Customers Bancorp (CUBI) 2 May 212021 Q1 Earnings call transcript

Good day. Thank you for standing by. Welcome to the Customers Bancorp, Inc. first quarter earnings conference call. At this time, all participants are in a listen-only mode. there a presentation, session. speakers' the will question-and-answer be After [Operator Instructions]. that Please being today's recorded. advised is conference be [Operator Instructions]. now call first over would to I like our speaker to today, turn the Mr. Patti. David go Please ahead.

joining morning the the for quarter Investor posted the during of deck of Thank good today's earnings presentation first and bank's The Relations www.customersbank.com. will Lisa Customer Bancorp's page you you Thank website on for you us XXXX. webcast for call been everyone. at see has

a red You marked, the can by clicking access Presentation. Earnings button deck Latest

Our on includes print important use, encourage walk investor details presentation or that this you will we the download I through document. morning's webcast. to

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

to for David very and and morning. us taking appreciate really your much, gentlemen. the us. Thank a important ladies morning, call We join good time this very you It's

Chief Dick Bank, Executive Chief Carla Sam Andy Officer Officer. incoming our Chief this Chief Customers and President of who Financial today end is and Dick is and President as when Sidhu, Bank, retires our Credit of our Officer, Bowman, of well as me Joining Ehst, Leibold, quarter Customers Officer Executive

and is you you that sharing we our into in Board with the are integrated first We we and considerations results how level level. every very which encourage cover website the our share updating be our me a and seriously talk bit at management And at policies this look my taking report Bancorp's would quarter, units operates. we like colleagues are and you I and company to about single And much also ESG on take our that. ESG of join business different and And Before very with a little put together principles across Customers ESG. will to at year, our we our that.

slide to performance on highlights six, as which of Now is franchise. as our our well the

earlier between payments BM to to disposition amount that our as BMTX. entire be made GAAP the us a to see, we we shareholders This on the we earnings pay that or disposition something of were as passed that is you had shared earnings had management on historical. core had tax of there Technologies And going because well by we are As we severance core difference on to awards the you all only the can and and of with earnings. exceptional had gain

also quality and X.X%. you Very talking about lot pre-provision so-called is Andy very ROA of credit Return core common we from more ratio this would about a important equity X.X%. improved was reserve capital a a about focus will XX%. strong is today. March significant coverage And earnings. much also our And pre-tax XX.X% that And only like important at with the past for Very Bowman, X.XX%. capital this lot of presentation as So bank of XX. and talk we on milestone ratios. in assets well points you this a From nonperforming during will Return of earnings. on very our our quarter basis to XX% is about on XX hear as our adjusted our increase assets our more

who a became Chief or in seven. he who slide appointed to Board Sidhu, very and couple And July joined who me join to XX my start XX we this taking Century for New of colleague, of together, will or fortunately total launch the be his me the on Century Dick Sam asset-in-failing It ago Moving XX Dick put was like friend our recruited. colleagues We our experienced be one you find time in Dick, cannot with Bank, saluting are it's experience as billion Customers bank. big you core other to Executive Sam you successor banking $XX.X you including averages very recruited assets million a team to would X. $XXX about the that years and of retire. of matter until XX $XX took Ehst, whether about Bank. today, Officer over successor. over From XX Bank you contributions, joined We And are Customers told comfortable and PPP. a effective partner, significant about years a Bancorp. of billion management and I highly us, and At with. doesn't New we bank, who team And

more of of several our credit we point years. couple XX% very, very last We we of and will are the quality quality has and view, quarters. profile over the talking view, the the have of improved franchise over of quality those our are CDs point our deposits only our comfortable And credit the with of franchise are maintaining today about total Q&A. demand know dramatically the about the deposits you next X% in from a from also new recruited several and And teams be

In on bank a and terms contact strategy for way say, term which Dick very and wants upon private colleagues and in is long held to built I our of building our goals, difference what the a wow. is the that or and focused single much privately customer banking point have been feels of businesses focused

We will and sheet. improving to a continue balance will single high-quality very are develop diversified risk At on always for a core asset businesses base management on And stable and allocation and consumers. every believe, forefront small the franchise. that earning both medium-sized we and focus we of company, in capital top deposit growing a digital it's our services and the And very, of XXXX. longer that banking and continue planning. to engaged comfortable share thing share comfortable in XXXX but And are to just $X achieving short XXXX. you least are pleased and our in of And we reporting we by term we we are $X do. very And we planning, on a in that our earnings are very GAAP a goal, goal of quarter-by-quarter also with with earnings much at in term not core in-house

to go Chief Sam business bank's this Sam? So our incoming some time it's to over my pleasure to hand highlights. our of Sidhu, Executive Officer, it at over

off a growth across everyone. from On Thanks are with pleasure. slide terrific franchise. in XXXX we quarter that start nine, the see great continued Good a morning another Jay. to you that will It's benefited

summarize results. Let our briefly me

adjusted Jay a perspective, XX% pre-provision $X.XX, million. ROA EPS translates ROE as earnings pre-tax from income represented Core of mentioned, which and and record to of was we This ROA the of net quarter Firstly, had in an X.X%. X.XX% about of XX%. core $XX.X was an PTPP ROE

Now moving revenue. PPP to

in and net from have We million we be revenue PPP more made efforts $XXX over $XXX million booked. have still our to-date to of

Importantly, net this the life of internal throughout all loan. the will external be of costs and

to moving asset quality. Now

our a has have points continue NPAs quality X.X%. XX we been always basis core just to to franchise peers, of Asset our ratio coverage at pillar at superior now credit with and quality and

of total in loan by $X.X outstanding, excluding grew with loans XX.X%. including Total growth, funded were billion terms million loans, quarter year PPP, up $XXX year-over-year line PPP first or about X.X%. loans, or last over expectations In

Total grew incredible we another XX%, by funding, doubling. billion had nearly deposits demand $X.X In terms our or year-over-year quarter. of with deposits

XX down basis have in this points we XX deposits points of Our to as And total below points. are stated, drop quarter. to second expect cost now the we basis previously XX basis

at will continue looking we year the been spend has to This capital. important Now most time about and bank this achievement this talking the some of today.

XX at growth We Flipping We walk TCE, share through TCE strong PPP on of are book experiencing both core we mix. will ratio excluding quarter After thanks realize XX%. Carla with to X.X%. earnings tremendous see to build, and revenues, $XX and a our approaching you as capital PPP, ended loan well slide value as the PPP a revenues.

assets away warehouse to experience continue improving we have and like our as we mortgage multifamily as remix loan previously lower-yielding an loan well As shared, strong growth from franchises.

deposits. highlight year, majority be This to Now the an Total nearly franchise. of moving past to continues XX, slide coming growth. unsung over of that have demand with deposits XX% grown deposit from our on

an superior cost rate expect which use and in to in a core will payments base allow below of points drop BXB of cost will platform our deposit to talk eventual few deposits our blockchain-based to our I future As basis to mentioned, our technology minutes create plans quarter a us network environment. we zero XX grow more rising this anticipation about real-time

XX. slide to Moving

excluding NIM, the left on on side. First, PPP

position of trough in XXXX, terms funded end year. quarter ramped slow, are our built have rise X%, but We the expected now the quarter, first throughout of are that we large which to we cash steadily and X.XX% at of increasing in of loans. the towards has started are pleased now but PPP from been up stable a the anticipation in In

and between in to bottomed the year. widening and only year narrow this our the to basis due through year declined our progresses. XX mix our to shift improve the by Again, Despite as X.XX% a with trend spread rates, expect and the deposits We points we we NIM even of to last X.X% are target drop further. loans out year-end reaffirming expect this loan range X.XX% yields

is our Moving of we to niche supported and contact community execute technology single businesses banking best-in-class as are, slide by in high-touch, point capabilities. a to XX. by on question To our answer what model, strategy, the high-tech, all complemented our cases, these

to model business well. continues differentiated incredibly Our perform

an Texas and as as opening like expertise which consumer well line installment business discussed. greenfield businesses our our improving one loans business increase new business with franchise, like XX% in mentioned, of also through Florida small opportunities in through market geographies expect have technology in We X% portfolio for we a existing in up in Jay and is share in SBA experienced teams, our previously small two fund additional lending, existing finance. new as to have continue the Digitization automated recruitment in this units, in a performance to and them and of to driven while experience year, growth balance

while our talk are We have risk that, And our as significant still characteristics, Credit it growth Bowman, I XX% our further. management. cost XXXX progress to made Andy Officer, of Chief projecting we deposit deposits With pass to in to lowering even will XX% in our credit outlined. previously about

Thanks good and everyone. morning Sam

to XX. Moving slide

commitment on performed at decline portfolio of our has our near assets are outlined to quarter-end. only credit to COVID-XX. our credit term As remains the was stood with against and and consumer Overall, maintaining very quality we continued outlook total strong as credit by to the to pressures strong position, social in remains brought quality points our commercial and perform coverage this and portfolios. and pleased deferments about political both strong continues stable economic, we X.XX% XX which and slide, NPAs our how and continue a basis

remains P&I X% result being outlines accounting an impacted CECL on XXX% by deferments which with and deferments NPA interest. borrowers macroeconomic Moving principal accounts positive and just individual or portfolio total a XXXX to of our X.XX%, reserve COVID-XX and factors of on levels, slide trend continue end for by very outlines as deferments XX our of COVID-XX, and deep after a reserve of detailed factors macroeconomic where dive X.X% coverage loan NPLs. impacted a assessment charge-off only Slide which overall to these XX. attributes predicated equates as to pay deferments portfolio-by-portfolio $XXX.X the for actual for a million This QX and overall based with upon rates contractual into said various

to XX very diversification these portfolio diversification important risk really that exposure the interest. to performance given and to quarters industry to have receiving industries conservative continue CRE continuing and that time, It's like this outline deferments at the are deferments a seeing those portfolio only and exposure of of exposure, pay added and And demand. CRE only, portfolio run focus retail retail would the the attributes on at within principal over Although of consumer minimum investment few are operating industry and of contractual risk we with metrics with into COVID-XX improved within stress investment continued this have predominant of and and the remains concerns our portfolio anticipate the we have deferments CRE off vital our stress, was impacted role Slides which only borrowers. X.X% deferments, in our as borrowers total hospitality and office industries fully around we XX% investment strong and and the represents conservative total to versus peers. We limited book. played very to next XX% to attributes office I XX our segments,

this Our performed applied been market in we has contact during moving conservative our overall model more point market a borrower has consistently this XXX. as forward committed how diversification our remain by as will underwriting moving morning strong during relationships committed asset will quality conservative has portfolio back to in and management strong borrower industries and from credit we during standards strong believe a are COVID-XX would through over geographic debt-to-income maintaining this portfolio strong trying single core FICO thank these carries average extremely time evidenced this culture we client Sam? for exposure has presentation performs you and a Sam. trying ratios to to our middle portfolio employment performance proactive of strong pleased with to even during the and our are downtimes. dictate attributes improves It's act Overall, at-risk is We and how attributable income perspective. and our times these pillars are and composition practice. now as times our to the they firmly conservative be we consumer of higher we standards, time like borrower Overall, forward. levels, extremely to how good and that to turning credit your I minimal portfolio

Andy. Thanks,

themselves. flip see, can in focused if Dave, bad we slide speak you very on XX. both As credit you are and in times superior could good and quality, our to results for

for thanks service done from before, to positioned mentioned I As model home. high-touch of capabilities, we challenges our the high-tech, technology our And last well so us superior year. very the working have despite mostly

best along strategy of a is the a best community the Our a model bank with bringing hybrid of of fintech.

We recognized billion. group peer country organization in are branch an and per the action. banks $X we find that comparable of one been a a of top average to hard-pressed bankrate.com as example deposit digital the has PPP high-touch our in have was in an of by high-tech,

streamline and we year, the at Digital deposits are over same has X,XXX and Savings, months. deposits just technology started expertise the deposit combined lending approach expertise. hybrid and fintech deposit and market SBA manager-driven $X.X Max Our with The seen few with a now in our process. billion. our a along gathering efforts. a accounts combined from November to digitally last opening can $XXX of knowledge CB in relationship combination servicing technology We in top million team experience product in account XXX generated be

experience installment team gain business strengths effort to consistently ways infrastructure create looking using all are lender existing in of is additional at value. One technology to to example data capabilities. our this term on vertical existing our tech leverage and hybrid our drive sale analytics near a consumer We with our

and looking income of quarter a driver piloting then are be fee the are year. the have this nice this to of the We half XX. in second Flipping slide in second to

the Here is lens of we some technology which platform. snapshot of manage our through our a organized tech with partnerships

automated that Firstly, served over to XXX was hours. huge we have a processes over way, digitization accelerate internal already COVID XX,XXX team that saved where effort have member under

and in this You will see efficiency to ratio. reflected continue our have

through, us financial as our originate example, efforts. previously deposits that as driving deposit Next, highlighted, external PPP impact as our our results partnerships significant helped digital are for on well and loans I

unique model delivering peers Banking-as-a-Service on have a we are our our emulate. that able Finally, and to commercial created few embedded bank partnerships, of bespoke

a this We modern API-based have centered around modular infrastructure.

on be platform PPP over this. for able of the Congress was the that seriously XX. funds to the in turned related pre-tax loan. report over after our that life When have frankly, we need, moving slide loans and to net I to for billion to approved Now am million vital costs we $X distribute technology pleased small took revenues, businesses our over very and over banks built $XXX to to of obligation again XXX,XXX

are or we serve most number small Importantly, applied of average and in including our PPP an serving top need X, number applications in under far, two scale size us approximately for smallest $XX,XXX greater the learnings XX have the and $X.X even small of and with banks, this Thus X. loan it in approved in help, the white year, have makes lenders. took the in businesses and referral the in the loan that we those loans. we XXXX truly This partnerships bank over billion. for size exclusive country commercial over Among businesses label XXX,XXX other among PPP X We $XX,XXX PPP arrangements. under an at $XX,XXX to of terms banks X

XXX% than than as than is this Bank and higher higher Wells XX% Fargo, perspective. JPMorgan, XX% For reference, of higher America

two XX% under of on have XX,XXX for is our XX. far, applications round forgiveness approximately processed XXXX. from billion, forgiveness we to and just one Moving originations which Thus $X.X slide

applications a maintained XXX% on rate submitted. have nearly We forgiveness

and we revenue realize $XXX round to one round the As and two only revenue of majority million to-date have recognized of XXXX. in highlighted, pre-tax expect previously

We XX. Net. Flipping that is further PPP am initiative cost recognized core the share slide zero all to CB be improve the already likely with is excited combined year. addition by nearly have deposits. to to This middle with of I our tech expect next franchise should going latest that of our strong opportunity you revenue to an of very our deposit

Customers bank the months, closed For real-time to a via sides stablecoin we customers, a payment on establishing and the that will effect through working dive payments platform the deposits be both began minted will customer's payments six network creating of into Bank. of a real-time on six use provide Signature at last platform when the been the evaluation intra-bank means payments Bank We a BXB more the business ago transactions importantly, than a network blockchain-based within of months deep private blockchain. we took bank. stay line This have this

existing estate, financial across real institutional investors benefit and have will immediately. clients We exchanges healthcare, who

the in We footprints space opportunity this payments growth to become value also will excellent in together that, to consider likely a grow it an this with we the our all and in have pass identified. I our There book the come Leibold, on CFO, and and With leader verticals to will more capital, bring our it to Carla coming months. weeks outlook. be

would three focus and Thanks like good topics. very morning my comments everyone. Sam important on I to

and earnings is value. momentum, is second is third The first the book the tangible capital

Turning slide XX. to

can strong that earnings continue we build You momentum. see to the

X%, XXX basis core average points, basis which core up basis adjusted continuing of XX%, record $XX.X income million, equity which share, our fourth of points, of to points X% which XX%, XX up net share, or operations XX% common $X.XX, XXXX. XX million up of income up or million, income $XX.X million fourth average which X.XX%, XX%, which XXXX on from return net pre-provision basis which up per $X.XX pre-tax assets which return assets of earnings was per was was up adjusted QX, pre-provision up points, our compared core on from up from net $XX.X XXXX and pre-tax interest was our was NIM quarter our of was which of on $XXX.X include return quarter First quarter was $X.XX of results XX was diluted our diluted

Fast capital resulting expected be our the of capital core risk-based and slide our of forward shows to This excluding and strong end on earnings. our year TCE XX. significant be capital at recognition on approximately Starting ratio, risk-based the is to expected to the the XX.X% and Moving of from QX, around loans, PPP about end ratio, slide to at capital PPP from loans was PPP our this excluding is was the fees TCE total XX% X.X%. deferred and X.X%. total loans, estimated accretion origination

capital excluding XX.X%. Now pro XXXX, $XXX of full the TCE PPP if that total of you XX.X% end you increases and see of by the million PPP estimated risk-based the forma revenue, ratio, recognition pre-tax will to loans, the again, increases to

loans So income recognized XXXX, ratio. capital is our PPP still or in the whether the XXXX accretive in from significantly is it to

XX. $XX. really tangible tangible I non-dilutive from we shows slide pro effectively value. expansion XX% ago raise. $XX At the in our this, a will and XXXX, Building up XX% XXXX, acted to possible end of forma additional capital EPS the year growth full was if value where By we about expected create to the Turning all value year, since revenues, quickly further had has PPP end quarter. strategies tangible talk In is of growth XX at of about That's That's tangible again, on quarter recognition PPP book first see of book this that about our $XX. slide you value the be proposition. book book as the is revenue around have one of the value.

stock first strategy a consider be program. The would to adopting common repurchase

If redeemable. Also both accretive be B and accretive stock. preferred to consider and of redeem Series us stock our redeemable. E specialty growth by could series be have also were EPS stock, by our Currently, about talking end sheet, well-positioned portion Series or particularly a would support the preferred about The Series by would been $X.XX. future that we EPS all million to F share are would estimating increase to about redeeming the also C those outstanding $X.XX. to by $XX very the also Series of are niches. the all year, accretion our about our common become lending C&I We We of balance capital a core $X.XX. preferred EPS we buyback both Redeeming our in that this of leaves of

Lastly, turning to slide XX.

end Our updated guidance loans is follows. and warehouse to excluding companies between Loan to average financial XXXX. balances, total billion expected next and in to The expand $X.X XXXX. mortgage And year. over to to mortgage the Again, is growth, high We the by our digits decline ratio $X.X X.X%. PPP at quarter several around loans, to quarters. as our the of expected this X.XX% ratio and project single TCE PPP mid excluding is between by to commercial XX% expected year-end X.XX% NIM, to balance capital exceed be is is billion fourth expected of

and EPS at tax XX% earn in rate And operations core and effective continuing XXXX $X XXXX XX%. $X between an estimated and XXXX. core projecting expect of we from least in are We in also then to EPS

include core one, remixing EPS guidance balance achieved that away loans toward sheet QX. than deposits XX to by, of completed consumer the to and in is does total was of loan our in portfolio restructuring C&I the quarter second points and NIM down less liability cost from of the bringing basis the side categories and XXXX loans, asset to the Our expansion revenues. mortgage companies number PPP-related be The commercial expected

like before the the the turning revenues and capital momentum to back I have stemming we the that So strong floor Jay, PPP reiterate, significant earnings two, would accretion built, one, to from of about that, with three, Jay, to revenues. you. value forma back earnings book core And it will and the tangible strong of I turn including PPP full $XX, recognition pro the

very you much, Carla. Thank

high bank very the unique As a shareholder I you colleagues we more and We we we with value it's are a assets how our bank all lot building and a and been Hope to build bank Dick that that all has build have with high-tech, we strategy. focused earning a of clearer very what company this supported on branches on funding know, call a a not do do becoming forward-thinking the years, touch. over everybody a how do our bank building do with reliant that's and franchise. future, and

will stock. that of being very It's on for in we as stock shareholders upbeat of shareholders Number the fastest allocation price, capital capital last for long one term been have in on management becoming very we stock. shared street. to a a tradable to company one a hold was, the that digital advantage beyond divestiture on wanted was has obviously got value these $XX a focused years, Over of stock of two, for not and three with be shareholders banks who focused Customers, having BMTX just I I, of to apparently on are five have billion think we Number size. decent it. amount to That very been you stock hopefully the stock holding we future which being am opportunistic. quarter. to BMTX just our large was growing $XX done. to but because that building wish were we clear of two created share done And that the And We you, did that BMT and million take dividend today's benefit very the to beneficial priorities, special we we the nation shareholders. of this at become our gain very term believe that our of and sometime and is, the the and of with longer will we on value the

for accretive to and book regarding very opinion, that we share a tangible all our quality And have of in Customers accretive quality Bancorp the have that our our in been next to saw, year very within we Number achieved franchise achievable addressed. manner focused significantly capital been of TCE concerns, per on value. value ratios, And you we that three, so. $XX the as our So book the goals in believe our lower-than-average ratios we deposits. PCD or believe tangible share the our was is per have

future in space we just and of a momentum is coming As you is term, have long past. that's lower, very we pace growth of model heard even also through that a of which with risk happens. credit from of been because what management, still than franchise in exposure absolutely we you we quality and deposits of have may on commercial growth a very And on we very our supporting believe to company lower, probably my too there important. systems, believe as been earnings that is, office which soon, And colleagues, the have are blockchain-based that business a think And our and heard payment well-positioned our from a lastly, very be but we the we years. expecting also time, our couple short Carla the intend is a focused we forward horizon, focused building the also whenever that term. with and as going not especially you, in have our company shared have probably And better Andy at is going quality. no last to we minimal be but have the estate you for ahead four, that upon that's seen okay. risk but on concentration based crisis We that real Number were

Okay.

for please So it you with up can Q&A. that, Lisa, if open

Instructions]. [Operator

Peter comes with first the Securities. Winter Wedbush of question line from Your

wanted EPS in morning. for ask, think just Obviously, A XXXX $X to about $X. Good increase with that nice for forecast a outlook driven year? increased guidance the success PPP the I today, are three. the earnings by But some the to you round of January's if other in is to by to drivers the the very quarter. what I next of lot

Number having we momentum in much I inevitable gives am to think the X. and our drivers this bank ask this obviously, higher hopefully, is continue kind to Number the is our some been the us assets this is very reaffirm an to very future. also before again, other those the something have been four of technology in blockchain-based PPP deposit for and of to part we money believe and our but recession high-quality comfort and the us focus And confidence well-positioned margins year. That's really to three and funding. we two that the but And comfortable And really about, everybody. in expand. to I half of rates I our of in months, core gives the so-called build the level thinking for talked have two-and-a-half us clear, like gives on in, future the that. been future, been very, are and said, clarity more a we last $XXX from sometime working earning for for we quality. implement colleagues our the lot are $X are we this you in having level Sam a real on of revenue, credit year expect comfort environment drivers several originating months, those will estate generated in the have believe have Number as million going And seeing second in about the commercial in to it that's cases and my that step XXXX. in

that, of specifically SBA would for the Peter, $X on disclosed I and income just some year. And benefit, both and we business, had million additional businesses, or fee advent your $X.X introduction the previously which add million quarter as to from for sale gain Jay a the

So introduction similar portfolio. leading well as a consumer and of the from the installment PPP learnings business in on our expertise in as

just, buyback the redeeming of capital What's maybe the that Okay. share the that on potential just the likelihood preferred. capital and better That's then happens Carla, the given some opportunities with And in on a second front ratios? the outlined some outlook of you helpful. half year,

Yes.

will So thoughts give a around I that. just few

two. the effect that's can X/XX, to and rounds see You from going the recognition as PPP of from the occur revenues rounds slingshot full just one of

to consider well-positioned buyback part doing early that. and preferred common are this year the stock either stock redeeming XXXX of we consider latter the So to also our in or

we peer If does get shy market be I we about and group not respond said on very multiples not to have value to very, and are the our we going not shareholder creation. think the does buying back. in that past multiples, stock are focused stock

a four last this bit pipeline hired color as little question. on Okay. teams, you quarter? we more in give what's Could just the the teams forward? And then the maybe my you And go

I take shot first the Sure. will at that.

for finance We place C&I have top then privately in private And one in York, here which have team and in fund well. we in hired of New held to started teams in already On have Chicago one do businesses in and Dallas, one today. in and in, mentioned, we and Texas. generation Orlando has a to our it's deposit Sam continue area to as banking the related this, teams right lending that C&I been group all Pennsylvania,

added are And we so the the those few teams that months. in have last

add, our help the as new Jay that's one we those geographies senior had dozen members just about Peter, in would to And that up to geographies mentioned. one I a well open team have of just of And collectively an move office. also leaders

Great. questions. taking my Thanks for

Peter. Thanks

next Your of the Haire from Casey comes Jefferies. with line question

morning Thanks. I had Good two-part question everyone. loan a actually. about Yes. growth,

couple core that think So guide the high of end billion expectation I Like $X.X to I for two, that? does PPP your been then this. one? missed the where three, the growth, quarters. And single up, apologies But what's the for loan of if mid digits, number round last that's

obviously of side. well it, but PPP have shy You been done on very the have

it to room PPP? going don't you So can focus You the core I that wondering, as think for am about have growth? make forward? to just on way much Is loan

take want that? Sam, do you to

Sure.

you Glad So to Casey. have good the on morning, call.

year, originated PPP, in what a of we through firstly, the for services, the typically of the billion forgiveness it we this period $X.X So about thought have similar the XX goal that SBA XX which about which last services how of copies to is to months. maximum terms at is loans post year, the SBA time the

growth, the a C&I, was are we where overall we little for for first reaffirming about loan loan to of growth as that's said businesses, PPP you expectations. year of next core our thinking Having bit middle sort are originations. So C&I as quarter, post typically slower. Getting the the that, our back see X goal end

We are the seeing across green franchise. shoots

comfortable strong given about our a on previous pipeline have We we building we guidance loan that have that's growth. feel and

But to the from that $X.X grow will continue Okay. PPP billion in three? round

available. while that depends are remind I But period cash PPPLF of is facilities funded of you on It through liquidity XX. are Having last funds the available that to-date, May would through long good XXX% this portion The not that, a the time. financing. how said we other that full money may program extended with for and

the Bank at of So loan not Customers it's traditional growth. expense

Great. just back to front. management circling the capital Okay. And

for guide that that you embedded? to a this to that $X, buyback year does buyback EPS if or any buyback, did was, the presume initiate So if Or choose be redeem would upside number? of preferred

All numbers that you preferred have document or buyback seen exclude redemption. of and in a the the the projections stock

So that all of upside. would be

All have this Or where right. like the expect in rate restructuring got we for the it more? backdrop? do sheet balance sheet feel Okay. kind you just me, you balance in lastly you of And should the want quarter,

No.

ahead, I think -- Carla. Go we have

Sorry.

give sheet on to little more going just balance was the restructuring. color a I

lock cash at terminate wholesale we essentially in flow to million $XXX So fixed did hedges funding used were that rate. of a

XX the seasonal of end going do did those And securities will remixing the at security, happen And just end to as of just by restructuring securities forward of book our our in basis were to XXXX expect those able unwind mortgage some hits an I essentially warehouse add, points NIM. to build we there capital and that the neutralize impact. loan is sold decline that the year. yield, about with We amount that such hedges expect offsetting of we like on we investment a to so that that replace

Okay. Thank you.

Casey. Thanks

from Your next B. the Moss with Steve line Riley question comes of Securities.

Congrats start wishes eligible his back second the draws, have to by want to to With regard Good on XX. best and morning upcoming to here. going PPP Dick with, May you retirement round the I everyone. XX,XXX maybe program.

beyond much how if wondering, an program? XX we is of Just extension May get the there

further top numbers tell the I the will there would there we mentioned. would I previously extension you head. be that don't a my of because be have off need as don't anticipate funds, additional that to I

So that addressable we think to range. approaching market we is that somewhere XX,XXX XX,XXX the in are

bank curious a call that historically at, terms terms kind ratio. right. then All it, guys repurchases of That's to helpful. to of in Okay. about of as the how And here, X% the capital? share just in think You have TCE run

of about up Do XXX in kind TCE, pretty that of think sizing bit? meaningful. XX a So terms of heading is points XX% it basis toward we just up maybe to maybe

possible. preferred. both for repurchase I as well have think opportunities Carla as our Like for that's that clearly shared redemption you very stock with we of

put And very the no and higher if for how repurchase future. we is it whether will trading of preferred. upon lower focused would be we repurchases look at at Stock point And margin allocation it is would There remain and we view. capital we a stock with And so the question will a be allocation risk, profitability it. from comfortable continue priority. of otherwise, on and about market the the not to multiples And always will at become course, we looking performing. into capital we our depend are

model of sort for allocation. our that's So capital

about payments then we there terms kind curious deposit be primarily Or Okay. of here, it's perhaps or blockchain as terms the things think in And just rollout you lines? along should in how those some maybe of fee guys of whether gatherer? some it, generation, sort thinking will just interchange of are a

will I Sure. take that.

said delivered play demanding end corporate strategic the blockchain. in I of over to and, day, customers for the are SMB that, payments some at us. very Having Instant this this service type So that and is banks. a the be requesting don't cases, need from think of

cost strategic a one where income a we to the we deposits. deposits. is free zero the banks zero the number first building that, going. low for building looking at priority that, they two this in down that and are of making would been is said getting Number fee have they From for are line. are of platform potential sure perspective, typically type some that be Having cost payments at moment providing puck are the providing So and the service, to movers both

one have medium to more payments could justify associated the line. term the a is, So that's be about a down the once think fee that this. Absolutely, of sense down But we will business there we what build the to have line, in are. we once income could opportunity long rails what the around

How Okay. do installment And consumer forward, much as to CUBI terms loan of thing just the the forward? in be other for you drivers versus growth going will That's then here. the just at helpful. partners expectations going one looking expect curious guys

question. Great Sure.

range to the XX% million continue of expect this a month can And We direct. ticked slightly a are up have the currently portfolio year. not potentially end of of with the quarters we target the And that of and XX% majority, that the you million to year $XXX if to that originating in as low will be all, end the reaching in by some see, between quarter. first the $XX somewhere direct we

Okay. Great. Thank quarter. you Nice very much.

Steve. Thanks

you. Thank

of the comes question line with next Your Will Group. Curtiss from Hovde

Good Hi. morning everyone.

Will. Hi morning. Good

know guess you the what it, of Carla, to $X for expense And mentioned but discussion assume that around I in up the growth? does if EPS. of I don't terms I wanted follow

I What for what? it does assume couldn't hear you. am I sorry.

in terms sorry. what assume this of of I I am does year? am curious just $X for what expense Yes. kind your of growth EPS, that

Yes.

is is we forecasting we two we The add positive that. by focus What grow models to operating expenses. our we the on extent times expense growth expense flat to hold growth, that amount. expectation our in are of said revenues For outside that leverage essentially is that

Got it.

markets I the wanted give Jay, expand in bit us of little comments of to if little terms slide might you be on you. the in a interest a bit expansion, about just of some then, of And sense see Okay. that the market a could to

Sure.

Our really branch-light. business model is

And Bancorp ask many too XX them. got is have? many In we because fact, people always usually me, answer does branches my XX of have Customers how

how but doing So are privately our of means traditional private banking expand and do branches, which by we with the businesses, held client, any without out having acquisition to base, it driven we for reach teams.

in where businesses? of held small did analysis terms of see medium-sized privately the so the we result do available? do in marketplace? can we we an teams. some where we we in where that attract see And a do So And see as talent to the And disruptions greatest growth

are we you Boston. today, know, in So as

We in Providence. are

in in York, are Manhattan, the We New different York. boroughs in New of

in We are Philadelphia.

had Philadelphia, through are Texas Suburban And we Dallas, already because which some the market We identified the Reading Lancaster, clients our we in market. Orlando, in area. and were Harrisburg includes then Chicago. And identified there. analysis, Jacksonville we We Tampa,

and So our in concentrate further objective to is for the an years, these to see really expansion we a before next markets have years, or into how year-and-a-half two new things two markets. expansion are going

are do Now quite go there funds we the there. West necessarily an Carolina be example, an be private with there that that might privately into group look a focus, as because might that for just fill-in Eastern. markets capital would could to over But not few of Coast, private in to our firms equity at is sort a thing. opportunity We held banking businesses. a finance the our that's But venture

Thank very Great. much. you

next the of Michael Your with line from KBW. comes question Perito

you. hear hardly can We Sorry.

Mike Perito. okay? hear It's guys Can you me Jay. Hi Yes.

Yes, voice. Good your Mike. hear to

dead of little book from least are not just things at and about a preferred similar your minute a back would that it a buyback objective. Obviously, buy near guys get I and strategically value. the element your be those answered here. over pretty mean make map how should kind we is conversation, is on. in to you just to years? heads of just term get but other don't to my as to seat, impact Good. to horse to on my I always we the buyback, mean bit impactful? few seems deployment for more I point, earnings trying seem about above stock like this out a here, Or here, thinking the capital three the at thinking clarifications, been the deck just I any we are Thanks I beat is want it obviously, try as two timely at to most have But from the just you questions versus there next preferred have trying but the guess to of I kind spend assumptions?

over years, three think I we two believe market at two trading to next be will we the multiples. years,

that, XX days lead three it, to So question or days, going that months, And are horizon. at about in that. looking or happen us but tomorrow know to will with don't right. we XX We no there's what's our performance

within earning have right. would generation, year all three assume through by we our our redeemed that been will period, that And it So fair would then normal asset be be preferred us, opportunistic. to

trading be right at almost no-brainer absolutely common book, looking buying to are You are we a it's back your stock. since below

Got it. That's helpful.

slides, But crypto on like seems you at you targeted like based types mean, in of guys am point thinking of I been guys want carriers realm you stuff systems, seems the to think grow way Like, what's expand this the of the could in the I in thing blockchain guys, of, you areas in networks looking Silvergate, payment, payroll and then kind that. this type to like to like been mean, with it least about obviously, maybe your that first aren't confirm are and hospitals? for about you some compete some laying necessarily the experience hospital with There's from use only get game early with of you and been more whole to obviously, first, my couple started on of I these cross-sell curious of I with kind how plan that's then Thanks. kind Okay. it game their you compete plan Network areas in the crypto the example, the are commentary, here. Silver think how to kind this. that. of then I just if in kind the guess, try right, about out growth? marketed so has Exchange there's with clarify seeing the of them? and to you innings that I there that, but slides two, and a guess, this And just form one, But insurance other to seeing in the that as brought and at the just

question. the for Thanks Mike. Absolutely, Sure.

playbook we time first at a on done try addressable They the very there's short So and and looking it. question, we the such job period Signature a impressive to in are to have large market. ambulate looking are of a

the the other side are And goes sort anyone on closed bring is that I think be, that the trying get So or And industries ours And first platforms it's then that in of as these as have basically verticals network, up who who's to about a other cases, demanding the private to participant they go the a you to of a main capabilities. question that first transaction supplier. that here of power in going you identified. example, transact the your other growth, go the it's blockchain-based have synapse is for And institutional significant payments important investors the it's power power, that first provider to on. and in and has we transaction. participants. some focus participant side ability payments first thing this to and a real-time between the and But but the to in exchanges the a a for from that is it that's of setting moves, vendor, they cases,

and an we a to that bit explore of heavily we in identified of when and There's launch. strategy. and lean cases have on different we little a it's So use number that interesting will as continue

touched payments last blockchain-based thing the would instant on payment I is before, not required to capabilities. Now provide mention this is I that, network a

network. benefits puck about or semi-private more a going, network, the network a could. the we the private where don't this long closed In public as is is However, a we private closed think term, have that

after having very create are said launch interbank this hopefully, and of a to we also with infrastructures mid-sized an are medium strategic the deposit franchise, be with whereby banks. successful could after could a studying have doing that, infrastructure initiative, of So to the we deep compete some viewing banks large our been and that term banks enhancing IT in the and the as large pockets what we be very able the

the most those two sense. difficult, that And sales or the where it's critical are onboard, sales most ones. willing benefits to and and but people No, you after account deposit feels on those something a one starts first and to definitely are the makes open I it cycle, in build of mean then get the like the reap it. probably more network jump

exclude right, number number, it just interesting. very lastly, because just figures you, that. in Sam, That's sure couple variance different revenue, want that's release the right? those But make got PPP, core, but only includes just between then in $X And So which EPS on XXXX then $X PPP, right? to I had of I just the And the the comments to was for Thank clarify a ER? two would the there. recurring

Yes.

what was excluding number that $X I think was our the we PPP earlier said X. had

to got this, have you yes. so at And look

year hopeful our just very this are and are we comfortable So but now is earnings for guidance. very $X, not year, for $X GAAP we next with

what of XXXX, fair kind the into first of third fair half forgiveness includes I a decent of assumption but chunk, that number the base correct? that wave a who amount it's fall And the that exact to knows a mean will is, think

correct. is That

the Okay. all Excellent. color. it. Thank appreciate you I for guys

you Thank Michael.

Gunther Your comes next question D.A. with Davidson. line of Russell from the

guys. Hi. morning Good

morning. Good

of Just left been most and picture one as big answered. mine really have asked question

as or a Banking-as-a contributor of per about you differentiated here any internal So way as number, ahead CUBI term external $X to the path partnerships, some it's do whether the payments blockchain to tech to your Service, that contributes look target? the XXXX the at think way and So to model there size earnings other the to what that share $X, is we all of how the that? up longer

before I longer blockchain. earnings term we even we given had think talked the about target

make we are look don't otherwise we do it. at we to this So going not need to

very strategy, a because much $X of, constantly still It's our high-touch external clear is make technologies-based, constantly and forward-thinking, to that environment, going the are company a model. a anyway. are type high vision are share a evaluating is at forward-looking, we clear we of banking about a community matter We its looking but innovation is its just about in a

for focused very something? doing are do concentrated things the you right can given know I your going to $X is year We you the be feel a this between that on have to And CMBS recession as So right that that been, very in the think you We question we of Or of have it And concentrated now problems some you are and the be XXXX. telling shopping assuming a are that some year. as in we who by the yet. guidance banks also well coming comfortable might people XXXX, because also are who probably don't are XXXX? we problems, $X we office heavily and pretty and will malls. market heavily

for That's me. thank much Jay, right. guys. you All very it

line the Capital from comes of Management. question Tieton with next Bill Dezellem Your

questions. two you. Thank have I

three from internally? round of what much of I the partnerships loans PPP billion, that label XXX,XXX and PPP have First how $X.X guess, of you white is originated all, the versus of

So all, morning, good Thanks of for Bill. question. your first

direct kind came originations white of firstly, range the So about or the scene of in it label about through those of of direct terms relationships, in the was somewhere XX,XXX relationships.

there was to were average? your essentially $XX,XXX And any Or they size difference? similar

XX% were on XX the size loan banks, in you on of round, industry are disclosures, But you mainly has banks as of the test. list ones the can some revenue overall larger because significantly the in down overall, even as that average look that trended can SBA at the side. commercial the came The appreciate, this from larger top

would come than that closer So from overall, average. of those have but many banks. were to for trending well. seen have ones then And non-banks still the time, we last But our lower higher also partnerships $XX,XXX as exclusive than you with the

a cost advantages a to And I then Would talk Thank am understand the the Understood. do would the you to why advantage essentially blockchain going here or that, I front. firm my to please? walk instantaneous given can all. my ignorance the that through so for what deposit movement deposit zero cost you money are, not can But low us ignorance already a that again you. thing? understanding happen, choose such expose on of you of advantages

Good Sure. and Absolutely, question Bill. clarification. good

which as to sort occur, two So delay transactions know, is inbound network, how potential is typically in process an the typically, interbank ACH of delay. outbound as a you settlement one day well an terms as of

So is instant instant payments, the settlement. benefit

say this what an of example, So think is. as PayPal

to and eBay. vendor said a there's seller, instantly But you to BXB with that, amongst your transfer sort a BXB you If that PayPal have now supplier both with a delay bank where Having traditionally buyer two a a to ACH of period, and a which world bank. same instantaneously. can through imagine opposed would account type be be needs a technologies settled you said of say, now existing those that that PayPal, done now as in within on in

an well settlement. have can transfer dollar instant as and you So U.S.

you Thank Sam. Great.

Absolutely.

Mr. few email. from webcast a and ask Patti now questions the will And

Thank you Lisa.

stock price? the be on love low Our a he Pennsylvania, would Jay, if investor an ratio you our talked PE have to if asked a consider Ludlow, that, common comes Jim comment on would something to stock? course, also, from first who you before. you he more know, It's And of perceives of about dividend the what little Central in could to question

And I important Capital revenues recognize we allocation of pocket. a to of think address have the aspect be in allocation of process. one very our constantly through GAAP, a pretty where first. But and first second Directors PPP will I our much our Board is on. we want would before management focused part is our capital we But at the will hip dividend dividends. look that

one BMTX confusion I is some if There told the what will in the it there of PE addressed why about was have addressed us. up That us we leave much questions, think is franchise. also how Now concerns there. than lower future, by believe the franchise. was I And concerns focus our to we behind a a so lower, analysts as There in the It's terms been heavy better good loans when some those core by analysts. were I I have think to capital concern at on We us. average about ratios. in been I what will just peer addressed deposit would performance. and multifamily have some our be all whether us. And heard divestiture There us. for That's has some concentration deposit by quality we have time were

concerns have portfolio. our We And addressed was some there loan that. about consumer

and some And speaks be words think concerns we to able think that. comfortable there very that. some by than earnings about about should better performance were momentum feel hope the I we And market analysts. that on

that a And expectation Thank our generate Pillars life we Oliver plus over at PPP all pre-tax London. Seven does question loans. our of the release, you to from XXXX the Oliver he Jay. refer from have in that Mihaljevic the over revenue million vintages, $XXX loans, the writes, friend, means quoting of to is Capital XXXX

from is out So on. of current it Sam funds the funding has collective? before end probability management program allowance made the running that any of touched May, something And PPP has of

take Thanks I will Dave. that.

January, of talked combination in quarter, PPP. all we XXXX it in the vintages. deck, vintages for release and fourth $XXX In IR our over a is about yes, of million So earnings

into based backing $XXX PPP this upon of would is to-date X million-plus So originations. that the that be and

originations and money a So between it's not out. of future the projection now runs when

you. right. see I questions. Thank All no additional

that think cover addressed. to already fully or everything didn't the us in. questions, listening feel anyone I the something else free has we or send email if been answered Please, webcast, is to feels

those my to will the Relations I You speakers. for exactly the information But now. Investor can otherwise, find believe that's provide our and contact questions page I on

Dick saluting and congratulating our in appreciate and once everybody. and interest call, to you contributions have we speaking my he's absolutely again him, thank a Really time partner, very join on And us look Ehst. questions company me any unbelievable Board. in will forward and Yes. just to your friend our much, we His any please have with give but you. email miss you And been my like Dave Well, us please Customers Bancorp. said, staying

much, Dick day. good retirement you, your Thank us. and thank a Have joining you. thank and you everybody, for enjoy So very

you for concludes conference This Thank today's participating. call.

You on line. Presenters, now remain may disconnect. please