Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Investor Presentation (July 2014)
32 slides from Customers Bancorp's investor presentation, Jul 23, 2014
Slide 1: Highly Focused, Low Risk, High Growth Bank Holding Company
Highly Focused, Low Risk, High Growth Bank Holding Company Investor Presentation NASDAQ: CUBI July 2014 Note: All information in this document has been adjusted for the10% stock dividend that was declared on May 15, 2014 to shareholders of record on May 27th payable on June 30, 2014.
Slide 2: 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 statements relate to future events
Slide 3: Forward-looking statements (continued)
the ability to increase market share and control expenses;continued volatility in the credit and equity markets and its effect on the general economy; andthe effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting
Slide 4: Our Biggest Advantage: A Highly Experienced Management Team
Our Biggest Advantage: A Highly Experienced Management Team 4
Slide 5: Investment Proposition
Investment Proposition High Organic Growth, Well Capitalized, Low Risk, Branch Lite Bank in Attractive Markets § $5.6 billion asset bank § Well capitalized at 12.8% total risk based capital and 7.8% tier 1 leverage § Target market from Boston to Washington D.C. along interstate 95 Strong Profitabili
Slide 6: Investment Proposition: Low Interest Rate Risk, Attractive Valuation
Investment Proposition Low Interest Rate Risk § Approximately 40% of the loan portfolio will re-price within one year (1) § 40% of loans have an average life of 3.8 years § ~18% of deposits, on average, are non-interest bearing § Extending liabilities at this time § $150 million in forward starting
Slide 7: Customers Bancorp Will Become A Stronger Performer
Customers Bancorp Will Become A Stronger Performer Return on Average Assets Return on Average Equity Efficiency Ratio NPAs Source: SNL Financial on an LTM basis as of 4Q2013 7
Slide 8: Company history and build-out of Customers Bank
We invested in and took control of a $270 million asset Customers Bank (FKA New Century Bank)Identified existing credit problems, adequately reserved and recapitalized the bank Actively worked out very extensive loan problems Recruited experienced management team Enhanced credit and risk management
Slide 9: Disciplined Model for Superior Shareholder Value Creation
Disciplined Model for Increasing Shareholder Value Disciplined Model for Superior Shareholder Value Creation § Strong organic revenue growth + scalable infrastructure = sustainable double digit EPS growth and increased shareholder value § A clear and simple risk management driven business strategy §
Slide 10: Business and Consumer Banking Strategy
Banking Strategy Business Banking Strategy - ~95% of revenues come from business • Loan and deposit business through these segments: • Banking Privately Held Businesses • Banking High Net Worth Families • Banking Mortgage Companies Consumer Banking Strategy • Principal focus is getting deposits in a
Slide 11: Branch-lite concierge banking model
Takes banker to the customer’s home or office, 12 hours a day, 7 days a week Appointment banking approach Customer access to private bankers “Virtual Branches” out of sales offices Experienced bankers who own a portfolio of customers Customer acquisition & retention strongly incentivized Low cost ba
Slide 12: Results of Deposit Growth: Organic Growth With Controlled Costs
Results of Deposit Growth: Organic Growth With Controlled Costs Customers strategies of single point of contact and recruiting known teams in target markets produce rapid deposit growth with low total cost Total Deposit Growth ($mm) Average DDA Growth ($mm) Source: Company data. 12
Slide 13: High Growth with Strong Credit Quality
High Growth with Strong Credit Quality 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 over 99% compounded annual growth rate on total loans Creation of solid foundation for
Slide 14: C&I & Owner Occupied CRE Banking Strategy
C&I & Owner Occupied CRE Banking Strategy Banking Privately Held Business Small Business §Target companies with less than $5.0 million annual revenue §Principally SBA loans originated by small business relationship managers or branch network §Current focus PA & NJ markets Private & Commercial §Targe
Slide 15: Banking High Net Worth Families
Banking High Net Worth Families 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 – $7.0 million Remote banking for deposits and other relationship based loans 314% compounded annu
Slide 16: Mortgage Warehouse Banking Strategy
Mortgage Warehouse Banking Strategy Customers Bancorp, Inc. Mortgage Warehouse Banking Loan and Deposit Growth ($mm) : : Banking Mortgage Companies 1,500.0 $1,449.5 1,300.0 — 1,100.0 pas « Private banking focused on mortgage 300.0 $7943 $745.4 companies with $5 to $10 million equity 700.0 5 « Lower
Slide 17: Disciplined & Profitable Growth: Core Net Income
These Deposit and Lending Strategies Results in Disciplined & Profitable Growth Strategy execution has produced superior growth in revenues and arnings Core Net Income ($mm) (1) Source: SNL Financial and Company data. 17
Slide 18: Strong Growth Provides for Shareholder Value Creation
Strong Growth Provides for Shareholder Value Creation § Per share tangible book value up 35% since December 2010 § Focused on continuous growth of TBV aligns executive management compensation with shareholder value creation § Any tangible book value dilution from acquisition must be recovered within
Slide 19: Credit Improving – Banks Face Operational Headwinds
Credit Improving – Though Banks Face a Number of Operational Headwinds Capital Accumulation Continues To Create Deployment Challenges ROI Continues to Trend Below 10% Despite Being Modestly Higher Than Pre-Recession1 Critical to Have a Winning Business Model Credit Improving NPAs and NCOs greatly de
Slide 20: Customers Bank Views Itself As An Innovator
Customers Bank Views Itself As An Innovator That Is Poised To Take Advantage Of Changes Taking Place In The Industry • Changes in technology have resulted in the digitization of consumer and business transactions and automation of the payment system • Technology dependent consumers and small busines
Slide 21: BankMobile: Always on.
§F bankmobile Always on.
Slide 22: 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 23: Mobile Banking – Creating a Virtual Bank for the Future
New no fee banking vertical supplementing Consumer and Community Banking Marketing Strategy Target technology dependent <35 years old, underserved/underbanked and larger depositors generally >50 years old segments Reach markets through Affinity Banking Groups Revenue generation from debit card inter
Slide 24: Key Financial Targets for the Next 2-3 Years
Key Financial Targets for the Next 2-3 Years Customers Bancorp, Inc. Focus in future years * Single point of contact model — “High touch supported by high tech” * Only superior credit quality niches Criteria 2 - 3 Year Targets * Above average organic growth Return on Assets 1% or greater * Expense m
Slide 25: Summary
Summary § Strong high performing $5.6 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 26: Regional Bank Comparison
Regional Bank Comparison High Performance Regional Banks Source: SNL Financial, Company documents. Market data as of 3/31/2014. Consists of Northeast and Mid-Atlantic banks and thrifts with assets between $3.0 billion and $8.0 billion and most recent quarter core ROAA greater than 90 bps. Excludes m
Slide 27: Contacts
Contacts Company: Investor Relations: Robert Wahlman, CFO Ted Haberfield Tel: 610-743-8074 President, MZ North America rwahlman@customersbank.com Tel: 760-755-2716 www.customersbank.com thaberfield@mzgroup.us www.mzgroup.us Jay Sidhu Chairman & CEO Tel: 610-301-6476 jsidhu@customersbank.com www.cust
Slide 28: Appendix
ee Appendix Customers Bancor p, Inc.
Slide 29: Balance Sheet
B alanc e S he et Customers Bancorp, Inc. _____ i777 CONSOLIDATED BALANCE SHEET - UNAUDITED (Dollars in thousands) June 30, December 31, June 30, 2014 2013 2013 ASSETS Cash and due from banks $ 48,521 $ 60,709 $ 11,516 Interest-earning deposits 217,013 172,359 194,169 Cash and cash equivalents 265,5
Slide 30: Income Statement
Income Statement Customers Bancorp, Inc. ee CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED - UNAUDITED (Dollars in thousands, except per shore data) a a az 2014 2014 2013 Interest income: Loans receivable, including fees $ 35,220 $ 28,355 $ 19,196 Loans held forsale 6715 5,083 11,1
Slide 31: Net Interest Margin
Net Intere st Margin Customers Bancorp, Inc. CC Average Balance Sheet / Net Interest Margin (Unaudited) (Dollars in thousands) Three Months Ended June 30, 2014 2013 Average yield Ave ield Average Balance or cost (%) Average Balance orcost (%) Assets Interest earning deposits $ 211,438 0.25% $ 178,62
Slide 32: Asset Quality
AS S et Quality Customers Bancorp, Inc. CC Asset Quality as of June 30, 2014 (Unaudited) (Dollars in thousands) Non Other Real Performing Allowance Total Total Non Accrual Estate Assets for loan Cash Credit NPL’ Reserves to Loan Type TotaiLoans —/NPL's Owned (NPA's) losses Reserve Reserves Total Loa
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