Customers Bancorp, Inc · NYSE:CUBI
Customers Bancorp — KBW Winter Financial Services Symposium 2020
23 slides from Customers Bancorp's conference presentation, February 2020
Slide 1: KBW Winter Financial Services Symposium
KBW Winter Financial Services Symposium February 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: Customers Bancorp Overview
Customers Bancorp Overview Customers Bancorp is a high performing relationship driven commercial bank servicing the Northeast and Mid-Atlantic From Startup to $11 Billion+ in Total Assets in 10 Years • Started in 2009 by the management team to clean up a $250 million in assets failing bank • Paused
Slide 5: Customers Bank: From Startup to Today
Customers Bank: From Startup to Today Phase I Phase III Phase IV Phase II Acquired Bank 2020 2025 Innovation & Platform, Built Near Term Long Term Execution Foundation Execution Execution ▪ Recapitalized a $250 ▪ Robust growth from ▪ Strengthen ▪ Achieve top million asset Bank (FKA Single Point of p
Slide 6: Proven Track Record of Consistent Growth
Proven Track Record of Consistent Growth Balance Sheet Tangible Book Value Per Share Deposits Loans Assets TBV/Share CUBI Stock Price $ in billions $12.0 $40.00 $11.5 $35.00 $10.0 $10.1 $9.8 $9.8 $9.4 $30.00 $8.7 $8.0 $8.4 $8.3 $8.5 $8.6 $25.00 $26.17 $7.3 $7.3 $7.1 $6.8 $23.32 $6.0 $20.00 $21.90 $2
Slide 7: Business Model: Customers Bank Diversified Lending Businesses
Business Model Customers Bank Franchise Enhancing Diversified Lending Businesses Community Banking Specialty Banking Businesses Businesses $5.7B loans outstanding $4.4B loans outstanding at December 31, 2019 at December 31, 2019 7
Slide 8: Business Model: Diversified Lending Increasing Franchise Value
Business Model: Diversified Lending Increasing Franchise Value Strategically Managing Loan Portfolio to Maximize Shareholder Value SBA Lending Commercial Loans to Mortgage Companies Specialty Finance 1% 8% 23% Commercial Loans to Equipment Mortgage Companies Residential 5% Finance & Residential Leas
Slide 9: Business Model: Diversified Deposit Franchise
Business Model Customers Bank Diversified Deposit Franchise Community Banking Unique Sources Sources $6.7B deposits outstanding $1.9B deposits outstanding at December 31, 2019 at December 31, 2019 9
Slide 10: Business Model: 2019 Deposits Growth In The Right Areas
Business Model: 2019 Deposits Growth In The Right Areas Deposit Growth We continue to improve our funding mix as we replace higher cost funding with lower cost core deposits from BankMobile, our Digital Direct Bank, and core business units Source: Company Data Total may not sum due to rounding 10
Slide 11: Business Model: Translating to Net Interest Margin
Business Model: Translating to Net Interest Margin FTE Net Interest Margin(1) Interest-Earning Assets Interest-Bearing Liabilities NIM(1) significantly expanded in Q4 2019 over Q4 2018: • NIM(1) expanded 6 basis points from Q3 2019 to 2.89% in Q4 2019 and up 32 basis points over Q4 2018; marking our
Slide 12: Outstanding Credit Quality Remains Better Than Peers
Outstanding Credit Quality Remains Better Than Peers Strong Track Record and NPLs to Total Assets Underwriting Comprehensive underwriting standards and processes • Loan origination supported by centralized credit group • Disciplined LTV and DSC standards for CRE o Only 2 bps of charge-offs in multi-
Slide 13: Attractive Investment Opportunity
Attractive Investment Opportunity The Company is well positioned to execute on its 2020 and 2025 LT strategies • 2020: $3 Core EPS, ~3% NIM, ~1% ROA, ~1.3% pre-tax, pre-provision ROA, and double-digit ROE • 2025: $6 Core EPS, 3%+ NIM, 1.25% ROA, ~1.5%+ pre-tax, pre-provision ROA, and double-digit RO
Slide 14: Appendix
Customers Bancorp, Inc. Appendix 14
Slide 15: Q4 2019 Profitability – Continued Improvement
Q4 2019 Profitability – Continued Improvement QoQ YoY ($ 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% $0.31 70% ROAA 0.97% 0.95% 0.71% 0.02% 2% 0.2
Slide 16: October 2018 – Summing It Up
Strategic Priorities Articulated at Analyst Day in October 2018 – Summing It Up Target ROAA of 1.25% or higher over the next 2-3 years • ROAA was 0.97% in Q4 2019, up significantly from Q4 2018 ROAA of 0.71%. • Adjusted ROAA – pre-tax and pre-provision(1) in Q4 2019 was 1.59%, up from 1.12% in Q4 20
Slide 17: Contacts
Contacts Company: Carla Leibold, CFO of Customers Bancorp, Inc and Customers Bank Tel: 484-923-8802 cleibold@customersbank.com Jay Sidhu Chairman & CEO of Customers Bancorp, Inc. and Executive Chairman of Customers Bank Tel: 610-935-8693 jsidhu@customersbank.com Richard Ehst President & COO of Custo
Slide 18: Reconciliation of Non-GAAP Measures - Unaudited
Reconciliation of Non-GAAP Measures - Unaudited Customers believes that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. Th
Slide 19: Reconciliation of Non-GAAP Measures – Unaudited (Cont.)
Reconciliation of Non-GAAP Measures – Unaudited (Cont.) Core Earnings - Customers Bancorp, Inc. Consolidated ($ 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 20: 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 21: 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 22: 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 23: 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
Customers Bancorp — KBW Winter Financial Services Symposium 2020 on 6ix