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Sep 30, 2020
Customers Bancorp Q3 2020 Earnings Report
Reported record results due to revenue growth and improved efficiency.
Key Takeaways
Customers Bancorp reported a strong third quarter with a 100% increase in GAAP net income compared to Q3 2019. The company benefited from revenue growth, driven by PPP loan originations and increases in commercial loans, as well as improved asset quality and operating efficiency.
GAAP net income increased to $47.1 million, or $1.48 per diluted share, up 100% over Q3 2019.
Total revenues were up 42.5% over Q3 2019.
Non-performing assets decreased to 0.34% of total assets at September 30, 2020.
Net interest margin, excluding the impact of PPP loans, was 2.86%.
Forward Guidance
Customers Bancorp anticipates continued short-term and long-term improvements, building a strong franchise focused principally on providing private banking to privately held businesses.
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.
- Total assets are projected to be about $12 billion -$13 billion at year-end 2020, excluding PPP loans and subject to refinance activity impacting loans to mortgage companies.
- The total risk based capital ratio is expected to exceed 12% by year-end 2020 and be about 14% by year-end 2021.
- We project the NIM in the 2.90%-3.00% range for the full year 2020 excluding PPP loans.
- A run-rate of $3.00+ in core EPS for 2020 and 2021 and $6.00 in core EPS for 2026 remains a goal.
Challenges Ahead
- Rapid changes in economic activity introduced uncertainty to our near-term profitability.
- Provisions are higher.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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