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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Customers Bancorp Inc | NYSE:CUBI | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 56.98 | 4 | 09:00:00 |
From Jan 2025 to Feb 2025
Customers Bancorp, Inc. (NYSE:CUBI):
Fourth Quarter 2024 Highlights
*
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.
1
Excludes pre-tax losses on investment securities of $26.7 million, severance expense of $1.6 million, derivative credit valuation adjustment of $0.4 million, unrealized gain on equity method investments of $0.4 million, legal settlement of $0.2 million and unrealized losses on loans held for sale of $0.1 million.
2
Regulatory capital ratios as of December 31, 2024 are estimates.
Full Year 2024 Highlights
*
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 is included at the end of this document.
1
Regulatory capital ratios as of December 31, 2024 are estimates.
2
Regional bank peers based on selected 2024 proxy peers with a reporting date on or before January 22, 2025.
CEO Commentary
“We are pleased to share our fourth quarter and full year 2024 results that highlight the company’s continuing incredible deposit transformation and underscore our success in growing franchise value in a competitive market environment. Exceptional client service is the cornerstone of our culture and business model, and is so important it is in our name. To measure customer satisfaction, we recently participated in an annual Net Promoter Score survey, also known as NPS. Our most recent score of 73 is well above the U.S. banking industry average of 411 and is above the scores of many other service-oriented brands across all industries. We are delighted by the positive response from our customers and the trust they place in us. This is a testament to our customer-centric mindset and commitment to service provided by our extraordinary colleagues,” said Customers Bancorp Chairman and CEO Jay Sidhu.
“In the fourth quarter, we once again brought in over $1 billion of gross deposit inflows which we utilized in part to paydown higher-cost and brokered deposits. Non-interest bearing deposits increased by $937.5 million and represented 29.7% of total deposits at December 31, 2024. These efforts, along with proactive management of the cost of our existing deposit portfolio, resulted in a 39 basis point reduction in our cost of deposits during the quarter.
“Our deposit pipelines continue to expand with a significant conversion ratio. In addition, deposit focused teams we have recruited since March 2023 managed $1.7 billion or 9% of total deposits. Enhanced by their efforts, we’ve increased commercial deposit accounts by 48% over the past two years, adding granular and sticky relationships while significantly lowering our cost of deposits, increasing our non-interest bearing deposits, and driving franchise value. During the quarter, we opportunistically repositioned a portion of the securities portfolio to improve structural liquidity, reduce asset sensitivity and benefit margin. Even with the repositioning transaction and balance sheet growth we experienced during the quarter, our TCE / TA ratio* remained roughly flat. 2024 was a year in which we made significant investments in our future. We believe the company is extremely well-positioned to continue to strengthen our deposit franchise, improve our profitability, and maintain our already strong capital ratios,” stated Jay Sidhu.
“Our Q4 2024 GAAP earnings were $23.3 million, or $0.71 per diluted share, and core earnings* were $44.2 million, or $1.36 per diluted share. Fourth quarter GAAP results include losses in connection the accretive securities portfolio repositioning. We maintain a strong liquidity position, with $9.1 billion of liquidity immediately available, which covers approximately 159% of uninsured deposits2 and our loan to deposit ratio was 78%, at December 31, 2024. We continue to focus on loan production where we have a holistic and primary relationship. Total loans and leases held for investment grew by $671.1 million which represent a 19% annualized growth rate, driven by strong commercial loan growth of $683.1 million led by growth in our existing specialized lending verticals. In 2024, total loans and leases held for investment grew by $1.6 billion which represent a 12.3% growth rate. Asset quality remains strong with our NPA ratio at just 0.25% of total assets and reserve levels are robust at 316% of total non-performing loans at the end of Q4 2024. Total net charge-offs declined by $2.4 million. Our exposure to the higher risk commercial real estate office sector is minimal, representing approximately 1% of the loan portfolio. We will remain disciplined, but opportunistic, with our balance sheet capacity to manage risk and maintain robust capital levels. Tangible Book Value per share* grew to $54.08. We believe that our unique strategy and the investments we have and are making, along with the exceptional talent in our organization, will position us for success in 2025 and beyond. We are extremely excited about the future of this company especially in what we expect to be a more favorable banking environment,” Jay Sidhu continued.
*
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.
1
The Qualtrics U.S. Banking Relational Net Promoter® Score (NPS®) benchmark is derived from Qualtrics' vast Customer Experience dataset. The dataset includes 2022-2023 anonymized results from 50+ U.S. banking organizations, covering 80+ separate relationship surveys, and encompassing 400,000 individual survey respondents.
2
Uninsured deposits (estimate) of $7.3 billion to be reported on the Bank’s call report, less deposits of $1.5 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $176.2 million.
Financial Highlights
At or Three Months Ended
(Dollars in thousands, except per share data)
December 31, 2024
September 30, 2024
Increase (Decrease)
Profitability Metrics:
Net income available for common shareholders
$
23,266
$
42,937
$
(19,671
)
(45.8
)%
Diluted earnings per share
$
0.71
$
1.31
$
(0.60
)
(45.8
)%
Core earnings*
$
44,168
$
43,838
$
330
0.8
%
Adjusted core earnings*
$
44,168
$
41,381
$
2,787
6.7
%
Core earnings per share*
$
1.36
$
1.34
$
0.02
1.5
%
Adjusted core earnings per share*
$
1.36
$
1.26
$
0.10
7.9
%
Return on average assets (“ROAA”)
0.48
%
0.88
%
(0.40
)
Core ROAA*
0.86
%
0.89
%
(0.03
)
Adjusted core ROAA*
0.86
%
0.85
%
0.01
Return on average common equity (“ROCE”)
5.50
%
10.44
%
(4.94
)
Core ROCE*
10.44
%
10.66
%
(0.22
)
Adjusted core ROCE*
10.44
%
10.06
%
0.38
Core pre-tax pre-provision net income*
$
84,224
$
64,824
$
19,400
29.9
%
Adjusted core pre-tax pre-provision net income*
$
84,224
$
61,827
$
22,397
36.2
%
Net interest margin, tax equivalent
3.11
%
3.06
%
0.05
Yield on loans (Loan yield)
6.78
%
6.99
%
(0.21
)
Cost of deposits
3.07
%
3.46
%
(0.39
)
Efficiency ratio
56.86
%
62.40
%
(5.54
)
Core efficiency ratio*
56.12
%
61.69
%
(5.57
)
Adjusted core efficiency ratio*
56.12
%
63.48
%
(7.36
)
Non-interest expense to average total assets
1.98
%
1.95
%
0.03
Core non-interest expense to average total assets*
1.95
%
1.94
%
0.01
Adjusted core non-interest expense to average total assets*
1.95
%
1.99
%
(0.04
)
Balance Sheet Trends:
Total assets
$
22,308,241
$
21,456,082
$
852,159
4.0
%
Total cash and investment securities
$
6,797,562
$
6,564,528
$
233,034
3.5
%
Total loans and leases
$
14,653,556
$
14,053,116
$
600,440
4.3
%
Non-interest bearing demand deposits
$
5,608,288
$
4,670,809
$
937,479
20.1
%
Total deposits
$
18,846,461
$
18,069,389
$
777,072
4.3
%
Capital Metrics:
Common Equity
$
1,698,889
$
1,663,386
$
35,503
2.1
%
Tangible Common Equity*
$
1,695,260
$
1,659,757
$
35,503
2.1
%
Common Equity to Total Assets
7.6
%
7.8
%
(0.2
)
Tangible Common Equity to Tangible Assets*
7.6
%
7.7
%
(0.1
)
Book Value per common share
$
54.20
$
53.07
$
1.13
2.1
%
Tangible Book Value per common share*
$
54.08
$
52.96
$
1.12
2.1
%
Common equity Tier 1 capital ratio (1)
12.0
%
12.5
%
(0.5
)
Total risk based capital ratio (1)
14.8
%
15.4
%
(0.6
)
(1) Regulatory capital ratios as of December 31, 2024 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
At or Three Months Ended
Twelve Months Ended
(Dollars in thousands, except per share data)
December 31, 2024
December 31, 2023
Increase (Decrease)
December 31, 2024
December 31, 2023
Increase (Decrease)
Profitability Metrics:
Net income available for common shareholders
$
23,266
$
58,223
$
(34,957
)
(60.0
)%
$
166,429
$
235,448
$
(69,019
)
(29.3
)%
Diluted earnings per share
$
0.71
$
1.79
$
(1.08
)
(60.3
)%
$
5.09
$
7.32
$
(2.23
)
(30.5
)%
Core earnings*
$
44,168
$
61,633
$
(17,465
)
(28.3
)%
$
183,105
$
248,233
$
(65,128
)
(26.2
)%
Adjusted core earnings*
$
44,168
$
61,633
$
(17,465
)
(28.3
)%
$
189,253
$
248,233
$
(58,980
)
(23.8
)%
Core earnings per share*
$
1.36
$
1.90
$
(0.54
)
(28.4
)%
$
5.60
$
7.72
$
(2.12
)
(27.5
)%
Adjusted core earnings per share*
$
1.36
$
1.90
$
(0.54
)
(28.4
)%
$
5.78
$
7.72
$
(1.94
)
(25.1
)%
Return on average assets (“ROAA”)
0.48
%
1.16
%
(0.68
)
0.85
%
1.16
%
(0.31
)
Core ROAA*
0.86
%
1.22
%
(0.36
)
0.92
%
1.22
%
(0.30
)
Adjusted core ROAA*
0.86
%
1.22
%
(0.36
)
0.95
%
1.22
%
(0.27
)
Return on average common equity (“ROCE”)
5.50
%
15.93
%
(10.43
)
10.36
%
17.33
%
(6.97
)
Core ROCE*
10.44
%
16.87
%
(6.43
)
11.40
%
18.27
%
(6.87
)
Adjusted core ROCE*
10.44
%
16.87
%
(6.43
)
11.78
%
18.27
%
(6.49
)
Core pre-tax pre-provision net income*
$
84,224
$
101,884
$
(17,660
)
(17.3
)%
$
321,942
$
416,563
$
(94,621
)
(22.7
)%
Adjusted core pre-tax pre-provision net income*
$
84,224
$
101,884
$
(17,660
)
(17.3
)%
$
330,259
$
416,563
$
(86,304
)
(20.7
)%
Net interest margin, tax equivalent
3.11
%
3.31
%
(0.20
)
3.15
%
3.29
%
(0.14
)
Yield on loans (Loan yield)
6.78
%
7.30
%
(0.52
)
6.99
%
7.16
%
(0.17
)
Cost of deposits
3.07
%
3.39
%
(0.32
)
3.34
%
3.27
%
0.07
Efficiency ratio
56.86
%
49.08
%
7.78
56.21
%
46.49
%
9.72
Core efficiency ratio*
56.12
%
46.70
%
9.42
56.25
%
45.45
%
10.80
Adjusted core efficiency ratio*
56.12
%
46.70
%
9.42
55.11
%
45.45
%
9.66
Non-interest expense to average total assets
1.98
%
1.75
%
0.23
1.95
%
1.64
%
0.31
Core non-interest expense to average total assets*
1.95
%
1.67
%
0.28
1.92
%
1.62
%
0.30
Adjusted core non-interest expense to average total assets*
1.95
%
1.67
%
0.28
1.88
%
1.62
%
0.26
(1) Regulatory capital ratios as of December 31, 2024 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
At or Three Months Ended
(Dollars in thousands, except per share data)
December 31, 2024
December 31, 2023
Increase (Decrease)
Balance Sheet Trends:
Total assets
$
22,308,241
$
21,316,265
$
991,976
4.7
%
Total cash and investment securities
$
6,797,562
$
7,355,156
$
(557,594
)
(7.6
)%
Total loans and leases
$
14,653,556
$
13,202,084
$
1,451,472
11.0
%
Non-interest bearing demand deposits
$
5,608,288
$
4,422,494
$
1,185,794
26.8
%
Total deposits
$
18,846,461
$
17,920,236
$
926,225
5.2
%
Capital Metrics:
Common Equity
$
1,698,889
$
1,500,600
$
198,289
13.2
%
Tangible Common Equity*
$
1,695,260
$
1,496,971
$
198,289
13.2
%
Common Equity to Total Assets
7.6
%
7.0
%
0.6
Tangible Common Equity to Tangible Assets*
7.6
%
7.0
%
0.6
Book Value per common share
$
54.20
$
47.73
$
6.47
13.6
%
Tangible Book Value per common share*
$
54.08
$
47.61
$
6.47
13.6
%
Common equity Tier 1 capital ratio (1)
12.0
%
12.2
%
(0.2
)
Total risk based capital ratio (1)
14.8
%
15.3
%
(0.5
)
(1) Regulatory capital ratios as of December 31, 2024 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)
December 31, 2024
% of Total
September 30, 2024
% of Total
December 31, 2023
% of Total
Loans and Leases Held for Investment
Commercial:
Commercial & industrial:
Specialized lending
$
5,842,420
40.4
%
$
5,468,507
39.7
%
$
5,006,693
38.9
%
Other commercial & industrial (1)
1,062,631
7.4
1,087,222
7.9
1,162,317
9.1
Mortgage finance
1,440,847
10.0
1,367,617
9.9
1,014,742
7.9
Multifamily
2,252,246
15.6
2,115,978
15.4
2,138,622
16.6
Commercial real estate owner occupied
1,100,944
7.6
981,904
7.1
797,319
6.2
Commercial real estate non-owner occupied
1,359,130
9.4
1,326,591
9.6
1,177,650
9.2
Construction
147,209
1.0
174,509
1.3
166,393
1.2
Total commercial loans and leases
13,205,427
91.4
12,522,328
90.9
11,463,736
89.1
Consumer:
Residential
496,559
3.4
500,786
3.6
484,435
3.8
Manufactured housing
33,123
0.3
34,481
0.3
38,670
0.3
Installment:
Personal
463,854
3.2
453,739
3.3
555,533
4.3
Other
249,799
1.7
266,362
1.9
319,393
2.5
Total installment loans
713,653
4.9
720,101
5.2
874,926
6.8
Total consumer loans
1,243,335
8.6
1,255,368
9.1
1,398,031
10.9
Total loans and leases held for investment
$
14,448,762
100.0
%
$
13,777,696
100.0
%
$
12,861,767
100.0
%
Loans Held for Sale
Residential
$
1,836
0.9
%
$
2,523
0.9
%
$
1,215
0.3
%
Installment:
Personal
40,903
20.0
55,799
20.3
151,040
44.4
Other
162,055
79.1
217,098
78.8
188,062
55.3
Total installment loans
202,958
99.1
272,897
99.1
339,102
99.7
Total loans held for sale
$
204,794
100.0
%
$
275,420
100.0
%
$
340,317
100.0
%
Total loans and leases portfolio
$
14,653,556
$
14,053,116
$
13,202,084
(1)
Includes PPP loans of $22.8 million, $30.5 million and $74.7 million as of December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
Loans and Leases Held for Investment
Loans and leases held for investment were $14.4 billion at December 31, 2024, up $671.1 million, or 4.9%, from September 30, 2024. Specialized lending increased by $373.9 million, or 6.8% quarter-over-quarter, to $5.8 billion. Multifamily loans increased by $136.3 million, or 6.4% to $2.3 billion. Owner-occupied commercial real estate loans increased by $119.0 million, or 12.1% to $1.1 billion. Mortgage finance loans increased by $73.2 million, or 5.4% to $1.4 billion. Non-owner occupied commercial real estate loans increased by $32.5 million, or 2.5% to $1.4 billion. These increases were partially offset by a decrease in other commercial and industrial loans of $24.6 million, or 2.3%, to $1.1 billion.
Loans and leases held for investment of $14.4 billion at December 31, 2024 were up $1.6 billion, or 12.3%, year-over-year. Specialized lending increased by $835.7 million, or 16.7% year-over-year. Mortgage finance loans increased by $426.1 million. Owner-occupied commercial real estate loans increased by $303.6 million. Non-owner occupied commercial real estate loans increased by $181.5 million. Multifamily loans increased by $113.6 million. These increases were partially offset by decreases in consumer installment loans of $161.3 million and other commercial and industrial loans of $99.7 million.
Loans Held for Sale
Loans held for sale decreased $70.6 million quarter-over-quarter, and were $204.8 million at December 31, 2024.
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
At or Three Months Ended
(Dollars in thousands)
December 31, 2024
September 30, 2024
Increase (Decrease)
December 31, 2024
December 31, 2023
Increase (Decrease)
Allowance for credit losses on loans and leases
$
136,775
$
133,158
$
3,617
$
136,775
$
135,311
$
1,464
Provision (benefit) for credit losses on loans and leases
$
18,229
$
17,766
$
463
$
18,229
$
13,420
$
4,809
Net charge-offs from loans held for investment
$
14,612
$
17,044
$
(2,432
)
$
14,612
$
17,322
$
(2,710
)
Annualized net charge-offs to average loans and leases
0.41
%
0.50
%
0.41
%
0.51
%
Coverage of credit loss reserves for loans and leases held for investment
1.04
%
1.06
%
1.04
%
1.13
%
Net charge-offs decreased with $14.6 million in Q4 2024, compared to $17.0 million in Q3 2024 and $17.3 million in Q4 2023.
Provision (benefit) for Credit Losses
Three Months Ended
Three Months Ended
(Dollars in thousands)
December 31, 2024
September 30, 2024
Increase (Decrease)
December 31, 2024
December 31, 2023
Increase (Decrease)
Provision (benefit) for credit losses on loans and leases
$
18,229
$
17,766
$
463
$
18,229
$
13,420
$
4,809
Provision (benefit) for credit losses on available for sale debt securities
2,965
(700
)
3,665
2,965
103
2,862
Provision for credit losses
21,194
17,066
4,128
21,194
13,523
7,671
Provision (benefit) for credit losses on unfunded commitments
(664
)
642
(1,306
)
(664
)
(136
)
(528
)
Total provision for credit losses
$
20,530
$
17,708
$
2,822
$
20,530
$
13,387
$
7,143
The provision for credit losses on loans and leases in Q4 2024 was $18.2 million, compared to $17.8 million in Q3 2024. The higher provision in Q4 2024 was primarily due to slight deterioration in macroeconomic forecasts.
The provision for credit losses on available for sale investment securities in Q4 2024 was a provision of $3.0 million, compared to a benefit to provision of $0.7 million in Q3 2024.
The provision for credit losses on loans and leases in Q4 2024 was $18.2 million, compared to $13.4 million in Q4 2023. The higher provision in Q4 2024 compared to the year ago period was primarily due to higher balances in commercial and industrial loan balances held for investment, partially offset by improvements in macroeconomic forecasts and lower balances in consumer installment loans held for investment.
The provision for credit losses on available for sale investment securities in Q4 2024 was a provision of $3.0 million compared to $0.1 million in Q4 2023.
Asset Quality
The following table presents asset quality metrics as of the dates indicated:
(Dollars in thousands)
December 31, 2024
September 30, 2024
Increase (Decrease)
December 31, 2024
December 31, 2023
Increase (Decrease)
Non-performing assets (“NPAs”):
Nonaccrual / non-performing loans (“NPLs”)
$
43,275
$
47,326
$
(4,051
)
$
43,275
$
27,110
$
16,165
Non-performing assets
$
55,807
$
47,326
$
8,481
$
55,807
$
27,209
$
28,598
NPLs to total loans and leases
0.30
%
0.34
%
0.30
%
0.21
%
Reserves to NPLs
316.06
%
281.36
%
316.06
%
499.12
%
NPAs to total assets
0.25
%
0.22
%
0.25
%
0.13
%
Loans and leases (1) risk ratings:
Commercial loans and leases
Pass
$
11,403,930
$
10,844,500
$
559,430
$
11,403,930
$
9,955,243
$
1,448,687
Special Mention
175,055
178,026
(2,971
)
175,055
196,182
(21,127
)
Substandard
282,563
218,921
63,642
282,563
339,664
(57,101
)
Total commercial loans and leases
11,861,548
11,241,447
620,101
11,861,548
10,491,089
1,370,459
Consumer loans
Performing
1,227,359
1,240,581
(13,222
)
1,227,359
1,379,603
(152,244
)
Non-performing
15,976
14,787
1,189
15,976
18,428
(2,452
)
Total consumer loans
1,243,335
1,255,368
(12,033
)
1,243,335
1,398,031
(154,696
)
Loans and leases receivable (1)
$
13,104,883
$
12,496,815
$
608,068
$
13,104,883
$
11,889,120
$
1,215,763
(1)
Risk ratings are assigned to loans and leases held for investment, and excludes loans held for sale, loans receivable, mortgage finance, at fair value and eligible PPP loans that are fully guaranteed by the Small Business Administration.
Over the last decade, the Bank has developed a suite of commercial loan products with one particularly important common denominator: a relatively low credit risk assumption. The Bank’s commercial and industrial (“C&I”), mortgage finance, corporate and specialized lending lines of business, and multifamily loans for example, are characterized by conservative underwriting standards and historically low loss rates. Because of this emphasis, the Bank’s credit quality to date has been incredibly healthy despite a challenging economic and rate 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, management employs a bottom-up data driven approach to analyze the commercial portfolio.
Total consumer installment loans held for investment at December 31, 2024 were less than 4% of total assets and approximately 5% of total loans and leases held for investment, and were supported by an allowance for credit losses of $49.7 million. At December 31, 2024, the consumer installment portfolio had the following characteristics: average original FICO score of 742, average debt-to-income of 20% and average borrower income of $102 thousand.
Non-performing loans at December 31, 2024 decreased to 0.30% of total loans and leases, compared to 0.34% at September 30, 2024 and increased, compared to 0.21% at December 31, 2023.
Investment Securities
The 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 the Bank’s liquidity position.
The following table presents the composition of the investment securities portfolio as of the dates indicated:
(Dollars in thousands)
December 31, 2024
September 30, 2024
December 31, 2023
Debt securities, available for sale
$
1,985,438
$
2,377,733
$
2,376,860
Equity securities
34,256
34,336
28,780
Investment securities, at fair value
2,019,694
2,412,069
2,405,640
Debt securities, held to maturity
991,937
1,064,437
1,103,170
Total investment securities portfolio
$
3,011,631
$
3,476,506
$
3,508,810
Customers’ securities portfolio is highly liquid, short in duration, and high in yield. At December 31, 2024, the AFS debt securities portfolio had a spot yield of 5.62%, an effective duration of approximately 2.6 years, and approximately 32% are variable rate. Additionally, 66% of the AFS securities portfolio was AAA rated at December 31, 2024.
At December 31, 2024, the HTM debt securities portfolio represented only 4.4% of total assets at December 31, 2024, had a spot yield of 4.13% and an effective duration of approximately 3.5 years. Additionally, at December 31, 2024, approximately 44% of the HTM securities were AAA rated and 52% 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)
December 31, 2024
% of Total
September 30, 2024
% of Total
December 31, 2023
% of Total
Demand, non-interest bearing
$
5,608,288
29.7
%
$
4,670,809
25.9
%
$
4,422,494
24.7
%
Demand, interest bearing
5,553,698
29.5
5,606,500
31.0
5,580,527
31.1
Total demand deposits
11,161,986
59.2
10,277,309
56.9
10,003,021
55.8
Savings
1,131,819
6.0
1,399,968
7.7
1,402,941
7.8
Money market
3,844,451
20.4
3,961,028
21.9
3,226,395
18.0
Time deposits
2,708,205
14.4
2,431,084
13.5
3,287,879
18.4
Total deposits
$
18,846,461
100.0
%
$
18,069,389
100.0
%
$
17,920,236
100.0
%
Total deposits increased $777.1 million, or 4.3%, to $18.8 billion at December 31, 2024 as compared to the prior quarter. Non-interest bearing demand deposits increased $937.5 million, or 20.1%, to $5.6 billion and time deposits increased $277.1 million, or 11.4%, to $2.7 billion. These increases were offset by decreases in savings deposits of $268.1 million, or 19.2%, to $1.1 billion, money market deposits of $116.6 million, or 2.9%, to $3.8 billion and interest bearing demand deposits of $52.8 million, or 0.9%, to $5.6 billion. The total average cost of deposits decreased by 39 basis points to 3.07% in Q4 2024 from 3.46% in the prior quarter primarily due to a favorable shift in deposit mix and lower market interest rates. Total estimated uninsured deposits were $5.7 billion1, or 30% of total deposits (inclusive of accrued interest) at December 31, 2024.
Total deposits increased $926.2 million, or 5.2%, to $18.8 billion at December 31, 2024 as compared to a year ago. Non-interest bearing demand deposits increased $1.2 billion, or 26.8%, to $5.6 billion and money market deposits increased $618.1 million, or 19.2%, to $3.8 billion. These increases were offset by decreases in time deposits of $579.7 million, or 17.6% to $2.7 billion, savings deposits of $271.1 million, or 19.3%, to $1.1 billion and interest bearing demand deposits of $26.8 million, or 0.5%, to $5.6 billion. The total average cost of deposits decreased by 32 basis points to 3.07% in Q4 2024 from 3.39% in the prior year primarily due to a favorable shift in deposit mix and lower market interest rates.
1 Uninsured deposits (estimate) of $7.3 billion to be reported on the Bank’s call report, less deposits of $1.5 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $176.2 million.
Borrowings
The following table presents the composition of our borrowings as of the dates indicated:
(Dollars in thousands)
December 31, 2024
September 30, 2024
December 31, 2023
FHLB advances
$
1,128,352
$
1,117,229
$
1,203,207
Senior notes
99,068
99,033
123,840
Subordinated debt
182,509
182,439
182,230
Total borrowings
$
1,409,929
$
1,398,701
$
1,509,277
Total borrowings increased $11.2 million, or 0.8%, to $1.4 billion at December 31, 2024 as compared to the prior quarter. This increase primarily resulted from net draws of $25.0 million in FHLB advances. As of December 31, 2024, Customers’ immediately available borrowing capacity with the FRB and FHLB was approximately $7.9 billion, of which $1.1 billion of available capacity was utilized in borrowings and $1.5 billion was utilized to collateralize deposits.
Total borrowings decreased $99.3 million, or 6.6%, to $1.4 billion at December 31, 2024 as compared to a year ago. This decrease primarily resulted from net repayments of $70.0 million in FHLB advances and $25.0 million in senior notes upon maturity.
Capital
The following table presents certain capital amounts and ratios as of the dates indicated:
(Dollars in thousands except per share data)
December 31, 2024
September 30, 2024
December 31, 2023
Customers Bancorp, Inc.
Common Equity
$
1,698,889
$
1,663,386
$
1,500,600
Tangible Common Equity*
$
1,695,260
$
1,659,757
$
1,496,971
Common Equity to Total Assets
7.6
%
7.8
%
7.0
%
Tangible Common Equity to Tangible Assets*
7.6
%
7.7
%
7.0
%
Book Value per common share
$
54.20
$
53.07
$
47.73
Tangible Book Value per common share*
$
54.08
$
52.96
$
47.61
Common equity Tier 1 (“CET 1”) capital ratio (1)
12.0
%
12.5
%
12.2
%
Total risk based capital ratio (1)
14.8
%
15.4
%
15.3
%
(1) Regulatory capital ratios as of December 31, 2024 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 $35.5 million to $1.7 billion, and tangible common equity* increased $35.5 million to $1.7 billion, at December 31, 2024 compared to the prior quarter, respectively, primarily from earnings of $23.3 million and decreased unrealized losses on investment securities of $9.5 million (net of taxes) deferred in accumulated other comprehensive income (“AOCI”). These increases were offset in part by $1.0 million of common share repurchases in Q4 2024. Similarly, book value per common share increased to $54.20 from $53.07, and tangible book value per common share* increased to $54.08 from $52.96, at December 31, 2024 and September 30, 2024, respectively.
Customers Bancorp’s common equity increased $198.3 million to $1.7 billion, and tangible common equity* increased $198.3 million to $1.7 billion, at December 31, 2024 compared to a year ago, respectively, primarily from earnings of $166.4 million and decreased unrealized losses on investment securities in AOCI of $40.0 million (net of taxes), offset in part by $19.2 million of common share repurchases. Similarly, book value per common share increased to $54.20 from $47.73, and tangible book value per common share* increased to $54.08 from $47.61, at December 31, 2024 and December 31, 2023, respectively.
At the Customers Bancorp level, the CET 1 ratio (estimate), total risk based capital ratio (estimate), common equity to total assets ratio and tangible common equity to tangible assets ratio* (“TCE / TA ratio”) were 12.0%, 14.8%, 7.6%, and 7.6%, respectively, at December 31, 2024.
At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At December 31, 2024, Tier 1 capital (estimate) and total risk based capital (estimate) were 12.9% and 14.3%, respectively.
Key Profitability Trends
Net Interest Income
Net interest income totaled $167.8 million in Q4 2024, an increase of $9.3 million from Q3 2024. This increase was primarily due to lower interest expense of $11.5 million due to a favorable shift in deposit mix and lower market interest rates. Interest income decreased $2.2 million primarily due to lower interest income from investment securities, partially offset by higher balances in interest-earning deposits.
“Net interest income and net interest margin expanded in the quarter primarily driven by improvements in the liability side of the balance sheet as we lowered interest bearing deposit costs and had higher levels of average non-interest bearing deposits. This is evident in the fact that our total cost of deposits declined by 39 basis points during the quarter. Additionally, robust loan growth late in the quarter should provide a strong foundation for our net interest income in 2025,” stated Customers Bancorp President Sam Sidhu. “We have positive drivers to net interest income on both sides of the balance sheet though we continue to believe the best opportunity remains in reducing our interest expense with continued momentum from our new deposit focused commercial banking teams and across our franchise.”
Net interest income totaled $167.8 million in Q4 2024, a decrease of $4.7 million from Q4 2023. This decrease was primarily due to lower interest income in specialized lending and investment securities, partially offset by lower interest expense from a favorable shift in deposit mix, lower market interest rates and lower balances in other borrowings.
Non-Interest Income
The following table presents details of non-interest income for the periods indicated:
Three Months Ended
Three Months Ended
(Dollars in thousands)
December 31, 2024
September 30, 2024
Increase (Decrease)
December 31, 2024
December 31, 2023
Increase (Decrease)
Commercial lease income
$
10,604
$
10,093
$
511
$
10,604
$
9,035
$
1,569
Loan fees
8,639
8,011
628
8,639
5,926
2,713
Bank-owned life insurance
2,125
2,049
76
2,125
2,160
(35
)
Mortgage finance transactional fees
1,010
1,087
(77
)
1,010
927
83
Net gain (loss) on sale of loans and leases
(852
)
(14,548
)
13,696
(852
)
(91
)
(761
)
Net gain (loss) on sale of investment securities
(26,260
)
—
(26,260
)
(26,260
)
(145
)
(26,115
)
Unrealized gain on equity method investments
389
—
389
389
—
389
Other
3,954
1,865
2,089
3,954
860
3,094
Total non-interest income
$
(391
)
$
8,557
$
(8,948
)
$
(391
)
$
18,672
$
(19,063
)
Reported non-interest income totaled a loss of $0.4 million for Q4 2024, a decrease of $8.9 million compared to Q3 2024. The decrease was primarily due to $26.3 million in net realized loss on sale of investment securities, partially offset by a decrease of $13.6 million in loss on leases of commercial clean vehicles that were accounted for as sales-type leases and included within net gain (loss) on sale of loans and leases, and an increase in deposit account fees of $1.9 million. The commercial clean vehicle leases generated the same amount of investment tax credits that were included as a benefit to income tax expense in Q4 2024 and Q3 2024. In Q4 2024, the Bank invested the proceeds from the sale of lower yielding investment securities into higher yielding loans and investment securities.
Non-interest income totaled a loss of $0.4 million for Q4 2024, a decrease of $19.1 million compared to Q4 2023. The decrease was primarily due to $26.3 million in net realized loss on sale of investment securities, partially offset by increases in commercial lease income of $1.6 million, loan fees of $2.7 million primarily resulting from increased unused line of credit fees, and deposit account fees of $1.9 million.
Non-Interest Expense
The following table presents details of non-interest expense for the periods indicated:
Three Months Ended
Three Months Ended
(Dollars in thousands)
December 31, 2024
September 30, 2024
Increase (Decrease)
December 31, 2024
December 31, 2023
Increase (Decrease)
Salaries and employee benefits
$
47,147
$
47,717
$
(570
)
$
47,147
$
33,965
$
13,182
Technology, communication and bank operations
13,435
13,588
(153
)
13,435
16,887
(3,452
)
Commercial lease depreciation
8,933
7,811
1,122
8,933
7,357
1,576
Professional services
13,473
9,048
4,425
13,473
9,820
3,653
Loan servicing
4,584
3,778
806
4,584
3,779
805
Occupancy
3,335
2,987
348
3,335
2,320
1,015
FDIC assessments, non-income taxes and regulatory fees
10,077
7,902
2,175
10,077
13,977
(3,900
)
Advertising and promotion
1,645
908
737
1,645
850
795
Other
7,746
10,279
(2,533
)
7,746
4,812
2,934
Total non-interest expense
$
110,375
$
104,018
$
6,357
$
110,375
$
93,767
$
16,608
Non-interest expenses totaled $110.4 million in Q4 2024, an increase of $6.4 million compared to Q3 2024. The increase was primarily attributable to increases of $4.4 million in professional fees including continued investment in our risk management infrastructure, and $2.2 million in FDIC assessments, non-income taxes and regulatory fees mainly due to a credit of $3.0 million in non-income taxes recorded in Q3 2024 for periods prior to 2024.
“In the quarter we incurred professional services expense of approximately $5.7 million as we made investments to enhance our risk management infrastructure. We expect these costs to remain elevated for the next quarter or so before tapering down as we seek to build a best-in-class risk management function which we believe can be a competitive advantage for the bank in the future. During the quarter we advanced our operational excellence initiative to provide the capacity for these and other investments which we are, and will continue to make, in our franchise to position us for success in the both the near-term and over the long-term,” stated Sam Sidhu.
Non-interest expenses totaled $110.4 million in Q4 2024, an increase of $16.6 million compared to Q4 2023. The increase was primarily attributable to increases of $13.2 million in salaries and employee benefits primarily due to higher headcount including the addition of new banking teams in 2024, annual merit increases, incentives and severance, $3.7 million in professional fees including the investment in our risk management infrastructure, and fees paid to a fintech company related to consumer installment loans originated and held for sale. These increases were partially offset by decreases in FDIC assessments primarily due to $3.7 million of FDIC special assessment in Q4 2023 and deposit servicing fees.
Taxes
Income tax expense increased by $9.7 million to a provision of $8.9 million in Q4 2024 from a benefit of $0.7 million in Q3 2024 primarily due to lower investment tax credits in Q4 2024, partially offset by lower pre-tax income. The decrease in investment tax credits was primarily due to $0.6 million of investment tax credits generated from commercial clean vehicles in Q4 2024 as compared to $14.3 million in Q3 2024. The investment tax credits from commercial clean vehicle leases were the same amount as the loss on leases of commercial clean vehicles included within net gain (loss) on sale of loans and leases in Q4 2024 and Q3 2024.
Income tax expense decreased by $12.9 million to a provision of $8.9 million in Q4 2024 from a provision of $21.8 million in Q4 2023 primarily due to lower pre-tax income and an increase in income tax credits for 2024, including $14.9 million of investment tax credits generated from commercial clean vehicles in 2024. The investment tax credits from commercial clean vehicle leases were the same amount as the loss on leases of commercial clean vehicles included within net gain (loss) on sale of loans and leases in 2024. The effective tax rate was 24.9% for Q4 2024 and 19.1% for the full year 2024.
Outlook
“Looking forward, our strategy remains unchanged. We are focused on continuing the transformation of our deposit franchise, further strengthening our risk management and compliance infrastructure, improving our profitability and growing net interest income, and maintaining strong capital ratios, liquidity, and credit quality. Our deposit transformation momentum is continuing. As a result, we expect deposit growth of 5% to 9% during 2025 with gross inflows expected to be higher as we continue to remix out less strategic deposits especially in the first half of the year. With strong loan pipelines and attractive opportunities from across our various verticals we are targeting to increase the loan portfolio by about 7% to 10% in 2025. Through the combination of these factors we expect our net interest income to increase between 3% to 7% in 2025. Operating efficiency has been and remains a priority for us even while we continue to make significant investments in our future. We see our core efficiency ratio* for the year in the low to mid 50’s as the execution of our strategic priorities take hold and as we move toward completion of some of our outsized investment. We remain committed to maintaining higher levels of capital with CET 1 ratio target of 11.5% in 2025. We expect an effective tax rate to be between 22% to 25%. We remain focused on executing in those areas which differentiate us from our peers and believe that providing truly exceptional service, sophisticated product offerings and a single-point-of-contact service model will deliver strategic, organic growth. We believe we are incredibly well positioned to continue to win new client relationships and that we have the right strategy, the right team, and a client-centric culture to achieve our goals in 2025 and beyond,” 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, January 24, 2025
Time:
9:00 AM EDT
The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com and at the Customers Bancorp 4th Quarter Earnings Webcast.
You may submit questions in advance of the live webcast by emailing our Head of Corporate Communications, Jordan Baucum at jbaucum@customersbank.com.
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 over $22 billion in assets making it one of the 80 largest bank holding companies in the U.S. Customers Bank’s commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service distinguished by a Single Point of Contact approach. 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 specialized lending clients. Major accolades include:
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, such as the FDIC special assessments; the potential for negative consequences resulting from regulatory violations, investigations and examinations, including potential supervisory actions, the assessment of fines and penalties, the imposition of sanctions, the need to undertake remedial actions and possible damage to our reputation; effects of competition on deposit rates and growth, loan rates and growth and net interest margin; failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks; public health crises and pandemics and their effects on the economic and business environments in which we operate; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and military conflicts, including the war between Russia and Ukraine and escalating conflict in the Middle East, which could impact economic conditions in the United States; 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 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, 2023, 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.
Q4 2024 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended December 31, 2024 and the preceding four quarters, and full year 2024 and 2023:
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED
Q4
Q3
Q2
Q1
Q4
Twelve Months Ended December 31,
(Dollars in thousands, except per share data and stock price data)2024
2024
2024
2024
2023
2024
2023
GAAP Profitability Metrics:
Net income available to common shareholders
$
23,266
$
42,937
$
54,300
$
45,926
$
58,223
$
166,429
$
235,448
Per share amounts:
Earnings per share - basic
$
0.74
$
1.36
$
1.72
$
1.46
$
1.86
$
5.28
$
7.49
Earnings per share - diluted
$
0.71
$
1.31
$
1.66
$
1.40
$
1.79
$
5.09
$
7.32
Book value per common share (1)
$
54.20
$
53.07
$
50.81
$
49.29
$
47.73
$
54.20
$
47.73
CUBI stock price (1)
$
48.68
$
46.45
$
47.98
$
53.06
$
57.62
$
48.68
$
57.62
CUBI stock price as % of book value (1)
90
%
88
%
94
%
108
%
121
%
90
%
121
%
Average shares outstanding - basic
31,346,920
31,567,797
31,649,715
31,473,424
31,385,043
31,509,179
31,435,647
Average shares outstanding - diluted
32,557,621
32,766,488
32,699,149
32,854,534
32,521,787
32,719,134
32,158,788
Shares outstanding (1)
31,346,507
31,342,107
31,667,655
31,521,931
31,440,906
31,346,507
31,440,906
Return on average assets (“ROAA”)
0.48
%
0.88
%
1.11
%
0.94
%
1.16
%
0.85
%
1.16
%
Return on average common equity (“ROCE”)
5.50
%
10.44
%
13.85
%
12.08
%
15.93
%
10.36
%
17.33
%
Net interest margin, tax equivalent
3.11
%
3.06
%
3.29
%
3.10
%
3.31
%
3.15
%
3.29
%
Efficiency ratio
56.86
%
62.40
%
51.87
%
54.58
%
49.08
%
56.21
%
46.49
%
Non-GAAP Profitability Metrics (2):
Core earnings
$
44,168
$
43,838
$
48,567
$
46,532
$
61,633
$
183,105
$
248,233
Core pre-tax pre-provision net income
$
84,224
$
64,824
$
89,220
$
83,674
$
101,884
$
321,942
$
416,563
Per share amounts:
Core earnings per share - diluted
$
1.36
$
1.34
$
1.49
$
1.42
$
1.90
$
5.60
$
7.72
Tangible book value per common share (1)
$
54.08
$
52.96
$
50.70
$
49.18
$
47.61
$
54.08
$
47.61
CUBI stock price as % of tangible book value (1)
90
%
88
%
95
%
108
%
121
%
90
%
121
%
Core ROAA
0.86
%
0.89
%
1.00
%
0.95
%
1.22
%
0.92
%
1.22
%
Core ROCE
10.44
%
10.66
%
12.39
%
12.24
%
16.87
%
11.40
%
18.27
%
Core pre-tax pre-provision ROAA
1.51
%
1.21
%
1.71
%
1.58
%
1.90
%
1.50
%
1.94
%
Core pre-tax pre-provision ROCE
19.04
%
14.84
%
21.79
%
21.01
%
26.82
%
19.10
%
29.58
%
Core efficiency ratio
56.12
%
61.69
%
53.47
%
54.24
%
46.70
%
56.25
%
45.45
%
Asset Quality:
Net charge-offs
$
14,612
$
17,044
$
18,711
$
17,968
$
17,322
$
68,335
$
69,035
Annualized net charge-offs to average total loans and leases
0.41
%
0.50
%
0.56
%
0.55
%
0.51
%
0.50
%
0.48
%
Non-performing loans (“NPLs”) to total loans and leases (1)
0.30
%
0.34
%
0.35
%
0.27
%
0.21
%
0.30
%
0.21
%
Reserves to NPLs (1)
316.06
%
281.36
%
279.52
%
373.86
%
499.12
%
316.06
%
499.12
%
Non-performing assets (“NPAs”) to total assets
0.25
%
0.22
%
0.23
%
0.17
%
0.13
%
0.25
%
0.13
%
Customers Bank Capital Ratios (3):
Common equity Tier 1 capital to risk-weighted assets
12.9
%
13.64
%
14.17
%
14.16
%
13.77
%
12.9
%
13.77
%
Tier 1 capital to risk-weighted assets
12.9
%
13.64
%
14.17
%
14.16
%
13.77
%
12.9
%
13.77
%
Total capital to risk-weighted assets
14.3
%
15.06
%
15.64
%
15.82
%
15.28
%
14.3
%
15.28
%
Tier 1 capital to average assets (leverage ratio)
8.7
%
9.08
%
9.16
%
8.82
%
8.71
%
8.7
%
8.71
%
(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 Q4 2024 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 December 31, 2024, our regulatory capital ratios reflected 25%, or $15.4 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)
Twelve Months Ended
Q4
Q3
Q2
Q1
Q4
December 31,
2024
2024
2024
2024
2023
2024
2023
Interest income:
Loans and leases
$
230,534
$
228,659
$
224,265
$
217,999
$
239,453
$
901,457
$
996,517
Investment securities
39,638
46,265
47,586
46,802
51,074
180,291
200,659
Interest earning deposits
48,147
44,372
45,506
52,817
44,104
190,842
125,923
Loans held for sale
9,447
10,907
13,671
12,048
8,707
46,073
36,221
Other
2,140
1,910
3,010
2,111
2,577
9,171
8,040
Total interest income
329,906
332,113
334,038
331,777
345,915
1,327,834
1,367,360
Interest expense:
Deposits
144,974
155,829
148,784
153,725
150,307
603,312
576,437
FHLB advances
12,595
12,590
13,437
13,485
18,868
52,107
80,008
FRB advances
—
—
—
—
—
—
6,286
Subordinated debt
3,349
3,537
2,734
2,689
2,688
12,309
10,755
Other borrowings
1,167
1,612
1,430
1,493
1,546
5,702
6,425
Total interest expense
162,085
173,568
166,385
171,392
173,409
673,430
679,911
Net interest income
167,821
158,545
167,653
160,385
172,506
654,404
687,449
Provision for credit losses
21,194
17,066
18,121
17,070
13,523
73,451
74,611
Net interest income after provision for credit losses
146,627
141,479
149,532
143,315
158,983
580,953
612,838
Non-interest income:
Commercial lease income
10,604
10,093
10,282
9,683
9,035
40,662
36,179
Loan fees
8,639
8,011
5,233
5,280
5,926
27,163
20,216
Bank-owned life insurance
2,125
2,049
2,007
3,261
2,160
9,442
11,777
Mortgage finance transactional fees
1,010
1,087
1,058
946
927
4,101
4,395
Net gain (loss) on sale of loans and leases
(852
)
(14,548
)
(238
)
10
(91
)
(15,628
)
(1,200
)
Loss on sale of capital call lines of credit
—
—
—
—
—
—
(5,037
)
Net gain (loss) on sale of investment securities
(26,260
)
—
(719
)
(30
)
(145
)
(27,009
)
(574
)
Unrealized gain on equity method investments
389
—
11,041
—
—
11,430
—
Other
3,954
1,865
2,373
2,081
860
10,273
4,809
Total non-interest income
(391
)
8,557
31,037
21,231
18,672
60,434
70,565
Non-interest expense:
Salaries and employee benefits
47,147
47,717
44,947
36,025
33,965
175,836
133,275
Technology, communication and bank operations
13,435
13,588
16,227
21,904
16,887
65,154
65,550
Commercial lease depreciation
8,933
7,811
7,829
7,970
7,357
32,543
29,898
Professional services
13,473
9,048
6,104
6,353
9,820
34,978
35,177
Loan servicing
4,584
3,778
3,516
4,031
3,779
15,909
17,075
Occupancy
3,335
2,987
3,120
2,347
2,320
11,789
10,070
FDIC assessments, non-income taxes and regulatory fees
10,077
7,902
10,236
13,469
13,977
41,684
35,036
Advertising and promotion
1,645
908
1,254
682
850
4,489
3,095
Legal settlement expense
—
—
—
—
—
—
4,096
Other
7,746
10,279
10,219
6,388
4,812
34,632
19,391
Total non-interest expense
110,375
104,018
103,452
99,169
93,767
417,014
352,663
Income before income tax expense (benefit)
35,861
46,018
77,117
65,377
83,888
224,373
330,740
Income tax expense (benefit)
8,946
(725
)
19,032
15,651
21,796
42,904
80,597
Net income
26,915
46,743
58,085
49,726
62,092
181,469
250,143
Preferred stock dividends
3,649
3,806
3,785
3,800
3,869
15,040
14,695
Net income available to common shareholders
$
23,266
$
42,937
$
54,300
$
45,926
$
58,223
$
166,429
$
235,448
Basic earnings per common share
$
0.74
$
1.36
$
1.72
$
1.46
$
1.86
$
5.28
$
7.49
Diluted earnings per common share
0.71
1.31
1.66
1.40
1.79
5.09
7.32
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2024
2024
2024
2024
2023
ASSETS
Cash and due from banks
$
56,787
$
39,429
$
45,045
$
51,974
$
45,210
Interest earning deposits
3,729,144
3,048,593
3,003,542
3,649,146
3,801,136
Cash and cash equivalents
3,785,931
3,088,022
3,048,587
3,701,120
3,846,346
Investment securities, at fair value
2,019,694
2,412,069
2,511,650
2,604,868
2,405,640
Investment securities held to maturity
991,937
1,064,437
962,799
1,032,037
1,103,170
Loans held for sale
204,794
275,420
375,724
357,640
340,317
Loans and leases receivable
13,127,634
12,527,283
12,254,204
11,936,621
11,963,855
Loans receivable, mortgage finance, at fair value
1,321,128
1,250,413
1,002,711
962,610
897,912
Allowance for credit losses on loans and leases
(136,775
)
(133,158
)
(132,436
)
(133,296
)
(135,311
)
Total loans and leases receivable, net of allowance for credit losses on loans and leases
14,311,987
13,644,538
13,124,479
12,765,935
12,726,456
FHLB, Federal Reserve Bank, and other restricted stock
96,214
95,035
92,276
100,067
109,548
Accrued interest receivable
108,351
115,588
112,788
120,123
114,766
Bank premises and equipment, net
6,668
6,730
7,019
7,253
7,371
Bank-owned life insurance
297,641
295,531
293,108
293,400
292,193
Goodwill and other intangibles
3,629
3,629
3,629
3,629
3,629
Other assets
481,395
455,083
410,916
361,295
366,829
Total assets
$
22,308,241
$
21,456,082
$
20,942,975
$
21,347,367
$
21,316,265
LIABILITIES AND SHAREHOLDERS’ EQUITY
Demand, non-interest bearing deposits
$
5,608,288
$
4,670,809
$
4,474,862
$
4,688,880
$
4,422,494
Interest bearing deposits
13,238,173
13,398,580
13,203,231
13,272,503
13,497,742
Total deposits
18,846,461
18,069,389
17,678,093
17,961,383
17,920,236
FHLB advances
1,128,352
1,117,229
1,018,349
1,195,088
1,203,207
Other borrowings
99,068
99,033
123,970
123,905
123,840
Subordinated debt
182,509
182,439
182,370
182,300
182,230
Accrued interest payable and other liabilities
215,168
186,812
193,328
193,074
248,358
Total liabilities
20,471,558
19,654,902
19,196,110
19,655,750
19,677,871
Preferred stock
137,794
137,794
137,794
137,794
137,794
Common stock
35,758
35,734
35,686
35,540
35,459
Additional paid in capital
575,333
571,609
567,345
567,490
564,538
Retained earnings
1,326,011
1,302,745
1,259,808
1,205,508
1,159,582
Accumulated other comprehensive income (loss), net
(96,560
)
(106,082
)
(131,358
)
(132,305
)
(136,569
)
Treasury stock, at cost
(141,653
)
(140,620
)
(122,410
)
(122,410
)
(122,410
)
Total shareholders’ equity
1,836,683
1,801,180
1,746,865
1,691,617
1,638,394
Total liabilities and shareholders’ equity
$
22,308,241
$
21,456,082
$
20,942,975
$
21,347,367
$
21,316,265
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Three Months Ended
December 31, 2024
September 30, 2024
December 31, 2023
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
$
3,973,262
$
48,147
4.82
%
$
3,224,940
$
44,372
5.47
%
$
3,191,677
$
44,104
5.48
%
Investment securities (1)
3,392,850
39,638
4.65
%
3,706,974
46,265
4.97
%
4,007,418
51,074
5.10
%
Loans and leases:
Commercial & industrial:
Specialized lending loans and leases (2)
6,022,062
121,818
8.05
%
5,805,389
124,667
8.54
%
5,574,149
130,838
9.31
%
Other commercial & industrial loans (2)(3)
1,529,478
25,514
6.64
%
1,533,057
24,654
6.40
%
1,666,052
28,053
6.68
%
Mortgage finance loans
1,316,884
16,704
5.05
%
1,267,656
17,723
5.56
%
997,353
13,726
5.46
%
Multifamily loans
2,162,825
22,400
4.12
%
2,071,340
21,147
4.06
%
2,131,750
22,347
4.16
%
Non-owner occupied commercial real estate loans
1,491,170
21,770
5.81
%
1,411,533
21,065
5.94
%
1,392,684
20,686
5.89
%
Residential mortgages
535,833
6,301
4.68
%
525,285
6,082
4.61
%
526,422
5,942
4.48
%
Installment loans
1,023,569
25,474
9.90
%
1,029,812
24,228
9.36
%
1,198,043
26,568
8.80
%
Total loans and leases (4)
14,081,821
239,981
6.78
%
13,644,072
239,566
6.99
%
13,486,453
248,160
7.30
%
Other interest-earning assets
122,784
2,140
6.93
%
118,914
1,910
6.39
%
116,756
2,577
8.75
%
Total interest-earning assets
21,570,717
329,906
6.09
%
20,694,900
332,113
6.39
%
20,802,304
345,915
6.61
%
Non-interest-earning assets
609,253
535,504
449,969
Total assets
$
22,179,970
$
21,230,404
$
21,252,273
Liabilities
Interest checking accounts
$
5,597,302
$
57,268
4.07
%
$
5,787,026
$
65,554
4.51
%
$
5,656,212
$
62,041
4.35
%
Money market deposit accounts
3,974,776
42,492
4.25
%
3,676,994
42,128
4.56
%
2,802,309
29,990
4.25
%
Other savings accounts
1,258,018
12,939
4.09
%
1,563,970
18,426
4.69
%
1,218,118
13,849
4.51
%
Certificates of deposit
2,612,246
32,275
4.92
%
2,339,937
29,721
5.05
%
3,625,311
44,427
4.86
%
Total interest-bearing deposits (5)
13,442,342
144,974
4.29
%
13,367,927
155,829
4.64
%
13,301,950
150,307
4.48
%
Borrowings
1,364,138
17,111
4.99
%
1,334,905
17,739
5.29
%
1,816,047
23,102
5.05
%
Total interest-bearing liabilities
14,806,480
162,085
4.36
%
14,702,832
173,568
4.70
%
15,117,997
173,409
4.55
%
Non-interest-bearing deposits (5)
5,346,912
4,557,815
4,270,557
Total deposits and borrowings
20,153,392
3.20
%
19,260,647
3.59
%
19,388,554
3.55
%
Other non-interest-bearing liabilities
204,947
195,722
276,198
Total liabilities
20,358,339
19,456,369
19,664,752
Shareholders’ equity
1,821,631
1,774,035
1,587,521
Total liabilities and shareholders’ equity
$
22,179,970
$
21,230,404
$
21,252,273
Net interest income
167,821
158,545
172,506
Tax-equivalent adjustment
377
392
398
Net interest earnings
$
168,198
$
158,937
$
172,904
Interest spread
2.89
%
2.80
%
3.06
%
Net interest margin
3.10
%
3.05
%
3.30
%
Net interest margin tax equivalent (6)
3.11
%
3.06
%
3.31
%
(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 PPP loans.
(4) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(5) Total costs of deposits (including interest bearing and non-interest bearing) were 3.07%, 3.46% and 3.39% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively.
(6) Tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023, presented to approximate interest income as a taxable asset.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED)
(Dollars in thousands)
Twelve Months Ended
December 31, 2024
December 31, 2023
Average Balance
Interest Income or Expense
Average Yield or Cost (%)
Average Balance
Interest Income or Expense
Average Yield or Cost (%)
Assets
Interest earning deposits
$
3,597,260
$
190,842
5.31
%
$
2,375,488
$
125,923
5.30
%
Investment securities (1)
3,650,320
180,291
4.94
%
4,057,564
200,659
4.95
%
Loans and leases:
Commercial & industrial:
Specialized lending loans and leases (2)
5,637,189
483,052
8.57
%
5,704,220
513,976
9.01
%
Other commercial & industrial loans (2)(3)
1,564,167
102,001
6.52
%
1,976,924
133,451
6.75
%
Mortgage finance loans
1,192,827
62,344
5.23
%
1,179,141
67,660
5.74
%
Multifamily loans
2,116,168
86,263
4.08
%
2,165,067
85,204
3.94
%
Non-owner occupied commercial real estate loans
1,412,201
83,484
5.91
%
1,423,929
81,970
5.76
%
Residential mortgages
526,133
24,046
4.57
%
533,213
23,240
4.36
%
Installment loans
1,104,470
106,340
9.63
%
1,437,078
127,237
8.85
%
Total loans and leases (4)
13,553,155
947,530
6.99
%
14,419,572
1,032,738
7.16
%
Other interest-earning assets
114,983
9,171
7.98
%
118,574
8,040
6.78
%
Total interest-earning assets
20,915,718
1,327,834
6.35
%
20,971,198
1,367,360
6.52
%
Non-interest-earning assets
518,472
515,185
Total assets
$
21,434,190
$
21,486,383
Liabilities
Interest checking accounts
$
5,660,890
$
248,400
4.39
%
$
6,048,797
$
241,025
3.98
%
Money market deposit accounts
3,559,362
159,598
4.48
%
2,358,437
93,434
3.96
%
Other savings accounts
1,595,357
73,947
4.64
%
1,029,951
41,556
4.03
%
Certificates of deposit
2,434,622
121,367
4.99
%
4,401,855
200,422
4.55
%
Total interest-bearing deposits (5)
13,250,231
603,312
4.55
%
13,839,040
576,437
4.17
%
Federal funds purchased
—
—
—
%
3,781
188
4.97
%
Borrowings
1,414,583
70,118
4.96
%
2,073,553
103,286
4.98
%
Total interest-bearing liabilities
14,664,814
673,430
4.59
%
15,916,374
679,911
4.27
%
Non-interest-bearing deposits (5)
4,807,647
3,801,053
Total deposits and borrowings
19,472,461
3.46
%
19,717,427
3.45
%
Other non-interest-bearing liabilities
217,172
272,599
Total liabilities
19,689,633
19,990,026
Shareholders’ equity
1,744,557
1,496,357
Total liabilities and shareholders’ equity
$
21,434,190
$
21,486,383
Net interest income
654,404
687,449
Tax-equivalent adjustment
1,556
1,568
Net interest earnings
$
655,960
$
689,017
Interest spread
2.89
%
3.07
%
Net interest margin
3.14
%
3.28
%
Net interest margin tax equivalent (6)
3.15
%
3.29
%
(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 PPP loans.
(4) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(5) Total costs of deposits (including interest bearing and non-interest bearing) were 3.34% and 3.27% for the twelve months ended December 31, 2024 and 2023, respectively.
(6) Tax-equivalent basis, using an estimated marginal tax rate of 26% for the twelve months ended December 31, 2024 and 2023, presented to approximate interest income as a taxable asset.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2024
2024
2024
2024
2023
Loans and leases held for investment
Commercial:
Commercial & industrial:
Specialized lending
$
5,842,420
$
5,468,507
$
5,528,745
$
5,104,405
$
5,006,693
Other commercial & industrial (1)
1,062,631
1,087,222
1,092,146
1,113,517
1,162,317
Mortgage finance
1,440,847
1,367,617
1,122,812
1,071,146
1,014,742
Multifamily
2,252,246
2,115,978
2,067,332
2,123,675
2,138,622
Commercial real estate owner occupied
1,100,944
981,904
805,779
806,278
797,319
Commercial real estate non-owner occupied
1,359,130
1,326,591
1,202,606
1,182,084
1,177,650
Construction
147,209
174,509
163,409
185,601
166,393
Total commercial loans and leases
13,205,427
12,522,328
11,982,829
11,586,706
11,463,736
Consumer:
Residential
496,559
500,786
481,503
482,537
484,435
Manufactured housing
33,123
34,481
35,901
37,382
38,670
Installment:
Personal
463,854
453,739
474,481
492,892
555,533
Other
249,799
266,362
282,201
299,714
319,393
Total installment loans
713,653
720,101
756,682
792,606
874,926
Total consumer loans
1,243,335
1,255,368
1,274,086
1,312,525
1,398,031
Total loans and leases held for investment
$
14,448,762
$
13,777,696
$
13,256,915
$
12,899,231
$
12,861,767
Loans held for sale
Residential
$
1,836
$
2,523
$
2,684
$
870
$
1,215
Installment:
Personal
40,903
55,799
125,598
137,755
151,040
Other
162,055
217,098
247,442
219,015
188,062
Total installment loans
202,958
272,897
373,040
356,770
339,102
Total loans held for sale
$
204,794
$
275,420
$
375,724
$
357,640
$
340,317
Total loans and leases portfolio
$
14,653,556
$
14,053,116
$
13,632,639
$
13,256,871
$
13,202,084
(1)
Includes PPP loans.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
December 31,
September 30,
June 30,
March 31,
December 31,
2024
2024
2024
2024
2023
Demand, non-interest bearing
$
5,608,288
$
4,670,809
$
4,474,862
$
4,688,880
$
4,422,494
Demand, interest bearing
5,553,698
5,606,500
5,894,056
5,661,775
5,580,527
Total demand deposits
11,161,986
10,277,309
10,368,918
10,350,655
10,003,021
Savings
1,131,819
1,399,968
1,573,661
2,080,374
1,402,941
Money market
3,844,451
3,961,028
3,539,815
3,347,843
3,226,395
Time deposits
2,708,205
2,431,084
2,195,699
2,182,511
3,287,879
Total deposits
$
18,846,461
$
18,069,389
$
17,678,093
$
17,961,383
$
17,920,236
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)
As of December 31, 2024
As of September 30, 2024
As of December 31, 2023
Loan type
Total loans
Allowance for credit losses
Total reserves to total loans
Total loans
Allowance for credit losses
Total reserves to total loans
Total loans
Allowance for credit losses
Total reserves to total loans
Commercial:
Commercial & industrial, including specialized lending (1)
$
7,024,770
$
29,379
0.42
%
$
6,672,933
$
25,191
0.38
%
$
6,285,840
$
23,503
0.37
%
Multifamily
2,252,246
18,511
0.82
%
2,115,978
18,090
0.85
%
2,138,622
16,343
0.76
%
Commercial real estate owner occupied
1,100,944
10,755
0.98
%
981,904
10,913
1.11
%
797,319
9,882
1.24
%
Commercial real estate non-owner occupied
1,359,130
17,405
1.28
%
1,326,591
17,303
1.30
%
1,177,650
16,859
1.43
%
Construction
147,209
1,250
0.85
%
174,509
1,606
0.92
%
166,393
1,482
0.89
%
Total commercial loans and leases receivable
11,884,299
77,300
0.65
%
11,271,915
73,103
0.65
%
10,565,824
68,069
0.64
%
Consumer:
Residential
496,559
5,968
1.20
%
500,786
5,838
1.17
%
484,435
6,586
1.36
%
Manufactured housing
33,123
3,829
11.56
%
34,481
4,080
11.83
%
38,670
4,239
10.96
%
Installment
713,653
49,678
6.96
%
720,101
50,137
6.96
%
874,926
56,417
6.45
%
Total consumer loans receivable
1,243,335
59,475
4.78
%
1,255,368
60,055
4.78
%
1,398,031
67,242
4.81
%
Loans and leases receivable held for investment
13,127,634
136,775
1.04
%
12,527,283
133,158
1.06
%
11,963,855
135,311
1.13
%
Loans receivable, mortgage finance, at fair value
1,321,128
—
—
%
1,250,413
—
—
%
897,912
—
—
%
Loans held for sale
204,794
—
—
%
275,420
—
—
%
340,317
—
—
%
Total loans and leases portfolio
$
14,653,556
$
136,775
0.93
%
$
14,053,116
$
133,158
0.95
%
$
13,202,084
$
135,311
1.02
%
(1)
Includes PPP loans.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)
As of December 31, 2024
As of September 30, 2024
As of December 31, 2023
Loan type
Non accrual /NPLs
Total NPLs to total loans
Total reserves to total NPLs
Non accrual /NPLs
Total NPLs to total loans
Total reserves to total NPLs
Non accrual /NPLs
Total NPLs to total loans
Total reserves to total NPLs
Commercial:
Commercial & industrial, including specialized lending (1)
$
4,041
0.06
%
727.02
%
$
4,615
0.07
%
545.85
%
$
4,436
0.07
%
529.82
%
Multifamily
11,834
0.53
%
156.42
%
11,834
0.56
%
152.86
%
—
—
%
—
%
Commercial real estate owner occupied
8,090
0.73
%
132.94
%
8,613
0.88
%
126.70
%
5,869
0.74
%
168.38
%
Commercial real estate non-owner occupied
354
0.03
%
4916.67
%
763
0.06
%
2267.76
%
—
—
%
—
%
Construction
—
—
%
—
%
—
—
%
—
%
—
—
%
—
%
Total commercial loans and leases receivable
24,319
0.20
%
317.86
%
25,825
0.23
%
283.07
%
10,305
0.10
%
660.54
%
Consumer:
Residential
8,714
1.75
%
68.49
%
7,997
1.60
%
73.00
%
6,802
1.40
%
96.82
%
Manufactured housing
1,852
5.59
%
206.75
%
1,869
5.42
%
218.30
%
2,331
6.03
%
181.85
%
Installment
5,613
0.79
%
885.05
%
6,328
0.88
%
792.30
%
7,211
0.82
%
782.37
%
Total consumer loans receivable
16,179
1.30
%
367.61
%
16,194
1.29
%
370.85
%
16,344
1.17
%
411.42
%
Loans and leases receivable
40,498
0.31
%
337.73
%
42,019
0.34
%
316.90
%
26,649
0.22
%
507.75
%
Loans receivable, mortgage finance, at fair value
—
—
%
—
%
—
—
%
—
%
—
—
%
—
%
Loans held for sale
2,777
1.36
%
—
%
5,307
1.93
%
—
%
461
0.14
%
—
%
Total loans and leases portfolio
$
43,275
0.30
%
316.06
%
$
47,326
0.34
%
281.36
%
$
27,110
0.21
%
499.12
%
(1)
Includes PPP loans.
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)
Q4
Q3
Q2
Q1
Q4
Twelve Months Ended December 31,
2024
2024
2024
2024
2023
2024
2023
Loan type
Commercial & industrial, including specialized lending
$
3,653
$
5,056
$
5,665
$
3,672
$
5,282
$
18,046
$
8,443
Multifamily
—
2,167
1,433
473
127
4,073
3,574
Commercial real estate owner occupied
339
4
—
22
—
365
5
Commercial real estate non-owner occupied
145
—
—
—
(288
)
145
4,212
Construction
—
(3
)
(7
)
—
—
(10
)
(116
)
Residential
(18
)
(21
)
(20
)
18
(1
)
(41
)
34
Installment
10,493
9,841
11,640
13,783
12,202
45,757
52,883
Total net charge-offs (recoveries) from loans held for investment
$
14,612
$
17,044
$
18,711
$
17,968
$
17,322
$
68,335
$
69,035
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.
Twelve Months Ended
December 31,
Core Earnings and Adjusted Core Earnings - Customers BancorpQ4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
(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
$
23,266
$
0.71
$
42,937
$
1.31
$
54,300
$
1.66
$
45,926
$
1.40
$
58,223
$
1.79
$
166,429
$
5.09
$
235,448
$
7.32
Reconciling items (after tax):
Severance expense
1,198
0.04
540
0.02
1,928
0.06
—
—
473
0.01
3,666
0.11
1,251
0.04
Impairments on fixed assets and leases
—
—
—
—
—
—
—
—
—
—
—
—
98
0.00
Loss on sale of capital call lines of credit
—
—
—
—
—
—
—
—
—
—
—
—
3,914
0.12
Legal settlement
157
0.00
—
—
—
—
—
—
—
—
157
0.00
—
—
(Gains) losses on investment securities
20,035
0.62
(322
)
(0.01
)
561
0.02
57
0.00
(85
)
0.00
20,331
0.62
407
0.01
Derivative credit valuation adjustment
(306
)
(0.01
)
185
0.01
(44
)
0.00
169
0.01
267
0.01
4
0.00
219
0.01
Tax on surrender of bank-owned life insurance policies
—
—
—
—
—
—
—
—
—
—
—
—
4,141
0.13
FDIC special assessment
—
—
—
—
138
0.00
380
0.01
2,755
0.08
518
0.02
2,755
0.09
Unrealized (gain) on equity method investments
(292
)
(0.01
)
—
—
(8,316
)
(0.25
)
—
—
—
—
(8,608
)
(0.26
)
—
—
Unrealized losses on loans held for sale
110
0.00
498
0.02
—
—
—
—
—
—
608
0.02
—
—
Core earnings
$
44,168
$
1.36
$
43,838
$
1.34
$
48,567
$
1.49
$
46,532
$
1.42
$
61,633
$
1.90
$
183,105
$
5.60
$
248,233
$
7.72
One-time non-interest expense items recorded in 2024 (after-tax):
Deposit servicing fees prior to 2024
—
—
—
—
—
—
5,405
0.16
—
—
5,405
0.17
—
—
FDIC premiums prior to 2024
—
—
—
—
—
—
3,200
0.10
—
—
3,200
0.10
—
—
Non-income taxes prior to 2024
—
—
(2,457
)
(0.07
)
—
—
—
—
—
—
(2,457
)
(0.08
)
—
—
Total one-time non-interest expense items
—
—
(2,457
)
(0.07
)
—
—
8,605
0.26
—
—
6,148
0.19
—
—
Adjusted core earnings (adjusted for one-time non-interest expense items)
$
44,168
$
1.36
$
41,381
$
1.26
$
48,567
$
1.49
$
55,137
$
1.68
$
61,633
$
1.90
$
189,253
$
5.78
$
248,233
$
7.72
Core Return on Average Assets and Adjusted Core Return on Average Assets - Customers Bancorp
Twelve Months Ended
December 31,
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
GAAP net income
$
26,915
$
46,743
$
58,085
$
49,726
$
62,092
$
181,469
$
250,143
Reconciling items (after tax):
Severance expense
1,198
540
1,928
—
473
3,666
1,251
Impairments on fixed assets and leases
—
—
—
—
—
—
98
Loss on sale of capital call lines of credit
—
—
—
—
—
—
3,914
Legal settlement
157
—
—
—
—
157
—
(Gains) losses on investment securities
20,035
(322
)
561
57
(85
)
20,331
407
Derivative credit valuation adjustment
(306
)
185
(44
)
169
267
4
219
Tax on surrender of bank-owned life insurance policies
—
—
—
—
—
—
4,141
FDIC special assessment
—
—
138
380
2,755
518
2,755
Unrealized (gain) on equity method investments
(292
)
—
(8,316
)
—
—
(8,608
)
—
Unrealized losses on loans held for sale
110
498
—
—
—
608
—
Core net income
$
47,817
$
47,644
$
52,352
$
50,332
$
65,502
$
198,145
$
262,928
One-time non-interest expense items recorded in 2024 (after-tax):
Deposit servicing fees prior to 2024
—
—
—
5,405
—
5,405
—
FDIC premiums prior to 2024
—
—
—
3,200
—
3,200
—
Non-income taxes prior to 2024
—
(2,457
)
—
—
—
(2,457
)
—
Total one-time non-interest expense items
—
(2,457
)
—
8,605
—
6,148
—
Adjusted core net income (adjusted for one-time non-interest expense items)
$
47,817
$
45,187
$
52,352
$
58,937
$
65,502
$
204,293
$
262,928
Average total assets
$
22,179,970
$
21,230,404
$
20,985,203
$
21,335,229
$
21,252,273
$
21,434,190
$
21,486,383
Core return on average assets
0.86
%
0.89
%
1.00
%
0.95
%
1.22
%
0.92
%
1.22
%
Adjusted core return on average assets (adjusted for one-time non-interest expense items)
0.86
%
0.85
%
1.00
%
1.11
%
1.22
%
0.95
%
1.22
%
Core Pre-Tax Pre-Provision Net Income and ROAA and Adjusted Core Pre-Tax Pre-Provision Net Income and ROAA - Customers Bancorp
Twelve Months Ended
December 31,
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
GAAP net income
$
26,915
$
46,743
$
58,085
$
49,726
$
62,092
$
181,469
$
250,143
Reconciling items:
Income tax expense (benefit)
8,946
(725
)
19,032
15,651
21,796
42,904
80,597
Provision (benefit) for credit losses
21,194
17,066
18,121
17,070
13,523
73,451
74,611
Provision (benefit) for credit losses on unfunded commitments
(664
)
642
1,594
430
(136
)
2,002
(112
)
Severance expense
1,595
659
2,560
—
639
4,814
1,630
Impairments on fixed assets and leases
—
—
—
—
—
—
124
Loss on sale of capital call lines of credit
—
—
—
—
—
—
5,037
Legal settlement
209
—
—
—
—
209
—
(Gains) losses on investment securities
26,678
(394
)
744
75
(114
)
27,103
512
Derivative credit valuation adjustment
(407
)
226
(58
)
222
361
(17
)
298
FDIC special assessment
—
—
183
500
3,723
683
3,723
Unrealized (gain) on equity method investments
(389
)
—
(11,041
)
—
—
(11,430
)
—
Unrealized losses on loans held for sale
147
607
—
—
—
754
—
Core pre-tax pre-provision net income
$
84,224
$
64,824
$
89,220
$
83,674
$
101,884
$
321,942
$
416,563
One-time non-interest expense items recorded in 2024 (after-tax):
Deposit servicing fees prior to 2024
—
—
—
7,106
—
7,106
—
FDIC premiums prior to 2024
—
—
—
4,208
—
4,208
—
Non-income taxes prior to 2024
—
(2,997
)
—
—
—
(2,997
)
—
Total one-time non-interest expense items
—
(2,997
)
—
11,314
—
8,317
—
Adjusted core pre-tax pre-provision net income (adjusted for one-time non-interest expense items)
$
84,224
$
61,827
$
89,220
$
94,988
$
101,884
$
330,259
$
416,563
Average total assets
$
22,179,970
$
21,230,404
$
20,985,203
$
21,335,229
$
21,252,273
$
21,434,190
$
21,486,383
Core pre-tax pre-provision ROAA
1.51
%
1.21
%
1.71
%
1.58
%
1.90
%
1.50
%
1.94
%
Adjusted core pre-tax pre-provision ROAA (adjusted for one-time non-interest expense items)
1.51
%
1.16
%
1.71
%
1.79
%
1.90
%
1.54
%
1.94
%
Core Return on Average Common Equity and Adjusted Core Return on Average Common Equity - Customers Bancorp
Twelve Months Ended
December 31,
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
GAAP net income to common shareholders
$
23,266
$
42,937
$
54,300
$
45,926
$
58,223
$
166,429
$
235,448
Reconciling items (after tax):
Severance expense
1,198
540
1,928
—
473
3,666
1,251
Impairments on fixed assets and leases
—
—
—
—
—
—
98
Loss on sale of capital call lines of credit
—
—
—
—
—
—
3,914
Legal settlement
157
—
—
—
—
157
—
(Gains) losses on investment securities
20,035
(322
)
561
57
(85
)
20,331
407
Derivative credit valuation adjustment
(306
)
185
(44
)
169
267
4
219
Tax on surrender of bank-owned life insurance policies
—
—
—
—
—
—
4,141
FDIC special assessment
—
—
138
380
2,755
518
2,755
Unrealized (gain) on equity method investments
(292
)
—
(8,316
)
—
—
(8,608
)
—
Unrealized losses on loans held for sale
110
498
—
—
—
608
—
Core earnings
$
44,168
$
43,838
$
48,567
$
46,532
$
61,633
$
183,105
$
248,233
One-time non-interest expense items recorded in 2024 (after-tax):
Deposit servicing fees prior to 2024
—
—
—
5,405
—
5,405
—
FDIC premiums prior to 2024
—
—
—
3,200
—
3,200
—
Non-income taxes prior to 2024
—
(2,457
)
—
—
—
(2,457
)
—
Total one-time non-interest expense items
—
(2,457
)
—
8,605
—
6,148
—
Adjusted core earnings (adjusted for one-time non-interest expense items)
$
44,168
$
41,381
$
48,567
$
55,137
$
61,633
$
189,253
$
248,233
Average total common shareholders’ equity
$
1,683,838
$
1,636,242
$
1,576,595
$
1,529,211
$
1,449,728
$
1,606,764
$
1,358,564
Core return on average common equity
10.44
%
10.66
%
12.39
%
12.24
%
16.87
%
11.40
%
18.27
%
Adjusted core return on average common equity (adjusted for one-time non-interest expense items)
10.44
%
10.06
%
12.39
%
14.50
%
16.87
%
11.78
%
18.27
%
Core Pre-Tax Pre-Provision ROCE and Adjusted Core Pre-Tax Pre-Provision ROCE - Customers Bancorp
Twelve Months Ended
December 31,
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
GAAP net income to common shareholders
$
23,266
$
42,937
$
54,300
$
45,926
$
58,223
$
166,429
$
235,448
Reconciling items:
Income tax expense (benefit)
8,946
(725
)
19,032
15,651
21,796
42,904
80,597
Provision (benefit) for credit losses
21,194
17,066
18,121
17,070
13,523
73,451
74,611
Provision (benefit) for credit losses on unfunded commitments
(664
)
642
1,594
430
(136
)
2,002
(112
)
Severance expense
1,595
659
2,560
—
639
4,814
1,630
Impairments on fixed assets and leases
—
—
—
—
—
—
124
Loss on sale of capital call lines of credit
—
—
—
—
—
—
5,037
Legal settlement
209
—
—
—
—
209
—
(Gains) losses on investment securities
26,678
(394
)
744
75
(114
)
27,103
512
Derivative credit valuation adjustment
(407
)
226
(58
)
222
361
(17
)
298
FDIC special assessment
—
—
183
500
3,723
683
3,723
Unrealized (gain) on equity method investments
(389
)
—
(11,041
)
—
—
(11,430
)
—
Unrealized losses on loans held for sale
147
607
—
—
—
754
—
Core pre-tax pre-provision net income available to common shareholders
$
80,575
$
61,018
$
85,435
$
79,874
$
98,015
$
306,902
$
401,868
One-time non-interest expense items recorded in 2024 (after-tax):
Deposit servicing fees prior to 2024
—
—
—
7,106
—
7,106
—
FDIC premiums prior to 2024
—
—
—
4,208
—
4,208
—
Non-income taxes prior to 2024
—
(2,997
)
—
—
—
(2,997
)
—
Total one-time non-interest expense items
—
(2,997
)
—
11,314
—
8,317
—
Adjusted core pre-tax pre-provision net income available to common shareholders
$
80,575
$
58,021
$
85,435
$
91,188
$
98,015
$
315,219
$
401,868
Average total common shareholders’ equity
$
1,683,838
$
1,636,242
$
1,576,595
$
1,529,211
$
1,449,728
$
1,606,764
$
1,358,564
Core pre-tax pre-provision ROCE
19.04
%
14.84
%
21.79
%
21.01
%
26.82
%
19.10
%
29.58
%
Adjusted core pre-tax pre-provision ROCE (adjusted for one-time non-interest expense items)
19.04
%
14.11
%
21.79
%
23.98
%
26.82
%
19.62
%
29.58
%
Core Efficiency Ratio and Adjusted Core Efficiency Ratio - Customers Bancorp
Twelve Months Ended
December 31,
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
GAAP net interest income
$
167,821
$
158,545
$
167,653
$
160,385
$
172,506
$
654,404
$
687,449
GAAP non-interest income
$
(391
)
$
8,557
$
31,037
$
21,231
$
18,672
$
60,434
$
70,565
Loss on sale of capital call lines of credit
—
—
—
—
—
—
5,037
(Gains) losses on investment securities
26,678
(394
)
744
75
(114
)
27,103
512
Derivative credit valuation adjustment
(407
)
226
(58
)
222
361
(17
)
298
Unrealized (gain) on equity method investments
(389
)
—
(11,041
)
—
—
(11,430
)
—
Unrealized losses on loans held for sale
147
607
—
—
—
754
—
Core non-interest income
25,638
8,996
20,682
21,528
18,919
76,844
76,412
Core revenue
$
193,459
$
167,541
$
188,335
$
181,913
$
191,425
$
731,248
$
763,861
GAAP non-interest expense
$
110,375
$
104,018
$
103,452
$
99,169
$
93,767
$
417,014
$
352,663
Severance expense
(1,595
)
(659
)
(2,560
)
—
(639
)
(4,814
)
(1,630
)
Impairments on fixed assets and leases
—
—
—
—
—
—
(124
)
FDIC special assessment
—
—
(183
)
(500
)
(3,723
)
(683
)
(3,723
)
Legal settlement
(209
)
—
—
—
—
(209
)
—
Core non-interest expense
$
108,571
$
103,359
$
100,709
$
98,669
$
89,405
$
411,308
$
347,186
One-time non-interest expense items recorded in 2024:
Deposit servicing fees prior to 2024
—
—
—
(7,106
)
—
(7,106
)
—
FDIC premiums prior to 2024
—
—
—
(4,208
)
—
(4,208
)
—
Non-income taxes prior to 2024
—
2,997
—
—
—
2,997
—
Total one-time non-interest expense items
—
2,997
—
(11,314
)
—
(8,317
)
—
Adjusted core non-interest expense
$
108,571
$
106,356
$
100,709
$
87,355
$
89,405
$
402,991
$
347,186
Core efficiency ratio (1)
56.12
%
61.69
%
53.47
%
54.24
%
46.70
%
56.25
%
45.45
%
Adjusted core efficiency ratio (adjusted for one-time non-interest expense items) (2)
56.12
%
63.48
%
53.47
%
48.02
%
46.70
%
55.11
%
45.45
%
(1)
Core efficiency ratio calculated as core non-interest expense divided by core revenue.
(2)
Adjusted core efficiency ratio calculated as adjusted core non-interest expense divided by core revenue.
Core Non-Interest Expense to Average Total Assets and Adjusted Core Non-Interest Expense to Average Total Assets- Customers Bancorp
Twelve Months Ended
December 31,
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
2024
2023
GAAP non-interest expense
$
110,375
$
104,018
$
103,452
$
99,169
$
93,767
$
417,014
$
352,663
Severance expense
(1,595
)
(659
)
(2,560
)
—
(639
)
(4,814
)
(1,630
)
Impairments on fixed assets and leases
—
—
—
—
—
—
(124
)
FDIC special assessment
—
—
(183
)
(500
)
(3,723
)
(683
)
(3,723
)
Legal settlement
(209
)
—
—
—
—
(209
)
—
Core non-interest expense
$
108,571
$
103,359
$
100,709
$
98,669
$
89,405
$
411,308
$
347,186
One-time non-interest expense items recorded in 2024:
Deposit servicing fees prior to 2024
—
—
—
(7,106
)
—
(7,106
)
—
FDIC premiums prior to 2024
—
—
—
(4,208
)
—
(4,208
)
—
Non-income taxes prior to 2024
—
2,997
—
—
—
2,997
—
Total one-time non-interest expense items
—
2,997
—
(11,314
)
—
(8,317
)
—
Adjusted core non-interest expense
$
108,571
$
106,356
$
100,709
$
87,355
$
89,405
$
402,991
$
347,186
Average total assets
$
22,179,970
$
21,230,404
$
20,985,203
$
21,335,229
$
21,252,273
$
21,434,190
$
21,486,383
Core non-interest expense to average total assets
1.95
%
1.94
%
1.93
%
1.86
%
1.67
%
1.92
%
1.62
%
Adjusted core non-interest expense to average total assets (adjusted for one-time non-interest expense items)
1.95
%
1.99
%
1.93
%
1.65
%
1.67
%
1.88
%
1.62
%
Tangible Common Equity to Tangible Assets - Customers Bancorp
(Dollars in thousands, except per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
GAAP total shareholders’ equity
$
1,836,683
$
1,801,180
$
1,746,865
$
1,691,617
$
1,638,394
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
$
1,695,260
$
1,659,757
$
1,605,442
$
1,550,194
$
1,496,971
GAAP total assets
$
22,308,241
$
21,456,082
$
20,942,975
$
21,347,367
$
21,316,265
Reconciling items:
Goodwill and other intangibles
(3,629
)
(3,629
)
(3,629
)
(3,629
)
(3,629
)
Tangible assets
$
22,304,612
$
21,452,453
$
20,939,346
$
21,343,738
$
21,312,636
Tangible common equity to tangible assets
7.6
%
7.7
%
7.7
%
7.3
%
7.0
%
Tangible Book Value per Common Share - Customers Bancorp
(Dollars in thousands, except share and per share data)
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
GAAP total shareholders’ equity
$
1,836,683
$
1,801,180
$
1,746,865
$
1,691,617
$
1,638,394
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
$
1,695,260
$
1,659,757
$
1,605,442
$
1,550,194
$
1,496,971
Common shares outstanding
31,346,507
31,342,107
31,667,655
31,521,931
31,440,906
Tangible book value per common share
$
54.08
$
52.96
$
50.70
$
49.18
$
47.61
View source version on businesswire.com: https://www.businesswire.com/news/home/20250122783498/en/
Jordan Baucum, Head of Corporate Communications 951-608-8314
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