CUBI - Customers Bancorp Reports Results for Third Quarter 2023

October, 26 2023 04:45 PM Customers Bancorp Inc

Customers Bancorp, Inc. (NYSE:CUBI)

Third Quarter 2023 Highlights

Q3 2023 net income available to common shareholders was $83.0 million, or $2.58 per diluted share; ROAA was 1.57% and ROCE was 23.97%.
Q3 2023 core earnings* were $83.3 million, or $2.59 per diluted share; Core ROAA* was 1.57% and Core ROCE* was 24.06%.
CET 1 capital ratio of 11.3% ¹ at September 30, 2023, compared to 10.3% at June 30, 2023, achieving goal of 11.0% - 11.5% one quarter earlier than expected.
Q3 2023 net interest margin, tax equivalent (NIM) was 3.70%, an increase of 55 basis points over Q2 2023 NIM of 3.15%, largely resulting from higher than expected discount accretion on the Venture Banking portfolio acquired in Q2 2023.
Total deposits grew by $244.9 million in Q3 2023 over Q2 2023 with a significant positive mix shift. Q3 2023 core deposit growth of $1.3 billion drove the repayment of maturing wholesale CDs of $937 million and callable FHLB advances of $510 million. Q3 2023 non-interest bearing deposits increased $268.5 million, or 6%, over Q2 2023.
Total estimated insured deposits were 78% ² of total deposits at September 30, 2023, with immediately available liquidity covering uninsured deposits by approximately 239%.
Q3 2023 adjusted pre-tax pre-provision net income* was $128.6 million; adjusted pre-tax pre-provision ROAA* was 2.32%; and adjusted pre-tax pre-provision ROCE* was 36.04%.
Q3 2023 provision for credit losses on loans and leases of $17.1 million was lower compared to Q2 2023 largely driven by lower balances in loans held for investment.
Non-performing assets were $30.0 million, or 0.14% of total assets, at September 30, 2023 compared to 0.13% at June 30, 2023. Allowance for credit losses on loans and leases equaled 466% of non-performing loans at September 30, 2023, compared to 494% at June 30, 2023.
Q3 2023 book value per share and tangible book value per share* both grew by $3.31, or 7.9% over Q2 2023, driven by strong quarterly earnings combined with decreased AOCI losses of $18.4 million over the same time period.

____________________

Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Regulatory capital ratios as of September 30, 2023 are estimates.

Uninsured deposits (estimate) of $4.8 billion to be reported on the Bank's call report, less state and municipal deposits of $591.3 million collateralized by standby letters of credit from the FHLB and from our affiliates of $99.2 million.

CEO Commentary

“We are pleased to share our third quarter results as we continued to execute on our strategic priorities and delivered another strong quarter for shareholders,” said Customers Bancorp Chairman and CEO Jay Sidhu. “While the banking industry has broadly stabilized following the events earlier this year, the headwinds of higher funding costs and net interest margin compression have not subsided for most banks. We demonstrated the sustainability of our differentiated deposit strategy by growing core deposits by $1.3 billion in the third quarter resulting in $245 million in total deposit growth. The remaining liquidity inflows, and a modest amount of balance sheet cash, were used to payoff maturing wholesale CDs of $937 million and $510 million in callable FHLB advances. The core deposit growth was broad-based with 13 different channels contributing $25 million or more and benefited from the onboarding of deposits from our new Venture Banking clients. Non-interest bearing deposits as a percentage of deposits increased modestly to 26%. Our net interest margin continued to expand in the quarter in contrast to the industry headwinds. Elevated payoffs and maturities in the acquired Venture Banking portfolio resulted in outsized discount accretion which contributed to our net interest income. Capital levels continued to increase substantially during the quarter as evidenced by a 50 basis point increase in our TCE ratio* and a 100 basis point increase in our CET 1 ratio to end the quarter at 11.3%. We remain well-positioned to continue strengthening our deposit franchise, improve our profitability, and increase our capital ratios,” stated Jay Sidhu.

“Our Q3 2023 GAAP earnings were $83.0 million, or $2.58 per diluted share, well above consensus estimates. At September 30, 2023, our deposit base was well diversified, with approximately 78% ² of total deposits insured. We maintain a strong liquidity position, with $9.7 billion of liquidity immediately available, which covers approximately 239% of uninsured deposits and our loan to deposit ratio was 75%. We continue to be selective on new loan production given the uncertain environment and our commitment to improve our capital ratios and are focusing new loan production where we have a holistic and primary relationship. We are seeing attractive new origination opportunities and we remain firmly committed to serving our clients. We have ample liquidity and capital to support their needs. At September 30, 2023, we had $3.4 billion of cash on hand, which we believe is prudent balance sheet and liquidity management in the current environment. Asset quality remains exceptional with our NPA ratio remaining roughly flat at just 0.14% of total assets and reserve levels are robust at over 465% of total non-performing loans at the end of Q3 2023. Our exposure to higher risk commercial real estate such as the office and retail sectors is minimal, each representing only 1% of the loan portfolio. Continued execution on our strategic priorities has positioned us favorably for success through the remainder of 2023 and into 2024 from a capital, credit, liquidity, interest rate risk and earnings perspective. We will remain disciplined, but opportunistic, with our balance sheet capacity to minimize risk and maintain robust capital levels. We are extremely proud of the progress we made in the quarter and are confident in our risk management capabilities and ability to provide excellent service to our clients in all operating environments. We are excited and optimistic about the opportunities ahead,” Jay Sidhu continued.

____________________

Regulatory capital ratios as of September 30, 2023 are estimates.

Financial Highlights




(Dollars in thousands, except per share data)

At or Three Months Ended

Increase (Decrease)

September 30, 2023

June 30, 2023

Profitability Metrics:








Net income available for common shareholders

$
82,953


$
44,007


$
38,946


88.5
%
Diluted earnings per share

$
2.58


$
1.39


$
1.19


85.6
%
Core earnings*

$
83,294


$
52,163


$
31,131


59.7
%
Core earnings per share*

$
2.59


$
1.65


$
0.94


57.0
%
Return on average assets ("ROAA")


1.57
%


0.88
%


0.69



Core ROAA*


1.57
%


1.03
%


0.54



Return on average common equity ("ROCE")


23.97
%


13.22
%


10.75



Core ROCE*


24.06
%


15.67
%


8.39



Adjusted pre-tax pre-provision net income*

$
128,564


$
96,833


$
31,731


32.8
%
Net interest margin, tax equivalent


3.70
%


3.15
%


0.55



Loan yield


7.87
%


6.83
%


1.04



Cost of deposits


3.24
%


3.11
%


0.13



Efficiency ratio


41.01
%


49.25
%


(8.24
)


Core efficiency ratio*


41.04
%


47.84
%


(6.80
)


Balance Sheet Trends:








Total assets

$
21,857,152


$
22,028,565


$
(171,413
)

(0.8
)%
Total loans and leases

$
13,713,482


$
13,910,907


$
(197,425
)

(1.4
)%
Non-interest bearing demand deposits

$
4,758,682


$
4,490,198


$
268,484


6.0
%
Total deposits

$
18,195,364


$
17,950,431


$
244,933


1.4
%
Capital Metrics:








Common Equity

$
1,423,813


$
1,318,858


$
104,955


8.0
%
Tangible Common Equity*

$
1,420,184


$
1,315,229


$
104,955


8.0
%
Common Equity to Total Assets


6.5
%


6.0
%


0.5



Tangible Common Equity to Tangible Assets*


6.5
%


6.0
%


0.5



Book Value per common share

$
45.47


$
42.16


$
3.31


7.9
%
Tangible Book Value per common share*

$
45.36


$
42.04


$
3.32


7.9
%
Common equity Tier 1 capital ratio ⁽¹⁾


11.3
%


10.3
%


1.0



Total risk based capital ratio ⁽¹⁾


14.3
%


13.2
%


1.1












(1) Regulatory capital ratios as of September 30, 2023 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Financial Highlights








(Dollars in thousands, except per share data)

At or Three Months Ended

Increase (Decrease)

Nine Months Ended

Increase (Decrease)

September 30, 2023

September 30, 2022


September 30, 2023

September 30, 2022

Profitability Metrics:
















Net income available for common shareholders

$
82,953


$
61,364


$
21,589


35.2
%

$
177,225


$
192,779


$
(15,554
)

(8.1
)%
Diluted earnings per share

$
2.58


$
1.85


$
0.73


39.5
%

$
5.53


$
5.72


$
(0.19
)

(3.3
)%
Core earnings*

$
83,294


$
82,270


$
1,024


1.2
%

$
186,600


$
217,047


$
(30,447
)

(14.0
)%
Core earnings per share*

$
2.59


$
2.48


$
0.11


4.4
%

$
5.82


$
6.44


$
(0.62
)

(9.6
)%
Return on average assets ("ROAA")


1.57
%


1.24
%


0.33





1.17
%


1.34
%


(0.17
)


Core ROAA*


1.57
%


1.64
%


(0.07
)




1.22
%


1.50
%


(0.28
)


Return on average common equity ("ROCE")


23.97
%


19.33
%


4.64





17.84
%


20.58
%


(2.74
)


Core ROCE*


24.06
%


25.91
%


(1.85
)




18.79
%


23.17
%


(4.38
)


Adjusted pre-tax pre-provision net income*

$
128,564


$
100,994


$
27,570


27.3
%

$
314,679


$
319,335


$
(4,656
)

(1.5
)%
Net interest margin, tax equivalent


3.70
%


3.16
%


0.54





3.28
%


3.38
%


(0.10
)


Loan yield


7.87
%


5.08
%


2.79





7.12
%


4.77
%


2.35



Cost of deposits


3.24
%


1.48
%


1.76





3.23
%


0.80
%


2.43



Efficiency ratio


41.01
%


50.00
%


(8.99
)




45.62
%


43.46
%


2.16



Core efficiency ratio*


41.04
%


42.57
%


(1.53
)




45.03
%


41.23
%


3.80



Balance Sheet Trends:
















Total assets

$
21,857,152


$
20,367,621


$
1,489,531


7.3
%








Total loans and leases

$
13,713,482


$
15,336,688


$
(1,623,206
)

(10.6
)%








Non-interest bearing demand deposits

$
4,758,682


$
2,993,793


$
1,764,889


59.0
%








Total deposits

$
18,195,364


$
17,522,438


$
672,926


3.8
%








Capital Metrics:
















Common Equity

$
1,423,813


$
1,249,137


$
174,676


14.0
%








Tangible Common Equity*

$
1,420,184


$
1,245,508


$
174,676


14.0
%








Common Equity to Total Assets


6.5
%


6.1
%


0.4











Tangible Common Equity to Tangible Assets*


6.5
%


6.1
%


0.4











Book Value per common share

$
45.47


$
38.46


$
7.01


18.2
%








Tangible Book Value per common share*

$
45.36


$
38.35


$
7.01


18.3
%








Common equity Tier 1 capital ratio ⁽¹⁾


11.3
%


9.8
%


1.5











Total risk based capital ratio ⁽¹⁾


14.3
%


12.5
%


1.8




























(1) Regulatory capital ratios as of September 30, 2023 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Key Balance Sheet Trends

Loans and Leases
The following table presents the composition of total loans and leases as of the dates indicated:
(Dollars in thousands)

September 30, 2023

% of Total

June 30, 2023

% of Total

September 30, 2022

% of Total
Loans and Leases Held for Investment












Commercial:












Commercial & industrial:












Specialty lending

$
5,422,161

40.0
%

$
5,534,832

40.0
%

$
5,103,974

33.3
%
Other commercial & industrial


1,115,364

8.2



1,052,145

7.6



1,064,332

7.0

Multifamily


2,130,213

15.7



2,151,734

15.6



2,263,268

14.8

Loans to mortgage companies


1,042,549

7.7



1,108,598

8.0



1,708,587

11.1

Commercial real estate owner occupied


794,815

5.9



842,042

6.1



726,670

4.7

Loans receivable, PPP


137,063

1.0



188,763

1.4



1,154,632

7.5

Commercial real estate non-owner occupied


1,178,203

8.7



1,211,091

8.8



1,263,211

8.2

Construction


252,588

1.8



212,214

1.5



136,133

0.9

Total commercial loans and leases


12,072,956

89.0



12,301,419

89.0



13,420,807

87.5

Consumer:












Residential


483,133

3.6



487,199

3.5



465,772

3.1

Manufactured housing


40,129

0.3



41,664

0.3



46,990

0.3

Installment:












Personal


629,843

4.6



752,470

5.4



1,056,432

6.9

Other


337,053

2.5



250,047

1.8



341,463

2.2

Total installment loans


966,896

7.1



1,002,517

7.2



1,397,895

9.1

Total consumer loans


1,490,158

11.0



1,531,380

11.0



1,910,657

12.5

Total loans and leases held for investment

$
13,563,114

100.0
%

$
13,832,799

100.0
%

$
15,331,464

100.0
%













Loans Held for Sale












Commercial:












Multifamily

$
—

—
%

$
—

—
%

$
4,108

78.6
%
Commercial real estate non-owner occupied


—

—



—

—



—

—

Total commercial loans and leases


—

—



—

—



4,108

78.6

Consumer:












Residential


1,005

0.7



1,234

1.6



1,116

21.4

Installment:












Personal


124,848

83.0



76,874

98.4



—

—

Other


24,515

16.3



—

—



—

—

Total installment loans


149,363

99.3



76,874

98.4



—

—

Total consumer loans


150,368

100.0



78,108

100.0



1,116

21.4

Total loans held for sale

$
150,368

100.0
%

$
78,108

100.0
%

$
5,224

100.0
%













Total loans and leases portfolio

$
13,713,482



$
13,910,907



$
15,336,688

Loans and Leases Held for Investment

Loans and leases held for investment were $13.6 billion at September 30, 2023, down $269.7 million, or 1.9%, from June 30, 2023, consistent with our stated goal of purposely moderating loan growth and exiting non-strategic relationships. Loans held for investment decreased modestly in every category, except for relatively small increases in construction loans and in other commercial and industrial ("C&I") loans quarter-over-quarter. Other C&I loans increased $63.2 million, or 6.0% quarter-over-quarter, to $1.1 billion. Loans to mortgage companies decreased $66.0 million, or 6.0% quarter-over-quarter due to lower mortgage activity. Consumer installment loans held for investment decreased $35.6 million, or 3.6% quarter-over-quarter, to $1.0 billion as we continue to execute on our held-for-sale strategy and de-risk the held-for-investment loan portfolio in 2023.

Loans and leases held for investment of $13.6 billion at September 30, 2023 was down $1.8 billion, or 11.5%, year-over-year, largely driven by reduced balances in PPP loans of $1.0 billion, loans to mortgage companies of $666.0 million and consumer installment loans of $431.0 million, offset in part by net growth in the lower risk variable rate specialty lending verticals of $318.2 million. Consumer installment loans held for investment decreased $431.0 million, or 30.8% year-over-year, to $966.9 million as we continue to execute on our held-for-sale strategy and de-risk the held-for-investment loan portfolio in 2023.

Loans Held for Sale

Loans held for sale increased $72.3 million quarter-over-quarter, and were $150.4 million at September 30, 2023 as we continue to build out our held-for-sale strategy in 2023.

Allowance for Credit Losses on Loans and Leases

The following table presents the allowance for credit losses on loans and leases as of the dates and for the periods presented:











At or Three Months Ended

Increase (Decrease)

At or Three Months Ended

Increase (Decrease)
(Dollars in thousands)

September 30, 2023

June 30, 2023


September 30, 2023

September 30, 2022

Allowance for credit losses on loans and leases

$
139,213


$
139,656


$
(443
)

$
139,213


$
130,197


$
9,016

Provision (benefit) for credit losses on loans and leases

$
17,055


$
22,363


$
(5,308
)

$
17,055


$
(7,836
)

$
24,891

Net charge-offs from loans held for investment

$
17,498


$
15,564


$
1,934


$
17,498


$
18,497


$
(999
)
Annualized net charge-offs to average loans and leases


0.50
%


0.42
%




0.50
%


0.47
%


Coverage of credit loss reserves for loans and leases held for investment


1.10
%


1.09
%




1.10
%


0.95
%

Net charge-offs were relatively stable with $17.5 million in Q3 2023, compared to $15.6 million in Q2 2023 and $18.5 million in Q3 2022.

Provision (benefit) for Credit Losses



Three Months Ended

Increase (Decrease)

Three Months Ended

Increase (Decrease)
(Dollars in thousands)

September 30, 2023

June 30, 2023


September 30, 2023

September 30, 2022

Provision (benefit) for credit losses on loans and leases

$
17,055

$
22,363


$
(5,308
)

$
17,055

$
(7,836
)

$
24,891

Provision (benefit) for credit losses on available for sale debt securities


801


1,266



(465
)


801


(158
)


959

Provision for credit losses


17,856


23,629



(5,773
)


17,856


(7,994
)


25,850

Provision (benefit) for credit losses on unfunded commitments


48


(304
)


352



48


254



(206
)
Total provision for credit losses

$
17,904

$
23,325


$
(5,421
)

$
17,904

$
(7,740
)

$
25,644

The provision for credit losses on loans and leases in Q3 2023 was $17.1 million, compared to $22.4 million in Q2 2023 and a benefit to provision of $7.8 million in Q3 2022. The lower provision in Q3 2023 was primarily due to lower balances in loans held for investment. The benefit to provision in Q3 2022 was primarily due to the sale of $500.0 million of unsecured consumer installment loans, partially offset by loan growth and the recognition of weaker macroeconomic forecasts. The sale transaction resulted in approximately $36.8 million of release in allowance for credit losses, which was included in core earnings* in Q3 2022.

The provision for credit losses on available for sale investment securities in Q3 2023 was $0.8 million, compared to provision of $1.3 million in Q2 2023 and a benefit to provision of $0.2 million in Q3 2022.

Asset Quality

The following table presents asset quality metrics as of the dates indicated:

(Dollars in thousands)

September 30, 2023

June 30, 2023

Increase (Decrease)

September 30, 2023

September 30, 2022

Increase (Decrease)
Non-performing assets ("NPAs"):












Nonaccrual / non-performing loans ("NPLs")

$
29,867


$
28,244


$
1,623


$
29,867


$
27,919


$
1,948

Non-performing assets

$
29,970


$
28,380


$
1,590


$
29,970


$
27,965


$
2,005

NPLs to total loans and leases


0.22
%


0.20
%




0.22
%


0.18
%


Reserves to NPLs


466.11
%


494.46
%




466.11
%


466.34
%


NPAs to total assets


0.14
%


0.13
%




0.14
%


0.14
%















Loans and leases ⁽¹⁾ risk ratings:












Commercial loans and leases ⁽²⁾












Pass

$
10,503,731


$
10,667,619


$
(163,888
)

$
10,503,731


$
10,262,647


$
241,084

Special Mention


189,329



166,468



22,861



189,329



104,560



84,769

Substandard


280,267



272,301



7,966



280,267



329,878



(49,611
)
Total commercial loans and leases


10,973,327



11,106,388



(133,061
)


10,973,327



10,697,085



276,242

Consumer loans












Performing


1,473,493



1,508,208



(34,715
)


1,473,493



1,893,977



(420,484
)
Non-performing


16,665



23,172



(6,507
)


16,665



16,680



(15
)
Total consumer loans


1,490,158



1,531,380



(41,222
)


1,490,158



1,910,657



(420,499
)
Loans and leases receivable ⁽¹⁾

$
12,463,485


$
12,637,768


$
(174,283
)

$
12,463,485


$
12,607,742


$
(144,257
)













(1) Risk ratings are assigned to loans and leases held for investment, and excludes loans held for sale and loans receivable, mortgage warehouse, at fair value.
(2) Excludes loan receivable, PPP, as eligible PPP loans are fully guaranteed by the Small Business Administration.

Over the last decade, we have developed a suite of commercial loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s C&I, loans to mortgage companies, corporate and specialty lending lines of business, and multifamily loans for example, are characterized by conservative underwriting standards and low loss rates. Because of this emphasis, the Bank’s credit quality to date has been incredibly healthy despite an adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, we employ a bottom-up data driven approach to analyze the commercial portfolio.

Total consumer installment loans held for investment at September 30, 2023 were less than 5% of total assets and approximately 7% of total loans and leases held for investment, and were supported by an allowance for credit losses of $58.2 million. At September 30, 2023, our consumer installment portfolio had the following characteristics: average original FICO score of 734, average debt-to-income of 19% and average borrower income of $106 thousand.

Non-performing loans at September 30, 2023 remained relatively stable at 0.22% of total loans and leases, compared to 0.20% at June 30, 2023 and 0.18% at September 30, 2022.

Investment Securities

Our investment securities portfolio, including debt securities classified as available for sale ("AFS") and held to maturity ("HTM") provides periodic cash flows through regular maturities and amortization, can be used as collateral to secure additional funding, and is an important component of our liquidity position.

The following table presents the composition of our investment securities portfolio as of the dates indicated:

(Dollars in thousands)

September 30, 2023

June 30, 2023

September 30, 2022
Debt securities, available for sale

$
2,746,729

$
2,797,940

$
2,918,830
Equity securities


26,478


26,698


24,864
Investment securities, at fair value


2,773,207


2,824,638


2,943,694
Debt securities, held to maturity


1,178,370


1,258,560


886,294
Total investment securities portfolio

$
3,951,577

$
4,083,198

$
3,829,988

Critically important to performance during the recent banking crisis are the characteristics of a bank’s securities portfolio. While there may be virtually no credit risk in some of these portfolios, holding longer term and lower yielding securities is creating challenges for many banks. Our securities portfolio is highly liquid, short in duration, and high in yield. At September 30, 2023, our AFS debt securities portfolio had a spot yield of 5.43%, an effective duration of approximately 1.6 years, and approximately 48% are variable rate. Additionally, 64% of our AFS securities portfolio was AAA rated at September 30, 2023.

At September 30, 2023, our HTM debt securities portfolio represented only 5.4% of our total assets at September 30, 2023, had a spot yield of 4.34% and an effective duration of approximately 3.0 years. Additionally, at September 30, 2023, approximately 38% of our HTM securities were AAA rated and 55% were credit enhanced asset backed securities with no current expectation of credit losses.

Deposits

The following table presents the composition of our deposit portfolio as of the dates indicated:

(Dollars in thousands)

September 30, 2023

% of Total

June 30, 2023

% of Total

September 30, 2022

% of Total
Demand, non-interest bearing

$
4,758,682

26.2
%

$
4,490,198

25.0
%

$
2,993,793

17.1
%
Demand, interest bearing


5,824,410

32.0



5,551,037

30.9



7,124,663

40.7

Total demand deposits


10,583,092

58.2



10,041,235

55.9



10,118,456

57.8

Savings


1,118,353

6.1



1,048,229

5.8



592,002

3.4

Money market


2,499,593

13.7



2,004,264

11.2



4,913,967

28.0

Time deposits


3,994,326

22.0



4,856,703

27.1



1,898,013

10.8

Total deposits

$
18,195,364

100.0
%

$
17,950,431

100.0
%

$
17,522,438

100.0
%

Total deposits increased $244.9 million, or 1.4%, to $18.2 billion at September 30, 2023 as compared to the prior quarter. Importantly, non-interest bearing demand deposits increased $268.5 million, or 6.0%, to $4.8 billion. Money market deposits increased $495.3 million, or 24.7%, to $2.5 billion, interest bearing demand deposits increased $273.4 million, or 4.9%, to $5.8 billion, and savings deposits increased $70.1 million, or 6.7%, to $1.1 billion. These increases were offset in part by a decrease in time deposits of $862.4 million, or 17.8%, to $4.0 billion. The total average cost of deposits increased by 13 basis points to 3.24% in Q3 2023 from 3.11% in the prior quarter largely driven by the increase in market interest rates during the third quarter. Total estimated uninsured deposits was $4.1 billion ¹ , or 22% of total deposits (inclusive of accrued interest) at September 30, 2023. We are also highly focused on total deposits with contractual term to manage our liquidity profile and the funding of loans and securities.

Total deposits increased $672.9 million, or 3.8%, to $18.2 billion at September 30, 2023 as compared to a year ago. Non-interest bearing demand deposits increased $1.8 billion, or 59.0%, to $4.8 billion, time deposits increased $2.1 billion to $4.0 billion and savings deposits increased $526.4 million, or 88.9%, to $1.1 billion. These increases were offset in part by decreases in money market deposits of $2.4 billion, or 49.1%, to $2.5 billion and interest bearing demand deposits of $1.3 billion, or 18.3%, to $5.8 billion. The total average cost of deposits increased by 176 basis points to 3.24% in Q3 2023 from 1.48% in the prior year primarily due to higher market interest rates and a shift in deposit mix.

____________________

Borrowings

The following table presents the composition of our borrowings as of the dates indicated:

(Dollars in thousands)

September 30, 2023

June 30, 2023

September 30, 2022
Federal funds purchased

$
—

$
—

$
365,000
FHLB advances


1,529,839


2,046,142


500,000
Senior notes


123,775


123,710


123,515
Subordinated debt


182,161


182,091


181,882
Total borrowings

$
1,835,775

$
2,351,943

$
1,170,397

Total borrowings decreased $516.2 million, or 21.9%, to $1.8 billion at September 30, 2023 as compared to the prior quarter. This decrease primarily resulted from the repayment of $510 million in callable FHLB advances. As of September 30, 2023, Customers' borrowing capacity with the FRB and FHLB was approximately $8.4 billion, of which $1.5 billion of available capacity was utilized in borrowings and $599.4 million was utilized to collateralize state and municipal deposits.

Total borrowings increased $665.4 million, or 56.9%, to $1.8 billion at September 30, 2023 as compared to a year ago. This increase primarily resulted from an increase in FHLB advances to ensure ample cash on hand given the heightened liquidity risk in the banking system, particularly among regional banks since early March 2023, net of repayments of $510 million in callable FHLB advances in Q3 2023 and federal funds purchased.

Capital

The following table presents certain capital amounts and ratios as of the dates indicated:

(Dollars in thousands except per share data)

September 30, 2023

June 30, 2023

September 30, 2022
Customers Bancorp, Inc.






Common Equity

$
1,423,813


$
1,318,858


$
1,249,137

Tangible Common Equity*

$
1,420,184


$
1,315,229


$
1,245,508

Common Equity to Total Assets


6.5
%


6.0
%


6.1
%
Tangible Common Equity to Tangible Assets*


6.5
%


6.0
%


6.1
%
Book Value per common share

$
45.47


$
42.16


$
38.46

Tangible Book Value per common share*

$
45.36


$
42.04


$
38.35

Common equity Tier 1 (CET 1) capital ratio ⁽¹⁾


11.3
%


10.3
%


9.8
%
Total risk based capital ratio ⁽¹⁾


14.3
%


13.2
%


12.5
%







(1) Regulatory capital ratios as of September 30, 2023 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Customers Bancorp's common equity increased $105.0 million to $1.4 billion, and tangible common equity* increased $105.0 million to $1.4 billion, at September 30, 2023 compared to the prior quarter, respectively, primarily from earnings of $83.0 million and decreased unrealized losses on investment securities of $18.4 million (net of taxes) deferred in accumulated other comprehensive income ("AOCI"). Similarly, book value per common share increased to $45.47 from $42.16, and tangible book value per common share* increased to $45.36 from $42.04, at September 30, 2023 and June 30, 2023, respectively.

Customers Bancorp's common equity increased $174.7 million to $1.4 billion, and tangible common equity* increased $174.7 million to $1.4 billion, at September 30, 2023 compared to a year ago, respectively, primarily from earnings of $202.8 million and decreased unrealized losses on investment securities in AOCI of $6.3 million (net of taxes), partially offset by $45.1 million of common share repurchases. Similarly, book value per common share increased to $45.47 from $38.46, and tangible book value per common share* increased to $45.36 from $38.35, at September 30, 2023 and September 30, 2022, respectively.

At the Customers Bancorp level, the CET 1 capital ratio (estimate), total risk based capital ratio (estimate), common equity to total assets ratio and tangible common equity to tangible assets ratio* ("TCE ratio") were 11.3%, 14.3%, 6.5%, and 6.5%, respectively, at September 30, 2023.

At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At September 30, 2023, Tier 1 capital (estimate) and total risk based capital (estimate) were 13.0% and 14.5%, respectively.

“Even though we remain well capitalized by all regulatory measures, we are committed to maintaining our CET 1 capital ratio between 11.0% - 11.5% at year-end 2023. In this environment, we will continue to be selective on new loan production to ensure the strength of our balance sheet and further improve our strong capital ratios,” stated Jay Sidhu.

Key Profitability Trends

Net Interest Income

Net interest income totaled $199.8 million in Q3 2023, an increase of $34.5 million from Q2 2023, primarily due to higher interest income from variable rate lower credit risk specialty lending verticals of $35.9 million, which included the acquired Venture Banking portfolio, interest earning deposits of $16.2 million maintained in response to heightened liquidity risk in the banking system, particularly among regional banks since early March 2023, and investment securities of $6.2 million, reflecting higher average balance and market interest rates. These increases were partially offset by lower interest income on consumer installment loans of $13.0 million reflecting the impact of the sales transactions that occurred late in Q2 2023. In addition, interest expense on deposits and other borrowings increased by $11.7 million in Q3 2023 largely resulting from higher market interest rates.

“We experienced robust net interest income growth in the third quarter due to strong core business performance and outsized discount accretion recognized on the acquired loan portfolio from the FDIC. To provide some context on the outsized discount accretion, Venture Banking loans have more frequent financing needs than traditional commercial loans given ongoing capital raises and other activities of the companies. These activities were essentially paused between March and our acquisition of the loan portfolio in June. When our new Venture Banking team members were fully onboarded in July, they began addressing this backlog in earnest. We estimate approximately $27 million of interest income in Q3 2023 was attributable to outsized discount accretion,” stated Customers Bancorp President Sam Sidhu.

Net interest income totaled $199.8 million in Q3 2023, an increase of $40.7 million from Q3 2022. This increase was due to higher interest income of $140.4 million resulting from increased average balance of interest earning assets of $1.5 billion, higher market interest rates on variable rate loans, investments and interest earning deposits, and discount accretion on the acquired Venture Banking portfolio, offset in part by higher interest expenses on deposits and other borrowings of $99.7 million primarily resulting from increased market interest rates and higher average balances of other borrowings. Interest-earning asset growth was primarily driven by increases in interest earning deposits and investments, C&I loans and leases, mostly in the variable rate lower credit risk specialty lending verticals, offset in part by decreases in PPP loans, as the PPP program was substantially completed in Q1 2023, consumer installment loans and commercial loans to mortgage companies. Total consumer installment loans decreased in Q3 2023 as compared to Q3 2022, as installment loans held for investment decreased primarily for risk management purposes and implementation of our held-for-sale strategy.

Non-Interest Income

The following table presents details of non-interest income for the periods indicated:



Three Months Ended

Increase (Decrease)

Three Months Ended

Increase (Decrease)
(Dollars in thousands)

September 30, 2023

June 30, 2023


September 30, 2023

September 30, 2022

Commercial lease income

$
8,901


$
8,917


$
(16
)

$
8,901


$
7,097


$
1,804

Loan fees


6,029



4,271



1,758



6,029



3,008



3,021

Bank-owned life insurance


1,973



4,997



(3,024
)


1,973



3,449



(1,476
)
Mortgage warehouse transactional fees


1,018



1,376



(358
)


1,018



1,545



(527
)
Gain (loss) on sale of SBA and other loans


(348
)


(761
)


413



(348
)


106



(454
)
Loss on sale of capital call lines of credit


—



(5,037
)


5,037



—



—



—

Loss on sale of consumer installment loans


—



—



—



—



(23,465
)


23,465

Net gain (loss) on sale of investment securities


(429
)


—



(429
)


(429
)


(2,135
)


1,706

Other


631



2,234



(1,603
)


631



1,378



(747
)
Total non-interest income

$
17,775


$
15,997


$
1,778


$
17,775


$
(9,017
)

$
26,792

Non-interest income totaled $17.8 million for Q3 2023, an increase of $1.8 million compared to Q2 2023. The increase was primarily due to a loss of $5.0 million realized from the sale of non-strategic short-term syndicated capital call lines of credit within our Specialty Lending vertical that the Bank exited completely in Q2 2023 offset in part by decreases in death benefits paid by insurance carriers under bank-owned life insurance policies of $3.0 million.

Non-interest income totaled $17.8 million for Q3 2023, an increase of $26.8 million compared to Q3 2022. The increase was primarily due to a loss of $23.5 million realized from the sale of $500 million of consumer installment loans in Q3 2022 and an increase in loan fees of $3.0 million resulting from increased servicing-related revenue and unused line of credit fees.

Non-Interest Expense

The following table presents details of non-interest expense for the periods indicated:



Three Months Ended

Increase (Decrease)

Three Months Ended

Increase (Decrease)
(Dollars in thousands)

September 30, 2023

June 30, 2023


September 30, 2023

September 30, 2022

Salaries and employee benefits

$
33,845

$
33,120

$
725


$
33,845

$
31,230

$
2,615

Technology, communication and bank operations


15,667


16,407


(740
)


15,667


19,588


(3,921
)
Commercial lease depreciation


7,338


7,328


10



7,338


5,966


1,372

Professional services


8,569


9,192


(623
)


8,569


6,269


2,300

Loan servicing


3,858


4,777


(919
)


3,858


3,851


7

Occupancy


2,471


2,519


(48
)


2,471


2,605


(134
)
FDIC assessments, non-income taxes and regulatory fees


8,551


9,780


(1,229
)


8,551


2,528


6,023

Advertising and promotion


650


546


104



650


762


(112
)
Legal settlement expense


4,096


—


4,096



4,096


—


4,096

Other


4,421


5,628


(1,207
)


4,421


3,399


1,022

Total non-interest expense

$
89,466

$
89,297

$
169


$
89,466

$
76,198

$
13,268

The management of non-interest expenses remains a priority for us. However, this will not deter us from making investments in new technologies to support efficient and responsible growth in the future.

Non-interest expenses totaled $89.5 million in Q3 2023, an increase of $0.2 million compared to Q2 2023. The increase was primarily attributable to $4.1 million of expenses from a settlement with a third party PPP service provider and an increase of $0.7 million in salaries and employee benefits resulting from the onboarding of the Venture Banking team. These increases were partially offset by decreases of $1.2 million in FDIC assessments, non-income taxes and regulatory fees, $1.2 million in other expenses primarily due to lower provision for operating losses, $0.9 million in loan servicing from loan portfolios serviced by third parties, $0.7 million in technology, communication and bank operations mostly due to lower fees paid to BM Technologies and $0.6 million in professional fees.

Non-interest expenses totaled $89.5 million in Q3 2023, an increase of $13.3 million compared to Q3 2022. The increase was primarily attributable to $4.1 million of expenses from a settlement with a third party PPP service provider, and increases of $6.0 million in FDIC assessments, non-income taxes and regulatory fees resulting from higher FDIC assessment rates, $2.6 million in salaries and employee benefits primarily due to headcount, annual merit increases, incentives and stock awards, $2.3 million in professional fees mostly for technology, compliance and risk management, $1.4 million in commercial lease depreciation from growth and $1.0 million in other expenses. These increases were partially offset by a decrease of $3.9 million in deposit servicing-related expenses mostly due to lower servicing fees and the discontinuation of interchange maintenance fees paid to BM Technologies offset by higher fees paid for software as a service.

Taxes

Income tax expense increased by $2.7 million to $23.5 million in Q3 2023 from $20.8 million in Q2 2023 primarily due to higher pre-tax income, partially offset by tax expense of $4.1 million on surrendered bank-owned life insurance policies recognized in Q2 2023 and increased income tax credits.

Income tax expense increased by $5.6 million to $23.5 million in Q3 2023 from $17.9 million in Q3 2022 primarily due to higher pre-tax income, partially offset by increased income tax credits.

The effective tax rate for Q3 2023 was 21%. Customers expects the full-year 2023 effective tax rate to be approximately 22% to 24%.

Outlook

“Looking forward, our strategy and risk management principles will remain unchanged. We’re focused on managing risk, strengthening our deposit franchise, improving our profitability and increasing our capital ratios. Our deposits will be relatively flat with continued improvement in the quality of deposits, reducing higher cost wholesale deposits with lower cost core deposits. Following the robust 3.70% NIM in Q3 2023 which was boosted by the outsized discount accretion, we expect a normalization of NIM to roughly 3.20%-3.25% in Q4 2023. Core EPS (excluding PPP)* remains on track for, and will likely well exceed, our target of $6.00 per diluted share with a core return on common equity* of over 15%. Operating efficiency has and will continue to be a differentiator of our business model, and we will continue to only make investments that generate long-term positive operating leverage. We remain committed to maintaining a CET 1 ratio between 11.0%-11.5% at year-end 2023 and have also achieved the tangible book value per share target of $45.00, inclusive of the impact of AOCI, a full quarter early. We are committed to preserving superior credit quality, managing interest rate risk, maintaining robust liquidity, further improving our capital ratios and generating positive operating leverage,” concluded Sam Sidhu.

____________________

* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Webcast

Date:

Friday, October 27, 2023

Time:

9:00 AM EDT

The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 3rd Quarter Earnings Webcast.

You may submit questions in advance of the live webcast by emailing our Communications Director, David Patti at dpatti@customersbank.com ; questions may also be asked during the webcast through the webcast application.

The webcast will be archived for viewing on the Customers Bank Investor Relations page and available beginning approximately two hours after the conclusion of the live event.

Institutional Background

Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation’s top-performing banking companies with about $22.0 billion in assets, making it one of the 80 largest bank holding companies in the US. Through its primary subsidiary, Customers Bank, commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service. In addition to traditional lines such as C&I lending, commercial real estate lending, and multifamily lending, Customers Bank also provides a number of national corporate banking services to Specialty Lending clients. Major accolades include:

#5 in top-performing banks with assets between $10 billion and $50 billion in 2023 per American Banker list;
#34 out of the 100 largest publicly traded banks in 2023 per Forbes; and
#64 on Fortune Magazine’s 2022 list of the 100 fastest growing companies in America.

A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: www.customersbank.com .

“Safe Harbor” Statement

In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Customers Bancorp, Inc.’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “project,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.’s control). Numerous competitive, economic, regulatory, legal and technological events and factors, among others, could cause Customers Bancorp, Inc.’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements, including: a continuation of the recent turmoil in the banking industry, responsive measures taken by us and regulatory authorities to mitigate and manage related risks, regulatory actions taken that address related issues and the costs and obligations associated therewith, the impact of COVID-19 and its variants on the U.S. economy and customer behavior, the impact that changes in the economy have on the performance of our loan and lease portfolio, the market value of our investment securities, the continued success and acceptance of our blockchain payments system, the demand for our products and services and the availability of sources of funding, the effects of actions by the federal government, including the Board of Governors of the Federal Reserve System and other government agencies, that affect market interest rates and the money supply, actions that we and our customers take in response to these developments and the effects such actions have on our operations, products, services and customer relationships, higher inflation and its impacts, and the effects of any changes in accounting standards or policies. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K for the year ended December 31, 2022, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank, except as may be required under applicable law.

Q3 2023 Overview

The following table presents a summary of key earnings and performance metrics for the quarter ended September 30, 2023 and the preceding four quarters:

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED

(Dollars in thousands, except per share data and stock price data)

Q3

Q2

Q1

Q4

Q3

Nine Months Ended September 30,


2023



2023



2023



2022



2022



2023



2022
















GAAP Profitability Metrics:
Net income available to common shareholders

$
82,953


$
44,007


$
50,265


$
25,623


$
61,364


$
177,225


$
192,779

Per share amounts:














Earnings per share - basic

$
2.65


$
1.41


$
1.58


$
0.79


$
1.89


$
5.63


$
5.89

Earnings per share - diluted

$
2.58


$
1.39


$
1.55


$
0.77


$
1.85


$
5.53


$
5.72

Book value per common share ⁽¹⁾

$
45.47


$
42.16


$
41.08


$
39.08


$
38.46


$
45.47


$
38.46

CUBI stock price ⁽¹⁾

$
34.45


$
30.26


$
18.52


$
28.34


$
29.48


$
34.45


$
29.48

CUBI stock price as % of book value ⁽¹⁾


76
%


72
%


45
%


73
%


77
%


76
%


77
%
Average shares outstanding - basic


31,290,581



31,254,125



31,819,203



32,413,459



32,455,814



31,452,700



32,706,652

Average shares outstanding - diluted


32,175,084



31,591,142



32,345,017



33,075,422



33,226,607



32,036,459



33,706,864

Shares outstanding ⁽¹⁾


31,311,254



31,282,318



31,239,750



32,373,697



32,475,502



31,311,254



32,475,502

Return on average assets ("ROAA")


1.57
%


0.88
%


1.03
%


0.55
%


1.24
%


1.17
%


1.34
%
Return on average common equity ("ROCE")


23.97
%


13.22
%


16.00
%


8.05
%


19.33
%


17.84
%


20.58
%
Net interest margin, tax equivalent


3.70
%


3.15
%


2.96
%


2.67
%


3.16
%


3.28
%


3.38
%
Efficiency ratio


41.01
%


49.25
%


47.71
%


49.20
%


50.00
%


45.62
%


43.46
%
Non-GAAP Profitability Metrics ⁽²⁾ :














Core earnings

$
83,294


$
52,163


$
51,143


$
39,368


$
82,270


$
186,600


$
217,047

Adjusted pre-tax pre-provision net income

$
128,564


$
96,833


$
89,282


$
81,377


$
100,994


$
314,679


$
319,335

Per share amounts:














Core earnings per share - diluted

$
2.59


$
1.65


$
1.58


$
1.19


$
2.48


$
5.82


$
6.44

Tangible book value per common share ⁽¹⁾

$
45.36


$
42.04


$
40.96


$
38.97


$
38.35


$
45.36


$
38.35

CUBI stock price as % of tangible book value ⁽¹⁾


76
%


72
%


45
%


73
%


77
%


76
%


77
%
Core ROAA


1.57
%


1.03
%


1.05
%


0.81
%


1.64
%


1.22
%


1.50
%
Core ROCE


24.06
%


15.67
%


16.28
%


12.36
%


25.91
%


18.79
%


23.17
%
Adjusted ROAA - pre-tax and pre-provision


2.32
%


1.79
%


1.72
%


1.56
%


1.95
%


1.95
%


2.14
%
Adjusted ROCE - pre-tax and pre-provision


36.04
%


28.01
%


27.33
%


24.59
%


31.01
%


30.59
%


33.40
%
Net interest margin, tax equivalent, excluding PPP loans


3.75
%


3.20
%


2.80
%


2.87
%


3.18
%


3.27
%


3.27
%
Core efficiency ratio


41.04
%


47.84
%


47.09
%


49.12
%


42.57
%


45.03
%


41.23
%
Asset Quality:














Net charge-offs

$
17,498


$
15,564


$
18,651


$
27,164


$
18,497


$
51,713


$
39,204

Annualized net charge-offs to average total loans and leases


0.50
%


0.42
%


0.49
%


0.70
%


0.47
%


0.47
%


0.36
%
Non-performing loans ("NPLs") to total loans and leases ⁽¹⁾


0.22
%


0.20
%


0.21
%


0.19
%


0.18
%


0.22
%


0.18
%
Reserves to NPLs ⁽¹⁾


466.11
%


494.46
%


405.56
%


425.95
%


466.34
%


466.11
%


466.34
%
Non-performing assets ("NPAs") to total assets


0.14
%


0.13
%


0.15
%


0.15
%


0.14
%


0.14
%


0.14
%
Customers Bank Capital Ratios ⁽³⁾ :














Common equity Tier 1 capital to risk-weighted assets


13.0
%


11.96
%


11.31
%


11.21
%


11.42
%


13.0
%


11.42
%
Tier 1 capital to risk-weighted assets


13.0
%


11.96
%


11.31
%


11.21
%


11.42
%


13.0
%


11.42
%
Total capital to risk-weighted assets


14.5
%


13.38
%


12.64
%


12.40
%


12.65
%


14.5
%


12.65
%
Tier 1 capital to average assets (leverage ratio)


8.3
%


8.00
%


8.09
%


8.15
%


8.10
%


8.3
%


8.10
%















(1) Metric is a spot balance for the last day of each quarter presented.
(2) Customers' reasons for the use of these non-GAAP measures and a detailed reconciliation between the non-GAAP measures and the comparable GAAP amounts are included at the end of this document.
(3) Regulatory capital ratios are estimated for Q3 2023 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected to apply the CECL capital transition provisions which delayed the effects of CECL on regulatory capital for two years until January 1, 2022, followed by a three-year transition period. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million will be phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of September 30, 2023, our regulatory capital ratios reflected 50%, or $30.8 million, benefit associated with the CECL transition provisions.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data)











Nine Months Ended


Q3

Q2

Q1

Q4

Q3

September 30,



2023



2023


2023


2022



2022



2023



2022

Interest income:














Loans and leases

$
271,107


$
241,745


$
244,212

$
217,471


$
200,438


$
757,064


$
526,478

Investment securities


54,243



48,026



47,316


42,953



30,546



149,585



76,283

Interest earning deposits


43,800



27,624



10,395


6,754



2,949



81,819



4,198

Loans held for sale


4,664



11,149



11,701


1,269



19



27,514



95

Other


2,526



1,616



1,321


1,200



1,964



5,463



8,672

Total interest income


376,340



330,160



314,945


269,647



235,916



1,021,445



615,726
















Interest expense:














Deposits


145,825



136,375



143,930


124,366



65,380



426,130



101,873

FHLB advances


26,485



24,285



10,370


4,464



4,684



61,140



7,000

FRB advances


—



—



6,286


—



—



6,286



—

Subordinated debt


2,689



2,689



2,689


2,688



2,689



8,067



8,067

Other borrowings


1,568



1,540



1,771


2,992



4,131



4,879



10,203

Total interest expense


176,567



164,889



165,046


134,510



76,884



506,502



127,143

Net interest income


199,773



165,271



149,899


135,137



159,032



514,943



488,583

Provision (benefit) for credit losses


17,856



23,629



19,603


28,216



(7,994
)


61,088



31,850

Net interest income after provision (benefit) for credit losses


181,917



141,642



130,296


106,921



167,026



453,855



456,733
















Non-interest income:














Commercial lease income


8,901



8,917



9,326


8,135



7,097



27,144



19,584

Loan fees


6,029



4,271



3,990


4,017



3,008



14,290



8,171

Bank-owned life insurance


1,973



4,997



2,647


1,975



3,449



9,617



13,722

Mortgage warehouse transactional fees


1,018



1,376



1,074


1,295



1,545



3,468



5,443

Gain (loss) on sale of SBA and other loans


(348
)


(761
)


—


—



106



(1,109
)


3,155

Loss on sale of capital call lines of credit


—



(5,037
)


—


—



—



(5,037
)


—

Loss on sale of consumer installment loans


—



—



—


—



(23,465
)


—



(23,465
)
Net gain (loss) on sale of investment securities


(429
)


—



—


(16,937
)


(2,135
)


(429
)


(6,227
)
Legal settlement gain


—



—



—


7,519



—



—



—

Other


631



2,234



1,084


1,341



1,378



3,949



4,544

Total non-interest income


17,775



15,997



18,121


7,345



(9,017
)


51,893



24,927
















Non-interest expense:














Salaries and employee benefits


33,845



33,120



32,345


29,194



31,230



99,310



83,171

Technology, communication and bank operations


15,667



16,407



16,589


18,604



19,588



48,663



66,394

Commercial lease depreciation


7,338



7,328



7,875


6,518



5,966



22,541



16,460

Professional services


8,569



9,192



7,596


6,825



6,269



25,357



20,640

Loan servicing


3,858



4,777



4,661


4,460



3,851



13,296



10,563

Occupancy


2,471



2,519



2,760


3,672



2,605



7,750



9,934

FDIC assessments, non-income taxes and regulatory fees


8,551



9,780



2,728


2,339



2,528



21,059



6,530

Advertising and promotion


650



546



1,049


1,111



762



2,245



1,430

Legal settlement expense


4,096



—



—


—



—



4,096



—

Other


4,421



5,628



4,530


5,696



3,399



14,579



11,088

Total non-interest expense


89,466



89,297



80,133


78,419



76,198



258,896



226,210

Income before income tax expense


110,226



68,342



68,284


35,847



81,811



246,852



255,450

Income tax expense


23,470



20,768



14,563


7,136



17,899



58,801



56,127

Net income


86,756



47,574



53,721


28,711



63,912



188,051



199,323

Preferred stock dividends


3,803



3,567



3,456


3,088



2,548



10,826



6,544

Net income available to common shareholders

$
82,953


$
44,007


$
50,265

$
25,623


$
61,364


$
177,225


$
192,779
















Basic earnings per common share

$
2.65


$
1.41


$
1.58

$
0.79


$
1.89


$
5.63


$
5.89

Diluted earnings per common share


2.58



1.39



1.55


0.77



1.85



5.53



5.72

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)


September 30,

June 30,

March 31,

December 31,

September 30,



2023



2023



2023



2022



2022

ASSETS










Cash and due from banks

$
68,288


$
54,127


$
77,251


$
58,025


$
41,520

Interest earning deposits


3,351,686



3,101,097



1,969,434



397,781



362,945

Cash and cash equivalents


3,419,974



3,155,224



2,046,685



455,806



404,465

Investment securities, at fair value


2,773,207



2,824,638



2,926,969



2,987,500



2,943,694

Investment securities held to maturity


1,178,370



1,258,560



870,294



840,259



886,294

Loans held for sale


150,368



78,108



424,057



328,312



5,224

Loans receivable, mortgage warehouse, at fair value


962,566



1,006,268



1,247,367



1,323,312



1,569,090

Loans receivable, PPP


137,063



188,763



246,258



998,153



1,154,632

Loans and leases receivable


12,463,485



12,637,768



13,145,352



13,144,894



12,607,742

Allowance for credit losses on loans and leases


(139,213
)


(139,656
)


(130,281
)


(130,924
)


(130,197
)
Total loans and leases receivable, net of allowance for credit losses on loans and leases


13,423,901



13,693,143



14,508,696



15,335,435



15,201,267

FHLB, Federal Reserve Bank, and other restricted stock


126,098



126,240



124,733



74,196



64,112

Accrued interest receivable


123,984



119,501



123,754



123,374



107,621

Bank premises and equipment, net


7,789



8,031



8,581



9,025



6,610

Bank-owned life insurance


291,670



290,322



339,607



338,441



336,130

Goodwill and other intangibles


3,629



3,629



3,629



3,629



3,629

Other assets


358,162



471,169



374,609



400,135



408,575

Total assets

$
21,857,152


$
22,028,565


$
21,751,614


$
20,896,112


$
20,367,621












LIABILITIES AND SHAREHOLDERS' EQUITY










Demand, non-interest bearing deposits

$
4,758,682


$
4,490,198


$
3,487,517


$
1,885,045


$
2,993,793

Interest bearing deposits


13,436,682



13,460,233



14,236,100



16,271,908



14,528,645

Total deposits


18,195,364



17,950,431



17,723,617



18,156,953



17,522,438

Federal funds purchased


—



—



—



—



365,000

FHLB advances


1,529,839



2,046,142



2,052,143



800,000



500,000

Other borrowings


123,775



123,710



123,645



123,580



123,515

Subordinated debt


182,161



182,091



182,021



181,952



181,882

Accrued interest payable and other liabilities


264,406



269,539



249,168



230,666



287,855

Total liabilities


20,295,545



20,571,913



20,330,594



19,493,151



18,980,690












Preferred stock


137,794



137,794



137,794



137,794



137,794

Common stock


35,330



35,301



35,258



35,012



34,948

Additional paid in capital


559,346



555,737



552,255



551,721



549,066

Retained earnings


1,101,359



1,018,406



974,399



924,134



898,511

Accumulated other comprehensive income (loss), net


(149,812
)


(168,176
)


(156,276
)


(163,096
)


(156,126
)
Treasury stock, at cost


(122,410
)


(122,410
)


(122,410
)


(82,604
)


(77,262
)
Total shareholders' equity


1,561,607



1,456,652



1,421,020



1,402,961



1,386,931

Total liabilities and shareholders' equity

$
21,857,152


$
22,028,565


$
21,751,614


$
20,896,112


$
20,367,621

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)




















Three Months Ended


September 30, 2023

June 30, 2023

September 30, 2022


Average Balance

Interest Income or Expense

Average Yield or Cost (%)

Average Balance

Interest Income or Expense

Average Yield or Cost (%)

Average Balance

Interest Income or Expense

Average Yield or Cost (%)
Assets


















Interest earning deposits

$
3,211,753

$
43,800

5.41
%

$
2,150,154

$
27,624

5.15
%

$
528,001

$
2,949

2.22
%
Investment securities ⁽¹⁾


4,240,116


54,243

5.12
%


3,949,732


48,026

4.86
%


3,770,922


30,546

3.24
%
Loans and leases:


















Commercial & industrial:


















Specialty lending loans and leases ⁽²⁾


5,717,252


157,671

10.94
%


5,832,485


121,779

8.37
%


5,064,730


64,753

5.07
%
Other commercial & industrial loans ⁽²⁾


1,613,614


28,012

6.89
%


1,672,667


26,028

6.24
%


1,585,136


18,794

4.70
%
Commercial loans to mortgage companies


1,159,698


16,916

5.79
%


1,300,496


19,606

6.05
%


1,623,624


17,092

4.18
%
Multifamily loans


2,141,384


21,292

3.94
%


2,181,617


21,095

3.88
%


2,206,953


20,427

3.67
%
Loans receivable, PPP


166,164


604

1.44
%


207,127


1,633

3.16
%


1,349,403


14,666

4.31
%
Non-owner occupied commercial real estate loans


1,425,831


21,208

5.90
%


1,428,086


19,877

5.58
%


1,372,244


15,595

4.51
%
Residential mortgages


528,022


5,965

4.48
%


535,739


5,735

4.28
%


513,694


5,008

3.87
%
Installment loans


1,147,069


24,103

8.34
%


1,684,215


37,141

8.84
%


1,938,199


44,122

9.03
%
Total loans and leases ⁽³⁾


13,899,034


275,771

7.87
%


14,842,432


252,894

6.83
%


15,653,983


200,457

5.08
%
Other interest-earning assets


134,416


2,526

7.45
%


131,362


1,616

4.93
%


68,549


1,964

11.37
%
Total interest-earning assets


21,485,319


376,340

6.96
%


21,073,680


330,160

6.28
%


20,021,455


235,916

4.68
%
Non-interest-earning assets


492,691






581,055






492,911




Total assets

$
21,978,010





$
21,654,735





$
20,514,366




Liabilities


















Interest checking accounts

$
5,758,215

$
58,637

4.04
%

$
5,309,775

$
49,862

3.77
%

$
6,669,787

$
33,685

2.00
%
Money market deposit accounts


2,181,184


22,983

4.18
%


1,978,546


19,678

3.99
%


5,789,991


24,348

1.67
%
Other savings accounts


1,077,298


11,582

4.27
%


997,205


9,839

3.96
%


625,908


1,818

1.15
%
Certificates of deposit


4,466,522


52,623

4.67
%


5,020,205


56,996

4.55
%


1,141,970


5,529

1.92
%
Total interest-bearing deposits ⁽⁴⁾


13,483,219


145,825

4.29
%


13,305,731


136,375

4.11
%


14,227,656


65,380

1.82
%
Federal funds purchased


—


—

—
%


—


—

—
%


513,011


2,871

2.22
%
Borrowings


2,328,955


30,742

5.24
%


2,357,981


28,514

4.85
%


874,497


8,633

3.92
%
Total interest-bearing liabilities


15,812,174


176,567

4.43
%


15,663,712


164,889

4.22
%


15,615,164


76,884

1.95
%
Non-interest-bearing deposits ⁽⁴⁾


4,347,977






4,258,711






3,245,963




Total deposits and borrowings


20,160,151



3.48
%


19,922,423



3.32
%


18,861,127



1.62
%
Other non-interest-bearing liabilities


306,822






259,111






255,735




Total liabilities


20,466,973






20,181,534






19,116,862




Shareholders' equity


1,511,037






1,473,201






1,397,504




Total liabilities and shareholders' equity

$
21,978,010





$
21,654,735





$
20,514,366




Net interest income




199,773






165,271






159,032


Tax-equivalent adjustment




405






390






334


Net interest earnings



$
200,178





$
165,661





$
159,366


Interest spread





3.48
%





2.96
%





3.06
%
Net interest margin





3.70
%





3.14
%





3.16
%
Net interest margin tax equivalent





3.70
%





3.15
%





3.16
%
Net interest margin tax equivalent excl. PPP ⁽⁵⁾





3.75
%





3.20
%





3.18
%






































(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 3.24%, 3.11% and 1.48% for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, presented to approximate interest income as a taxable asset and excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED)
(Dollars in thousands)














Nine Months Ended


September 30, 2023

September 30, 2022


Average Balance

Interest Income or Expense

Average Yield or Cost (%)

Average Balance

Interest Income or Expense

Average Yield or Cost (%)
Assets












Interest earning deposits

$
2,100,435

$
81,819

5.21
%

$
595,305

$
4,197

0.94
%
Investment securities ⁽¹⁾


4,074,464


149,585

4.90
%


3,969,809


76,283

2.56
%
Loans and leases:












Commercial & industrial:












Specialty lending loans and leases ⁽²⁾


5,748,053


383,138

8.91
%


3,963,180


127,304

4.29
%
Other commercial & industrial loans ⁽²⁾


1,663,494


79,610

6.40
%


1,496,772


46,768

4.18
%
Commercial loans to mortgage companies


1,240,403


53,934

5.81
%


1,785,495


46,713

3.50
%
Multifamily loans


2,176,294


62,857

3.86
%


1,863,915


51,506

3.69
%
Loans receivable, PPP


418,194


25,788

8.24
%


1,946,651


72,132

4.95
%
Non-owner occupied commercial real estate loans


1,434,459


61,284

5.71
%


1,331,037


40,551

4.07
%
Residential mortgages


535,502


17,298

4.32
%


482,263


13,586

3.77
%
Installment loans


1,517,632


100,669

8.87
%


1,881,160


128,013

9.10
%
Total loans and leases ⁽³⁾


14,734,031


784,578

7.12
%


14,750,473


526,573

4.77
%
Other interest-earning assets


119,187


5,463

6.13
%


62,955


8,673

NM ⁽⁶⁾
Total interest-earning assets


21,028,117


1,021,445

6.49
%


19,378,542


615,726

4.25
%
Non-interest-earning assets


537,160






526,437




Total assets

$
21,565,277





$
19,904,979




Liabilities












Interest checking accounts

$
6,181,097

$
178,984

3.87
%

$
6,286,224

$
55,059

1.17
%
Money market deposit accounts


2,208,853


63,444

3.84
%


5,128,270


36,545

0.95
%
Other savings accounts


966,539


27,707

3.83
%


732,801


3,359

0.61
%
Certificates of deposit


4,663,548


155,995

4.47
%


710,130


6,910

1.30
%
Total interest-bearing deposits ⁽⁴⁾


14,020,037


426,130

4.06
%


12,857,425


101,873

1.06
%
Federal funds purchased


5,055


188

4.97
%


416,344


4,374

1.40
%
Borrowings


2,160,332


80,184

4.96
%


783,644


20,896

3.57
%
Total interest-bearing liabilities


16,185,424


506,502

4.18
%


14,057,413


127,143

1.21
%
Non-interest-bearing deposits ⁽⁴⁾


3,642,832






4,206,778




Total deposits and borrowings


19,828,256



3.42
%


18,264,191



0.93
%
Other non-interest-bearing liabilities


271,387






250,783




Total liabilities


20,099,643






18,514,974




Shareholders' equity


1,465,634






1,390,005




Total liabilities and shareholders' equity

$
21,565,277





$
19,904,979




Net interest income




514,943






488,583


Tax-equivalent adjustment




1,170






843


Net interest earnings



$
516,113





$
489,426


Interest spread





3.08
%





3.32
%
Net interest margin





3.27
%





3.37
%
Net interest margin tax equivalent





3.28
%





3.38
%
Net interest margin tax equivalent excl. PPP ⁽⁵⁾





3.27
%





3.27
%


























(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 3.23% and 0.80% for the nine months ended September 30, 2023 and 2022, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the nine months ended September 30, 2023 and 2022, presented to approximate interest income as a taxable asset and excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
(6) Not meaningful.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands)












September 30,

June 30,

March 31,

December 31,

September 30,


2023

2023

2023

2022

2022
Loans and leases held for investment










Commercial:










Commercial & industrial:










Specialty lending

$
5,422,161

$
5,534,832

$
5,519,176

$
5,412,887

$
5,103,974
Other commercial & industrial


1,115,364


1,052,145


1,168,161


1,135,336


1,064,332
Multifamily


2,130,213


2,151,734


2,195,211


2,213,019


2,263,268
Loans to mortgage companies


1,042,549


1,108,598


1,374,894


1,447,919


1,708,587
Commercial real estate owner occupied


794,815


842,042


895,314


885,339


726,670
Loans receivable, PPP


137,063


188,763


246,258


998,153


1,154,632
Commercial real estate non-owner occupied


1,178,203


1,211,091


1,245,248


1,290,730


1,263,211
Construction


252,588


212,214


188,123


162,009


136,133
Total commercial loans and leases


12,072,956


12,301,419


12,832,385


13,545,392


13,420,807
Consumer:










Residential


483,133


487,199


494,815


497,952


465,772
Manufactured housing


40,129


41,664


43,272


45,076


46,990
Installment:










Personal


629,843


752,470


849,420


964,641


1,056,432
Other


337,053


250,047


419,085


413,298


341,463
Total installment loans


966,896


1,002,517


1,268,505


1,377,939


1,397,895
Total consumer loans


1,490,158


1,531,380


1,806,592


1,920,967


1,910,657
Total loans and leases held for investment

$
13,563,114

$
13,832,799

$
14,638,977

$
15,466,359

$
15,331,464











Loans held for sale










Commercial:










Multifamily

$
—

$
—

$
4,051

$
4,079

$
4,108
Commercial real estate non-owner occupied


—


—


16,000


—


—
Total commercial loans and leases


—


—


20,051


4,079


4,108
Consumer:










Residential


1,005


1,234


821


829


1,116
Installment:










Personal


124,848


76,874


307,336


133,801


—
Other


24,515


—


95,849


189,603


—
Total installment loans


149,363


76,874


403,185


323,404


—
Total consumer loans


150,368


78,108


404,006


324,233


1,116
Total loans held for sale

$
150,368

$
78,108

$
424,057

$
328,312

$
5,224











Total loans and leases portfolio

$
13,713,482

$
13,910,907

$
15,063,034

$
15,794,671

$
15,336,688

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)












September 30,

June 30,

March 31,

December 31,

September 30,


2023

2023

2023

2022

2022











Demand, non-interest bearing

$
4,758,682

$
4,490,198

$
3,487,517

$
1,885,045

$
2,993,793
Demand, interest bearing


5,824,410


5,551,037


5,791,302


8,476,027


7,124,663
Total demand deposits


10,583,092


10,041,235


9,278,819


10,361,072


10,118,456
Savings


1,118,353


1,048,229


924,359


811,798


592,002
Money market


2,499,593


2,004,264


2,019,633


2,734,217


4,913,967
Time deposits


3,994,326


4,856,703


5,500,806


4,249,866


1,898,013
Total deposits

$
18,195,364

$
17,950,431

$
17,723,617

$
18,156,953

$
17,522,438

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED

(Dollars in thousands)
As of September 30, 2023

As of June 30, 2023

As of September 30, 2022


Total loans

Non accrual /NPLs

Allowance for credit losses

Total NPLs to total loans

Total reserves to total NPLs

Total loans

Non accrual /NPLs

Allowance for credit losses

Total NPLs to total loans

Total reserves to total NPLs

Total loans

Non accrual /NPLs

Allowance for credit losses

Total NPLs to total loans

Total reserves to total NPLs

















Loan type






























Commercial & industrial, including specialty lending ⁽¹⁾
$
6,617,508

$
5,767

$
24,986

0.09
%

433.26
%

$
6,689,307

$
4,441

$
29,092

0.07
%

655.08
%

$
6,307,803

$
4,078

$
15,131

0.06
%

371.04
%

Multifamily

2,130,213


—


15,870

—
%

—
%


2,151,734


4,022


15,400

0.19
%

382.89
%


2,263,268


1,158


14,244

0.05
%

1230.05
%

Commercial real estate owner occupied

794,815


7,442


10,363

0.94
%

139.25
%


842,042


3,304


10,215

0.39
%

309.17
%


726,670


2,198


6,220

0.30
%

282.98
%

Commercial real estate non-owner occupied

1,178,203


—


15,819

—
%

—
%


1,211,091


—


13,495

—
%

—
%


1,263,211


—


11,332

—
%

—
%

Construction

252,588


—


3,130

—
%

—
%


212,214


—


2,639

—
%

—
%


136,133


—


1,614

—
%

—
%

*Total commercial loans and leases receivable*

10,973,327


13,209


70,168

0.12
%

531.21
%


11,106,388


11,767


70,841

0.11
%

602.03
%


10,697,085


7,434


48,541

0.07
%

652.96
%

Residential

483,133


6,559


6,802

1.36
%

103.70
%


487,199


7,306


6,846

1.50
%

93.70
%


465,772


6,438


5,453

1.38
%

84.70
%

Manufactured housing

40,129


2,582


4,080

6.43
%

158.02
%


41,664


2,634


4,338

6.32
%

164.69
%


46,990


2,584


4,482

5.50
%

173.45
%

Installment

966,896


7,299


58,163

0.75
%

796.86
%


1,002,517


6,537


57,631

0.65
%

881.61
%


1,397,895


6,848


71,721

0.49
%

1047.33
%

*Total consumer loans receivable*

1,490,158


16,440


69,045

1.10
%

419.98
%


1,531,380


16,477


68,815

1.08
%

417.64
%


1,910,657


15,870


81,656

0.83
%

514.53
%

*Loans and leases receivable ⁽¹⁾*

12,463,485


29,649


139,213

0.24
%

469.54
%


12,637,768


28,244


139,656

0.22
%

494.46
%


12,607,742


23,304


130,197

0.18
%

558.69
%

*Loans receivable, PPP*

137,063


—


—

—
%

—
%


188,763


—


—

—
%

—
%


1,154,632


—


—

—
%

—
%

*Loans receivable, mortgage warehouse, at fair value*

962,566


—


—

—
%

—
%


1,006,268


—


—

—
%

—
%


1,569,090


—


—

—
%

—
%

*Total loans held for sale*

150,368


218


—

0.14
%

—
%


78,108


—


—

—
%

—
%


5,224


4,615


—

88.34
%

—
%

*Total portfolio*
$
13,713,482

$
29,867

$
139,213

0.22
%

466.11
%

$
13,910,907

$
28,244

$
139,656

0.20
%

494.46
%

$
15,336,688

$
27,919

$
130,197

0.18
%

466.34
%















































(1) Excluding loans receivable, PPP from total loans and leases receivable is a non-GAAP measure. Management believes the use of these non-GAAP measures provides additional clarity when assessing Customers' financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. Please refer to the reconciliation schedules that follow this table.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)
















Q3

Q2

Q1

Q4

Q3

Nine Months Ended September 30,


2023

2023 ⁽¹⁾

2023

2022

2022

2023

2022
*Loan type*














Commercial & industrial, including specialty lending

$
2,974

$
258


$
(71
)

$
12,960


$
2,581


$
3,161


$
2,106

Multifamily


1,999


1,448



—



—



—



3,447



1,653

Commercial real estate owner occupied


39


(34
)


—



(2
)


—



5



(49
)
Commercial real estate non-owner occupied


—


266



4,234



972



4,831



4,500



4,982

Construction


—


—



(116
)


(10
)


(10
)


(116
)


(226
)
Residential


13


24



(2
)


7



(13
)


35



(54
)
Installment


12,473


13,602



14,606



13,237



11,108



40,681



30,792

Total net charge-offs (recoveries) from loans held for investment

$
17,498

$
15,564


$
18,651


$
27,164


$
18,497


$
51,713


$
39,204
















(1) Excludes $6.2 million of charge-offs for certain PCD loans acquired from the FDIC that were immediately applied against $8.7 million of allowance for credit losses on PCD loans recognized upon the acquisition of the loan portfolio on June 15, 2023. Subsequent recoveries and charge-offs of these PCD loans will be included in the period in which they occur.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED
We believe 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. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our ongoing financial results, which we believe enhance an overall understanding of our performance and increases comparability of our period to period results. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. The non-GAAP measures presented are not necessarily comparable to non-GAAP measures that may be presented by other financial institutions. Although non-GAAP financial measures are frequently used in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results of operations or financial condition as reported under GAAP.
The following tables present reconciliations of GAAP to non-GAAP measures disclosed within this document.

*Core Earnings - Customers Bancorp*
















Nine Months Ended S eptember 30,

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022

2023

2022
(Dollars in thousands, except per share data)

USD
Per share

USD
Per share

USD
Per share

USD
Per share

USD
Per share

USD
Per share

USD
Per share
GAAP net income to common shareholders

$
82,953

$
2.58

$
44,007

$
1.39

$
50,265

$
1.55

$
25,623
$
0.77

$
61,364

$
1.85


$
177,225

$
5.53

$
192,779

$
5.72

Reconciling items (after tax):





















Severance expense


—


—


141


0.00


637


0.02


—

—


1,058


0.03



778


0.02


1,058


0.03

Impairments on fixed assets and leases


—


—


12


0.00


86


0.00


—

—


126


0.00



98


0.00


1,051


0.03

Loss on sale of consumer installment loans


—


—


—


—


—


—


—

—


18,221


0.55



—


—


18,221


0.54

Loss on sale of capital call lines of credit


—


—


3,914


0.12


—


—


—

—


—


—



3,914


0.12


—


—

(Gains) losses on investment securities


492


0.02


49


0.00


(49
)

0.00


13,543

0.41


1,859


0.06



492


0.02


5,383


0.16

Derivative credit valuation adjustment


(151
)

0.00


(101
)

0.00


204


0.01


202

0.01


(358
)

(0.01
)


(48
)

0.00


(1,445
)

(0.04
)
Tax on surrender of bank-owned life insurance policies


—


—


4,141


0.13


—


—


—

—


—


—



4,141


0.13


—


—

Core earnings

$
83,294

$
2.59

$
52,163

$
1.65

$
51,143

$
1.58

$
39,368
$
1.19

$
82,270

$
2.48


$
186,600

$
5.82

$
217,047

$
6.44


















Nine Months Ended September 30,
*Core Earnings, excluding PPP - Customers Bancorp*

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022

2023

2022
(Dollars in thousands, except per share data)

USD
Per share

USD
Per share

USD
Per share

USD
Per share

USD
Per share

USD
Per share

USD
Per share
GAAP net income to common shareholders

$
82,953

$
2.58


$
44,007

$
1.39


$
50,265

$
1.55

$
25,623

$
0.77


$
61,364

$
1.85


$
177,225

$
5.53


$
192,779

$
5.72

Less: PPP net income (loss) (after tax)


(11,168
)

(0.35
)


(2,068
)

(0.07
)


9,606


0.30


(5,956
)

(0.18
)


5,846


0.18



(3,630
)

(0.11
)


43,625


1.29

Net income to common shareholders, excluding PPP


94,121


2.93



46,075


1.46



40,659


1.26


31,579


0.95



55,518


1.67



180,855


5.65



149,154


4.43

Reconciling items (after tax):





















Severance expense


—


—



141


0.00



637


0.02


—


—



1,058


0.03



778


0.02



1,058


0.03

Impairments on fixed assets and leases


—


—



12


0.00



86


0.00


—


—



126


0.00



98


0.00



1,051


0.03

Loss on sale of consumer installment loans


—


—



—


—



—


—


—


—



18,221


0.55



—


—



18,221


0.54

Loss on sale of capital call lines of credit


—


—



3,914


0.12



—


—


—


—



—


—



3,914


0.12



—


—

(Gains) losses on investment securities


492


0.02



49


0.00



(49
)

0.00


13,543


0.41



1,859


0.06



492


0.02



5,383


0.16

Derivative credit valuation adjustment


(151
)

0.00



(101
)

0.00



204


0.01


202


0.01



(358
)

(0.01
)


(48
)

0.00



(1,445
)

(0.04
)
Tax on surrender of bank-owned life insurance policies


—


—



4,141


0.13



—


—


—


—



—


—



4,141


0.13



—


—

Core earnings, excluding PPP

$
94,462

$
2.94


$
54,231

$
1.72


$
41,537

$
1.28

$
45,324

$
1.37


$
76,424

$
2.30


$
190,230

$
5.93


$
173,422

$
5.15

*Core Return on Average Assets - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net income

$
86,756


$
47,574


$
53,721


$
28,711


$
63,912


$
188,051


$
199,323

Reconciling items (after tax):














Severance expense


—



141



637



—



1,058



778



1,058

Impairments on fixed assets and leases


—



12



86



—



126



98



1,051

Loss on sale of consumer installment loans


—



—



—



—



18,221



—



18,221

Loss on sale of capital call lines of credit


—



3,914



—



—



—



3,914



—

(Gains) losses on investment securities


492



49



(49
)


13,543



1,859



492



5,383

Derivative credit valuation adjustment


(151
)


(101
)


204



202



(358
)


(48
)


(1,445
)
Tax on surrender of bank-owned life insurance policies


—



4,141



—



—



—



4,141



—

Core net income

$
87,097


$
55,730


$
54,599


$
42,456


$
84,818


$
197,426


$
223,591
















Average total assets

$
21,978,010


$
21,654,735


$
21,052,920


$
20,717,362


$
20,514,366


$
21,565,277


$
19,904,979
















Core return on average assets


1.57
%


1.03
%


1.05
%


0.81
%


1.64
%


1.22
%


1.50
%

*Core Return on Average Assets, excluding PPP - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net income

$
86,756


$
47,574


$
53,721


$
28,711


$
63,912


$
188,051


$
199,323

Less: PPP net income (loss) (after tax)


(11,168
)


(2,068
)


9,606



(5,956
)


5,846



(3,630
)


43,625

Net income, excluding PPP


97,924



49,642



44,115



34,667



58,066



191,681



155,698

Reconciling items (after tax):














Severance expense


—



141



637



—



1,058



778



1,058

Impairments on fixed assets and leases


—



12



86



—



126



98



1,051

Loss on sale of consumer installment loans


—



—



—



—



18,221



—



18,221

Loss on sale of capital call lines of credit


—



3,914



—



—



—



3,914



—

(Gains) losses on investment securities


492



49



(49
)


13,543



1,859



492



5,383

Derivative credit valuation adjustment


(151
)


(101
)


204



202



(358
)


(48
)


(1,445
)
Tax on surrender of bank-owned life insurance policies


—



4,141



—



—



—



4,141



—

Core net income, excluding PPP

$
98,265


$
57,798


$
44,993


$
48,412


$
78,972


$
201,056


$
179,966
















Average total assets

$
21,978,010


$
21,654,735


$
21,052,920


$
20,717,362


$
20,514,366


$
21,565,277


$
19,904,979
















Core return on average assets, excluding PPP


1.77
%


1.07
%


0.87
%


0.93
%


1.53
%


1.25
%


1.21
%

*Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net income

$
86,756


$
47,574


$
53,721


$
28,711


$
63,912


$
188,051


$
199,323

Reconciling items:














Income tax expense


23,470



20,768



14,563



7,136



17,899



58,801



56,127

Provision (benefit) for credit losses


17,856



23,629



19,603



28,216



(7,994
)


61,088



31,850

Provision (benefit) for credit losses on unfunded commitments


48



(304
)


280



153



254



24



753

Severance expense


—



182



809



—



1,363



991



1,363

Impairments on fixed assets and leases


—



15



109



—



162



124



1,362

Loss on sale of consumer installment loans


—



—



—



—



23,465



—



23,465

Loss on sale of capital call lines of credit


—



5,037



—



—



—



5,037



—

(Gains) losses on investment securities


626



62



(62
)


16,909



2,394



626



6,965

Derivative credit valuation adjustment


(192
)


(130
)


259



252



(461
)


(63
)


(1,873
)
Adjusted net income - pre-tax pre-provision

$
128,564


$
96,833


$
89,282


$
81,377


$
100,994


$
314,679


$
319,335
















Average total assets

$
21,978,010


$
21,654,735


$
21,052,920


$
20,717,362


$
20,514,366


$
21,565,277


$
19,904,979
















Adjusted ROAA - pre-tax pre-provision


2.32
%


1.79
%


1.72
%


1.56
%


1.95
%


1.95
%


2.14
%

*Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision, excluding PPP - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net income

$
86,756


$
47,574


$
53,721


$
28,711


$
63,912


$
188,051


$
199,323

Less: PPP net income (loss) (after tax)


(11,168
)


(2,068
)


9,606



(5,956
)


5,846



(3,630
)


43,625

Net income, excluding PPP


97,924



49,642



44,115



34,667



58,066



191,681



155,698

Reconciling items:














Income tax expense


23,470



20,768



14,563



7,136



17,899



58,801



56,127

Provision (benefit) for credit losses


17,856



23,629



19,603



28,216



(7,994
)


61,088



31,850

Provision (benefit) for credit losses on unfunded commitments


48



(304
)


280



153



254



24



753

Severance expense


—



182



809



—



1,363



991



1,363

Impairments on fixed assets and leases


—



15



109



—



162



124



1,362

Loss on sale of consumer installment loans


—



—



—



—



23,465



—



23,465

Loss on sale of capital call lines of credit


—



5,037



—



—



—



5,037



—

(Gains) losses on investment securities


626



62



(62
)


16,909



2,394



626



6,965

Derivative credit valuation adjustment


(192
)


(130
)


259



252



(461
)


(63
)


(1,873
)
Adjusted net income - pre-tax pre-provision, excluding PPP

$
139,732


$
98,901


$
79,676


$
87,333


$
95,148


$
318,309


$
275,710
















Average total assets

$
21,978,010


$
21,654,735


$
21,052,920


$
20,717,362


$
20,514,366


$
21,565,277


$
19,904,979
















Adjusted ROAA - pre-tax pre-provision, excluding PPP


2.52
%


1.83
%


1.53
%


1.67
%


1.84
%


1.97
%


1.85
%

*Core Return on Average Common Equity - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net income to common shareholders

$
82,953


$
44,007


$
50,265


$
25,623


$
61,364


$
177,225


$
192,779

Reconciling items (after tax):














Severance expense


—



141



637



—



1,058



778



1,058

Impairments on fixed assets and leases


—



12



86



—



126



98



1,051

Loss on sale of consumer installment loans


—



—



—



—



18,221



—



18,221

Loss on sale of capital call lines of credit


—



3,914



—



—



—



3,914



—

(Gains) losses on investment securities


492



49



(49
)


13,543



1,859



492



5,383

Derivative credit valuation adjustment


(151
)


(101
)


204



202



(358
)


(48
)


(1,445
)
Tax on surrender of bank-owned life insurance policies


—



4,141



—



—



—



4,141



—

Core earnings

$
83,294


$
52,163


$
51,143


$
39,368


$
82,270


$
186,600


$
217,047
















Average total common shareholders' equity

$
1,373,244


$
1,335,408


$
1,273,780


$
1,263,190


$
1,259,711


$
1,327,841


$
1,252,212
















Core return on average common equity


24.06
%


15.67
%


16.28
%


12.36
%


25.91
%


18.79
%


23.17
%

*Adjusted ROCE - Pre-Tax Pre-Provision - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net income to common shareholders

$
82,953


$
44,007


$
50,265


$
25,623


$
61,364


$
177,225


$
192,779

Reconciling items:














Income tax expense


23,470



20,768



14,563



7,136



17,899



58,801



56,127

Provision (benefit) for credit losses


17,856



23,629



19,603



28,216



(7,994
)


61,088



31,850

Provision (benefit) for credit losses on unfunded commitments


48



(304
)


280



153



254



24



753

Severance expense


—



182



809



—



1,363



991



1,363

Impairments on fixed assets and leases


—



15



109



—



162



124



1,362

Loss on sale of consumer installment loans


—



—



—



—



23,465



—



23,465

Loss on sale of capital call lines of credit


—



5,037



—



—



—



5,037



—

(Gains) losses on investment securities


626



62



(62
)


16,909



2,394



626



6,965

Derivative credit valuation adjustment


(192
)


(130
)


259



252



(461
)


(63
)


(1,873
)
Pre-tax pre-provision adjusted net income available to common shareholders

$
124,761


$
93,266


$
85,826


$
78,289


$
98,446


$
303,853


$
312,791
















Average total common shareholders' equity

$
1,373,244


$
1,335,408


$
1,273,780


$
1,263,190


$
1,259,711


$
1,327,841


$
1,252,212
















Adjusted ROCE - pre-tax pre-provision


36.04
%


28.01
%


27.33
%


24.59
%


31.01
%


30.59
%


33.40
%

*Net Interest Margin, Tax Equivalent, excluding PPP - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net interest income

$
199,773


$
165,271


$
149,899


$
135,137


$
159,032


$
514,943


$
488,583

PPP net interest (income) expense


1,381



765



(14,106
)


2,791



(9,632
)


(11,960
)


(63,193
)
Tax-equivalent adjustment


405



390



375



342



334



1,170



843

Net interest income, tax equivalent, excluding PPP

$
201,559


$
166,426


$
136,168


$
138,270


$
149,734


$
504,153


$
426,233































GAAP average total interest earning assets

$
21,485,319


$
21,073,680


$
20,514,677


$
20,211,028


$
20,021,455


$
21,028,117


$
19,378,542

Average PPP loans


(166,164
)


(207,127
)


(889,235
)


(1,065,919
)


(1,349,403
)


(418,194
)


(1,946,651
)
Adjusted average total interest earning assets, excluding PPP

$
21,319,155


$
20,866,553


$
19,625,442


$
19,145,109


$
18,672,052


$
20,609,923


$
17,431,891
















Net interest margin, tax equivalent, excluding PPP


3.75
%


3.20
%


2.80
%


2.87
%


3.18
%


3.27
%


3.27
%

*Loan Yield, excluding PPP*











Nine Months Ended September 30,
(Dollars in thousands except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

Interest income on loans and leases

$
275,771


$
252,894


$
255,913


$
218,740


$
200,457


$
784,578


$
526,573
















PPP interest income


(604
)


(1,633
)


(23,551
)


(7,249
)


(14,666
)


(25,788
)


(72,132
)
Interest income on core loans (Loans and leases, excluding PPP)

$
275,167


$
251,261


$
232,362


$
211,491


$
185,791


$
758,790


$
454,441































Average total loans and leases

$
13,899,034


$
14,842,432


$
15,477,973


$
15,388,003


$
15,653,983


$
14,734,031


$
14,750,473

Average PPP loans


(166,164
)


(207,127
)


(889,235
)


(1,065,919
)


(1,349,403
)


(418,194
)


(1,946,651
)
Adjusted average total loans and leases

$
13,732,870


$
14,635,305


$
14,588,738


$
14,322,084


$
14,304,580


$
14,315,837


$
12,803,822
















Loan yield, excluding PPP


7.95
%


6.89
%


6.46
%


5.86
%


5.15
%


7.09
%


4.75
%

*Core Efficiency Ratio - Customers Bancorp*











Nine Months Ended September 30,
(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022


2023



2022

GAAP net interest income

$
199,773


$
165,271


$
149,899


$
135,137


$
159,032


$
514,943


$
488,583
















GAAP non-interest income

$
17,775


$
15,997


$
18,121


$
7,345


$
(9,017
)

$
51,893


$
24,927

Loss on sale of consumer installment loans


—



—



—



—



23,465



—



23,465

Loss on sale of capital call lines of credit


—



5,037



—



—



—



5,037



—

(Gains) losses on investment securities


626



62



(62
)


16,909



2,394



626



6,965

Derivative credit valuation adjustment


(192
)


(130
)


259



252



(461
)


(63
)


(1,873
)
Core non-interest income


18,209



20,966



18,318



24,506



16,381



57,493



53,484

Core revenue

$
217,982


$
186,237


$
168,217


$
159,643


$
175,413


$
572,436


$
542,067































GAAP non-interest expense

$
89,466


$
89,297


$
80,133


$
78,419


$
76,198


$
258,896


$
226,210

Severance expense


—



(182
)


(809
)


—



(1,363
)


(991
)


(1,363
)
Impairments on fixed assets and leases


—



(15
)


(109
)


—



(162
)


(124
)


(1,362
)
Core non-interest expense

$
89,466


$
89,100


$
79,215


$
78,419


$
74,673


$
257,781


$
223,485
















Core efficiency ratio ⁽¹⁾


41.04
%


47.84
%


47.09
%


49.12
%


42.57
%


45.03
%


41.23
%















(1) Core efficiency ratio calculated as core non-interest expense divided by core revenue.

*Tangible Common Equity to Tangible Assets - Customers Bancorp*





















(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
GAAP total shareholders' equity

$
1,561,607


$
1,456,652


$
1,421,020


$
1,402,961


$
1,386,931

Reconciling items:










Preferred stock


(137,794
)


(137,794
)


(137,794
)


(137,794
)


(137,794
)
Goodwill and other intangibles


(3,629
)


(3,629
)


(3,629
)


(3,629
)


(3,629
)
Tangible common equity

$
1,420,184


$
1,315,229


$
1,279,597


$
1,261,538


$
1,245,508












GAAP total assets

$
21,857,152


$
22,028,565


$
21,751,614


$
20,896,112


$
20,367,621

Reconciling items:










Goodwill and other intangibles


(3,629
)


(3,629
)


(3,629
)


(3,629
)


(3,629
)
Tangible assets

$
21,853,523


$
22,024,936


$
21,747,985


$
20,892,483


$
20,363,992












Tangible common equity to tangible assets


6.5
%


6.0
%


5.9
%


6.0
%


6.1
%

*Tangible Common Equity to Tangible Assets, excluding PPP - Customers Bancorp*





















(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
GAAP total shareholders' equity

$
1,561,607


$
1,456,652


$
1,421,020


$
1,402,961


$
1,386,931

Reconciling items:










Preferred stock


(137,794
)


(137,794
)


(137,794
)


(137,794
)


(137,794
)
Goodwill and other intangibles


(3,629
)


(3,629
)


(3,629
)


(3,629
)


(3,629
)
Tangible common equity

$
1,420,184


$
1,315,229


$
1,279,597


$
1,261,538


$
1,245,508












GAAP total assets

$
21,857,152


$
22,028,565


$
21,751,614


$
20,896,112


$
20,367,621

Loans receivable, PPP


(137,063
)


(188,763
)


(246,258
)


(998,153
)


(1,154,632
)
Total assets, excluding PPP

$
21,720,089


$
21,839,802


$
21,505,356


$
19,897,959


$
19,212,989

Reconciling items:










Goodwill and other intangibles


(3,629
)


(3,629
)


(3,629
)


(3,629
)


(3,629
)
Tangible assets, excluding PPP

$
21,716,460


$
21,836,173


$
21,501,727


$
19,894,330


$
19,209,360












Tangible common equity to tangible assets, excluding PPP


6.5
%


6.0
%


6.0
%


6.3
%


6.5
%

*Tangible Book Value per Common Share - Customers Bancorp*





















(Dollars in thousands, except share and per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
GAAP total shareholders' equity

$
1,561,607


$
1,456,652


$
1,421,020


$
1,402,961


$
1,386,931

Reconciling Items:










Preferred stock


(137,794
)


(137,794
)


(137,794
)


(137,794
)


(137,794
)
Goodwill and other intangibles


(3,629
)


(3,629
)


(3,629
)


(3,629
)


(3,629
)
Tangible common equity

$
1,420,184


$
1,315,229


$
1,279,597


$
1,261,538


$
1,245,508












Common shares outstanding


31,311,254



31,282,318



31,239,750



32,373,697



32,475,502












Tangible book value per common share

$
45.36


$
42.04


$
40.96


$
38.97


$
38.35

*Core Loans (Total Loans and Leases, excluding PPP)*





















(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
Total loans and leases

$
13,713,482


$
13,910,907


$
15,063,034


$
15,794,671


$
15,336,688












Loans receivable, PPP


(137,063
)


(188,763
)


(246,258
)


(998,153
)


(1,154,632
)
Core Loans (Total loans and leases, excluding PPP)

$
13,576,419


$
13,722,144


$
14,816,776


$
14,796,518


$
14,182,056












*Core Loans Held for Investment* *(Total Loans and Leases Held for Investment, excluding PPP)*





















(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
Total loans and leases, held for investment

$
13,563,114


$
13,832,799


$
14,638,977


$
15,466,359


$
15,331,464












Loans receivable, PPP


(137,063
)


(188,763
)


(246,258
)


(998,153
)


(1,154,632
)
Core Loans Held for Investment (Total loans and leases held for investment, excluding PPP)

$
13,426,051


$
13,644,036


$
14,392,719


$
14,468,206


$
14,176,832

*Total Assets, excluding PPP*





















(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
Total assets

$
21,857,152


$
22,028,565


$
21,751,614


$
20,896,112


$
20,367,621












Loans receivable, PPP


(137,063
)


(188,763
)


(246,258
)


(998,153
)


(1,154,632
)
Total assets, excluding PPP

$
21,720,089


$
21,839,802


$
21,505,356


$
19,897,959


$
19,212,989

*Coverage of credit loss reserves for loans and leases held for investment, excluding PPP*





















(Dollars in thousands, except per share data)

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Q3 2022
Loans and leases receivable

$
12,600,548


$
12,826,531


$
13,391,610


$
14,143,047


$
13,762,374












Loans receivable, PPP


(137,063
)


(188,763
)


(246,258
)


(998,153
)


(1,154,632
)
Loans and leases held for investment, excluding PPP

$
12,463,485


$
12,637,768


$
13,145,352


$
13,144,894


$
12,607,742












Allowance for credit losses on loans and leases

$
139,213


$
139,656


$
130,281


$
130,924


$
130,197












Coverage of credit loss reserves for loans and leases held for investment, excluding PPP


1.12
%


1.11
%


0.99
%


1.00
%


1.03
%

View source version on businesswire.com: https://www.businesswire.com/news/home/20231026731318/en/

David W. Patti, Communications Director 610-451-9452

Company Name:	Customers Bancorp Inc
Stock Symbol:	CUBI
Market:	NYSE
Website:	customersbank.com

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