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Mar 31, 2023
Customers Bancorp Q1 2023 Earnings Report
Reported net income available to common shareholders of $50.3 million, or $1.55 per diluted share.
Key Takeaways
Customers Bancorp reported a decrease in net income available to common shareholders to $50.3 million, or $1.55 per diluted share, for Q1 2023. Despite the challenges in the banking industry, the company's strong risk management practices and focus on core banking fundamentals contributed to its performance.
Net income available to common shareholders was $50.3 million, or $1.55 per diluted share.
Core earnings were $51.1 million, or $1.58 per diluted share.
Non-interest bearing deposits grew by $1.6 billion, or 85%, over Q4 2022.
Total insured deposits were 81% of total deposits, with immediately available liquidity covering uninsured deposits by 272%.
Customers Bancorp
Customers Bancorp
Forward Guidance
Customers Bancorp anticipates moderating growth or potentially reducing the balance sheet to optimize capital ratios. The company expects core loans to be essentially flat to down, with deposits remaining relatively stable. Net interest margin, excluding PPP, is projected to increase throughout 2023 to 3.00% or higher. Core EPS (excluding PPP) is still expected to be about $6.00 with a return on common equity of over 15%. Core non-interest expense is expected to increase between 5% - 7% in 2023, and the company is targeting a CET 1 ratio of approximately 11% - 11.5% by year-end 2023.
Positive Outlook
- Net interest margin, excluding PPP, is expected to increase throughout 2023 by about 20 basis points to 3.00% or higher.
- 2023 Core EPS (excluding PPP) is still expected to be about $6.00 with a return on common equity of over 15%.
- Targeting a CET 1 ratio of approximately 11% - 11.5% by year-end 2023.
- Focus on improving the quality of the balance sheet and deposit franchise.
- Achieving tangible book value guidance in excess of $45 by year-end 2023.
Challenges Ahead
- Will continue to moderate growth, or even reduce the size of the balance sheet, as we optimize the balance sheet and materially improve our capital ratios
- Deposits are expected to remain relatively flat with a focus on improving our funding profile and reducing high cost deposits.
- Expect 2023 core loans to be essentially flat to down.
- Core non-interest expense is expected to increase between 5% - 7% in 2023
- Uncertainty in the current environment