Customers Bancorp (CUBI) 28 Apr 192019 Q1 Earnings call transcript

Good morning and welcome to the First Quarter 2019 Customers Bancorp Earnings Call. Today's call is being recorded. At this time, I would like to turn the call over to Mr. Bob Ramsey, Director Investor Relations for Customers Bancorp. Please go ahead sir.

good and Shenay you, morning everyone. Thank first along with Bancorp's quarter earnings afternoon, yesterday issued was our release Customers investor presentation. Both Investor website are Relations page of the posted the at www.customersbank.com. on company's Jay of on of myself, call Officer; company of BankMobile Ehst, Officer; Luvleen and Financial Operating Investor Bob CFO Leibold, Chief and BankMobile. Chief Sidhu, the Representing President Dick today are and Relations Chief Sidhu, and the Executive Chief Officer; Director Carla Ramsay, Chairman Strategy Officer

statements information our may new refer filings, risk description that except SEC the required extent XX-Q our to laws. the like would presentation statements uncertainties we to including applicable date from performance of differ to securities XX-K a a speak in by begin, more remind Please may you we anticipated. considered and the and factors for detailed future what we Before the risks affect These that as Form materially Please or to of of statements no SEC these the of floor of Relations is results. some Copies may to this forward-looking actual are CEO, currently Sidhu. update we the obligation Jay by pleasure Bancorp Jay these be be obtained of to visiting light and yours. the my our that Investor cause our it's or from number to of this results section subject today make may time, At is only forward-looking undertake forward looking. forward-looking website. statements note introduce Customers that events,

Customers QX to ladies and welcome XXXX good earnings Thank you. you I gentlemen. morning Thank also Bob, call. and want Bancorp to you,

performing excited at today but to opinion our delighting aim executing progress success not report of credit our is bank, service good business factors to high extremely our customers high on all value, model, and unique very superior and We with stay branches, and high reliant journey while significant highly model a critical in of you tech, touch focused, extremely management that are by become supported a our a in we to superior with risk rather an exceptional on quality. on focused

our Ehst, morning CFO Leibold Carla this are our in the you our Carla you our here then opinion of me ahead October highlights goals mentioned, line last and all from of Luvleen President Leibold. first year. also Pennsylvania. joining Dick Analyst And are with Day BankMobile in had Bob progress Sidhu, expectations. towards Carla, discussed our we of with President QX XX with discuss on share will which briefly As or division. our Manhattan our with is CFO, will the results, in us I at And

excited we be progress about BankMobile. and course, many at must you curious recognize of Of that the

Luvleen will that we on have So also. report

first So to on Carla.

executing value year the since management have profitability Day strategic creating in entire plan. growing we plan Analyst and internal is and and core quarters passed franchise. shareholder of by the developed a Thanks, good laser New Analyst we and remarks, Jay's we execution laid that three for the Jay, and morning To achieving York remain opening that Day end, of October. focused everyone. are engaged Two actively or banking team goals each our with successfully ahead our we've improving at in in on out the you Consistent on

per From diluted talk a consolidated XXXX I'll share. first $X.XX quarter up $XXX,XXX, diluted our about earned business results. net to or a segment perspective, common banking the $X.XX $XX.X a shareholders loss a million financial $X.XX of first which BankMobile available per or net income $XX quarter On diluted and XXXX share. recorded segment per share rounds loss was million our basis, Now about GAAP to

or notable quarter total assets first difference results at the from reported Total XXXX. a loans significant billion the Our XXXX March From include quarter, our quarter billion, the quarter. so an quarter. towards XXXX, totaled and X% higher $XX.X and the over $XXX increase at down $XXX XX, perspective, credit XX, Residential represented quarter the our up Throughout at March XXX% made year when excluding At loans, the and that up up significant quarter. yielding GAAP million at and and mortgages, there X% ended for core not reported between December were improving quarter. ago million from the when consumer first quarter quarter our is XXXX, $X prior no the year-over-year. sacrificing billion XX% without results approximately from of year non-recurring from increased billion, of we loans any at increasing GAAP $X.X million items, to ago ago compared we year compared we million decreased March quarter $XX do totaled quality. to strides XX, C&I prior X% March and XXXX, $XX.X prior XXXX, the X% the and from from industrial mortgages loan successfully overall the an XX, Consumer prior $XXX residential increase XX, which mix, commercial and the loans,

quarter which prior an ago over over XX% Our X% warehouse a totaled commercial at the quarter. of loans XXXX, increase March $X.X billion mortgage and decrease year represented the XX, of

over decrease multi-family loans billion, CRE ago $X.X prior to of quarter decrease decline our declined also and a year prior the a the XX% quarter. billion, the X% $X.X the over loans Investment a decrease planned, year a to As quarter. X% and ago over quarter decreased over XX%

CDs improve and from $X.X at at up March deposits Executing the decrease to total of the December prior the X% prior XXXX, XXXX, and of to billion $X.X XXXX side, mix, the and from quarter billion $X increase and deposit year over XX, March XXXX. of X% represented over a at at from ago and accounts deposits decrease at a deposit XX, of represented quarter March XX% our up quarter. our XXXX, on the market ago XX% billion strategy the quarter. an Demand XX, year over XX% billion totaled over billion $X.X XX% $X.X which prior March XX, XX, billion, $X.X totaled an to ago money which increased declined year quarter. On quarter increase saving the

interest net margin. to on Moving

We continue in see positive to momentum the our that from efforts drop quarter in expansion XXXX. recorded we X.XX% of the third

in for from XXXX. quarter margin interest points quarter was net fourth we which of the up basis Our the X.XX% was X.XX%, first the reported that X

saw prepayment points. basis margin X expansion fees, Excluding we of core

mix achieved in hike. the a that During first the given level positive from changes mitigated somewhat by of repricing as costs, quarter, of yields the that some modest December we increase result occurred were loan deposit increased a rate

loans for multifamily $X.X on X the quality to $X.X million, portfolio first Turning our and loans quarter were first including runoff. Provision XX metrics consumer, charge-offs quarter basis and credit well growth to total core than March basis continue residential XXXX quality, net million to basis. to an mortgages in better totaled peers. and significantly trend and investment points XX, annualized for XXXX, C&I was to At our points perform of the asset average CRE portfolio, expense our remarkably non-performing total continues for loans loan

of $XXX,XXX approximately provisions for was there addition, impaired In loans.

what look of expected I'd is an the for outlook XXXX like to Lastly provide like. remainder to

We fourth the expansion quarter of least margin XXXX. XXXX, expect by continued throughout at X.XX% reaching

is line is XXXX the estimate. net margin year expected in for X.XX%, interest be to full with above consensus Our which

expect also low from are assets average We XXXX comparable a XXXX relatively to loans our we assets. growth average estimating be XXXX to average end-of-period earning interest and Total flat will for earning that be interest digit in mid-single will deposits.

in positive growth the ratio non-interest XX% We quarter income in mid-XXs fourth contribution XX% by BankMobile core are also also a generate of and is expecting to a XXXX. from expected earnings for XXXX core to XXXX. the efficiency

us it XXXX. All that keeps on to of earn core $X.XX Jay. EPS this back of turn to With I'll track in you

approximately our above these years it with will very -- average you to much back provide with believe in Carla in goals, regular October X discussed value. that which on progress. updates as we And several would Thank long-term Carla. that achieve goals, that to but you in we shared time Analyst achieve you ultimately strategies Day detail our at drive last would on year, Good. we said We to take shareholder you,

six pleased or plan So that with we of are achieve share we about ahead on you to these goals. after months, of are to each

that core our staying along heard we Day, that that's earnings very level have to confidence our consensus very strategic share with detailed from is and plan on in absolutely that Analyst we high and Carla, $X estimate going you exceed a meet report XXXX. the are we will and religiously As a are following why in track or we

achieve to with you Number as recall as we'd practically may goals. you like X.XX% an that in back As one the ROA we possible. shared soon was following of October,

of a basis of on loan half the ROA our expect ROA ROA our to our talk improvement both loans was current first some about we expansion X XX mix from our deposits. putting well While only will high some our provision points minute. about loading end categories as a this and XXXX X% will XX points, X%, our be of front reflect to to ROA impacted I NIM or in by way expect changes by by to about build year-end which expense, XX potentially growth in this we XXXX, QX year-end, to X.XX% very certain ROA as significant of the basis perhaps years. more X in To timing within us in of XX and

lower to 'XX, also just within the you. Carla of from to expand Day XXXX. QX a provision returns shared time about our Hence of the think as to Analyst at and from should margin BankMobile our X.XX% profitability quarters expected higher end five we X.XX% I by by modest contribute with

and to X to X of our on in expanded shared points just against you know, rehash progress total a a or that another XX with our of the Day. on points Analyst basis we to basis you NIM as XXXX X.XX%, core target X.XX% QX QX XXXX about expanded points XX the basis basis to-date, So in XX to

target to quarters. approximate year, NIM X.XX% track of another, least you, expanding on are to we XX basis at I over next So end as our this the with the few points by shared XX reach

strategy superior know, NIM you mix include, profile. as well while is as funding, as assets maintaining credit on to further, both expand favorable Our shifts

adding increasing on are we portfolio yields risk. average, an without our undue on loan any So

the on As $XXX But $XX about quarter, in million average or over Carla shared with so million, in average the -- we X.X% an loans considerably million consumer through loan yield. our with loans efforts sequentially. consumer originated loans We coupon only of C&I loans, direct of about our we X%. in C&I growth X.X%, $XX in in still new yield or is first but partnerships. X.X% million originated about origination $XX excess portfolio above added net C&I the through about FinTech first quarter to The you, was in of approximately our

add $XXX QX of our and us. FinTechs through We only still, business origination increase through for loans adding loans small makes remain are up track our -- is our consumer less at it quality, about growth less partnerships to But prime-only of Consumer fact year. consumer duration preference short that million consumer to X.X% diversity piece to and of about efforts the XXXX. borrowers good loans, like on only some than X% balance with but make our of But and prime diversification an our and -- given today than from in approximately sense own assets only that this relatively assets, sheet. negligible, a our through the BankMobile we some will X.X% in

-- risk credit performance to than The of of mindful modeled, had we to are loan are We profile our which loan of going hallmark has Customers of quality, very long the so portfolio pleased much continue that very better a to-date we Bancorp. been our has been portfolio. consumer what be with

time multi-family which We to multi-family $X.X the between would also would to end of over we XX% we like about are said we last loans, credit in we reducing that decline relatively spreads billion loans compared thin assets, and and that somewhere XX% accomplished XXXX said with of loans, year fixed assets. but rate this lower the yielding to multi-family exposure today are XX% to quality today. really our our We the

billion We stated to would by our XX, reduce to December you expect multi-family grow we to $X We funding and million core cost another loans higher go XXXX. down that had deposits. $XXX by

by deposits down deposits past and the $X mix. borrowings over by over have So year, are grown billion our time about at million. same we about $XXX We little the the improved our grew

Part XX%. or We deposits a build about we the very us at provide deposits the BankMobile of so of business time Over would cost has reduced ability rapid terms is grew in grow greater deployment. XX% an low demand would no-cost capital, core year, and to much reason past about said we deposits love which capital we that pace. flexibility

Our about time is higher period TCE book. shares XX% months ratio outstanding it points have where of and we XXX was ago X during than at of today this approximately also basis tangible X% just repurchased

to of expect the aggressive do strategy. stronger in not capital at end will a regularly continue somewhat impact capital CECL want at become as year. we ratios allocation We will banks board create Our this very the evaluate also stock and still to buybacks year, to balance sheet this best all

that so. strategy If consider would back add potentially choose our We over EPS. opportunity about next implement or to X $X.XX the eventually to stock preferred have very this years our we another buying unique to

BankMobile. be profitable -- BankMobile the of on stated you Now to end should to would by XXXX. We that

with is are in in management QX comfortable that that with executing, just ago, national on will and team that modest to would you new The was about expect less Luvleen, April goal. terms share President, QX achieve lost in has and details We of already of strategies week XXXX. to like all surpassing very more our a expectations is share $X.XX ask XX, growth BankMobile's achieve T-Mobile the than BankMobile. but now launch profitability we business. We implemented Luvleen? to X I

It's like on an BankMobile time growth at would new an the beginning as update give the I you us for business. phase. Jay. are you, exciting of a we Thank Great. to

device X Before we and began. time changing that the today, I is ago we to where a like a to one adapt. with in years would and versus understanding slow rapidly talk year are are bank about the walking U.S. briefly XX reality Americans bank were were about on with about XX a banks needs mobile times consumer into launched The their speak interacting we that branch where to BankMobile a We month. behaviors

began better Higher and Through position to means To of at Americans BankMobile year launched with of enough now to overdraft don't with ourselves, affordable, transparent, to volume a strategy empowering. relationships our BXBXC approximately a but higher exposed more acquisition us. we attract $XXX to year customers We students these this XXX and country. BXBXC the approach, to our at and and to one these brand with three in XXXX. We XX% a lower One business around emergency, with for banking billion are have acquisition, college bank the banks have cost. option the $XX our We in bound One making are Additionally, universities seamless have after with schools, approach, to in of started charging colleges which XXX direct of and attend these students consumer a every but business same our just a even business fees. Americans first consumer. to pay shifted a mission

strength, is account added on transactions spend are recently, as account, modest account can waived and account, our more business student those monthly we month. all per organic deposits $XXX per every to showing active student fee per a active which rise. the Our be active or for depositing Most

provide out students. attractive fee provide monthly on for like other offering those with to to strategies added that a $X,XXX, value we a banks customers X% who we still to deposits. and nominal transactional more helping truly is and the those competitive also interest making more very are $XXX those relationship us would perk I the have Additionally, versus our balances have two these us. also this are monthly with up who point to of to Overall, banking compared us

on We T-Mobile. have now officially with expanded XX. T-Mobile with our launched BXBXC the week strategy partnership our last partnership April

We you previously account a T-Mobile shared points. are our that as of deposits the partner, to We since products might a you have has what pain be million common with no curious launch. to the we official as over we share $XX delighted that advertising, since consumer We launch. as activity with know had in mission solve been pilot creating that a

going agreed BankMobile that, T-Mobile All is exceeding information. how received reasons this However, share for not we we and product. pleased that it competitive and to and by have is can customers that we are say are expectations the have market very this

to charter, about Today, and verticals front. We progress which user are BankMobile employees, white entirely seek we'll XX% across a focused Thank fastest we our technology of I Jay. continuing approximately on and design. out on country. opportunities FinTech, on label other to being a well being it our with keep the you of has different continue development of position in approach are growing growth XXX With experience the posted back this bank banks maintain various hybrid are you. and among to will pass this positioned now digital

much so Thanks Luvleen.

you can track I BankMobile. important very imagine, on So we a stated an quarter and important to well this year like year-end. by and earlier, an exciting And for profitability is as achieve are

you As last account that in typical about every branch moments we bank in checking days end will United up a And only one several multiples that in were States, minute. a net there opening of new were we the the week. know, opening

excited very BankMobile are business. about we So overall the

back with Analyst you back So to we to on as see, -- - a we October message the have Day. you can that shared

we stated with and are with forward were to for in January you consensus that very to stated so to XXXX at earn are too. once We XXXX comfortable report far we this we are looking In we of you are to and February, happy least just to very our you. again year the we are $X.XX that on EPS the started we taking that report In track. year, that on are that to the this track on execution $X continuing are happy update we we and to want foundation in that - steps

for Next you to which we profitability, And track - am very level as foundation year about to $X we which today the will will to building you talk significant in up that are with within And next of X earn to about happy shareholder next about X target, with that end that the is well. our target more on - value. years. increase of are in EPS report we I

we future this time progress update any you to continuing have. for like at we'd look the any in quarters. to that to on you And questions So our may forward open call of

So you open please up can operator, it Q&A. us help for

Thank you, Please KBW. sir. first our [Operator Michael We'll Instructions] go from from question ahead. take Perito now

Your line is open.

Mike. morning, Good

Good kind just for sheet of Thank couple on or I you want questions. morning, sheet [ph] - Jay. a start my balance questions. four taking to balance

mentioned you Jay consumer loans to million. you So grow that believe $XXX will

release clear million? bucket -- Just you -- consumer right, to in you you go -- at million to be earnings the that be that include $XXX first expect kind to the residential the mortgages. quarter. That piece, was in $XXX because of figure that's should mortgage Do consumer which non-residential

That Mike. is correct

Okay.

thanks the And we from consumer for pointing mortgages that clear out. loans. be In separating will future, in

the a is more being quarter, okay. the ago? year to I there I with this early growth quarter last than sure to consumer on of on. the maybe case, that, that to consumer that's guys the most about you or going first come And I early the now guess over was months no, to the be growth thinking make follow-up that Is three was No, I really. provision the still balance year mentioned of had in provision think just question want

majority the from. I coming year half this growth in our would think, is first that where Mike, consumer of of we be had mentioned

capability. know, various As products we've last you months, the consumer few added over loan

and we we focused all personal And were loans, with very we loan We infancy quality. So in are offer offer partnerships their offer cards, superior we stage. credit setting credit on student up now they refinancing, excellent were FinTechs.

and making subprime score. very on lending that a subprime do define focused we not anything below sure as we are We do lending any XXX

subprime lending the You people XXX some below industry score. in consider a know,

a consumer and increasing of But our there might commitment would So mix, them to expectations your put credit are than are rather is on, simply quality and because terms in focusing loans buying when our a to way, doing of than that a it gradually in chunkiness this focus. rather we the our core business we be compared the them, little focusing bit sheet. of he it balance franchise on core is wholesale on our originating

right up also potentially to loans So various to consumer for platforms we new involved originate us. now further activities are in pick

I modest will you second our even greatest and quarter. quarter probably increase quarter. should after become after gradual increases, it So second expect consumer second expect will loans But the more be that then in

Okay.

and consistent there's months in suggest would that in the pretty then back few step-up what minimal. would - said of a you you more second provision ago, For probably guys half one year with the the quarter be

correct. That is

a since Okay. was guys changing CECL, share I've to provide is and around you bankers go it? be your if commentary curious, implement book - we reserve to you are is into or changing that? curious the I the helpful any guys I'd to have loan you guys as been see of color willing are to takeaways bit willing you asking as look this you my especially, initial for any most quarter, of

This time. point on estimate our hi. Carla. in We're any Mike, So, is guidance at giving not this

we track We are are confident to implement X, XXXX. that January on

according we're plans, on not range. effect our But giving We XXXX. time of estimated internal this parallel include most are our which the at tracking to throughout phase guidance or

Okay.

planned theoretically, then. a fast me differently place down you $XXX multi-family the the the right what would curve and was C&I, million do question as it that think in were CECL we build guys see you portfolio and Let methodology able the today? no forward loans ask there under consumer reserve as year to to a for If and you maybe grow bring the and little be bit

based I'm is quality might reserving. more seeing, you course be CECL normal X% there through [ph] X% closer so, portfolio, range seeing, that not but X% think on a normal, based we I a expect about to Mike, upon It's expert. quality obviously consumer our the should business, the upon to Yeah, we the that are are the of

So and kind of experts. more team our much management risk at Carla our are of company those

are and very conservative thing to in as prudent we are stated what do think you. is we we doing our So mindful, provisioning. a being Carla are We to that's

Our internal already what from are line CECL you're estimates for seeing very those in companies have pretty much few that announced. with

So unique, in will report you of exact probably fourth the impact the it's to CECL nothing but we quarter.

Okay. And a couple more here, if you guys don't mind.

you for provided sheet some which Carla was Just, balance expectations the helpful. year

mean, does investment to as suggest earning the that bit assets guys first move maybe little were year-over-year, expected in along you earning book you here? add you expected you think of also So kind think flat a be year-over-year. quarter? I was period-end will XXXX. about assets I any a just be to loans over said $XX think I to $X.X relatively But be that billion then we flat looking billion which I hair in only

flat Yeah, year-over-year. we're relatively expecting our investment to portfolio stay

what about growth. is So we're will seasonality our And see business. a warehouse loan mortgage I Mike, in think talking you you'll see

well see are average which core fourth by in a of quite than should achieve $X higher for much very to very us the you well more picked assets to our towards clearer And that the then earning quarter margin, And but up that. getting bit provisioning, can on with sort rightfully higher you ROA for X% quarter EPS first thing a positions positioned estimated and for improved second be higher quarter, path So you like so and or probably to a going XXXX. see that profitability.

Got it.

Okay.

the for billion the [indiscernible] So what's sale including flat is earning and held bucket asset year? figure of balances that loan $XX was for the not

Jay warehouse as that our don't investment. held actually the business, sale the middle But would the year in say relatively now I for year. But does I a held think is seasonality just the seasonality of through that the grow it. end keep business which loans of the will mentioned, flat. in for piece bucket mortgage significant No, mind the is that more means --

earning So the average be… will assets

Yeah, up brings okay. assets. which Right, the earning

that's Yes, right.

All right. guys. taking got you Appreciate it. my you Thank for I questions.

Mike. Thanks,

Please question We our Schiraldi ahead. take Partners] next will & O’Neill go now from [Sandler Frank

line Your is open.

Good morning.

Frank. Hey, Morning, Frank.

morning. Good

of on consumer a growth Just couple Jay. questions the

build Just more terms can to come if partners, in term give mostly over relationships the like growth time, in will think color it's direct near of to the expectations with you a sounds or here? it the growth little within should we from -- the that how in about on bit XQ of the categories. wondered growth then going Is be FinTech and going bulk

the QX some as partners FinTech that majority our be will of through growth, from Frank, well Yeah, the with as originations. minority direct

partnership We by are developing the think really offerings will growth then in also. at credit very that's to some FinTechs, will the methodologies -- very, cards. still hopefully a two you but now credit student see very of using using but those will which over and same compliant developing are with fashion further is different and our direct to categories, little right It technology, loan of time expanding spending processes, right start now a underwriting refinancing investigate be in lot of our period we time time improve in originations. we trying use a credit both There and where

growth terms the with Okay. expect XQ, term And in the coming think then in Is reasonable? of should that X%. you in is that I the we yields something that on, near mentioned

so. I would say

I you you guys -- Okay. have the growth and strong wondered see, just to And little know expanded growth, shifting a gears bit about if C&I the you then geographically. talk continue could to

could So guys targeting you average is size talk strength about if of are in range sort the terms geographically you where of and in size, what outstandings?

range. markets in it's size different it's different think I -

to off as the in the going and at going average be it's start be of market. growth And of England will we New metro $X those I'll so York in size range the be All D.C., the market or are million be of million $X modest $XXX average approximately each market in average million, seasonality There [ph] to in in Pennsylvania So about in be a York New some to chunkiness, a to year. think and this metro some between that. In more Jersey of total In will sort in the C&I. size market. that's a New million in $XX sort Pennsylvania, for Chicago growth market the looking Washington million million the it's $X perhaps this New loans. range. markets all, will and We $XXX our

year so, expect consumer CRE, so million the And company. in margins that's of multi-family $XXX reduction funding on prove we million ought or the and ratios, I that and up our improve the that's why improve can the that that's improve C&I non-owner and with $X balance really our And our look we in somewhere reserves, end the occupied by sheet, dramatically our so and capital our $XXX you on. a space to million by billion growth, that or end our we value focused franchise $XXX open of so if simultaneously at of you where you improve what when the growth to shared about year are

the $XXX Chicago that's And of then together did about DC $XXX million? you and in say, million Jay,

million. $XXX No, of no, million million $XXX no. $XX the to

fee at finally of up that an fee $XX I structure bucks? detail then student generated to thousand just of for offset fee the if to expectations give will million will of how by the the much know change enough what this you accounts, balances BankMobile, income offering be on And you and in know to the have don't on Okay. monthly point sort $XXX be million? your

lot it's going Frank, of guidance Bob. that. a Yeah, to I'll not Hi Yeah. we're take that. around provide

you said, quarter, the didn't very implemented As late first the much so see were in impact. we fees

will the second for customers We with drive all those quarter full see are quarter. were able month, and really for to that a love to them to these account. it trying for in customers a using the You the so life $XXX would waive we fees deposit

of base to those really there do customers a we But able are those to piece that costs. our So avoid the are path, we some need customer trying material so clear provide accounts a and are fees. of certainly not using that cover is to

fees the break so to those on implemented being And all accounts. are even

thinking the about So we're it. that's way

Frank, basically from the the coming is a was the more in quarter. at really and so or at implemented you'll clarity first target. a a -- on [ph]. see is in see fees more lot And what bottom of in BankMobile, direction The the And transparency business were two, the be because there'll in end on you'll quarter revenues of the T-Mobile partnership too quarter this launched day, lot

-- number our accounts you But provide on So a basis, we on objectives we the partner. confidentiality your regular basis. on will balances to the will of accounts a that of respecting regular not to report

All great. right, Thank you.

Thank you.

take We B. will Moss question Steve now Please next Riley from go ahead. our FBR. from

open. Your line is

morning. Good

Steve. Hi,

just partnership, up T-Mobile we but just too this going stages wonder on you if of could much, go money the into lay rollout guess, here following T-Mobile? with I kind not the sure can forward of out the

questions so you they folks all other -- your And is as have laid say and of have investor our we Steve, I'd direct research. that far. rest think and had a that you out are you, I I'd to the I you review review to can encourage the internal press and way should those -- we T-Mobile you think the and call doing release of And your markets for they you own relations exceeding we folks if part like are it. and if to targets T-Mobile's to PR the at you

for for growth that. to guidance looking the income this here, just my as think how to Okay. question to And drivers about give some XX% second just the of non-interest underlying XX% at year,

sure. Yeah,

of does So accounts. it include dependent fees are there comes those does, fee we of it charging the lot two spread the that it some with new factors. we the piece of would partnership [ph]. include were and that as on from fees A the as come BankMobile side the does earn guess so dependent, biggest a of those all Most I the more that deposit T-Mobile It house I and it BankMobile and -- there the from as would we're include obviously are say, house. does while see that well, that's well. this of side I

this in for color the upcoming Okay. about around just to margin the NII the consumer quarter for just this for quarter, margin the and kind of thinking -- loan of a quarter? terms purchases And feel any get the timing the then [ph] of

very every Steve, came it's of day pretty that we business Yeah, a think -- difficult in. get gradual -- Okay. to single think so or I I it's project really And regular, business. the $XXX the it's million approximately

month of You can assume April. in, came the in

consumer with yields in benefit become the quarter. I third our will to you so growth loan of evident and higher And commercial think complete

the mortgage should is higher You be X% to of to because well commercial the is companies above of -- going That business. our quarter, loans seasonality assume this growth in mortgage that business. also

margins our again compared quarter. to positively the impact this will that So first quarter,

we of -- added that mortgage with you the very of have our that first we CRA. CRA was more in noticed. mortgage and quarter our -- some loans folks the That on responsibilities we loans, focused originations I'm was sort as or are accordance the sure And growth in in

weren't the we loans. end added at high CRA loans, necessarily the because year, They So yielding those. were they of

So some in first may those that the expected margin of to by growth loans year add by by impacted have quarter or end CRA of by the the the were January. our in you our -- responsibility first the

we by get to So on the line to the year. are margin bottom we confident of plus-minus that end X.XX%, the is a are path the

you All right. much. very Thank

D.A. go Davidson. next Gunther Please from our you. Thank take We'll from Russell question ahead. now

open. Your line is

Hi. Good morning, guys.\

Russell. Morning,

quickly on some circle of on questions Mike's the provision. back Just to

this of for quarter. How guys originations? roughly that million growth consumer flagged You much of derived $X.X from million $XX the

side. was million on the $X.X About consumer

how to expected has And to commercial contributing is that return in then is to you. the decision continue would market chance portfolio sale on much there you SBA, growth? that to that guys Thank to the and XXXX? contribute a much Great. How Okay. gain been the

be I the know if any don't guidance past I really think have that. given on in opportunistic. we we'll

first sense there in the makes very significant were government more shutdown it a delays. the with because quarter now right So to lot portfolio,

to gone But a conditions and quite of we've I credit so we SBA And bit that. a are quality holdings be will and growth in like evaluate portfolio on some opportunistic. actually seeing portfolio. the we that of We market of our think

plans And one me. to can for share last Is forward? Okay. Jay. market guys T-Mobile just going relationship that you Great, anything there then I about gradually that the appreciate how

company you know, wish and but we rightfully controlled share by, and that. we that. are You by is with the dissemination agree with the so with T-Mobile They totally I a could -- controlled and respect I agree it reality and it, is we news and public is, this

I guide we a deposit our think like would will to I to on you as quarterly you basis. report growth

a We BankMobile to report transfer growth non-interest in as think will we quarterly segment segment, so company were that That how bit folks can little on the objective. I have funds And the basis. you as income the on nothing BankMobile know BankMobile look know our pricing as We interest, an you that increased independent our see does a their is now. like. net if well profitability

darn rather to it folks the market negative, understand to arms BankMobile than we a pretty been and around that that's that. be some So valuation put and put to have which able on significant, their start and respect can not going

you as Bank. on next few color will the lot a quarters. But as think be BankMobile So more well on get please Customers over patient I

so of there a would the more is end And lot the year clarity. that be our thinking by

non-interest struggling of us to very rest seeing level the on, to buying on company And of have confidence see of model is very near significant bearing flatness a increases rest impacting, in assets, focused business. we are you're When we're our earning want non-interest is at earning why about our a the assets, very or that margin to future you find huge deposits, a when business become and generating because level of so and we positively expansion. industry see the industry compression, are your positive confidence we in is Street's is the having the industry is very time we will the us high which deposits. When time the bearing margin going that a tough ability what the future a to the performing are are and positive rest excited see

I Thank good. had. That’s you, Very all guys.

Thanks.

Please Thank you. Well go ahead. question from now our Mochizuki [Akemi take next Elise Capital].

open. Your line is

Hi, this is Elise Mochizuki.

Morning.

promising on Congrats another quarter.

questions today. two Just

First question, customers without that partners? up penny marketing so sign BankMobile future so beta T-Mobile white did many spending and would a and with testing, replicate how how new quickly label on

you have with customers a increased not products and they offer have them banks done? bit to customer little reaction then customer which dig me you and When philosophy. what customer embrace hours, as start customer get you branches, have a anything. and up Luvleen and been you if address and but opened they Let more pain want you, fees a directly Traditionally And and identify add you endpoints, services the that. BankMobile's basically They've Luvleen shared the customer-centric. longer with their points

other evaluate customer philosophy. We've our have we improve single all points, our single how think business white and expect every the will And standards. response, can been future not our what using do perfect. day learned, student our service the with are you label customer-centric aligned businesses. it's for white philosophy philosophy constantly And in we been so We our can pain we only for that every that that if using I have label we should expansion, how that improve customer we we

our I Just over single yesterday gotten. action Dick with Ehst, and management reaction going every we've team our were President and

is best. We have you half-hour on basis. monitored every customer that And the way get feedback the

Okay.

Second question. grab? just for imitate is with barriers competitors label What land or the it this are to white partners, their strategy own a

strategy our think is I clear.

BXBXC, BankMobile, that. banking consumer are banking of that majority what banking then the the today through rates high bank And branches strategy wrong at that's to wants are the you attract business money. service accounts. is benefit pursuing. execute. with strategy to the proprietary. not the is checking engagement our their proprietary customers a customers. banks time easy continuing to our not with BankMobile of last Nothing very see open it's who BankMobile to But digital business it not business, people to relationship be a and easy. as we primary open is engaged that to say our since has full It on technology. strategy, a And we've focused spent to performance. is their are and easy where and or show it's we with deposits What million our but to their years, And they a to consumer technology BXBXC business is is and consumer with attract checking is to that in partners launched X leverage aligned $XXX which technology with help use strategy we on a by call through look about that traditional can XXX they very with consumer to attracting have we their are to call the how which means -- to banks developing we us strategy It's Our we banks And a partners improve partner to accounts.

done for banking service complying win win as our a So and must for for and absolute service. the it in a technology fashion win with at us must look an be superior It be must be we and customer win-win. customer, it's as superior partners it

that’s Well, guys. you, Thank from it me.

Thank you.

ahead. Dezellem from Management]. now next Capital Bill We question take our [Tieton go will Please

open. is line Your

questions. Jay. Good I of a group have morning,

when to First that relative that for your include target, included and does $X excluding or all, thinking 'XX? of CECL, XXXX any initial the you about think in ongoing $X is -- implementation $X target I'm guidance about your expense provision,

our include effective Yes, amounts. estimated those CECL did we in

quite And then two Carla. you questions. That's BankMobile thank helpful,

interest of you $X,XXX, right? $X,XXX, to did balances that on hear is over is we the all, that First correctly not that are paying up

That's business. Correct. totally the for student

T-Mobile now the of and release, has up as balances. is that their articulated works T-Mobile's X% think I press we For $X,XXX interest on BankMobile saw -- to clearly T-Mobile, product how in

Hey, it's Bill.

fee they interests the up pay we meet to if $XXXX deposit requirement. On a minimum business the

$XXX? is Which

month. per correct, That's

and think T-Mobile we T-Mobile. describe, interest organization look label a wanted it. could provided or identical different But to different as terms future a structure. then white label about to the or future fees white relationships, X% and to choose What these need won't in of they what chose structure the the they that's And in you how relationships,

correct? do that You flexibility, have

certainly. Yes,

cheap, the that's we people developed In we make technology needs fact, the sure appropriately of meet flexible we and XXX-and-some that the flexibility and regularly time. way. it in a working have not to where but takes partners It's is have a our

-- it's not very easy our to to very opinion this copy others quickly. for So going it's in be

Okay. you, all. Thank

there Bill. other you, Are Thank any questions?

There time. no in further are questions queue this at the

Thank us appreciate really please Thank the you you and much everybody, a your day have other time. very any If taking give questions, there call. good are a

Ladies and participation. your you for gentlemen, today's call. this concludes Thank

disconnect. now may You