mm new student checking customers holding over
Slide 5: Key Terms
Key Terms Asset Purchase Agreement between CUBI and Higher OneCUBI will assume the OneAccount Student Checking and related Refund Management Disbursement business of Higher One in exchange for a total $42mm including $5 million for transition services, to be paid over 24 monthsPayments Incentive pay
Slide 6: Higher One Disbursement Business Size and Scope
Higher One Disbursement Business Size and Scope Refund & Disbursements Helps higher education institutions and students by streamlining the process of financial aid paymentsProvides technological solution to the paper-intensive disbursement processProvides robust problem handling (lost checks, stop
Slide 7: Situation Background
Situation Background Higher One Operating Challenges Disclosed:New Dept. of Education Rules(1)Possible Federal Reserve and FDIC actions expected against Higher One(2)Potential Restitution payments for 2014 and prior period asserted violations(2)Deep understanding of issues surrounding Higher OneCUBI
Slide 8: Timeline: Path to Inflection Point to Create a FinTech Company with a Bank Charter
platform launches Timeline:Path to Inflection Point to Create A FinTech Company with a Bank Charter Confluence of Our Digital Strategy and Unique Opportunity $250M Deposit Partnership CUBI-Higher One Higher One-CUBI operate under terms of theAsset Purchase Agreement Higher One and CUBI ongoing busin
Slide 9: Attractive Standalone Transaction Metrics
Attractive Standalone Transaction Metrics Creates the top digital bank in U.S. with several options for CUBIStill maintain 2016E guidance of $2.40-$2.50 per share excluding transaction related one-time charges(3) Estimate mid-single digits accretion to 2017E core EPS(3) $0.25-$0.35 Tangible Book Val
Slide 10: Additional Option Value for CUBI Shareholders
Additional option value for CUBI Shareholders created by pro forma platform Significant Value for with Embedded Upside ≈2 million active deposit customers on day oneOver 500,000 new accounts per yearPotential for long-term growth rate of 15% - 20%Existing students with automatic recurring growthUniq
Slide 11: Tech Solutions to Evolve Banking Valued Highly
Technological capabilities for existing banksBBVA acquires FinTech firm Simple Technology$117M acquisition valueEstimated 33,000 customer accounts5 year old companyTechnology driven growth in new consumer segmentsLending Club $1B IPO in 2014OnDeck Capital $230M IPO in 2014Live Oak Bancshares $94M IP
Slide 12: Consistent with Core Strategy Articulated by CUBI
Consistent with core strategy articulated by CUBIInvested capital, R&D and HR inHigh Touch combined with High TechInnovative platform with proprietary in-house technologyCreate a highly efficient customer acquisition platform Higher One is an opportunistic transaction that delivers on our digital ba
Slide 13: Immediate Operating Model and Comprehensive Model
Immediate Operating Model Comprehensive Model Solicit enrolled students – provide consistent servicesRevenuesDisbursement Revenues (modified interchange fees)Monthly Fees (revised for new programs, ED/CFPB)University Fees (revised)Net Interest Income (deploy deposits)Expenses (Cost of Sales & Fixed
Slide 14: What is Next for CUBI: Milestone Events & Activities
Analyst Day: February 2016 — New York, NYDiscuss the core strategy of as a business bank and opportunities for future gainsA deep dive into the platform and strategic options for value creationPrior to Acquisition ClosingRefine pricing strategies for certain productsAny further regulatory actions re
Slide 15: Summary Conclusions
Summary Conclusions Customers Bank remains committed to its core business banking strategy"High-touch, supported by high-tech" and “Single Point of Contact” value proposition with branch-lite model from Boston to Philadelphia footprintHistory of robust organic growth, profitability and efficient ope
Slide 16: Appendix
Appendix Customers = Bancorp, Inc.
Slide 17: Higher One Current Disbursement Business Model
Govt. or Pvt. Loans/Grants Loan/Grant Amount Colleges/Universities Refunds / Residuals net ofTuition and Charges SubscriptionFee revenues Higher One Disbursement Services Student Check (Deposited With 3rd Party Bank) ACH to 3rd Party Bank OneAccount Partner Bank Mobile App / Online Access Debit Mast
Slide 18: Potentially Addressable Student Universe
Potentially Addressable Student Universe Commentary Source: National Center for Education Statistics, US Dept. of Education (2015), Higher One company reports. * Forward projections based on 10-year student enrollment growth rates. Student Enrollment During interim 5yrs Net enrollment in post-second
Slide 19: Contacts
Contacts Company:Robert Wahlman, CFO Tel: 610-743-8074 rwahlman@customersbank.comwww.customersbank.com Jay SidhuChairman & CEOTel: 610-301-6476 jsidhu@customersbank.comwww.customersbank.com
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