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Dec 31, 2022
Customers Bancorp Q4 2022 Earnings Report
Reported solid results driven by core bank earnings, despite being negatively impacted by after-tax securities net losses and PPP loan losses.
Key Takeaways
Customers Bancorp reported a solid fourth quarter and full year 2022, with core bank earnings beating internal targets and estimates. The company's responsible organic growth strategy focuses on credit quality and prudent risk management.
Q4 2022 net income available to common shareholders was $25.6 million, or $0.77 per diluted share.
Q4 2022 core earnings were $39.4 million, or $1.19 per diluted share.
Q4 2022 core earnings (excluding PPP) were $45.3 million, or $1.37 per diluted share, up 22.9% over Q4 2021.
Q4 2022 loan growth was $458.0 million, or 3.0%.
Forward Guidance
Customers Bancorp expects to moderate growth, optimize the balance sheet, build out the deposit franchise, maximize the efficiency ratio, and buy back common shares. They expect 2023 core loan growth to be in the low-to-mid single digits with tighter margins in the first half of 2023 and wider margins in the second half of 2023.
Positive Outlook
- 2023 Core EPS (excluding PPP) is expected to be between $6.00 - $6.25
- Return on common equity of over 15% is expected.
- Core non interest expense (excluding BM Technologies expense) is expected to increase between 8% - 10% in 2023
- Targeting a CET 1 ratio of approximately 9.5%.
- Focused on improving the quality of the balance sheet and deposit franchise, improving net interest margin, and achieving a book value in excess of $45 by year-end 2023.
Challenges Ahead
- Expect to moderate growth as we optimize the balance sheet
- Tighter margins in the first half of 2023
- Deposits are expected to remain relatively flat with a focus on reducing high cost deposits
Historical Earnings Impact
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Avg. Return Before/After Earnings
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