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Mar 31, 2021
Customers Bancorp Q1 2021 Earnings Report
Reported a net income of $33.2 million and core earnings of $70.3 million, driven by PPP lending and net interest income growth.
Key Takeaways
Customers Bancorp reported a net income of $33.2 million, or $1.01 per diluted share, for Q1 2021. Core earnings were $70.3 million, or $2.14 per diluted share, up 29% over Q4 2020 and 1,282% over Q1 2020. The company was the 5th largest PPP lender (Round 3) in the U.S. and expects to generate approximately $400 million of pre-tax revenues from PPP participation.
Net income available to common shareholders was $33.2 million, or $1.01 per diluted share.
Core earnings were $70.3 million, or $2.14 per diluted share, up 29% over Q4 2020 and 1,282% over Q1 2020.
Net interest income grew $9.8 million, or 8.0%, over Q4 2020 and $51.4 million, or 63.2% over Q1 2020.
Total loans and leases increased $5.8 billion, or 56.6% year-over-year, driven by PPP loans of $5.2 billion and strong growth in short-term commercial loans to mortgage companies of $890.1 million.
Forward Guidance
Customers Bancorp anticipates loan growth, excluding PPP and mortgage warehouse balances, is expected to average in the mid-to-high single digits over the next several quarters. The company projects an effective tax rate from continuing operations for 2021 of 23.0%-24.0%. Customers also expects to earn at least $5.00 in core EPS in 2021 and 2022 and remain on track to earn $6.00 in core EPS in 2026.
Positive Outlook
- Loan growth, excluding PPP and mortgage warehouse balances, is expected to average in the mid-to-high single digits over the next several quarters.
- The Total Capital Ratio is expected to be about 14.0% by year-end 2021.
- We project the NIM excluding PPP loans to expand into the 3.10%-3.30% range by Q4 2021.
- We project an effective tax rate from continuing operations for 2021 of 23.0%-24.0%.
- We expect to earn at least $5.00 in core EPS in 2021 and 2022 and remain on track to earn $6.00 in core EPS in 2026.
Challenges Ahead
- The balance of commercial loans to mortgage companies is expected to decline to $1.6-$2.4 billion at December 31, 2021.
- The TCE ratio excluding PPP loans is expected to be about 8.5% by year-end 2021.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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