Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Q4 2019 Earnings Presentation
22 slides from Customers Bancorp's earnings presentation, Jan 23, 2020
Slide 1: Q4 2019 Earnings Call Presentation
Q4 2019 Earnings Call Presentation January 23, 2020 NYSE: CUBI Member FDIC
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, 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 3: Forward-Looking Statements (Cont.)
Forward-Looking Statements (Cont.) • material differences in the actual financial results of merger and acquisition activities compared with our expectations, such as with respect to the full realization of anticipated cost savings and revenue enhancements within the expected time frame; • our abili
Slide 4: Q4 2019 Highlights
Q4 2019 Highlights • Net income to common shareholders of $23.9 million, or $0.75 per diluted share, in Q4 2019, up 70% year-over-year • Increase in net income to common shareholders of $10 million compared to Q4 2018. • FY 2019 net income to common shareholders of $64.9 million, or $2.05 per dilute
Slide 5: Q4 2019 Profitability – Continued Improvement
Q4 2019 Profitability – Continued Improvement QoQ YoY ($ in thousands) Q4 2019 Q3 2019 Q4 2018 $ Change % Change $ Change % Change GAAP Profitability Metrics: GAAP earnings $23,911 $23,451 $14,247 $460 2% $9,664 68% Diluted EPS $0.75 $0.74 $0.44 $0.01 1% $0.31 70% ROAA 0.97% 0.95% 0.71% 0.02% 2% 0.2
Slide 6: Q4 2019 Consolidated Results
Q4 2019 Consolidated Results GAAP vs. Core EPS(1) $0.80 $0.74 $0.73 $0.75 $0.76 Q4 2019 Net Income to Common Shareholders of $0.70 $23.9 million, and Diluted Earnings Per Common Share of $0.75. $0.60 $0.53 $0.50 $0.44 • $0.70 of diluted EPS from the Customers Bank $0.40 $0.38 $0.38 $0.38 Business Ba
Slide 7: Q4 2019 Net Interest Margin
Q4 2019 Net Interest Margin FTE Net Interest Margin (1) $80 $75.7 $77.6 3.00% $70 2.89% $64.7 2.90% $61.5 2.83% $59.3 $60 2.80% $50 $ in millions $40 2.64% 2.70% $30 2.59% 2.57% 2.60% $20 2.50% $10 $0 2.40% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net Interest Income FTE Net Interest Margin (1) NIM(1
Slide 8: 2019 Deposits: Growth In The Right Areas
2019 Deposits: Growth In The Right Areas Deposit Growth 9.0 Deposits ($ in Billions) 8.0 $2.7 $2.6 7.0 $2.3 6.0 $1.9 $2.2 5.0 4.0 $3.4 $3.8 $3.5 $4.4 3.0 $3.7 2.0 1.0 $1.7 $2.4 $2.4 $1.7 $1.6 Growth ‐ Dec 2018 Mar 2019 Jun 2019 Sep 2019 Dec 2019 QoQ YoY DDA $1.9 B $2.2 B $2.3 B $2.7 B $2.6 B ‐$0.1 B
Slide 9: Q4 2019 Loans
Q4 2019 Loans Loan Growth $12 4.79% 4.68% 5.0% 4.62% 4.37% 4.48% $10 $0.6 $0.1 $0.5 $0.7 $1.2 4.0% $0.1 $0.7 $0.5 $0.7 $0.7 $1.3 Yield on Loans $8 Loans ($ in Billions) $1.2 $1.3 $1.2 $1.2 3.0% $2.3 $6 $2.1 $2.4 $1.9 $2.0 2.0% $4 $1.5 $1.5 $2.1 $2.5 $2.3 1.0% $2 $3.3 $3.2 $3.0 $2.8 $2.4 $0 0.0% Dec
Slide 10: Q4 2019 Loans
Q4 2019 Loans Loan Portfolio Composition Loan Growth QoQ YoY C&I Loa ns $0.1 B 6% $0.5 B 26% Commerci a l Loa ns to Mortga ge Compa ni es ‐$0.2 B ‐10% $0.8 B 58% Mul ti ‐Fa mi l y ‐$0.4 B ‐15% ‐$0.9 B ‐27% Non‐Owner Occupi ed CRE $0.0 B 1% $0.1 B 12% Cons umer $0.3 B 21% $0.9 B NM Tota l ‐$0.2 B ‐2%
Slide 11: Superior Operating Efficiency and Costs
Superior Operating Efficiency and Costs Our Customers Bank Business Banking Segment operating costs(2), as a percentage of average assets, are at least 91 basis points lower than peers and approximately 146 basis points lower than the industry Total Operating Costs as a % of Average Assets (1) 3.50%
Slide 12: Outstanding Credit Quality
Outstanding Credit Quality Credit metrics remain better than peers NPLs to Total Loans Net Charge Offs / Average Total Loans 2.25% 2.06% 0.50% 0.48% 0.47% 0.47% 0.45% 0.45% 0.42% 1.70% 1.75% 1.55% 1.55% 0.40% 1.18% 1.11% 0.30% 1.25% 1.03% 0.92% 0.85% 0.19% 0.80% 0.73% 0.73% 0.20% 0.16% 0.18% 0.15% 0
Slide 13: Strategic Priorities Articulated at Analyst Day in October 2018 – Summing It Up
Strategic Priorities Articulated at Analyst Day in October 2018 – Summing It Up • Target ROAA of 1.25% or higher over the next 2-3 years • ROAA was 0.97% in Q4 2019, up significantly from Q4 2018 ROAA of 0.71%. • Adjusted ROAA – pre-tax and pre-provision(1) in Q4 2019 was 1.59%, up from 1.12% in Q4
Slide 14: Outlook
Outlook 2020 and beyond: • Core EPS in 2020 of $3.00 • Continued profitability for the BankMobile segment, with some seasonality • Assumed annual Durbin restrictions will be effective July 1, 2020 on profit model for 2020 • Core EPS within 3 years of $4.00 and $6.00 by 2025 • Core ROAA of 1.25% or h
Slide 15: Contacts
Contacts Company: Carla Leibold, CFO of Customers Bancorp, Inc and Customers Bank Tel: 484‐923‐8802 cleibold@customersbank.com Jay Sidhu Chairman & CEO of Customers Bancorp, Inc. and Executive Chairman of Customers Bank Tel: 610‐935‐8693 jsidhu@customersbank.com Richard Ehst President & COO of Custo
Slide 16: BankMobile Segment Expanded Financials
BankMobile Segment Expanded Financials BankMobile Segment Income Statement ($ in 000s), Except Per Share Data Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Interest income $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 2 $ 1 $ 2 $ 1 $ ‐ $ 2 $
Slide 17: 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 core results of operations and financial condition relative to other financial institutions. Th
Slide 18: Reconciliation of Non‐GAAP Measures – Unaudited (Cont.)
Reconciliation of Non‐GAAP Measures – Unaudited (Cont.) Core Earnings - Customers Bancorp, Inc. Consolidated ($ in thousands, not including per share amounts) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 USD Per Share USD Per Share USD Per Share USD Per Share USD Per Share GAAP net income to common share
Slide 19: Reconciliation of Non‐GAAP Measures – Unaudited (Cont.)
Reconciliation of Non‐GAAP Measures – Unaudited (Cont.) Core Earnings (Loss) - BankMobile Segment ($ in thousands, not including per share amounts) Q4 2019 Q3 2019 Q2 2019 Q1 2019 USD Per Share USD Per Share USD Per Share USD Per Share GAAP net income (loss) to common shareholders $ 1,693 $ 0.05 $ 6
Slide 20: Reconciliation of Non‐GAAP Measures – Unaudited (Cont.)
Reconciliation of Non‐GAAP Measures – Unaudited (Cont.) Tangible Book Value per Common Share - Customers Bancorp, Inc. Consolidated ($ in thousands, except per share data) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q4 2017 Q4 2016 Q4 2015 Q4 2014 GAAP -Total Shareholders' Equity $ 1,052,795 $ 1,019,919
Slide 21: Reconciliation of Non‐GAAP Measures – Unaudited (Cont.)
Reconciliation of Non‐GAAP Measures – Unaudited (Cont.) Twelve Months Ended Core Return on Average Assets - Customers Bancorp December 31, (dollars in thousands except per share data) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 2019 2018 GAAP net income 27,526 27,066 9,296 15,440 17,862 79,327 71,695 Re
Slide 22: Reconciliation of Non‐GAAP Measures – Unaudited (Cont.)
Reconciliation of Non‐GAAP Measures – Unaudited (Cont.) Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Twelve Months Ended Customers Bancorp December 31, (dollars in thousands except per share data) Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 2019 2018 GAAP net income 27,526 27,066 9,29