Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — Investor Presentation (April 2016)
41 slides from Customers Bancorp's investor presentation, Apr 14, 2016
Slide 1: Investor Presentation April 2016
Highly Focused, Low Risk, Above Average Growth Bank Holding Company Investor PresentationApril, 2016NYSE: 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 (continued)
Forward-Looking Statements timely development and acceptance of new banking products and services and perceived overall value of these products and services by users;changes in consumer spending, borrowing and saving habits;technological changes;our ability to increase market share and control expen
Slide 4: Business bank and digital consumer bank overview
A $9.0 billion asset business bank serving privately held businesses A digital consumer bank, set up as a division of Customers Bank, serving millennials, middle income families and underbanked throughout the United States Member FDIC
Slide 5: Investment Proposition
Investment Proposition Strong Organic Growth, Well Capitalized, Branch Lite Bank in Attractive Markets$9.0 billion asset bank with only 21 sales officesWell capitalized at 10.4% total risk based capital (estimated), 7.2% tier 1 leverage, and 6.2% tangible common equity to average tangible assetsTarg
Slide 6: Banking Industry Trends
Banking Industry Trends……How Do We Deal with These Issues Impediments to Growth External Forces Role of traditional bank branches changing very rapidlyMobile banking fastest growing channelBanks of all sizes revisiting their business strategies, revenue generation models and cost structuresTechnolog
Slide 7: What Is Our Business Model
Innovator / disruptor / not branch dependentDifferentiated / Unique modelTechnology savvyProduct dominance What is Our Business Model Credit Improving – Though Banks Face a Number of Operational Headwinds Credit Quality Improved over past 5 years; some pressure emergingQuality Asset Generation Remai
Slide 8: Our Competitive Advantage: A Highly Experienced Management Team
Our Competitive Advantage: A Highly Experienced Management Team
Slide 9: Customers Bank Executing On Our Unique High Performing Banking Model
Customers Bank Executing On Our Unique High Performing Banking Model
Slide 10: Disciplined Model for Superior Shareholder Value Creation
Disciplined Model for Increasing Shareholder Value Strong organic revenue growth + scalable infrastructure = sustainable double digit EPS = growth and increased shareholder valueA very robust risk management driven business strategyBuild tangible book value per share each quarter via earningsAny boo
Slide 11: Execution Timeline
Execution Timeline We invested in and took control of a $270 million asset Customers Bank (FKA New Century Bank)Identified existing credit problems, adequately reserved and recapitalized the bankActively worked out very extensive loan problemsRecruited experienced management team Enhanced credit and
Slide 12: Banking Strategy – Customers Bank
Very Experienced Teams Exceptional Service Risk Based Incentive Compensation Banking Strategy – Customers Bank Business Banking Focus - ~95% of revenues come from business segmentsLoan and deposit business through these well diversified segments:Banking Privately Held Businesses – 39% of portfolioMa
Slide 13: Organic Growth of Deposits with Controlled Costs
Results in: Organic Growth of Deposits with Controlled Costs Source: Company data. Total Deposit Growth ($mm) Average DDA Growth ($mm) Cost of Deposits Total Deposits per Branch ($mm) Customers’ strategies of single point of contact and recruiting known teams in target markets produce rapid deposit
Slide 14: Lending Strategy
Lending Strategy High Growth with Strong Credit QualityContinuous recruitment and retention of high quality teamsCentralized credit committee approval for all loansLoans are stress tested for higher rates and a slower economyInsignificant delinquencies on loans originated since new management team t
Slide 15: Build an Outstanding Loan Quality Portfolio
NPL Source: SNL Financial, Company documents. Peer data consists of Northeast and Mid-Atlantic banks and thrifts with assets between $3.5 billion and $10.0 billion. Industry data includes all FDIC insured banks. Peer and Industry data as of December 31, 2015 Build an Outstanding Loan Quality Portfol
Slide 16: C&I & Owner Occupied CRE Banking Strategy
C&I & Owner Occupied CRE Banking Strategy Private & Commercial BankingTarget companies with up to $100 million annual revenuesVery experienced teamsFour new teams with 14 professionals added in 2015, including a new business line Equipment Finance TeamSingle point of contactNE, NY, PA & NJ marketsSB
Slide 17: Multi-Family Banking Strategy
Multi-Family Banking Strategy Banking High Net Worth Families Multi-Family Loan and Deposit Growth ($mm) Focus on families that have income producing real estate in their portfoliosPrivate banking approachFocus Markets: New York & Philadelphia MSAsAverage Loan Size: $4.0 – $6.0 millionRemote banking
Slide 18: Build Efficient Operations
Staff Expense Ratio Build Efficient Operations Source: SNL Financial, Company documents. Peer data consists of Northeast and Mid-Atlantic banks and thrifts with assets between $3.5 billion and $10.0 billion. Industry data includes all FDIC insured banks. Peer and Industry data as of December 31, 201
Slide 19: Disciplined & Profitable Growth
Deposit, Lending and Efficiency Strategies Result in Disciplined & Profitable Growth Core Revenue ($mm) Core Net Income ($mm) (1) Net Interest Income ($mm) Strategy execution has produced superior growth in revenues and earnings Income / Expense Growth ($mm) Core income is net income before extraord
Slide 20: Building Customers to Provide Superior Returns to Investors
Tangible BV per Share Building Customers to Provide Superior Returns to Investors Recent Performance Results Financial Performance Targets Earnings per Share Guidance / Valuation Multiples
Slide 21: Our Approach to Developing a Winning Business Model
Our Approach to Developing a Winning Business Model 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 easilyAttract and retain best high quality talent. Business Bankers / Relationship Bankers with
Slide 22: BankMobile, a division of Customers Bank
Customers¥ Bancorp, Inc. Adivision of Customers Bank 22
Slide 23: Startling Facts about Banks
Startling Facts about Banks Banks each year charge about $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 feesThat’s more than 3x what America spends on Breast Cancer and Lung Cancer combined a
Slide 24: Creating a Virtual Bank for the Future for Consumers
No fee or very low fee banking, 25 bps higher interest savings, line of credit, 55,000 ATM’s, Personal Banker and more, all in the palm of your handMarketing Strategy Target technology dependent younger consumers; including underserved / underbanked and middle income AmericansCapitalize on retaining
Slide 25: Executive Summary of Recent Acquisition
Executive Summary of Recent Acquisition 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
Slide 26: Immediate and Comprehensive Operating 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 27: BankMobile Business Model – Old vs. New
BankMobile Business Model – Old vs. New Higher One acquisition coupled with existing technology enables BankMobile to convert student customers into lifetime customers
Slide 28: BankMobile's Customer Lifecycle Ecosystem
BankMobile’s Customer Lifecycle Ecosystem BankMobile is well positioned to be its customers' primary banking relationship throughout their lives
Slide 29: 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 30: 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
Slide 31: Appendix
Appendix Customers = Bancorp, Inc.
Slide 32: Customers Bank Risk Management
Customers Bank Risk Management
Slide 33: Elements of an Effective Risk Management Program
Elements of an Effective Risk Management Program
Slide 34: ERM Framework at Customers Bancorp, Inc.
ERM Framework at Customers Bancorp, Inc. Well Defined ERM Plan – ERM Integration into CAMELS +++++
Slide 35: Customers Bank Financial Statements
Customers Bank Financial Statements
Slide 36: Income Statement
Income Statement Customers Bancorp, Inc. 36
Slide 37: Balance Sheet
Balance Sheet Customers Bancorp, Inc. CUSTOMERS BANCORP, INC. AND SUBSIDIARIES ‘CONSOLIDATED BALANCE SHEET- UNAUDITED (Dells heswond) March 3, December 31, March 3, ASSETS (Cash nd de from banks s es 5 53590 $ 64216 meres caning deposits 198.789 2u106s 265.607 (Cash and each equivalents 262,638 2645
Slide 38: Net Interest Margin
Net Interest Margin Customers Bancorp, Inc. CUSTOMERS BANCORP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEET / NET INTEREST MARGIN (UNAUDITED) ‘Dollars in rsa) ‘are month cde Demers a ams ams Seed aime vse finesse Assets Inert casing depois oun 03% $61 025% Investment eres stish 257% 406600 232% Loans
Slide 39: Loan Composition
Loan Composition Customers Bancorp, Inc. CUSTOMERS BANCORP, INC. AND SUBSIDIARIES PERIOD END LOAN COMPOSITION (UNAUDITED) (Dollar in thousands) March31, December31, March 31, 2016 2015 2015 ‘Commerca: ‘Mol-Family S 3237855 $2988.66 $ 2,134933, Mortgage warehouse 1988657 1797.753 717,739 Commercial &
Slide 40: Asset Quality
Asset Quality Customers Bancorp, Inc. CUSTOMERS BANCORP, INC. AND SUBSIDIARIES ASSET QUALITY (UNAUDITED) ‘As of March 31 2016 ‘As of March 31, 2015 Laat timm_| “Ria | were | tse | hts tim | ‘norees | secowes | tive | “hte rinatet Lowe tray 520.05 135 of ef 29030 na xs] sh 200m a comment tnineichy |
Slide 41: Net Charge Offs
Net Charge Offs Customers Bancorp, Inc. [eee enn CUSTOMERS BANCORP, INC. AND SUBSIDIARIES NET CHARGE-OFFS (UNAUDITED) For the Quarter Ended a a a 2016 2015 2015 s s s ‘Commercial & Industral (1) 4558 5 ‘Commercial Real Estato- Non- Owner Occupied Residential = ~ = Construction Other consumer 3 @ Tot
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