Slide 1: Q3 2019 Earnings Call Presentation
Q3 2019 Earnings Call Presentation October 24, 2019 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: Q3 2019 Highlights
Q3 2019 Highlights • Net interest margin, tax equivalent(1) (“NIM”), expanded 19 basis points during the quarter • Expect NIM to be above 2.83% during fourth quarter 2019 • Total deposits grew 5% year over year and 9% during Q3 2019; DDA’s grew 25% year over year • Loan mix improved • Multi-family l
Slide 5: Q3 2019 Profitability – Significant Improvement
Q3 2019 Profitability – Significant Improvement QoQ YoY ($ in thousands) Q3 Q2 Q3 $ % $ % 2019 2019 2018 Change Change Change Change GAAP Profitability Metrics: GAAP earnings $23,451 $5,681 $2,414 $17,770 NM $21,037 NM Diluted EPS $0.74 $0.18 $0.07 $0.56 NM $0.67 NM ROAA 0.95% 0.36% 0.22% 0.59% NM 0
Slide 6: Q3 2019 Consolidated Results
Q3 2019 Consolidated Results GAAP vs. Core EPS(1) $0.80 $0.73 Q3 2019 Net Income to Common Shareholders of $0.70 $0.62 $0.74 $23.5 million, and Diluted Earnings Per Common $0.60 $0.53 Share of $0.74. $0.50 $0.40 $0.38 $0.38 • $0.72 of diluted EPS from the Customers Bank $0.44 $0.38 Business Banking
Slide 7: Q3 2019 Net Interest Margin
Q3 2019 Net Interest Margin FTE Net Interest Margin (1) Interest‐Earning Assets $12 6.0% $10 4.72% 5.0% 4.41% 4.56% 4.24% 4.31% $ in millions $8 4.0% $6 $8.9 3.0% $9.8 $8.6 $8.4 $9.0 $4 2.0% $2 1.0% $1.5 $1.0 $0.9 $0.9 $0.9 $0 0.0% Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Securities & Other Loans Yie
Slide 8: 2019 Deposits: Growth In The Right Areas
2019 Deposits: Growth In The Right Areas Deposit Growth 9.0 Deposits ($ in Billions) 8.0 $2.4 7.0 $2.4 $2.4 $1.7 $1.6 6.0 5.0 $3.8 4.0 $3.9 $3.7 $3.4 $3.5 3.0 2.0 1.0 $2.2 $1.9 $2.2 $2.3 $2.7 ‐ Growth Sep 2018 Dec 2018 Mar 2019 Jun 2019 Sep 2019 QoQ YoY CD's $2.4 B $1.7 B $1.6 B $2.4 B $2.4 B $0.0 B
Slide 9: Q3 2019 Loans
Q3 2019 Loans Loan Growth $12 5.0% 4.62% 4.79% 4.37% 4.48% 4.38% $10 $0.6 $0.5 4.0% $0.7 $0.0 $0.1 $0.1 $0.7 $0.6 $0.7 $0.7 $1.3 $8 $1.2 Yield on Loans $1.3 $1.2 Loans ($ in Billions) $1.2 3.0% $2.3 $6 $1.8 $2.1 $1.9 $2.0 2.0% $4 $1.6 $1.5 $2.1 $2.5 $1.5 1.0% $2 $3.5 $3.3 $3.2 $3.0 $2.8 $0 0.0% Grow
Slide 10: 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 96 bps lower than peers and approximately 134 bps lower than the industry Total Operating Costs as a % of Average Assets (1) 3.50% 3.17% 3.13% 3.08%
Slide 11: 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% 1.25% 1.07% 0.30% 0.92% 0.85% 0.80% 0.73% 0.71% 0.19% 0.20% 0.16% 0.15% 0.18% 0
Slide 12: 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 0.95% in Q3 2019, up significantly from Q2 2019 and Q3 2018 • Achieve NIM(1) expansion to 2.75% or greater by Q4 2019, with full year 2019 NIM above 2.7
Slide 13: Outlook
Outlook 2019: • On track to earn at least $2.20 of core EPS in 2019 • Net Interest Income • Net Interest Margin: Expansion through 2019 to above 2.83% in Q4 2019, with a full-year net interest margin above 2.70% • Deposits: Core deposit growth is expected to maintain the same pace in Q4 2019 as the
Slide 14: Contacts
Contacts Company: Carla Leibold, CFO Tel: 484‐923‐8802 cleibold@customersbank.com Jay Sidhu Chairman & CEO Tel: 610‐935‐8693 jsidhu@customersbank.com Bob Ramsey Director of IR Tel: 484‐926‐7118 rramsey@customersbank.com 14
Slide 15: BankMobile Segment Expanded Financials
BankMobile Segment Expanded Financials BankMobile Segment Income Statement ($ 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 Interest income $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ 2 $ 1 $ 2 $ 1 $ ‐ $ 2 $ 1,344 $
Slide 16: 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 17: 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) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 USD Per Share USD Per Share USD Per Share USD Per Share USD Per Share GAAP net income to common share
Slide 18: 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) Q3 2019 Q2 2019 Q1 2019 USD Per Share USD Per Share USD Per Share GAAP net income (loss) to common shareholders $ 684 $ 0.02 $ (7,097) $ (0.22) $ (163)
Slide 19: 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) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q4 2017 Q4 2016 Q4 2015 Q4 2014 GAAP -Total Shareholders' Equity $ 1,019,919 $ 991,405 $ 978,373
Slide 20: Reconciliation of Non-GAAP Measures – Unaudited (Cont.)
Reconciliation of Non‐GAAP Measures – Unaudited (Cont.) Nine Months Ended Core Return on Average Assets - Customers Bancorp September 30, (dollars in thousands except per share data) Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 2019 2018 GAAP net income 27,066 9,296 15,440 17,862 6,029 51,801 53,833 Reco