CUBI

CUSTOMERS BANCORP INC

Financial Services | Small Cap

$1.28

EPS Forecast

$183.5

Revenue Forecast

Announcing earnings for the quarter ending 2024-12-31 soon
EX-99.1 2 q419pressrelease.htm EX-99.1 Document

Exhibit 99.1
bancorpa261.jpg 
Customers Bancorp, Inc.
1015 Penn Avenue
Wyomissing, PA 19610
Contacts:
Jay Sidhu, Chairman & CEO 610-935-8693
Richard Ehst, President & COO 610-917-3263
Carla Leibold, CFO 484-923-8802
Sam Sidhu, Head of Corporate Development 212-843-2485
Customers Bancorp Reports Full Year 2019 Net Income up 13% Over Full Year 2018 and Fourth Quarter 2019 Net Income up 68% Over Fourth Quarter 2018

Record Q4 2019 GAAP Earnings up $10 million Over Q4 2018, and Core Earnings up $7 million
Year-end Assets Exceed $10 billion as CUBI Resumes Growth Strategy and
Reaffirms Target of $3 Core EPS for 2020 and Sets Goal of $6 Core EPS for 2025
•Q4 2019 GAAP Earnings Per Diluted Share of $0.75 and Q4 2019 Core Earnings Per Diluted Share of $0.76
•Q4 2019 Return on Average Assets of 0.97% up 37% Over Q4 2018 and Q4 2019 Pre-Tax and Pre-Provision Adjusted Return on Average Assets of 1.59% up 42% Over Q4 2018
•Q4 2019 Net Interest Margin Expands 6 Basis Points From Q3 2019 to 2.89%
•Customers Bank Business Banking Segment Q4 2019 Net Income Increases 27% Over Q4 2018. BankMobile Segment Moves From a Loss of $3.3 Million in Q4 2018 to a Profit of $1.7 Million in Q4 2019
•CUBI Stock Price up 31% in 2019, Trading at only 89% of Book Value and 91% of Tangible Book Value, and 8.4x the 2020 Consensus EPS Estimate of $2.84, at Year-end 2019

Wyomissing, PA, January 22, 2020 - Customers Bancorp, Inc. (NYSE: CUBI) the parent company of Customers Bank and its operating division BankMobile (collectively “Customers” or "CUBI"), today reported record fourth quarter 2019 ("Q4 2019") net income to common shareholders of $23.9 million, or $0.75 per diluted share, up from $23.5 million in third quarter 2019 ("Q3 2019") and $14.2 million in fourth quarter 2018 ("Q4 2018"). Core earnings for Q4 2019 totaled $24.3 million, or $0.76 per diluted share, up from $23.0 million in Q3 2019 and $17.0 million in Q4 2018 (non-GAAP measures). Q4 2019 core earnings per diluted share was up 43% over Q4 2018 core earnings per diluted share (non-GAAP measures). Net interest margin, tax equivalent ("NIM") (a non-GAAP measure), expanded 6 basis points during Q4 2019 to 2.89%. Full year 2019 ("FY 2019") net income to common shareholders was $64.9 million, or $2.05 per diluted share, up from full year 2018 ("FY 2018") net income to common shareholders of $57.2 million, or $1.78 per diluted share. Core earnings for FY 2019 totaled $71.2 million, or $2.25 per diluted share, compared to core earnings of $78.5 million, or $2.43 per diluted share,
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for FY 2018 (non-GAAP measures). FY 2019 NIM expanded 17 basis points to 2.75% from FY 2018 NIM of 2.58% (non-GAAP measures).
(Dollars in thousands, except earnings per share amounts)
Net Income to Common Shareholders (GAAP)
Q4 2019EPSQ4 2018EPSFY 2019EPSFY 2018EPS
Customers Bank Business Banking$22,218  $0.70  $17,521  $0.55  $69,751  $2.20  $70,698  $2.19  
BankMobile1,693  0.05  (3,274) (0.10) (4,883) (0.15) (13,462) (0.42) 
Consolidated$23,911  $0.75  $14,247  $0.44  $64,868  $2.05  $57,236  $1.78  
Core Earnings (Non-GAAP Measure)
Q4 2019EPSQ4 2018EPSFY 2019EPSFY 2018EPS
Customers Bank Business Banking$22,503  $0.71  $19,911  $0.62  $75,235  $2.38  $88,633  $2.75  
BankMobile1,769  0.06  (2,919) (0.09) (4,034) (0.13) (10,150) (0.31) 
Consolidated$24,272  $0.76  $16,992  $0.53  $71,202  $2.25  $78,483  $2.43  

•Total assets were $11.5 billion at December 31, 2019, compared to $11.7 billion at September 30, 2019 and $9.8 billion at December 31, 2018. Total assets at December 31, 2019 reflected a change in management's strategy to expand beyond $10 billion in assets during the quarter.
•Loan mix improved year-over-year, as commercial and industrial ("C&I") loans and leases, excluding commercial loans to mortgage companies, increased $487 million, or 26%. Commercial loans to mortgage companies increased $844 million, or 58%, year-over-year as the continued low interest rate environment resulted in a higher 2019 year-end balance than historically experienced. Other consumer loans increased $1.1 billion year-over-year. Multi-family loans decreased $893 million, or 27%, year-over-year, consistent with management's strategy to reduce its overall exposure in this loan portfolio.
•Total deposits increased $1.5 billion, or 21%, year-over-year, which included a $653 million, or 34%, increase in demand deposits.
•The BankMobile segment reported Q4 2019 GAAP earnings per diluted share of $0.05, an increase of $0.15 from a loss per diluted share of $(0.10) in Q4 2018 and the second consecutive quarter of segment profitability.
•NIM (a non-GAAP measure) expanded 6 basis points from Q3 2019 to 2.89% in Q4 2019 and up 32 basis points over Q4 2018; this marks our fifth consecutive quarter of NIM expansion from the trough of 2.47% reported in Q3 2018.
•Core earnings in Q4 2019 was impacted by a $0.8 million ($0.02 per diluted share) loss realized from the sale of non-qualifying ("non-QM") residential mortgage loans and a $0.3 million ($0.01 per diluted share) gain on investment securities.
•Core earnings in FY 2019 was impacted by a loss upon acquisition of interest-only GNMA securities of $7.5 million ($0.18 per diluted share), $2.3 million ($0.06 per diluted share) of gains on investment securities, $2 million ($0.05 per diluted share) of legal reserve accruals, a $0.8 million ($0.02 per diluted share) loss realized from the sale of non-QM residential mortgage loans and $0.5 million ($0.01 per diluted share) of severance expense.
•The return on average assets ("ROAA") was 0.97% in Q4 2019, up from 0.95% in Q3 2019 and 0.71% in Q4 2018. Core ROAA (a non-GAAP measure) was 0.98% in Q4 2019, up from 0.94% in Q3 2019 and 0.82% in Q4 2018.
•The pre-tax and pre-provision adjusted ROAA (a non-GAAP measure) for Q4 2019 was 1.59%, up from 1.38% in Q3 2019 and 1.12% in Q4 2018.
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•The return on average common equity ("ROCE") was 11.58 % in Q4 2019 compared to 11.81% in Q3 2019 and up from 7.58% in Q4 2018. Core ROCE (a non-GAAP measure) was 11.76% in Q4 2019, up from 11.59% in Q3 2019 and 9.05% in Q4 2018.
•Asset quality remains strong. Non-performing loans were only 0.21% of total loans and leases at December 31, 2019 and reserves equaled 265% of non-performing loans. Net charge-offs were only $4.4 million, or 18 basis points of average total loans and leases on an annualized basis, during Q4 2019.
•Reflecting changes in loan mix, the provision for loan losses was $9.7 million in Q4 2019, compared to $4.4 million in Q3 2019 and $1.4 million in Q4 2018.
•Q4 2019 book value per common share was $26.66 and tangible book value per common share (a non-GAAP measure) was $26.17. Tangible book value per common share has increased at a compound annual growth rate of about 10% over the past five years.
•On December 9, 2019, Customers Bancorp completed a public offering of $74.8 million of its 15-year fixed rate 5.375% Subordinated Notes due 2034, which qualifies as Tier 2 capital. $50 million of the net proceeds from that offering were contributed to Customers Bank as qualifying Tier 1 capital.
•Based on the January 17, 2020 closing price of $22.56, Customers Bancorp common equity is trading at 0.86x tangible book value of $26.17 (a non-GAAP measure) and 7.9x the 2020 consensus EPS estimate of $2.84.

Jay Sidhu, CEO and Chairman of Customers Bancorp, Inc. stated, "We are pleased to report that we ended Q4 2019 with record earnings, superior asset quality, strong control in expenses, and our fifth consecutive quarter of net interest margin expansion, a reflection of improved loan mix, core deposit growth, disciplined pricing strategy and absolute focus on efficiency improvement and risk management. We are also excited that BankMobile attained profitability for the second consecutive quarter and its White Label banking strategy has already generated over $80 million of very low-cost deposits to Customers, a number that is expected to grow over time."





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Status Report on Strategic Priorities Articulated at Analyst Day in October 2018

Improve Profitability: Target a 2.75% NIM by Q4 2019 and a 1.25% Core ROAA in 2-3 years

As stated during our 2018 Analysts Day in October 2018, Customers expects to remain focused on growing its core businesses, while improving margins, capital and profitability. Through favorable mix shifts in both assets and liabilities, while maintaining its superior credit quality culture and extreme focus on productivity improvement, Customers improved the overall quality of its balance sheet and deposit franchise, expanded its net interest margin, enhanced liquidity and remains relatively neutral to interest rate changes. The strategies articulated at the 2018 Analysts Day in October 2018 and subsequent 2019 progress are summarized below:

•
Target ROAA in top quartile of peer group, which we expect will equate to a ROAA of 1.25% or higher over the next 2-3 years. ROAA was 0.97% in Q4 2019, up significantly from Q4 2018 ROAA of 0.71%. The pre-tax and pre-provision adjusted ROAA (a non-GAAP measure) was 1.59% for Q4 2019, up from 1.12% in Q4 2018.
•
Achieve NIM expansion to 2.75% or greater by Q4 2019, with a full year 2019 NIM above 2.70%, through an expected shift in asset and funding mix. Actual results are materially better. NIM was 2.89% in Q4 2019, up from 2.83% in Q3 2019 and 2.57% in Q4 2018. FY 2019 NIM was 2.75%, up from FY 2018 NIM of 2.58%. Since Q3 2018, Customers effectively restructured its balance sheet resulting in NIM expansion of 42 basis points (non-GAAP measures).
•
BankMobile growth and maturity was expected with profitability achieved by year end 2019. BankMobile reached profitability in Q3 2019 and maintained profitability in Q4 2019. BankMobile is expected to remain profitable in 2020.
•
Expense control. Customers' efficiency ratio was 56.98% in Q4 2019, down from 61.58% in Q3 2019 and 69.99% in Q4 2018. Customers' efficiency ratio for FY 2019 was 65.15%, down from 65.35% for FY 2018.
•
Growth in core deposits and good quality higher-yielding loans. Demand Deposit Accounts ("DDAs") grew 34% year-over-year. Lower yielding multi-family loans decreased by $893 million, or 27%, year-over-year and were replaced by higher yielding C&I loans and leases and other consumer loans, which had net growth of $487 million and $1.1 billion year-over-year, respectively.
•
Maintain strong credit quality and superior risk management. Non-Performing Loans ("NPLs") were only 0.21% of total loans and leases at December 31, 2019. Reserves to NPLs at December 31, 2019 were 265%, an improvement from 147% at December 31, 2018. The Bank is relatively neutral to interest rate changes at December 31, 2019. We remain very focused on a strong Risk Management culture throughout the company.
•
Evaluate opportunities to redeem our preferred stock as it becomes callable. Redeeming all of the preferred stock as it becomes callable would result in an increase to our diluted earnings per share by approximately $0.46 annually. Customers will continue to analyze the best ways to execute this strategy over the next two years, subject to liquidity and capital needs.

Focus on Capital Allocation

The tangible common equity to tangible assets ratio (a non-GAAP measure) was 7.13% and the estimated common equity Tier 1 capital to risk-weighted assets ratio was 8.00% at December 31, 2019, while the leverage ratio was 9.26%. Capital ratios increased from Q3 2019. Customers Bancorp, Inc. also raised $74.8 million in 15-year fixed rate subordinated notes during Q4 2019, $50.0 million of which was contributed to Customers Bank as qualifying Tier 1 capital with the remaining net proceeds retained by Customers Bancorp increasing its liquidity position. Mr. Sidhu stated, "As capital builds, we will evaluate the best uses for our excess capital, which may include calling our preferred equity as it becomes callable, starting in 2020."

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BankMobile Segment Update

BankMobile, a division of Customers Bank, operates a branchless digital bank offering low cost banking services to over two million Americans, with approximately 1.1 million active deposit customers. Customers reported in Q4 2018 that it expects to retain BankMobile for up to a 2-3 year period, but will regularly evaluate the best options for BankMobile.

BankMobile deposits averaged $543 million in Q4 2019, with an average cost of just 0.21%, and Q4 2019 revenues were $22.3 million and FY 2019 revenues were $86.4 million. The Q4 2019 segment earnings increased to $1.7 million, or $0.05 per diluted share, compared to a net loss of $3.3 million, or $(0.10) per diluted share in Q4 2018, principally due to an increase in net interest income, partially offset by an increase in provision for loan losses. BankMobile had its second consecutive quarter of profitability and is expected to remain profitable in 2020. "We remain in the investment mode for our white label and other unique Banking as a Service ("BaaS") strategic opportunities for BankMobile," stated Luvleen Sidhu, President and Chief Executive Officer of BankMobile. "The profitability improvement has come from increasing revenues from our student banking business while watching our expenses. We are very optimistic about our longer term opportunities to supplement this profitability and growth with continued expansion of our BaaS business," Luvleen Sidhu concluded. "Since Customers Bancorp, Inc. decided to cross the $10 billion asset mark at December 31, 2019, Customers will explore all strategic options for BankMobile in 2020," concluded Jay Sidhu, Customers Bancorp, Inc. CEO and Chairman.

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Q4 2019 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended December 31, 2019, the preceding four quarters, and the twelve months ended December 31, 2019 and 2018, respectively:
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED
(Dollars in thousands, except per share data and stock price data)Q4Q3Q2Q1Q4Twelve Months Ended December 31,
2019201920192019201820192018
GAAP Profitability Metrics:
Net income available to common shareholders$23,911  $23,451  $5,681  $11,825  $14,247  $64,868  $57,236  
Per share amounts:
Earnings per share - basic$0.76  $0.75  $0.18  $0.38  $0.45  $2.08  $1.81  
Earnings per share - diluted$0.75  $0.74  $0.18  $0.38  $0.44  $2.05  $1.78  
Book value per common share (1)
$26.66  $25.66  $24.80  $24.44  $23.85  $26.66  $23.85  
CUBI stock price (1)
$23.81  $20.74  $21.00  $18.31  $18.20  $23.81  $18.20  
CUBI stock price as % of book value (1)
89 %81 %85 %75 %76 %89 %76 %
Average shares outstanding - basic31,306,813  31,223,777  31,154,292  31,047,191  31,616,740  31,183,841  31,570,118  
Average shares outstanding - diluted31,876,341  31,644,728  31,625,741  31,482,867  32,051,030  31,646,216  32,233,098  
Shares outstanding (1)
31,336,791  31,245,776  31,202,023  31,131,247  31,003,028  31,336,791  31,003,028  
Return on average assets ("ROAA")0.97 %0.95 %0.36 %0.64 %0.71 %0.74 %0.69 %
Return on average common equity ("ROCE")11.58 %  11.81 %2.96 %6.38 %7.58 %8.30 %7.90 %
Efficiency ratio56.98 %  61.58 %77.32 %68.32 %69.99 %65.15 %65.35 %
Non-GAAP Profitability Metrics (2):
Core earnings$24,272  $23,024  $12,083  $11,823  $16,992  $71,202  $78,483  
Per share amounts:
Core earnings per share - diluted$0.76  $0.73  $0.38  $0.38  $0.53  $2.25  $2.43  
Tangible book value per common share (1)
$26.17  $25.16  $24.30  $23.92  $23.32  $26.17  $23.32  
CUBI stock price as % of tangible book value (1)
91 %82 %86 %77 %78 %91 %78 %
Net interest margin, tax equivalent 2.89 %2.83 %2.64 %2.59 %2.57 %2.75 %2.58 %
Tangible common equity to tangible assets (1)
7.13 %6.71 %6.79 %7.35 %7.36 %7.13 %7.36 %
Core ROAA0.98 %0.94 %0.61 %0.64 %0.82 %0.80 %0.89 %
Core ROCE11.76 %11.59 %6.31 %6.38 %9.05 %9.11 %10.83 %
Adjusted pre-tax pre-provision net income$45,238  $39,178  $25,446  $25,036  $27,957  $134,895  $124,410  
Adjusted ROAA - pre-tax and pre-provision1.59 %1.38 %0.98 %1.04 %1.12 %1.26 %1.19 %
Adjusted ROCE - pre-tax and pre-provision20.16 %17.91 %11.39 %11.57 %12.96 %15.40 %15.18 %
Core efficiency ratio56.45 %59.51 %69.90 %68.32 %66.18 %62.96 %63.23 %
Asset Quality:
Net charge-offs $4,362  $1,761  $637  $1,060  $2,154  $7,821  $3,685  
Annualized net charge-offs to average total loans and leases0.18 %0.07 %0.03 %0.05 %0.10 %0.08 %0.04 %
Non-performing loans ("NPLs") to total loans and leases (1)
0.21 %0.17 %0.15 %0.26 %0.32 %0.21 %0.32 %
Reserves to NPLs (1)
264.67 %290.38 %330.36 %194.15 %147.16 %264.67 %147.16 %
Regulatory Ratios (3):
Common equity Tier 1 capital to risk-weighted assets8.00 %7.81 %8.04 %8.91 %8.96 %8.00 %8.96 %
Tier 1 capital to risk-weighted assets 10.11 %9.95 %10.32 %11.47 %11.58 %10.11 %11.58 %
Total capital to risk-weighted assets 12.21 %11.36 %11.76 %12.92 %13.00 %12.21 %13.00 %
Tier 1 capital to average assets (leverage ratio) 9.26 %9.01 %9.51 %10.01 %9.66 %9.26 %9.66 %
(1) Metric is a spot balance for the last day of each quarter presented.
(2) Non-GAAP measures exclude investment securities gains and losses, severance expense, merger and acquisition-related expenses, losses realized from the sale of lower-yielding multi-family loans, losses realized from the sale of non-QM residential mortgage loans, loss upon acquisition of interest-only GNMA securities, legal reserves and goodwill and intangible assets. These notable items are not included in Customers' disclosures of core earnings and other core profitability metrics. Please note that not each of the aforementioned adjustments affected the reported amount in each of the periods presented. 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 2019.

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Net Interest Income
FY 2019 net interest income was $277.3 million, up almost $20 million from $257.9 million for FY 2018. Net interest income totaled $77.6 million in Q4 2019, an increase of $1.9 million from Q3 2019, primarily due to an increase in the average balance of non-interest bearing deposits of about $150 million and a 16 basis point decline in the cost of interest-bearing liabilities. Compared to Q3 2019, total loan yields decreased 11 basis points to 4.68%. The cost of interest-bearing deposits in Q4 2019 decreased by 18 basis points due to two Federal Reserve interest rate cuts in September 2019 and October 2019. Borrowing costs increased 5 basis points to 2.91% due to the issuance of $25 million in five-year 4.5% senior notes in September 2019 and $74.8 million in 15-year 5.375% subordinated notes in December 2019, partially offset by two Federal Reserve interest rate cuts in September 2019 and October 2019.
Q4 2019 net interest income increased $16.1 million from Q4 2018, primarily due to 32 basis points of NIM (a non-GAAP measure) expansion and a $1.2 billion increase in average interest-earning assets. Compared to Q4 2018, total loan yields increased 31 basis points to 4.68%. Given Federal Reserve interest rate hikes in 2018 and interest rate cuts in the second half of 2019, the cost of interest-bearing liabilities remained flat at 2.17%.
Total loans and leases increased $1.5 billion, or 17.6%, to $10.1 billion at December 31, 2019 compared to the year-ago period. Mortgage warehouse loans increased $844 million to $2.3 billion, C&I loans and leases increased $487 million to $2.4 billion, commercial real estate non-owner occupied loans increased $98 million to $1.2 billion and other consumer loans increased $1.1 billion to $1.2 billion. These increases were offset in part by planned decreases in multi-family loans of $893 million to $2.4 billion and residential mortgages of $190 million to $378 million.
Total deposits increased $1.5 billion, or 21.1%, to $8.6 billion at December 31, 2019 compared to the year-ago period. Total demand deposits increased $653 million, or 33.9%, to $2.6 billion, savings deposits increased $535 million, or 139.0%, to $919 million, and money market deposits increased $385 million, or 12.4%, to $3.5 billion. These increases were offset in part by a decrease in time deposits of $66 million, or 3.8%, to $1.7 billion. In July 2018, Customers launched a new digital, on-line savings banking product with a goal of gathering retail deposits. At December 31, 2019, this new product generated $863 million in retail deposits, an increase of $330 million since September 30, 2019.

Provision, Credit Quality and Risk Management

The provision for loan and lease losses totaled $24.2 million for FY 2019, up from $5.6 million in FY 2018, while NPLs to total loans and leases improved to 0.21% at December 31, 2019 from 0.32% at December 31, 2018. The provision for loan and lease losses totaled $9.7 million in Q4 2019, compared to $4.4 million in Q3 2019 and $1.4 million in Q4 2018. The Q4 2019 provision expense included $5.0 million for quarter-over-quarter changes in the mix of the loan portfolio and $0.5 million for specifically identified loans. Net charge-offs for Q4 2019 were $4.4 million, or 18 basis points of average loans and leases on an annualized basis, compared to net charge-offs of $1.8 million, or 7 basis points in Q3 2019, and $2.2 million, or 10 basis points in Q4 2018.
Risk management is a critical component of how Customers creates long-term shareholder value, and Customers believes that asset quality is one of the most important risks in banking to be understood and managed. Customers believes that asset quality risks must be diligently addressed during good economic times with prudent underwriting standards so that when the economy deteriorates the bank's capital is sufficient to absorb all losses without threatening its ability to operate and serve its community and other constituents. "Customers' non-performing loans at December 31, 2019 were only 0.21% of total loans and leases, compared to our peer group non-performing loans of approximately 0.74% in the most recent period available, and industry average non-performing loans of 1.03% in the most recent period available. Our expectation is superior asset quality performance in good times and in difficult years," said Mr. Sidhu.

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Non-Interest Income

Non-interest income totaled $80.9 million for FY 2019, an increase of $21.9 million compared to FY 2018. Non-interest income totaled $25.8 million in Q4 2019, an increase of $2.4 million compared to Q3 2019. The increase in non-interest income primarily resulted from increases of $2.8 million in gains on sales of SBA loans, $2.4 million in other non-interest income and $0.8 million in commercial lease income, partially offset by decreases of $1.0 million in gains on sales of investment securities, $1.0 million in unrealized gains on investment securities, $0.9 million in mortgage banking income and $0.4 million in interchange and card revenue. The increase in gains on sales of SBA loans resulted from a strategic shift to no longer retain all SBA loans on our balance sheet in Q4 2019. The increase in other non-interest income primarily resulted from derivative transactions and the increase in commercial lease income resulted from the continued growth of our Equipment Finance Group. The decrease in gain on sales of investment securities resulted from the gain realized from the sale of $95 million of corporate bonds during Q3 2019. The decrease in unrealized gains on investment securities primarily resulted from a smaller improvement in the fair values of the interest-only GNMA securities and equity securities issued by a foreign entity during Q4 2019. The decrease in mortgage banking income primarily resulted from a $0.8 million loss realized from the sale of $230 million of non-QM residential mortgage loans in Q4 2019. The decrease in interchange and card revenue primarily resulted from a seasonal decrease in activity at BankMobile, coinciding with the end of the academic semester.

Non-Interest Expense

Non-interest expense totaled $231.9 million for FY 2019, an increase of $11.7 million compared to FY 2018. Non-interest expense totaled $58.7 million in Q4 2019, a decrease of $0.9 million compared to Q3 2019. The decrease in non-interest expense in Q4 2019 primarily resulted from decreases of $2.6 million in provision for operating losses, $1.9 million in professional services and $1.9 million in other non-interest expense, partially offset by increases of $3.3 million in FDIC assessments, $1.6 million in technology and $0.5 million in salaries and employee benefits. The decrease in the provision for operating losses primarily resulted from an internet-based organized crime ring which targeted BankMobile checking accounts in Q3 2019. The decrease in professional services primarily resulted from successful concentrated cost savings initiatives in Q4 2019. The decrease in other non-interest expense primarily resulted from legal reserve accruals totaling $2.0 million recognized in Q3 2019 for previously disclosed legal matters. The increase in FDIC assessments primarily resulted from a $2.6 million small bank assessment credit provided by the FDIC in Q3 2019 related to Customers' contribution to the growth of the FDIC's deposit insurance fund since July 2016. The increase in technology primarily resulted from continued investment in Customers' digital transformation initiatives. The increase in salaries and employee benefits primarily resulted from an increase in full-time equivalents.

Taxes

Customers' effective tax rate was 21.3% for Q4 2019, compared to 22.9% for Q3 2019 and 22.2% for Q4 2018. The decrease in the effective tax rate from Q3 2019 and Q4 2018 was primarily driven by strategic initiatives to lower Customers' effective tax rate through effective use of available tax credits and changes in the apportionment of revenues to states with lower tax costs. Customers expects the full-year 2020 effective tax rate to be approximately 22% to 24%.

Significantly Lowering Commercial Real Estate Concentration

Customers' total commercial real estate ("CRE") loan exposures subject to regulatory concentration guidelines of $3.7 billion as of December 31, 2019 included construction loans of $0.1 billion, multi-family loans of $2.4 billion, and non-owner occupied commercial real estate loans of $1.1 billion, which represent 294% of total risk-based capital on a combined basis, a reduction from a 361% commercial real estate concentration as of December 31, 2018. Customers' loans subject to regulatory CRE concentration guidelines had a 3 year cumulative reduction of 16.0% as of the end of Q4 2019, a deceleration from cumulative growth of 10.6% a year ago.

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Customers' loans collateralized by multi-family properties were approximately 23.8% of Customers' total loan portfolio and approximately 191% of total risk-based capital at December 31, 2019, down from approximately 38.4% and 270%, respectively, at December 31, 2018. Following are some key characteristics of Customers' multi-family loan portfolio:

•Mostly concentrated in New York City with an emphasis on properties subject to some type of rent control; and principally to high net worth families;
•Current average loan size is approximately $6.9 million;
•Current weighted average annual debt service coverage ratio is 1.51x;
•Current weighted average loan-to-value for the portfolio is 60.1%;
•All loans are individually stressed with an increase of 1% and 2% to the cap rate and an increase of 1.5% and 3% in loan interest rates;
•All properties are inspected prior to a loan being granted and inspected thereafter on an annual basis by dedicated portfolio managers or outside inspectors; and
•Credit approval process is independent of customer sales and portfolio management process.

Recap of 2019 and Looking Ahead to 2020 and Beyond

Mr. Sidhu stated, "Customers' core earnings per share was $2.25 for 2019, in line with our internal expectations and higher than targets we had made public. After diligent consideration and analysis, we decided to end 2019 with total assets above $10 billion. This decision reflects our desire and optimism to continue to grow the Customers Bank Business Banking segment while giving careful consideration to the future strategic options for our BankMobile segment."

Looking ahead to 2020, Mr. Sidhu continued "Customers is projecting core earnings per share of $3.00 for 2020 with continued improvement in all profitability metrics." Mr. Sidhu continued, "In addition, management and our Board of Directors have been actively engaged in developing a vision and strategy for 2025 and are pleased to make public our confidence in achieving $6 per share in annual core earnings by the end of 2025."


Conference Call

Date:   Thursday, January 23, 2020  
Time:   9:00 AM EST  
US Dial-in:  +1 (800) 368-1029
International Dial-in: +1 (334) 777-6981
Participant Code: 094854

Please dial in at least 10 minutes before the start of the call to ensure timely participation. Slides accompanying the presentation will be available on Customers' website at https://www.customersbank.com/investor-relations/ prior to the call.

Please submit any questions you have regarding the earnings in advance to rramsey@customersbank.com and the executives will address them on the call. Customers will also open the lines to questions following management's presentation of the fourth quarter results. A playback of the call will be available beginning January 23, 2020 at 12:00 PM EST until 12:00 PM EST on February 22, 2020. To listen, call within the United States +1 (888) 203-1112, or +1 (719) 457-0820 when calling internationally. Please use the replay passcode 3422011.

9


Institutional Background

Customers Bancorp, Inc. is a bank holding company located in Wyomissing, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank. Customers Bank is a community-based, full-service bank with assets of approximately $11.5 billion at December 31, 2019. A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender that provides a range of banking services to small and medium-sized businesses, professionals, individuals and families through offices in Pennsylvania, Illinois, New York, Rhode Island, Massachusetts, New Hampshire and New Jersey. Committed to fostering customer loyalty, Customers Bank uses a High Tech/High Touch strategy that includes use of industry-leading technology to provide customers better access to their money, as well as Concierge Banking® by appointment at customers’ homes or offices 12 hours a day, seven days a week. Customers Bank offers a continually expanding portfolio of loans to small businesses, multi-family projects, mortgage companies and consumers.

Customers Bancorp, Inc.'s voting common shares are listed on the New York Stock Exchange under the symbol CUBI. Additional information about Customers Bancorp, Inc. can be found on the Company’s website, 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,'' 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 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. In addition, important factors relating to the acquisition of the Disbursements business, the combination of Customers' BankMobile business with the acquired Disbursements business, the implementation of Customers Bancorp, Inc.'s strategy to retain BankMobile for 2-3 years, the possibility that the expected benefits of retaining BankMobile for 2-3 years may not be achieved, or the possible effects on Customers' results of operations if BankMobile is never divested could cause Customers Bancorp's actual results to differ from those in the forward-looking statements. 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, 2018, 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.

10


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,  
2019  2019  2019  2019  2018  2019  2018  
Interest income:
Loans and leases$116,365  $118,444  $103,567  $93,116  $94,248  $431,491  $373,234  
Investment securities5,125  5,867  6,481  6,241  6,277  23,713  33,209  
Other2,505  2,407  1,902  1,718  2,778  8,535  11,508  
Total interest income123,995  126,718  111,950  101,075  103,303  463,739  417,951  
Interest expense:
Deposits35,992  38,267  35,980  31,225  34,029  141,464  110,808  
FHLB advances6,056  7,563  7,607  5,293  3,662  26,519  31,043  
Subordinated debt1,930  1,684  1,684  1,684  1,684  6,983  6,737  
Other borrowings2,424  3,469  2,000  3,569  2,404  11,463  11,486  
Total interest expense46,402  50,983  47,271  41,771  41,779  186,429  160,074  
Net interest income77,593  75,735  64,679  59,304  61,524  277,310  257,877  
Provision for loan and lease losses9,689  4,426  5,346  4,767  1,385  24,227  5,642  
Net interest income after provision for loan and lease losses67,904  71,309  59,333  54,537  60,139  253,083  252,235  
Non-interest income:
Interchange and card revenue6,506  6,869  6,760  8,806  7,568  28,941  30,695  
Deposit fees3,616  3,642  3,348  2,209  2,099  12,815  7,824  
Commercial lease income3,839  3,080  2,730  2,401  1,982  12,051  5,354  
Bank-owned life insurance 1,795  1,824  1,836  1,816  1,852  7,272  7,620  
Mortgage warehouse transactional fees1,983  2,150  1,681  1,314  1,495  7,128  7,158  
Gain (loss) on sale of SBA and other loans2,770  —  —  —  (110) 2,770  3,294  
Mortgage banking income (loss)(635) 283  250  167  73  66  606  
Loss upon acquisition of interest-only GNMA securities—  —  (7,476) —  —  (7,476) —  
Gain (loss) on sale of investment securities—  1,001  —  —  —  1,001  (18,659) 
Unrealized gain (loss) on investment securities310  1,333  (347) 2  (101) 1,299  (1,634) 
Other5,629  3,187  3,254  3,003  5,019  15,071  16,740  
Total non-interest income25,813  23,369  12,036  19,718  19,877  80,938  58,998  
Non-interest expense:
Salaries and employee benefits27,697  27,193  26,920  25,823  26,706  107,632  104,841  
Technology, communication and bank operations10,370  8,755  12,402  11,953  11,531  43,481  44,454  
Professional services6,470  8,348  5,718  4,573  5,674  25,109  20,237  
Occupancy3,470  3,661  3,064  2,903  2,933  13,098  11,809  
Commercial lease depreciation2,840  2,459  2,252  1,923  1,550  9,473  4,388  
FDIC assessments, non-income taxes, and regulatory fees2,492  (777) 2,157  1,988  1,892  5,861  8,642  
Provision for operating losses1,415  3,998  2,446  1,779  1,685  9,638  5,616  
Advertising and promotion899  976  1,360  809  917  4,044  2,446  
Merger and acquisition related expenses100  —  —  —  470  100  4,391  
Loan workout230  495  643  320  360  1,687  2,183  
Other real estate owned (income) expenses247  108  (14) 57  285  398  449  
Other2,510  4,376  2,634  1,856  3,042  11,380  10,723  
Total non-interest expense58,740  59,592  59,582  53,984  57,045  231,901  220,179  
Income before income tax expense34,977  35,086  11,787  20,271  22,971  102,120  91,054  
Income tax expense7,451  8,020  2,491  4,831  5,109  22,793  19,359  
Net income27,526  27,066  9,296  15,440  17,862  79,327  71,695  
Preferred stock dividends3,615  3,615  3,615  3,615  3,615  14,459  14,459  
Net income available to common shareholders$23,911  $23,451  $5,681  $11,825  $14,247  $64,868  $57,236  
 Basic earnings per common share$0.76  $0.75  $0.18  $0.38  $0.45  $2.08  $1.81  
 Diluted earnings per common share $0.75  $0.74  $0.18  $0.38  $0.44  $2.05  $1.78  


11


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
December 31,September 30,June 30,March 31,December 31,
20192019201920192018
ASSETS
Cash and due from banks$33,095  $12,555  $24,757  $41,723  $17,696  
Interest-earning deposits179,410  169,663  71,038  75,939  44,439  
Cash and cash equivalents212,505  182,218  95,795  117,662  62,135  
Investment securities, at fair value595,876  608,714  708,359  678,142  665,012  
Loans held for sale486,328  502,854  5,697  1,602  1,507  
Loans receivable, mortgage warehouse, at fair value2,245,758  2,438,530  2,001,540  1,480,195  1,405,420  
Loans and leases receivable7,318,988  7,336,237  7,714,106  7,264,049  7,138,074  
Allowance for loan and lease losses(56,379) (51,053) (48,388) (43,679) (39,972) 
Total loans and leases receivable, net of allowance for loan and lease losses9,508,367  9,723,714  9,667,258  8,700,565  8,503,522  
FHLB, Federal Reserve Bank, and other restricted stock84,214  81,853  101,947  80,416  89,685  
Accrued interest receivable38,072  38,412  38,506  35,716  32,955  
Bank premises and equipment, net9,389  14,075  10,095  10,542  11,063  
Bank-owned life insurance272,546  270,526  268,682  266,740  264,559  
Other real estate owned173  204  1,076  976  816  
Goodwill and other intangibles15,195  15,521  15,847  16,173  16,499  
Other assets298,052  285,699  269,165  235,360  185,672  
Total assets$11,520,717  $11,723,790  $11,182,427  $10,143,894  $9,833,425  
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, non-interest bearing deposits$1,343,391  $1,569,918  $1,380,698  $1,372,358  $1,122,171  
Interest-bearing deposits7,305,545  7,355,767  6,805,079  6,052,960  6,020,065  
Total deposits8,648,936  8,925,685  8,185,777  7,425,318  7,142,236  
Federal funds purchased538,000  373,000  406,000  388,000  187,000  
FHLB advances850,000  1,040,800  1,262,100  1,025,832  1,248,070  
Other borrowings123,630  123,528  99,055  123,963  123,871  
Subordinated debt181,115  109,050  109,026  109,002  108,977  
Accrued interest payable and other liabilities126,241  132,577  129,064  93,406  66,455  
Total liabilities10,467,922  10,704,640  10,191,022  9,165,521  8,876,609  
Preferred stock217,471  217,471  217,471  217,471  217,471  
Common stock32,617  32,526  32,483  32,412  32,252  
Additional paid in capital444,218  441,499  439,067  436,713  434,314  
Retained earnings381,519  357,608  334,157  328,476  316,651  
Accumulated other comprehensive loss(1,250) (8,174) (9,993) (14,919) (22,663) 
Treasury stock, at cost(21,780) (21,780) (21,780) (21,780) (21,209) 
Total shareholders' equity1,052,795  1,019,150  991,405  978,373  956,816  
Total liabilities & shareholders' equity$11,520,717  $11,723,790  $11,182,427  $10,143,894  $9,833,425  


12


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Three Months Ended
December 31, 2019September 30, 2019December 31, 2018
Average BalanceAverage Yield or Cost (%)Average BalanceAverage Yield or Cost (%)Average BalanceAverage Yield or Cost (%)
Assets
Interest earning deposits $150,382  2.21%  $100,343  3.26%  $185,145  2.24%  
Investment securities (1)
584,955  3.50%  652,142  3.60%  697,474  3.60%  
Loans and leases:
Commercial loans to mortgage companies2,158,626  4.16%  2,103,612  4.58%  1,409,197  5.03%  
Multi-family loans2,654,919  3.96%  2,929,650  3.91%  3,445,267  3.76%  
Commercial and industrial loans and leases (2)
2,318,313  4.79%  2,159,067  5.24%  1,823,189  4.93%  
Non-owner occupied commercial real estate loans1,325,630  4.55%  1,294,246  4.57%  1,224,750  4.40%  
Residential mortgages631,370  4.05%  729,603  4.11%  599,797  4.02%  
Other consumer loans765,765  9.11%  600,256  9.47%  60,210  9.26%  
Total loans and leases (3)
9,854,623  4.68%  9,816,434  4.79%  8,562,410  4.37%  
Other interest-earning assets86,770  7.63%  98,279  6.39%  73,091  9.41%  
Total interest-earning assets10,676,730  4.61%  10,667,198  4.72%  9,518,120  4.31%  
Non-interest-earning assets580,477  591,946  429,247  
Total assets $11,257,207  $11,259,144  $9,947,367  
Liabilities
Interest checking accounts$1,152,349  1.65%  $1,014,590  1.83%  $767,154  1.60%  
Money market deposit accounts3,190,543  2.01%  3,100,975  2.22%  3,391,542  2.08%  
Other savings accounts722,487  2.09%  561,790  2.19%  350,304  1.99%  
Certificates of deposit2,012,497  2.21%  2,227,817  2.34%  2,141,598  2.11%  
Total interest-bearing deposits (4)
7,077,876  2.02%  6,905,172  2.20%  6,650,598  2.03%  
Borrowings1,424,550  2.91%  1,770,459  2.86%  983,540  3.13%  
Total interest-bearing liabilities8,502,426  2.17%  8,675,631  2.33%  7,634,138  2.17%  
Non-interest-bearing deposits (4)
1,580,050  1,431,810  1,261,330  
Total deposits and borrowings10,082,476  1.83%  10,107,441  2.00%  8,895,468  1.86%  
Other non-interest-bearing liabilities138,242  146,347  89,202  
Total liabilities 10,220,718  10,253,788  8,984,670  
Shareholders' equity1,036,489  1,005,356  962,697  
Total liabilities and shareholders' equity$11,257,207  $11,259,144  $9,947,367  
Interest spread2.78%  2.71%  2.45%  
Net interest margin2.89%  2.82%  2.57%  
Net interest margin tax equivalent (5)
2.89%  2.83%  2.57%  
(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 1.65%, 1.82% and 1.71% for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018, presented to approximate interest income as a taxable asset. 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.


13


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
Twelve Months Ended
December 31, 2019December 31, 2018
Average BalanceAverage Yield
or Cost (%)		Average BalanceAverage Yield
or Cost (%)
Assets
Interest earning deposits $103,833  2.68%  $217,168  1.90%  
Investment securities (1)
653,694  3.63%  1,005,688  3.30%  
Loans and leases:
Commercial loans to mortgage companies1,799,489  4.58%  1,610,168  4.92%  
Multi-family loans2,982,185  3.87%  3,549,511  3.82%  
Commercial and industrial loans and leases (2)
2,111,181  5.08%  1,743,696  4.72%  
Non-owner occupied commercial real estate loans1,243,236  4.53%  1,257,545  4.32%  
Residential mortgages694,889  4.15%  497,772  4.05%  
Other consumer loans445,166  9.28%  20,028  8.78%  
Total loans and leases (3)
9,276,146  4.65%  8,678,720  4.30%  
Other interest-earning assets90,035  6.39%  110,223  6.71%  
Total interest-earning assets10,123,708  4.58%  10,011,799  4.17%  
Non-interest-earning assets543,962  406,303  
Total assets $10,667,670  $10,418,102  
Liabilities
Interest checking accounts$955,630  1.82%  $630,335  1.49%  
Money market deposit accounts3,151,328  2.18%  3,417,779  1.77%  
Other savings accounts538,375  2.12%  135,994  1.67%  
Certificates of deposit1,943,361  2.26%  2,066,896  1.87%  
Total interest-bearing deposits (4)
6,588,694  2.15%  6,251,004  1.77%  
Borrowings1,523,171  2.95%  1,951,921  2.52%  
Total interest-bearing liabilities8,111,865  2.30%  8,202,925  1.95%  
Non-interest-bearing deposits (4)
1,430,149  1,189,638  
Total deposits and borrowings9,542,014  1.95%  9,392,563  1.70%  
Other non-interest-bearing liabilities126,325  83,563  
Total liabilities 9,668,339  9,476,126  
Shareholders' equity999,331  941,976  
Total liabilities and shareholders' equity$10,667,670  $10,418,102  
Interest spread2.63%  2.47%  
Net interest margin2.74%  2.58%  
Net interest margin tax equivalent (5)
2.75%  2.58%  
(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 1.76% and 1.49% for the twelve months ended December 31, 2019 and December 31, 2018, respectively.
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for both the year ended December 31, 2019 and 2018, presented to approximate interest income as a taxable asset. 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.


14


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
SEGMENT REPORTING - UNAUDITED
(Dollars in thousands, except per share amounts)
The following tables present Customers' business segment results for the three and twelve months ended December 31, 2019 and 2018:
Three Months Ended December 31, 2019Three Months Ended December 31, 2018
Customers Bank Business BankingBankMobileConsolidatedCustomers Bank Business BankingBankMobileConsolidated
Interest income (1)
$112,212  $11,783  $123,995  $98,129  $5,174  $103,303  
Interest expense46,111  291  46,402  41,592  187  41,779  
Net interest income66,101  11,492  77,593  56,537  4,987  61,524  
Provision for loan and lease losses6,846  2,843  9,689  (200) 1,585  1,385  
Non-interest income14,964  10,849  25,813  9,352  10,525  19,877  
Non-interest expense41,494  17,246  58,740  38,778  18,267  57,045  
Income (loss) before income tax expense (benefit)32,725  2,252  34,977  27,311  (4,340) 22,971  
Income tax expense (benefit)6,892  559  7,451  6,175  (1,066) 5,109  
Net income (loss)25,833  1,693  27,526  21,136  (3,274) 17,862  
Preferred stock dividends3,615  —  3,615  3,615  —  3,615  
Net income (loss) available to common shareholders$22,218  $1,693  $23,911  $17,521  $(3,274) $14,247  
Basic earnings (loss) per common share$0.71  $0.05  $0.76  $0.55  $(0.10) $0.45  
Diluted earnings (loss) per common share$0.70  $0.05  $0.75  $0.55  $(0.10) $0.44  
(1) Amounts reported include funds transfer pricing of $0.7 million and $3.8 million for the three months ended December 31, 2019 and 2018, respectively, credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
15


Twelve Months Ended December 31, 2019Twelve Months Ended December 31, 2018
Customers Bank Business BankingBankMobileConsolidatedCustomers Bank Business BankingBankMobileConsolidated
Interest income (2)
$422,094  $41,645  $463,739  $400,948  $17,003  $417,951  
Interest expense185,513  916  186,429  159,674  400  160,074  
Net interest income236,581  40,729  277,310  241,274  16,603  257,877  
Provision for loan and lease losses10,091  14,136  24,227  2,928  2,714  5,642  
Non-interest income 35,268  45,670  80,938  17,499  41,499  58,998  
Non-interest expense153,333  78,568  231,901  146,946  73,233  220,179  
Income (loss) before income tax expense (benefit)108,425  (6,305) 102,120  108,899  (17,845) 91,054  
Income tax expense (benefit)24,215  (1,422) 22,793  23,742  (4,383) 19,359  
Net income (loss) 84,210  (4,883) 79,327  85,157  (13,462) 71,695  
Preferred stock dividends14,459  —  14,459  14,459  —  14,459  
Net income (loss) available to common shareholders$69,751  $(4,883) $64,868  $70,698  $(13,462) $57,236  
Basic earnings (loss) per common share$2.24  $(0.16) $2.08  $2.24  $(0.43) $1.81  
Diluted earnings (loss) per common share$2.20  $(0.15) $2.05  $2.19  $(0.42) $1.78  
As of December 31, 2019 and 2018
Goodwill and other intangibles$3,629  $11,566  $15,195  $3,629  $12,870  $16,499  
Total assets (3)
$10,990,550  $530,167  $11,520,717  $9,688,146  $145,279  $9,833,425  
Total deposits$8,247,836  $401,100  $8,648,936  $6,766,378  $375,858  $7,142,236  
Total non-deposit liabilities (3)
$1,789,329  $29,657  $1,818,986  $1,719,225  $15,148  $1,734,373  
(2) Amounts reported include funds transfer pricing of $8.8 million and $15.7 million for the twelve months ended December 31, 2019 and 2018, respectively, credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
(3) Amounts reported exclude inter-segment receivables.
16


The following tables present Customers' business segment results for the quarter ended December 31, 2019, the preceding four quarters, and the twelve months ended December 31, 2019 and 2018, respectively:
Customers Bank Business Banking:Twelve Months Ended December 31,
Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
Interest income (1)
$112,212  $113,995  $103,014  $92,871  $98,129  $422,094  $400,948  
Interest expense46,111  50,734  47,061  41,605  41,592  185,513  159,674  
Net interest income66,101  63,261  55,953  51,266  56,537  236,581  241,274  
Provision for loan and lease losses6,846  2,475  (2,206) 2,976  (200) 10,091  2,928  
Non-interest income (loss)14,964  11,757  970  7,577  9,352  35,268  17,499  
Non-interest expense41,494  38,347  38,107  35,384  38,778  153,333  146,946  
Income before income tax expense32,725  34,196  21,022  20,483  27,311  108,425  108,899  
Income tax expense 6,892  7,814  4,629  4,880  6,175  24,215  23,742  
Net income 25,833  26,382  16,393  15,603  21,136  84,210  85,157  
Preferred stock dividends3,615  3,615  3,615  3,615  3,615  14,459  14,459  
Net income available to common shareholders$22,218  $22,767  $12,778  $11,988  $17,521  $69,751  $70,698  
Basic earnings per common share$0.71  $0.73  $0.41  $0.39  $0.55  $2.24  $2.24  
Diluted earnings per common share$0.70  $0.72  $0.40  $0.38  $0.55  $2.20  $2.19  
(1) Amounts reported include funds transfer pricing of $0.7 million, $0.3 million, $2.2 million, $5.6 million and $3.8 million for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. Amounts reported also include funds transfer pricing of $8.8 million and $15.7 million for the twelve months ended December 31, 2019 and 2018, respectively. These amounts are credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.


BankMobile:Twelve Months Ended December 31,
Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
Interest income (2)
$11,783  $12,723  $8,936  $8,204  $5,174  $41,645  $17,003  
Interest expense291  249  210  166  187  916  400  
Net interest income11,492  12,474  8,726  8,038  4,987  40,729  16,603  
Provision for loan and lease losses2,843  1,951  7,552  1,791  1,585  14,136  2,714  
Non-interest income 10,849  11,612  11,066  12,141  10,525  45,670  41,499  
Non-interest expense17,246  21,245  21,475  18,600  18,267  78,568  73,233  
Loss before income tax expense or benefit2,252  890  (9,235) (212) (4,340) (6,305) (17,845) 
Income tax benefit559  206  (2,138) (49) (1,066) (1,422) (4,383) 
Net loss available to common shareholders$1,693  $684  $(7,097) $(163) $(3,274) $(4,883) $(13,462) 
Basic loss per common share$0.05  $0.02  $(0.23) $(0.01) $(0.10) $(0.16) $(0.43) 
Diluted loss per common share$0.05  $0.02  $(0.22) $(0.01) $(0.10) $(0.15) $(0.42) 
Deposit balances (3)
Disbursements business deposits $319,263  $598,064  $409,683  $615,710  $370,690  
White label deposits 81,837  67,541  46,514  11,046  5,168  
Total deposits $401,100  $665,605  $456,197  $626,756  $375,858  
(2) Amounts reported include funds transfer pricing of $0.7 million, $0.3 million, $2.2 million, $5.6 million and $3.8 million for the three months ended December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018, respectively. Amounts reported also include funds transfer pricing of $8.8 million and $15.7 million for the twelve months ended December 31, 2019 and 2018, respectively. These amounts are credited to BankMobile for the value provided to the Customers Bank Business Banking segment for the use of excess low/no cost deposits.
(3) As of December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018.


17




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,  
20192019201920192018  
Commercial:
Multi-family$2,392,146  $2,800,018  $3,017,531  $3,212,312  $3,285,297  
Mortgage warehouse2,305,953  2,549,286  2,054,307  1,535,343  1,461,810  
Commercial & industrial 2,381,792  2,252,843  2,131,790  1,983,081  1,894,887  
Commercial real estate non-owner occupied1,223,529  1,268,557  1,176,575  1,107,336  1,125,106  
Construction118,418  61,200  59,811  53,372  56,491  
Total commercial loans and leases8,421,838  8,931,904  8,440,014  7,891,444  7,823,591  
Consumer:
Residential378,470  631,866  654,556  626,668  568,068  
Manufactured housing70,398  72,616  75,597  77,778  79,731  
Other consumer1,178,283  643,553  552,839  153,153  74,035  
Total consumer loans1,627,151  1,348,035  1,282,992  857,599  721,834  
Deferred (fees)/costs and unamortized (discounts)/premiums, net2,085  (2,318) (1,663) (3,197) (424) 
Total loans and leases$10,051,074  $10,277,621  $9,721,343  $8,745,846  $8,545,001  


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
December 31,  September 30,  June 30,  March 31,  December 31,  
2019  2019  2019  2019  2018  
Demand, non-interest bearing$1,343,391  $1,569,918  $1,380,698  $1,372,358  $1,122,171  
Demand, interest bearing1,235,292  1,139,675  925,180  811,490  803,948  
Savings919,214  591,336  529,532  417,346  384,545  
Money market3,482,505  3,201,883  2,912,266  3,265,823  3,097,391  
Time deposits1,668,534  2,422,873  2,438,101  1,558,301  1,734,181  
Total deposits$8,648,936  $8,925,685  $8,185,777  $7,425,318  $7,142,236  


18


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)As of December 31, 2019As of September 30, 2019As of December 31, 2018
Total loansNon accrual /NPLsTotal credit reservesTotal NPLs to total loansTotal reserves to total NPLsTotal loansNon accrual /NPLsTotal credit reservesTotal NPLs to total loansTotal reserves to total NPLsTotal loansNon accrual /NPLsTotal credit reservesTotal NPLs to total loansTotal reserves to total NPLs
Loan type
Multi-family$1,909,274  $4,117  $6,157  0.22 %149.55 %$2,300,244  $—  $7,498  — %— %$3,285,297  $1,155  $11,462  0.04 %992.38 %
Commercial & industrial (1)
2,441,987  6,494  17,791  0.27 %273.96 %2,363,599  7,382  18,765  0.31 %254.20 %1,951,277  18,801  15,465  0.96 %82.26 %
Commercial real estate non-owner occupied1,223,529  76  6,243  0.01 %8214.47 %1,268,557  83  6,440  0.01 %7759.04 %1,125,106  129  6,093  0.01 %4723.26 %
Construction118,418  —  1,262  — %— %61,200  —  658  — %— %56,491  —  624  — %— %
Total commercial loans and leases receivable5,693,208  10,687  31,453  0.19 %294.31 %5,993,600  7,465  33,361  0.12 %446.90 %6,418,171  20,085  33,644  0.31 %167.51 %
Residential375,014  6,128  3,218  1.63 %52.51 %628,786  6,093  4,083  0.97 %67.01 %566,561  5,605  3,654  0.99 %65.19 %
Manufactured housing70,398  1,655  1,178  2.35 %71.18 %72,616  1,567  1,051  2.16 %67.07 %79,731  1,693  633  2.12 %37.39 %
Other consumer1,178,283  1,551  20,648  0.13 %1331.27 %643,553  1,140  12,582  0.18 %1103.68 %74,035  111  2,529  0.15 %2278.38 %
Total consumer loans receivable1,623,695  9,334  25,044  0.57 %268.31 %1,344,955  8,800  17,716  0.65 %201.32 %720,327  7,409  6,816  1.03 %92.00 %
Deferred (fees) costs and unamortized (discounts) premiums, net2,085  —  —  — %— %(2,318) —  —  — %— %(424) —  —  — %— %
Loans and leases receivable7,318,988  20,021  56,497  0.27 %282.19 %7,336,237  16,265  51,077  0.22 %314.03 %7,138,074  27,494  40,460  0.39 %147.16 %
Loans receivable, mortgage warehouse, at fair value2,245,758  —  —  — %— %2,438,530  —  —  — %— %1,405,420  —  —  — %— %
Total loans held for sale486,328  1,325  —  0.27 %— %502,854  1,325  —  0.26 %— %1,507  —  —  — %— %
Total portfolio$10,051,074  $21,346  $56,497  0.21 %264.67 %$10,277,621  $17,590  $51,077  0.17 %290.38 %$8,545,001  $27,494  $40,460  0.32 %147.16 %
(1) Commercial & industrial loans, including owner occupied commercial real estate loans.


19


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)Twelve Months Ended December 31,  
Q4Q3Q2  Q1  Q4  
2019201920192019201820192018
Loan type
Multi-family$—  $—  $(7) $541  $—  $534  $—  
Commercial & industrial (1)
(225) 15  (186) (239) 1,457  (635) 1,740  
Commercial real estate non-owner occupied(8) (8) (114) (6) (10) (136) (246) 
Residential181  (5) 61  33  52  270  390  
Other consumer4,414  1,759  883  731  655  7,787  1,801  
Total net charge-offs (recoveries) from loans held for investment$4,362  $1,761  $637  $1,060  $2,154  $7,820  $3,685  
(1) Commercial & industrial loans, including owner occupied commercial real estate.


20


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED
Customers believes that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in Customers' 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. 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
Twelve Months Ended
December 31,
Q4 2019  Q3 2019  Q2 2019  Q1 2019  Q4 2018  20192018
(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$23,911  $0.75  $23,451  $0.74  $5,681  $0.18  $11,825  $0.38  $14,247  $0.44  $64,868  $2.05  $57,236  $1.78  
Reconciling items (after tax):
Severance expense—  —  —  —  373  0.01  —  —  1,421  0.04  373  0.01  1,421  0.04  
Loss upon acquisition of interest-only GNMA securities—  —  —  —  5,682  0.18  —  —  —  —  5,682  0.18  —  —  
Merger and acquisition related expenses76  —  —  —  —  —  —  —  355  0.01  76  —  3,312  0.10  
Losses on sale of multi-family loans—  —  —  —  —  —  —  —  868  0.03  —  —  868  0.03  
Legal reserves—  —  1,520  0.05  —  —  —  —  —  —  1,520  0.05  —  —  
(Gains) losses on investment securities(310) (0.01) (1,947) (0.06) 347  0.01  (2) —  101  —  (1,912) (0.06) 15,646  0.49  
Losses on sale of non-QM residential mortgage loans595  0.02  —  —  —  —  —  —  —  —  595  0.02  —  —  
Core earnings$24,272  $0.76  $23,024  $0.73  $12,083  $0.38  $11,823  $0.38  $16,992  $0.53  $71,202  $2.25  $78,483  $2.43  

21


Core Return on Average Assets - Customers BancorpTwelve Months Ended December 31,
(dollars in thousands except per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
GAAP net income$27,526  $27,066  $9,296  $15,440  $17,862  $79,327  $71,695  
Reconciling items (after tax):
Severance expense—  —  373  —  1,421  373  1,421  
Loss upon acquisition of interest-only GNMA securities—  —  5,682  —  —  5,682  —  
Merger and acquisition related expenses
76  —  —  —  355  76  3,312  
Losses on sale of multi-family loans—  —  —  —  868  —  868  
Legal reserves—  1,520  —  —  —  1,520  —  
(Gains) losses on investment securities(310) (1,947) 347  (2) 101  (1,912) 15,646  
Losses on sale of non-QM residential mortgage loans595  —  —  —  —  595  —  
Core net income
$27,887  $26,639  $15,698  $15,438  $20,607  $85,661  $92,942  
Average total assets
$11,257,207  $11,259,144  $10,371,842  $9,759,529  $9,947,367  $10,667,670  $10,418,102  
Core return on average assets0.98 %0.94 %0.61 %0.64 %0.82 %0.80 %0.89 %


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision -
Customers Bancorp		Twelve Months Ended December 31,
(dollars in thousands except per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
GAAP net income$27,526  $27,066  $9,296  $15,440  $17,862  $79,327  $71,695  
Reconciling items:
Income tax expense
7,451  8,020  2,491  4,831  5,109  22,793  19,359  
Provision for loan and lease losses
9,689  4,426  5,346  4,767  1,385  24,227  5,642  
Severance expense—  —  490  —  1,869  490  1,869  
Loss upon acquisition of interest-only GNMA securities—  —  7,476  —  —  7,476  —  
Merger and acquisition related expenses
100  —  —  —  470  100  4,391  
Losses on sale of multi-family loans—  —  —  —  1,161  —  1,161  
Legal reserves—  2,000  —  —  —  2,000  —  
(Gains) losses on investment securities(310) (2,334) 347  (2) 101  (2,300) 20,293  
Losses on sale of non-QM residential mortgage loans782  —  —  —  —  782  —  
Adjusted net income - pre-tax pre-provision
$45,238  $39,178  $25,446  $25,036  $27,957  $134,895  $124,410  
Average total assets
$11,257,207  $11,259,144  $10,371,842  $9,759,529  $9,947,367  $10,667,670  $10,418,102  
Adjusted ROAA - pre-tax pre-provision1.59 %1.38 %0.98 %1.04 %1.12 %1.26 %1.19 %

22


Core Return on Average Common Equity - Customers BancorpTwelve Months Ended December 31,
(dollars in thousands except per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
GAAP net income to common shareholders$23,911  $23,451  $5,681  $11,825  $14,247  $64,868  $57,236  
Reconciling items (after tax):
Severance expense—  —  373  —  1,421  373  1,421  
Loss upon acquisition of interest-only GNMA securities—  —  5,682  —  —  5,682  —  
Merger and acquisition related expenses
76  —  —  —  355  76  3,312  
Losses on sale of multi-family loans—  —  —  —  868  —  868  
Legal reserves—  1,520  —  —  —  1,520  —  
(Gains) losses on investment securities(310) (1,947) 347  (2) 101  (1,912) 15,646  
Losses on sale of non-QM residential mortgage loans595  —  —  —  —  595  —  
Core earnings
$24,272  $23,024  $12,083  $11,823  $16,992  $71,202  $78,483  
Average total common shareholders' equity $819,018  $787,885  $768,592  $751,133  $745,226  $781,860  $724,505  
Core return on average common equity11.76 %11.59 %6.31 %6.38 %9.05 %9.11 %10.83 %


23


CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Adjusted ROCE - Pre-Tax Pre-Provision - Customers BancorpTwelve Months Ended December 31,
(dollars in thousands except per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
GAAP net income to common shareholders$23,911  $23,451  $5,681  $11,825  $14,247  $64,868  $57,236  
Reconciling items:
Income tax expense
7,451  8,020  2,491  4,831  5,109  22,793  19,359  
Provision for loan and lease losses
9,689  4,426  5,346  4,767  1,385  24,227  5,642  
Severance expense—  —  490  —  1,869  490  1,869  
Loss upon acquisition of interest-only GNMA securities—  —  7,476  —  —  7,476  —  
Merger and acquisition related expenses
100  —  —  —  470  100  4,391  
Losses on sale of multi-family loans—  —  —  —  1,161  —  1,161  
Legal reserves—  2,000  —  —  —  2,000  —  
(Gains) losses on investment securities(310) (2,334) 347  (2) 101  (2,300) 20,293  
Losses on sale of non-QM residential mortgage loans782  —  —  —  —  782  —  
Pre-tax pre-provision adjusted net income available to common shareholders
$41,623  $35,563  $21,831  $21,421  $24,342  $120,436  $109,951  
Average total common shareholders' equity
$819,018  $787,885  $768,592  $751,133  $745,226  $781,860  $724,505  
Adjusted ROCE - pre-tax pre-provision20.16 %17.91 %11.39 %11.57 %12.96 %15.40 %15.18 %

Net Interest Margin, Tax Equivalent - Customers BancorpTwelve Months Ended December 31,
(dollars in thousands except per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
GAAP net interest income$77,593  $75,735  $64,679  $59,304  $61,524  $277,310  $257,877  
Tax-equivalent adjustment187  184  183  181  171  735  685  
Net interest income tax equivalent$77,780  $75,919  $64,862  $59,485  $61,695  $278,045  $258,562  
Average total interest earning assets$10,676,730  $10,667,198  $9,851,150  $9,278,413  $9,518,120  $10,123,708  $10,011,799  
Net interest margin, tax equivalent2.89 %2.83 %2.64 %2.59 %2.57 %2.75 %2.58 %


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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Core Efficiency Ratio - Customers BancorpTwelve Months Ended December 31,
(dollars in thousands except per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 201820192018
GAAP net interest income$77,593  $75,735  $64,679  $59,304  $61,524  $277,310  $257,877  
GAAP non-interest income$25,813  $23,369  $12,036  $19,718  $19,877  $80,938  $58,998  
Loss upon acquisition of interest-only GNMA securities—  —  7,476  —  —  7,476  —  
(Gains) losses on investment securities(310) (2,334) 347  (2) 101  (2,300) 20,293  
Losses on sale of multi-family loans—  —  —  —  1,161  —  1,161  
Losses on sale of non-QM residential mortgage loans782  —  —  —  —  782  —  
Core non-interest income26,285  21,035  19,859  19,716  21,139  86,896  80,452  
Core revenue$103,878  $96,770  $84,538  $79,020  $82,663  $364,206  $338,329  
GAAP non-interest expense$58,740  $59,592  $59,582  $53,984  $57,045  $231,901  $220,179  
Severance expense—  —  (490) —  (1,869) (490) (1,869) 
Legal reserves—  (2,000) —  —  —  (2,000) —  
Merger and acquisition related expenses(100) —  —  —  (470) (100) (4,391) 
Core non-interest expense$58,640  $57,592  $59,092  $53,984  $54,706  $229,311  $213,919  
Core efficiency ratio (1)
56.45 %59.51 %69.90 %68.32 %66.18 %62.96 %63.23 %
(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)Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
GAAP - Total shareholders' equity$1,052,795  $1,019,150  $991,405  $978,373  $956,816  
Reconciling items:
   Preferred stock(217,471) (217,471) (217,471) (217,471) (217,471) 
   Goodwill and other intangibles(15,195) (15,521) (15,847) (16,173) (16,499) 
Tangible common equity$820,129  $786,158  $758,087  $744,729  $722,846  
Total assets$11,520,717  $11,723,790  $11,182,427  $10,143,894  $9,833,425  
Reconciling items:
Goodwill and other intangibles(15,195) (15,521) (15,847) (16,173) (16,499) 
Tangible assets$11,505,522  $11,708,269  $11,166,580  $10,127,721  $9,816,926  
Tangible common equity to tangible assets7.13 %6.71 %6.79 %7.35 %7.36 %



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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Tangible Book Value per Common Share - Customers Bancorp
(dollars in thousands except share and per share data)Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
GAAP - Total shareholders' equity$1,052,795  $1,019,150  $991,405  $978,373  $956,816  
Reconciling Items:
   Preferred stock(217,471) (217,471) (217,471) (217,471) (217,471) 
   Goodwill and other intangibles(15,195) (15,521) (15,847) (16,173) (16,499) 
Tangible common equity$820,129  $786,158  $758,087  $744,729  $722,846  
Common shares outstanding31,336,791  31,245,776  31,202,023  31,131,247  31,003,028  
Tangible book value per common share$26.17  $25.16  $24.30  $23.92  $23.32  

Tangible Book Value per Common Share - CAGR - Customers Bancorp
(dollars in thousands except share and per share data)Q4 2019Q4 2018Q4 2017Q4 2016Q4 2015Q4 2014
GAAP - Total shareholders' equity$1,052,795  $956,816  $920,964  $855,872  $553,902  $443,145  
Reconciling Items:
   Preferred stock(217,471) (217,471) (217,471) (217,471) (55,569) —  
   Goodwill and other intangibles(15,195) (16,499) (16,295) (17,621) (3,651) (3,664) 
Tangible common equity$820,129  $722,846  $687,198  $620,780  $494,682  $439,481  
Common shares outstanding31,336,791  31,003,028  31,382,503  30,289,917  26,901,801  26,745,529  
Tangible book value per common share$26.17  $23.32  $21.90  $20.49  $18.39  $16.43  
CAGR9.76 %


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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)
Core Earnings - Customers Bank Business Banking Segment
Twelve Months Ended
December 31,
Q4 2019  Q3 2019  Q2 2019  Q1 2019  Q4 2018  20192018
(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$22,218  $0.70  $22,767  $0.72  $12,778  $0.40  $11,988  $0.38  $17,521  $0.55  $69,751  $2.20  $70,698  $2.19  
Reconciling items (after tax):
Severance expense
—  —  —  —  359  0.01  —  —  1,421  0.04  359  0.01  1,421  0.04  
Loss upon acquisition of interest-only GNMA securities—  —  —  —  5,682  0.18  —  —  —  —  5,682  0.18  —  —  
Losses on sale of multi-family loans—  —  —  —  —  —  —  —  868  0.03  —  —  868  0.03  
Legal reserves—  —  760  0.02  —  —  —  —  —  —  760  0.02  —  —  
(Gains) losses on investment securities(310) (0.01) (1,947) (0.06) 347  0.01  (2) —  101  —  (1,912) (0.06) 15,646  0.49  
Losses on sale of non-QM residential mortgage loans595  0.02  —  —  —  —  —  —  —  —  595  0.02  —  —  
Core earnings$22,503  $0.71  $21,580  $0.68  $19,166  $0.61  $11,986  $0.38  $19,911  $0.62  $75,235  $2.38  $88,633  $2.75  

Core Earnings (Loss) - BankMobile Segment
Twelve Months Ended
December 31,
Q4 2019  Q3 2019  Q2 2019  Q1 2019  Q4 2018  20192018
(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 loss to common shareholders$1,693  $0.05  $684  $0.02  $(7,097) $(0.22) $(163) $(0.01) $(3,274) $(0.10) $(4,883) $(0.15) $(13,462) $(0.42) 
Reconciling items (after tax):
Severance expense—  —  —  —  13  —  —  —  —  —  13  —  —  —  
Legal reserves—  —  760  0.02  —  —  —  —  —  —  760  0.02  —  —  
Merger and acquisition related expenses76  —  —  —  —  —  —  —  355  0.01  76  —  3,312  0.10  
Core loss$1,769  $0.06  $1,444  $0.05  $(7,084) $(0.22) $(163) $(0.01) $(2,919) $(0.09) $(4,034) $(0.13) $(10,150) $(0.31) 


27