Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Investor Presentation (July 2015)
41 slides from Customers Bancorp's investor presentation, Jul 23, 2015
Slide 1: Highly Focused, Low Risk, Above Average Growth
Highly Focused, Low Risk, Above Average Growth Bank Holding Company Investor Presentation July, 2015 NYSE: CUBI
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
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 Financia
Slide 4: A $7.6 billion asset business
A $7.6 billion asset business bank serving privately held businesses A consumer bank start up, set up as a division of Customers Bank, serving millennials, middle income families and underbanked throughout the United States
Slide 5: Branches and Loan Production Offices
Branches and Loan Production Offices Customers Bank Overview $7.6 bn Business Bank with 21 sales offices with target market from Boston to Philadelphia Operating in key Mid-Atlantic and Northeast markets § Greater New York City area (Westchester County, Manhattan and Melville) § Philadelphia area (B
Slide 6: Our Competitive Advantage: A Highly Experienced Management Team
Our Competitive Advantage: A Highly Experienced Management Team
Slide 7: Investment Proposition
Investment Proposition 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 (estimated), 7.4% tier 1 leverage, and 6.1% tangible equity to tangible assets § Target mar
Slide 8: Customers Bank
Customers Bank Executing On Our Unique High Performing Banking Model
Slide 9: Disciplined Model for Increasing Shareholder Value
Disciplined Model for Increasing Shareholder Value § Strong organic revenue growth + scalable infrastructure = sustainable double digit EPS = growth and increased shareholder value § A very robust risk management driven business strategy § Build tangible book value per share each quarter via earning
Slide 10: Execution Timeline
Execution Timeline § We invested in and took control of a $270 million asset Customers Bank (FKA New Century Bank) § Identified existing credit problems, adequately reserved and recapitalized the bank § Actively worked out very extensive loan problems § Recruited experienced management team § Enhanc
Slide 11: Banking Strategy - Customers Bank
All Consumer Products All Business Products All Non-Credit Products Client Makes One Call Client Private / Personal Bankers Concierge Bankers Banking Strategy - Customers Bank Business Banking Focus - ~95% of revenues come from business segments • Loan and deposit business through these segments: •
Slide 12: Total Deposit Growth and Average DDA Growth
Total Deposit Growth ($mm) Average DDA Growth ($mm) Results in: Organic Growth of Deposits with Controlled Costs Customers strategies of single point of contact and recruiting known teams in target markets produce rapid deposit growth with low total cost
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: NPL Charge Offs
NPL Charge Offs Source: SNL Financial, Company documents. Peer data consists of Northeast and Mid-Atlantic banks and thrifts with assets between $3.0 billion and $8.0 billion. Industry data includes all FDIC insured banks. Peer and Industry data as of March 31, 2015. Build an Outstanding Loan Qualit
Slide 15: Banking Privately Held Business C&I / Owner Occupied CRE
Banking Privately Held Business C&I / Owner Occupied CRE Loan and Deposit Growth ($mm) C&I & Owner Occupied CRE Banking Strategy Private & Commercial Banking § Target companies with up to $100 million annual revenues § Very experienced teams § Two new teams with 10 professionals added year to date §
Slide 16: Banking High Net Worth Families Multi-Family
Banking High Net Worth Families Multi-Family Loan and Deposit Growth ($mm) Multi-Family Banking Strategy § Focus on families that have income producing real estate in their portfolios § Private banking approach § Focus Markets: New York & Philadelphia MSAs § Average Loan Size: $4.0 - $5.0 million §
Slide 17: Banking Mortgage Companies Mortgage Warehouse
Banking Mortgage Companies Mortgage Warehouse Banking Loan and Deposit Growth ($mm) Mortgage Warehouse Banking Strategy § Private banking focused on mortgage companies with $5 to $10 million equity § Very strong credit quality relationship business with good fee income and deposits § ~75 strong ware
Slide 18: Build Efficient Operations
Staff Expense Ratio Occupancy Expense Ratio Total Costs as a % of Assets Total Revenue per Employee ($000s) Assets per Employee ($mm) Build Efficient Operations Source: SNL Financial, Company documents. Peer data consists of Northeast, and Mid-Atlantic banks and thrifts with assets between $3.0 bill
Slide 19: Disciplined & Profitable Growth
Core Revenue ($mm) Core Net Income ($mm) (1) Net Interest Income ($mm) Income / Expense Growth ($mm) Deposit, Lending and Efficiency Strategies Results in Disciplined & Profitable Growth (2) CAGR calculated from Dec-09 to June 2015 (annualized). (3) Non-GAAP core results including profitability meas
Slide 20: Risk Management
Customers Bank Risk Management
Slide 21: Elements of an Effective Risk Management Program
Elements of an Effective Risk Management Program
Slide 22: ERM Framework at Customers Bancorp, Inc.
ERM Framework at Customers Bancorp, Inc. Well Defined ERM Plan - ERM Integration into CAMELS +++++
Slide 23: Current Banking Environment and How We are Positioned
Current Banking Environment and How We are Positioned
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
Slide 25: Banking Industry Trends
Impediments to Growth External Forces Business Issues Shareholder Expectations Issues facing Boards & CEO’s Banking Industry Trends…… How Do We Deal with These Issues • Role of traditional bank branches changing very rapidly • Mobile banking fastest growing channel • Banks of all sizes revisiting th
Slide 26: Our Thesis on Current U.S. Banking Environment
Credit Improving - Though Banks Face a Number of Operational Headwinds Critical to Have a Winning Business Model Traditional Banks Fee Income Leaders Relationship & Innovative Banks § Innovator / disruptor / not branch dependent § Differentiated / Unique model § Technology savvy Our Thesis on Curren
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
Customers Bancorp, Inc. barkmeblle TIONARY bankmobile A Division Of Customers Bank
Slide 29: Startling Facts about Banks
Startling Facts about Banks § Banks each year charge $32 billion in overdraft fees - that’s allowing or creating over 1 billion overdrafts 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
§ 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 § Marketing Strategy § Target technology dependent younger consumers; including underserved / underbanked and middle income Americans § Capitalize on retaining a
Slide 31: Building Customers to Provide Superior Returns to Investors
Core Tangible BV per Share Recent Core Performance Results Financial Performance Targets Earnings per Share Guidance / Valuation Multiples Building Customers to Provide Superior Returns to Investors • Non-GAAP core results including profitability measures, earnings, credit quality measures and valua
Slide 32: Summary
Summary § Strong high performing $7.6 billion bank with significant growth opportunities § 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
Slide 33: Contacts
Contacts Company: Robert Wahlman, CFO Tel: 610-743-8074 rwahlman@customersbank.com www.customersbank.com Jay Sidhu Chairman & CEO Tel: 610-301-6476 jsidhu@customersbank.com www.customersbank.com Investor Relations: Ted Haberfield President, MZ North America Tel: 760-755-2716 thaberfield@mzgroup.us w
Slide 34: Customers Bancorp, Inc.
Customers @= Bancorp, Inc.
Slide 35: Reconciliation of GAAP to Non-GAAP Measures
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 EPS GAAP net income ava
Slide 36: Consolidated Statements of Operations - Three Months Ended
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 sale 13,522 10,900 6
Slide 37: Consolidated Statements of Operations - Six Months Ended
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 24,422 11,798 Investme
Slide 38: Consolidated 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 and cash equiva
Slide 39: Average Balance Sheet / Net Interest Margin - Six Months
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 Balance Average yield or cost (%) Average Balance Average yield or cost (%) Assets Interest earning deposits $ 28
Slide 40: Average Balance Sheet / Net Interest Margin - Three Months
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 Balance Average yield or cost (%) Average Balance Average yield or cost (%) Assets Interest earning deposits $
Slide 41: Asset Quality as of June 30, 2015
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES Asset Quality as of June 30, 2015 (Unaudited) (Dollars in thousands, except per share data) Total Loans Non Accrual /NPLs Other Real Estate Owned Non Performing Assets (NPAs) Allowance for loan losses Cash Reserve Total Credit Reserves NPLs / Total Loans Tota
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