Customers Bancorp Reports Results for First Quarter

WEST READING, Pa.--(BUSINESS WIRE)--Customers Bancorp, Inc. (NYSE:CUBI):

First Quarter 2024 Highlights

• Q1 2024 net income available to common shareholders was $45.9 million, or $1.40 per diluted share; ROAA was 0.94% and ROCE was 12.08%.
• Q1 2024 core earnings* were $46.5 million, or $1.42 per diluted share; Core ROAA* was 0.95% and Core ROCE* was 12.24%.
• Q1 2024 adjusted core earnings* excluding certain one-time items were $55.1 million, or $1.68 per diluted share; Adjusted Core ROAA* excluding certain one-time items was 1.11% and Adjusted Core ROCE* excluding certain one-time items was 14.50%.
• CET 1 ratio of 12.5%¹ at March 31, 2024, compared to 12.2% at December 31, 2023, above the approximately 11.5% target.
• TCE / TA ratio* of 7.3% at March 31, 2024, compared to 7.0% at December 31, 2023, on track to achieve 7.5% target within one to two quarters.
• Q1 2024 net interest margin, tax equivalent ("NIM") was 3.10%, compared to Q4 2023 NIM of 3.31%, due to higher cash balances and lower average loans during the quarter.
• Total deposits increased by $41.1 million in Q1 2024 from Q4 2023 with a significant positive mix shift. Q1 2024 business unit deposit*² growth of $1.2 billion funded the repayment of maturing wholesale CDs of $1.2 billion.
• Non-interest bearing deposits increased by $266.4 million in Q1 2024 from Q4 2023 and represented 26% of total deposits.
• Total estimated insured deposits were 78%³ of total deposits at March 31, 2024, with immediately available liquidity covering estimated uninsured deposits³ by approximately 224%.
• Non-performing assets were $35.8 million, or 0.17% of total assets, at March 31, 2024 compared to 0.13% at December 31, 2023. Allowance for credit losses on loans and leases equaled 374% of non-performing loans at March 31, 2024, compared to 499% at December 31, 2023.
• Q1 2024 provision for credit losses on loans and leases was $16.0 million compared to $13.4 million in Q4 2023 and the coverage of credit loss reserves for loans and leases held for investment was 1.12%. The coverage of credit loss reserves for loans and leases held for investment decreased modestly from 1.13% in Q4 2023 largely driven by lower consumer installment loans held for investment.
• Q1 2024 book value per share and tangible book value per share* both grew by approximately $1.56, or 3.3% over Q4 2023, driven by strong quarterly earnings and a decrease in AOCI losses of $4.3 million over the same time period.

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*		Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
1		Regulatory capital ratios as of March 31, 2024 are estimates.
2		Total deposits excluding wholesale CDs and BMTX student-related deposits.
3		Uninsured deposits (estimate) of $5.2 billion to be reported on the Bank's call report, less deposits of $1.1 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $124.5 million.

CEO Commentary

"Following an exceptional year in 2023, we are pleased to share continued progress on the execution of our strategic priorities which we believe will grow our franchise value, our margins and net interest income in 2024 and beyond," said Customers Bancorp Chairman and CEO Jay Sidhu. "We are excited to announce that in April we welcomed 10 new, very experienced, banking teams to Customers Bank that are commercial focused deposit generators in the New York metropolitan area and in selected markets in California and Nevada. These commercial and business banking teams are highly experienced, have worked together for decades and have longstanding and deep client relationships. We expect the addition of these teams to accelerate the continued improvement of our deposit franchise with low cost, granular, primary relationship-based deposit accounts. We look forward to delivering exceptional service to their clients with our single point of contact, high-touch, technology-enabled banking capabilities. In the quarter, we once again demonstrated the momentum of our deposit franchise transformation by growing business unit deposits*² by $1.2 billion which funded the repayment of maturing wholesale CDs in the amount of $1.2 billion. This was our fourth consecutive quarter of approximately $1 billion of business unit deposit*² growth. The business unit deposit*² growth was, once again, broad-based with more than 20 different channels increasing balances and roughly half contributing $25 million or more. Non-interest bearing deposits increased by $266.4 million during the quarter and represented 26 percent of total deposits. Our net interest margin moderated in the first quarter to 3.10% driven primarily by elevated cash balances resulting from strong business unit deposit*² growth and the timing associated with replenishing higher yielding interest-earning assets that exited in the fourth quarter as we continue to remain focused on loan growth supporting holistic relationships. Capital levels continued to build as evidenced by a 24 basis point increase in our TCE / TA ratio* and an increase in our CET 1 ratio to 12.5%¹. We are confident in our ability to achieve the 7.5% TCE / TA ratio* target that we disclosed last quarter. Enhanced by the addition of our new banking teams, we believe we are extremely well-positioned to continue to strengthen our deposit franchise, improve our profitability, and maintain our already strong capital ratios," stated Jay Sidhu.

"Our Q1 2024 GAAP earnings were $45.9 million, or $1.40 per diluted share, and core earnings* were $46.5 million, or $1.42 per diluted share. Excluding certain one-time items incurred during the quarter, our adjusted core earnings* were $55.1 million, or $1.68 per diluted share. At March 31, 2024, our deposit base was well diversified, with approximately 78%³ of total deposits insured. We maintain a strong liquidity position, with $8.9 billion of liquidity immediately available, which covers approximately 224% of uninsured deposits³ and our loan to deposit ratio was 74%. We continue to focus loan production where we have a holistic and primary relationship. Commercial loans grew by $123.0 million though gross loan balances remained relatively flat given targeted reductions in consumer installment loans in the quarter. Our loan pipeline grew meaningfully through the first quarter, and we remain confident in the 10% - 15% loan growth outlook previously provided. We have ample liquidity and capital to support the needs of our customers. At March 31, 2024, we had $3.7 billion of cash on hand, to fund strategic loan growth as well as prudent balance sheet and liquidity management. Asset quality remains strong with our NPA ratio at just 0.17% of total assets and reserve levels are robust at over 370% of total non-performing loans at the end of Q1 2024. Our exposure to the higher risk commercial real estate office sector is minimal, representing approximately 1% of the loan portfolio. Continued execution on our strategic priorities has positioned us favorably for success in 2024 from a capital, credit, liquidity, interest rate risk and earnings perspective. We will remain disciplined, but opportunistic, with our balance sheet capacity to manage risk and maintain robust capital levels. We are confident in our risk management capabilities and ability to provide excellent and differentiated service to our clients. We are excited and optimistic about the opportunities we had entering 2024, which will only be enhanced by the addition of the new banking teams," Jay Sidhu continued.

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*		Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
1		Regulatory capital ratios as of March 31, 2024 are estimates.
2		Total deposits excluding wholesale CDs and BMTX student-related deposits.
3		Uninsured deposits (estimate) of $5.2 billion to be reported on the Bank's call report, less deposits of $1.1 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $124.5 million.

Financial Highlights

(Dollars in thousands, except per share data)		At or Three Months Ended								Increase (Decrease)
		March 31, 2024				December 31, 2023
Profitability Metrics:
Net income available for common shareholders		$	45,926			$	58,223			$	(12,297	)		(21.1	)%
Diluted earnings per share		$	1.40			$	1.79			$	(0.39	)		(21.8	)%
Core earnings*		$	46,532			$	61,633			$	(15,101	)		(24.5	)%
Adjusted core earnings*		$	55,137			$	61,633			$	(6,496	)		(10.5	)%
Core earnings per share*		$	1.42			$	1.90			$	(0.48	)		(25.3	)%
Adjusted core earnings per share*		$	1.68			$	1.90			$	(0.22	)		(11.6	)%
Return on average assets ("ROAA")			0.94	%			1.16	%			(0.22	)
Core ROAA*			0.95	%			1.22	%			(0.27	)
Adjusted core ROAA*			1.11	%			1.22	%			(0.11	)
Return on average common equity ("ROCE")			12.08	%			15.93	%			(3.85	)
Core ROCE*			12.24	%			16.87	%			(4.63	)
Adjusted core ROCE*			14.50	%			16.87	%			(2.37	)
Core pre-tax pre-provision net income*		$	83,674			$	101,884			$	(18,210	)		(17.9	)%
Adjusted core pre-tax pre-provision net income*		$	94,988			$	101,884			$	(6,896	)		(6.8	)%
Net interest margin, tax equivalent			3.10	%			3.31	%			(0.21	)
Yield on loans (Loan yield)			7.05	%			7.30	%			(0.25	)
Cost of deposits			3.45	%			3.39	%			0.06
Efficiency ratio			54.58	%			49.08	%			5.50
Core efficiency ratio*			54.24	%			46.70	%			7.54
Adjusted core efficiency ratio*			48.02	%			46.70	%			1.32
Non-interest expense to average total assets			1.87	%			1.75	%			0.12
Core non-interest expense to average total assets*			1.86	%			1.67	%			0.19
Adjusted core non-interest expense to average total assets*			1.65	%			1.67	%			(0.02	)
Balance Sheet Trends:
Total assets		$	21,347,367			$	21,316,265			$	31,102			0.1	%
Total cash and investment securities		$	7,338,025			$	7,355,156			$	(17,131	)		(0.2	)%
Total loans and leases		$	13,256,871			$	13,202,084			$	54,787			0.4	%
Non-interest bearing demand deposits		$	4,688,880			$	4,422,494			$	266,386			6.0	%
Total deposits		$	17,961,383			$	17,920,236			$	41,147			0.2	%
Capital Metrics:
Common Equity		$	1,553,823			$	1,500,600			$	53,223			3.5	%
Tangible Common Equity*		$	1,550,194			$	1,496,971			$	53,223			3.6	%
Common Equity to Total Assets			7.3	%			7.0	%			0.3
Tangible Common Equity to Tangible Assets*			7.3	%			7.0	%			0.3
Book Value per common share		$	49.29			$	47.73			$	1.56			3.3	%
Tangible Book Value per common share*		$	49.18			$	47.61			$	1.57			3.3	%
Common equity Tier 1 capital ratio (1)			12.5	%			12.2	%			0.3
Total risk based capital ratio (1)			15.6	%			15.3	%			0.3
(1) Regulatory capital ratios as of March 31, 2024 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Financial Highlights

(Dollars in thousands, except per share data)		At or Three Months Ended								Increase (Decrease)
		March 31, 2024				March 31, 2023
Profitability Metrics:
Net income available for common shareholders		$	45,926			$	50,265			$	(4,339	)		(8.6	)%
Diluted earnings per share		$	1.40			$	1.55			$	(0.15	)		(9.7	)%
Core earnings*		$	46,532			$	51,143			$	(4,611	)		(9.0	)%
Adjusted core earnings*		$	55,137			$	51,143			$	3,994			7.8	%
Core earnings per share*		$	1.42			$	1.58			$	(0.16	)		(10.1	)%
Adjusted core earnings per share*		$	1.68			$	1.58			$	0.10			6.3	%
Return on average assets ("ROAA")			0.94	%			1.03	%			(0.09	)
Core ROAA*			0.95	%			1.05	%			(0.10	)
Adjusted core ROAA*			1.11	%			1.05	%			0.06
Return on average common equity ("ROCE")			12.08	%			16.00	%			(3.92	)
Core ROCE*			12.24	%			16.28	%			(4.04	)
Adjusted core ROCE*			14.50	%			16.28	%			(1.78	)
Core pre-tax pre-provision net income*		$	83,674			$	89,282			$	(5,608	)		(6.3	)%
Adjusted core pre-tax pre-provision net income*		$	94,988			$	89,282			$	5,706			6.4	%
Net interest margin, tax equivalent			3.10	%			2.96	%			0.14
Yield on loans (Loan yield)			7.05	%			6.70	%			0.35
Cost of deposits			3.45	%			3.32	%			0.13
Efficiency ratio			54.58	%			47.71	%			6.87
Core efficiency ratio*			54.24	%			47.09	%			7.15
Adjusted core efficiency ratio*			48.02	%			47.09	%			0.93
Non-interest expense to average total assets			1.87	%			1.54	%			0.33
Core non-interest expense to average total assets*			1.86	%			1.53	%			0.33
Adjusted core non-interest expense to average total assets*			1.65	%			1.53	%			0.12
Balance Sheet Trends:
Total assets		$	21,347,367			$	21,751,614			$	(404,247	)		(1.9	)%
Total cash and investment securities		$	7,338,025			$	5,843,948			$	1,494,077			25.6	%
Total loans and leases		$	13,256,871			$	15,063,034			$	(1,806,163	)		(12.0	)%
Non-interest bearing demand deposits		$	4,688,880			$	3,487,517			$	1,201,363			34.4	%
Total deposits		$	17,961,383			$	17,723,617			$	237,766			1.3	%
Capital Metrics:
Common Equity		$	1,553,823			$	1,283,226			$	270,597			21.1	%
Tangible Common Equity*		$	1,550,194			$	1,279,597			$	270,597			21.1	%
Common Equity to Total Assets			7.3	%			5.9	%			1.4
Tangible Common Equity to Tangible Assets*			7.3	%			5.9	%			1.4
Book Value per common share		$	49.29			$	41.08			$	8.21			20.0	%
Tangible Book Value per common share*		$	49.18			$	40.96			$	8.22			20.1	%
Common equity Tier 1 capital ratio (1)			12.5	%			9.6	%			2.9
Total risk based capital ratio (1)			15.6	%			12.3	%			3.3
(1) Regulatory capital ratios as of March 31, 2024 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Key Balance Sheet Trends

Loans and Leases

The following table presents the composition of total loans and leases as of the dates indicated:

(Dollars in thousands)	March 31, 2024			% of Total			December 31, 2023			% of Total			March 31, 2023			% of Total
Loans and Leases Held for Investment
Commercial:
Commercial & industrial:
Specialized lending	$	5,104,405		39.6	%		$	5,006,693		38.9	%		$	5,519,176		37.7	%
Other commercial & industrial (1)		1,113,517		8.6				1,162,317		9.0				1,414,419		9.7
Mortgage finance		1,071,146		8.3				1,014,742		7.9				1,374,894		9.4
Multifamily		2,123,675		16.5				2,138,622		16.6				2,195,211		15.0
Commercial real estate owner occupied		806,278		6.3				797,319		6.2				895,314		6.1
Commercial real estate non-owner occupied		1,182,084		9.2				1,177,650		9.2				1,245,248		8.5
Construction		185,601		1.3				166,393		1.3				188,123		1.3
Total commercial loans and leases		11,586,706		89.8				11,463,736		89.1				12,832,385		87.7
Consumer:
Residential		482,537		3.8				484,435		3.8				494,815		3.4
Manufactured housing		37,382		0.3				38,670		0.3				43,272		0.3
Installment:
Personal		492,892		3.8				555,533		4.3				849,420		5.8
Other		299,714		2.3				319,393		2.5				419,085		2.8
Total installment loans		792,606		6.1				874,926		6.8				1,268,505		8.6
Total consumer loans		1,312,525		10.2				1,398,031		10.9				1,806,592		12.3
Total loans and leases held for investment	$	12,899,231		100.0	%		$	12,861,767		100.0	%		$	14,638,977		100.0	%
Loans Held for Sale
Commercial:
Multifamily	$	-		-	%		$	-		-	%		$	4,051		1.0	%
Commercial real estate non-owner occupied		-		-				-		-				16,000		3.7
Total commercial loans and leases		-		-				-		-				20,051		4.7
Consumer:
Residential		870		0.2				1,215		0.3				821		0.2
Installment:
Personal		137,755		38.5				151,040		44.4				307,336		72.5
Other		219,015		61.3				188,062		55.3				95,849		22.6
Total installment loans		356,770		99.8				339,102		99.7				403,185		95.1
Total consumer loans		357,640		100.0				340,317		100.0				404,006		95.3
Total loans held for sale	$	357,640		100.0	%		$	340,317		100.0	%		$	424,057		100.0	%
Total loans and leases portfolio	$	13,256,871					$	13,202,084					$	15,063,034
(1) Includes PPP loans of $52.0 million, $74.7 million and $246.3 million as of March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

Loans and Leases Held for Investment

Loans and leases held for investment were $12.9 billion at March 31, 2024, up $37.5 million, or 0.3%, from December 31, 2023. Specialized lending increased $97.7 million, or 2.0% quarter-over-quarter, to $5.1 billion. Mortgage finance loans increased $56.4 million, or 5.6% quarter-over-quarter due to higher mortgage activity. Construction loans increased $19.2 million, or 11.5% quarter-over-quarter, to $185.6 million. Consumer installment loans held for investment decreased $82.3 million, or 9.4% quarter-over-quarter, to $792.6 million due to the continued build out of the held-for-sale strategy and de-risking of the held-for-investment loan portfolio. Other commercial and industrial loans decreased $48.8 million, or 4.2% quarter-over-quarter, to $1.1 billion, which included a decrease in PPP loans primarily from guarantee payments.

Loans and leases held for investment of $12.9 billion at March 31, 2024 was down $1.7 billion, or 11.9%, year-over-year, largely driven by reduced balances in consumer installment loans of $475.9 million, or 37.5% year-over-year, specialized lending of $414.8 million, mortgage finance loans of $303.7 million and other commercial and industrial loans of $300.9 million, which included a decrease in PPP loans primarily from guarantee payments.

Loans Held for Sale

Loans held for sale increased $17.3 million quarter-over-quarter, and were $357.6 million at March 31, 2024 due to the continued build out of the held-for-sale strategy in 2024.

Allowance for Credit Losses on Loans and Leases

The following table presents the allowance for credit losses on loans and leases as of the dates and for the periods presented:

	At or Three Months Ended								Increase (Decrease)				At or Three Months Ended								Increase (Decrease)
(Dollars in thousands)	March 31, 2024				December 31, 2023								March 31, 2024				March 31, 2023
Allowance for credit losses on loans and leases	$	133,296			$	135,311			$	(2,015	)		$	133,296			$	130,281			$	3,015
Provision (benefit) for credit losses on loans and leases	$	15,953			$	13,420			$	2,533			$	15,953			$	18,008			$	(2,055	)
Net charge-offs from loans held for investment	$	17,968			$	17,322			$	646			$	17,968			$	18,651			$	(683	)
Annualized net charge-offs to average loans and leases		0.55	%			0.51	%							0.55	%			0.49	%
Coverage of credit loss reserves for loans and leases held for investment		1.12	%			1.13	%							1.12	%			0.97	%

Net charge-offs were relatively stable with $18.0 million in Q1 2024, compared to $17.3 million in Q4 2023 and $18.7 million in Q1 2023.

Provision (benefit) for Credit Losses

	Three Months Ended							Increase (Decrease)			Three Months Ended						Increase (Decrease)
(Dollars in thousands)	March 31, 2024			December 31, 2023							March 31, 2024			March 31, 2023
Provision (benefit) for credit losses on loans and leases	$	15,953		$	13,420			$	2,533		$	15,953		$	18,008		$	(2,055	)
Provision (benefit) for credit losses on available for sale debt securities		1,117			103				1,014			1,117			1,595			(478	)
Provision for credit losses		17,070			13,523				3,547			17,070			19,603			(2,533	)
Provision (benefit) for credit losses on unfunded commitments		430			(136	)			566			430			280			150
Total provision for credit losses	$	17,500		$	13,387			$	4,113		$	17,500		$	19,883		$	(2,383	)

The provision for credit losses on loans and leases in Q1 2024 was $16.0 million, compared to $13.4 million in Q4 2023. The higher provision in Q1 2024 was primarily due to increased uncertainty and slightly weaker macroeconomic forecasts, partially offset by lower balances in consumer installment loans held for investment.

The provision for credit losses on available for sale investment securities in Q1 2024 was $1.1 million, compared to provision of $0.1 million in Q4 2023.

The provision for credit losses on loans and leases in Q1 2024 was $16.0 million, compared to $18.0 million in Q1 2023. The lower provision in Q1 2024 compared to the year ago period was primarily due to lower balances in loans held for investment.

The provision for credit losses on available for sale investment securities in Q1 2024 was $1.1 million compared to provision of $1.6 million in Q1 2023.

Asset Quality

The following table presents asset quality metrics as of the dates indicated:

(Dollars in thousands)	March 31, 2024				December 31, 2023				Increase (Decrease)				March 31, 2024				March 31, 2023				Increase (Decrease)
Non-performing assets ("NPAs"):
Nonaccrual / non-performing loans ("NPLs")	$	35,654			$	27,110			$	8,544			$	35,654			$	32,124			$	3,530
Non-performing assets	$	35,753			$	27,209			$	8,544			$	35,753			$	32,260			$	3,493
NPLs to total loans and leases		0.27	%			0.21	%							0.27	%			0.21	%
Reserves to NPLs		373.86	%			499.12	%							373.86	%			405.56	%
NPAs to total assets		0.17	%			0.13	%							0.17	%			0.15	%
Loans and leases (1) risk ratings:
Commercial loans and leases
Pass	$	10,095,611			$	9,955,243			$	140,368			$	10,095,611			$	10,928,620			$	(833,009	)
Special Mention		194,365				196,182				(1,817	)			194,365				136,986				57,379
Substandard		282,163				339,664				(57,501	)			282,163				273,154				9,009
Total commercial loans and leases		10,572,139				10,491,089				81,050				10,572,139				11,338,760				(766,621	)
Consumer loans
Performing		1,293,457				1,379,603				(86,146	)			1,293,457				1,787,123				(493,666	)
Non-performing		19,068				18,428				640				19,068				19,469				(401	)
Total consumer loans		1,312,525				1,398,031				(85,506	)			1,312,525				1,806,592				(494,067	)
Loans and leases receivable (1)	$	11,884,664			$	11,889,120			$	(4,456	)		$	11,884,664			$	13,145,352			$	(1,260,688	)
(1) Risk ratings are assigned to loans and leases held for investment, and excludes loans held for sale, loans receivable, mortgage finance, at fair value and eligible PPP loans that are fully guaranteed by the Small Business Administration.

Over the last decade, the Bank has developed a suite of commercial loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank's commercial and industrial ("C&I"), mortgage finance, corporate and specialized lending lines of business, and multifamily loans for example, are characterized by conservative underwriting standards and low loss rates. Because of this emphasis, the Bank's credit quality to date has been incredibly healthy despite an adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, management employs a bottom-up data driven approach to analyze the commercial portfolio.

Total consumer installment loans held for investment at March 31, 2024 were less than 4% of total assets and approximately 6% of total loans and leases held for investment, and were supported by an allowance for credit losses of $50.7 million. At March 31, 2024, the consumer installment portfolio had the following characteristics: average original FICO score of 737, average debt-to-income of 20% and average borrower income of $107 thousand.

Non-performing loans at March 31, 2024 increased to 0.27% of total loans and leases, compared to 0.21% at December 31, 2023 and 0.21% at March 31, 2023.

Investment Securities

The investment securities portfolio, including debt securities classified as available for sale ("AFS") and held to maturity ("HTM") provides periodic cash flows through regular maturities and amortization, can be used as collateral to secure additional funding, and is an important component of the Bank's liquidity position.

The following table presents the composition of the investment securities portfolio as of the dates indicated:

(Dollars in thousands)	March 31, 2024			December 31, 2023			March 31, 2023
Debt securities, available for sale	$	2,571,139		$	2,376,860		$	2,900,259
Equity securities		33,729			28,780			26,710
Investment securities, at fair value		2,604,868			2,405,640			2,926,969
Debt securities, held to maturity		1,032,037			1,103,170			870,294
Total investment securities portfolio	$	3,636,905		$	3,508,810		$	3,797,263

Critically important to performance during the recent banking crisis are the characteristics of a bank's securities portfolio. While there may be virtually no credit risk in some of these portfolios, holding longer term and lower yielding securities is creating challenges for many banks. Customers' securities portfolio is highly liquid, short in duration, and high in yield. At March 31, 2024, the AFS debt securities portfolio had a spot yield of 5.33%, an effective duration of approximately 1.7 years, and approximately 40% are variable rate. Additionally, 62% of the AFS securities portfolio was AAA rated at March 31, 2024.

At March 31, 2024, the HTM debt securities portfolio represented only 4.8% of total assets at March 31, 2024, had a spot yield of 4.26% and an effective duration of approximately 3.0 years. Additionally, at March 31, 2024, approximately 41% of the HTM securities were AAA rated and 49% were credit enhanced asset backed securities with no current expectation of credit losses.

Deposits

The following table presents the composition of our deposit portfolio as of the dates indicated:

(Dollars in thousands)	March 31, 2024			% of Total			December 31, 2023			% of Total			March 31, 2023			% of Total
Demand, non-interest bearing	$	4,688,880		26.1	%		$	4,422,494		24.7	%		$	3,487,517		19.7	%
Demand, interest bearing		5,661,775		31.5				5,580,527		31.1				5,791,302		32.7
Total demand deposits		10,350,655		57.6				10,003,021		55.8				9,278,819		52.4
Savings		2,080,374		11.6				1,402,941		7.8				924,359		5.2
Money market		3,347,843		18.6				3,226,395		18.0				2,019,633		11.4
Time deposits		2,182,511		12.2				3,287,879		18.4				5,500,806		31.0
Total deposits	$	17,961,383		100.0	%		$	17,920,236		100.0	%		$	17,723,617		100.0	%

Total deposits increased $41.1 million, or 0.2%, to $18.0 billion at March 31, 2024 as compared to the prior quarter. Non-interest bearing demand deposits increased $266.4 million, or 6.0%, to $4.7 billion, savings deposits increased $677.4 million, or 48.3%, to $2.1 billion, money market deposits increased $121.4 million, or 3.8%, to $3.3 billion and interest bearing demand deposits of $81.2 million, or 1.5%, to $5.7 billion. These increases were offset by a decrease in time deposits of $1.1 billion, or 33.6%, to $2.2 billion. The total average cost of deposits increased modestly by 6 basis points to 3.45% in Q1 2024 from 3.39% in the prior quarter largely driven by continued competitive dynamics in the deposit market that the industry continues to experience. Total estimated uninsured deposits were $4.0 billion¹, or 22% of total deposits (inclusive of accrued interest) at March 31, 2024. Customers is also highly focused on total deposits with contractual term to manage its liquidity profile and the funding of loans and securities.

Total deposits increased $237.8 million, or 1.3%, to $18.0 billion at March 31, 2024 as compared to a year ago. Non-interest bearing demand deposits increased $1.2 billion, or 34.4%, to $4.7 billion, money market deposits increased $1.3 billion, or 65.8%, to $3.3 billion and savings deposits increased $1.2 billion, or 125.1%, to $2.1 billion. These increases were offset by decreases in time deposits of $3.3 billion, or 60.3% to $2.2 billion and interest bearing demand deposits of $129.5 million, or 2.2%, to $5.7 billion. The total average cost of deposits increased modestly by 13 basis points to 3.45% in Q1 2024 from 3.32% in the prior year primarily due to higher market interest rates, offsetting a positive shift in deposit mix.

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1		Uninsured deposits (estimate) of $5.2 billion to be reported on the Bank's call report, less deposits of $1.1 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $124.5 million.

Borrowings

The following table presents the composition of our borrowings as of the dates indicated:

(Dollars in thousands)	March 31, 2024			December 31, 2023			March 31, 2023
FHLB advances	$	1,195,088		$	1,203,207		$	2,052,143
Senior notes		123,905			123,840			123,645
Subordinated debt		182,300			182,230			182,021
Total borrowings	$	1,501,293		$	1,509,277		$	2,357,809

Total borrowings decreased $8.0 million, or 0.5%, to $1.5 billion at March 31, 2024 as compared to the prior quarter. As of March 31, 2024, Customers' immediately available borrowing capacity with the FRB and FHLB was approximately $7.5 billion, of which $1.2 billion of available capacity was utilized in borrowings and $1.1 billion was utilized to collateralize deposits.

Total borrowings decreased $856.5 million, or 36.3%, to $1.5 billion at March 31, 2024 as compared to a year ago. This decrease primarily resulted from repayments of $340.0 million and $510.0 million in callable FHLB advances in Q4 2023 and Q3 2023, respectively.

Capital

The following table presents certain capital amounts and ratios as of the dates indicated:

(Dollars in thousands except per share data)	March 31, 2024				December 31, 2023				March 31, 2023
Customers Bancorp, Inc.
Common Equity	$	1,553,823			$	1,500,600			$	1,283,226
Tangible Common Equity*	$	1,550,194			$	1,496,971			$	1,279,597
Common Equity to Total Assets		7.3	%			7.0	%			5.9	%
Tangible Common Equity to Tangible Assets*		7.3	%			7.0	%			5.9	%
Book Value per common share	$	49.29			$	47.73			$	41.08
Tangible Book Value per common share*	$	49.18			$	47.61			$	40.96
Common equity Tier 1 ("CET 1") capital ratio (1)		12.5	%			12.2	%			9.6	%
Total risk based capital ratio (1)		15.6	%			15.3	%			12.3	%
(1) Regulatory capital ratios as of March 31, 2024 are estimates.
* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.

Customers Bancorp's common equity increased $53.2 million to $1.6 billion, and tangible common equity* increased $53.2 million to $1.6 billion, at March 31, 2024 compared to the prior quarter, respectively, primarily from earnings of $45.9 million and decreased unrealized losses on investment securities of $4.3 million (net of taxes) deferred in accumulated other comprehensive income ("AOCI"). Similarly, book value per common share increased to $49.29 from $47.73, and tangible book value per common share* increased to $49.18 from $47.61, at March 31, 2024 and December 31, 2023, respectively.

Customers Bancorp's common equity increased $270.6 million to $1.6 billion, and tangible common equity* increased $270.6 million to $1.6 billion, at March 31, 2024 compared to a year ago, respectively, primarily from earnings of $231.1 million and decreased unrealized losses on investment securities in AOCI of $24.0 million (net of taxes). Similarly, book value per common share increased to $49.29 from $41.08, and tangible book value per common share* increased to $49.18 from $40.96, at March 31, 2024 and March 31, 2023, respectively.

At the Customers Bancorp level, the CET 1 ratio (estimate), total risk based capital ratio (estimate), common equity to total assets ratio and tangible common equity to tangible assets ratio* ("TCE / TA ratio") were 12.5%, 15.6%, 7.3%, and 7.3%, respectively, at March 31, 2024.

At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At March 31, 2024, Tier 1 capital (estimate) and total risk based capital (estimate) were 14.0% and 15.7%, respectively.

"Even though we remain well capitalized by all regulatory measures, we are committed to maintaining our CET 1 ratio around 11.5% and growing our TCE / TA ratio* to 7.5% in 2024," stated Jay Sidhu.

Key Profitability Trends

Net Interest Income

Net interest income totaled $160.4 million in Q1 2024, a decrease of $12.1 million from Q4 2023. This decrease was due to lower interest income of $14.1 million primarily due to the reduction of higher yielding loans and securities that exited the bank in the fourth quarter, and the measured pace of replenishing those interest-earning assets in the first quarter. Partially offsetting this decline was lower interest expense of $2.0 million due to the reduction of FHLB advances and positive remix of wholesale CDs with business unit deposits*² that we executed in the fourth and first quarters.

"We experienced a modest decline in net interest income in the first quarter due to the selective reduction of higher yielding loans and securities in last quarter. This quarter we also reserved loan growth capacity in anticipation of the onboarding of the new teams. As we deploy excess liquidity, currently on the balance sheet in cash and securities, our net interest income is expected to grow and our net interest margin is expected to expand over the remainder of the year. Our loan pipeline grew meaningfully in the first quarter, which will benefit interest income and margin for the remainder of the year. For the second quarter in a row we reported lower interest expense compared to the prior quarter. The continued replacement of wholesale deposits and the remix of higher cost less strategic business unit deposits*² is expected to continue to drive interest expense lower going forward. The combination of these efforts will benefit our net interest income throughout 2024 and beyond," stated Customers Bancorp President Sam Sidhu.

Net interest income totaled $160.4 million in Q1 2024, an increase of $10.5 million from Q1 2023. This increase was due to higher interest income of $16.8 million primarily due to variable rate lower credit risk specialized lending verticals and interest earning deposits from higher market interest rates, and lower interest expense from lower average balances of borrowings, offset in part by higher interest expense on deposits of $9.8 million primarily resulting from increased market interest rates. The decrease in interest-earning assets was primarily driven by decreases in specialized lending verticals, consumer installment loans, mortgage finance loans and PPP loans included in other C&I loans. Total consumer installment loans decreased in Q1 2024 as compared to Q1 2023, as installment loans held for investment decreased primarily for risk management purposes and the implementation of a held-for-sale strategy.

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2		Total deposits excluding wholesale CDs and BMTX student-related deposits.

Non-Interest Income

The following table presents details of non-interest income for the periods indicated:

	Three Months Ended								Increase (Decrease)				Three Months Ended							Increase (Decrease)
(Dollars in thousands)	March 31, 2024				December 31, 2023								March 31, 2024				March 31, 2023
Commercial lease income	$	9,683			$	9,035			$	648			$	9,683			$	9,326		$	357
Loan fees		5,280				5,926				(646	)			5,280				3,990			1,290
Bank-owned life insurance		3,261				2,160				1,101				3,261				2,647			614
Mortgage finance transactional fees		946				927				19				946				1,074			(128	)
Gain (loss) on sale of loans		10				(91	)			101				10				-			10
Net gain (loss) on sale of investment securities		(30	)			(145	)			115				(30	)			-			(30	)
Other		2,081				860				1,221				2,081				1,084			997
Total non-interest income	$	21,231			$	18,672			$	2,559			$	21,231			$	18,121		$	3,110

Non-interest income totaled $21.2 million for Q1 2024, an increase of $2.6 million compared to Q4 2023. The increase was primarily due to increases in death benefits paid by insurance carriers under bank-owned life insurance policies, commercial lease income and other income.

Non-interest income totaled $21.2 million for Q1 2024, an increase of $3.1 million compared to Q1 2023. The increase was primarily due to increases in loan fees of $1.3 million resulting from increased servicing-related revenue and unused line of credit fees, death benefits paid by insurance carriers under bank-owned life insurance policies, commercial lease income and other income.

Non-Interest Expense

The following table presents details of non-interest expense for the periods indicated:

	Three Months Ended						Increase (Decrease)				Three Months Ended						Increase (Decrease)
(Dollars in thousands)	March 31, 2024			December 31, 2023							March 31, 2024			March 31, 2023
Salaries and employee benefits	$	36,025		$	33,965		$	2,060			$	36,025		$	32,345		$	3,680
Technology, communication and bank operations		21,904			16,887			5,017				21,904			16,589			5,315
Commercial lease depreciation		7,970			7,357			613				7,970			7,875			95
Professional services		6,353			9,820			(3,467	)			6,353			7,596			(1,243	)
Loan servicing		4,031			3,779			252				4,031			4,661			(630	)
Occupancy		2,347			2,320			27				2,347			2,760			(413	)
FDIC assessments, non-income taxes and regulatory fees		13,469			13,977			(508	)			13,469			2,728			10,741
Advertising and promotion		682			850			(168	)			682			1,049			(367	)
Other		6,388			4,812			1,576				6,388			4,530			1,858
Total non-interest expense	$	99,169		$	93,767		$	5,402			$	99,169		$	80,133		$	19,036

Non-interest expenses totaled $99.2 million in Q1 2024, an increase of $5.4 million compared to Q4 2023. The increase was primarily attributable to certain one-time items which included deposit servicing-related fees of $7.1 million in technology, communications and bank operations and FDIC premiums of $4.2 million, both of which relate to periods prior to 2024. There was also an increase in the estimated industry-wide FDIC special assessment of $0.5 million in Q1 2024 from the $3.7 million FDIC special assessment fee recorded in Q4 2023. Excluding the impact of these amounts, total non-interest expenses were $87.4 million, which decreased $2.7 million in Q1 2024 compared to $90.0 million in Q4 2023. Other changes during the quarter include an increase of $2.1 million in salaries and employee benefits primarily due to higher incentives and stock awards and a decrease of $3.5 million in professional fees. Q1 2024 adjusted core non-interest expenses* were $87.4 million, a decrease of $2.1 million over Q4 2023.

Non-interest expenses totaled $99.2 million in Q1 2024, an increase of $19.0 million compared to Q1 2023. The increase was primarily attributable to increases of $10.7 million in FDIC assessments, non-income taxes and regulatory fees resulting primarily from higher FDIC assessments, one-time FDIC premiums of $4.2 million relating to periods prior to 2024 and an increase in the estimated industry-wide FDIC special assessment of $0.5 million, $5.3 million in technology, communications and bank operations which included the one-time deposit servicing-related fees and $3.7 million in salaries and employee benefits primarily due to higher headcount, annual merit increases and incentives. These increases were partially offset by a decrease of $1.2 million in professional fees.

Taxes

Income tax expense decreased by $6.1 million to $15.7 million in Q1 2024 from $21.8 million in Q4 2023 primarily due to lower pre-tax income.

Income tax expense increased by $1.1 million to $15.7 million in Q1 2024 from $14.6 million in Q1 2023 primarily due to a decrease in estimated income tax credits for 2024.

The effective tax rate for Q1 2024 was 24%. Customers expects the full-year 2024 effective tax rate to be approximately 22% to 24%.

Outlook

"Looking forward, our strategy and risk management principles remain unchanged. We are focused on managing risk, strengthening our deposit franchise, further improving our profitability and maintaining our strong capital ratios. Our deposits are expected to grow modestly with continued improvement in the quality of deposits, reducing higher cost business unit deposits*¹ with lower cost deposits where we have a holistic and primary relationship. The addition of the new banking teams is expected to accelerate and enhance these efforts which were already well underway. We see attractive opportunities to deploy cash and securities cash flows into franchise-enhancing loan growth and our pipeline is strong. We remain confident in our ability to deliver 10% - 15% loan growth for the full year. The management of non-interest expenses remains a priority for us. Our adjusted core non-interest expense*, which excludes certain one-time items, declined from the core non-interest expense in the prior quarter. We expect the investments made in recruiting the new banking teams will produce significant benefits by increasing our net interest income and net interest margin primarily through lowering our interest expense costs as well as improving the overall quality of our deposit franchise. Operating efficiency has and will continue to be a differentiator of our business model, and we will continue to only make investments that generate long-term positive operating leverage and enable the organization to operate at a mid-40's efficiency ratio. The onboarding of our new banking teams will elevate our efficiency ratio temporarily, but we are confident in our ability to operate with a mid-40's efficiency ratio over the medium term. We remain committed to maintaining a CET 1 ratio around 11.5% in 2024, and growing our TCE / TA ratio* to 7.5%. We are highly focused on preserving superior credit quality, managing interest rate risk, maintaining robust liquidity, operating with higher capital ratios and generating positive operating leverage," concluded Sam Sidhu.

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*		Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
1		Total deposits excluding wholesale CDs and BMTX student-related deposits.

Webcast
Date:		Friday, April 26, 2024
Time:		9:00 AM EDT

The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 1st Quarter Earnings Webcast.

You may submit questions in advance of the live webcast by emailing our Communications Director, David Patti at [e-mail].

The webcast will be archived for viewing on the Customers Bank Investor Relations page and available beginning approximately two hours after the conclusion of the live event.

Institutional Background

Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation's top-performing banking companies with nearly $22 billion in assets making it one of the 80 largest bank holding companies in the U.S. Customers Bank's commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service distinguished by a Single Point of Contact approach. In addition to traditional lines such as C&I lending, commercial real estate lending and multifamily lending, Customers Bank also provides a number of national corporate banking services to specialized lending clients. Major accolades include:

• No. 5 on American Banker 2023 list of top-performing banks with $10B to $50B in assets
• No. 29 out of the 100 largest publicly traded banks in 2024 Forbes Best Banks list
• No. 52 on Investor's Business Daily 100 Best Stocks for 2023

A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: www.customersbank.com.

"Safe Harbor" Statement

In addition to historical information, this press release may contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Customers Bancorp, Inc.'s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words "may," "could," "should," "pro forma," "looking forward," "would," "believe," "expect," "anticipate," "estimate," "intend," "plan," "project," or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.'s control). Numerous competitive, economic, regulatory, legal and technological events and factors, among others, could cause Customers Bancorp, Inc.'s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements, including: a continuation of the recent turmoil in the banking industry, responsive measures taken by us and regulatory authorities to mitigate and manage related risks, regulatory actions taken that address related issues and the costs and obligations associated therewith, such as the FDIC special assessments, the impact of COVID-19 and its variants on the U.S. economy and customer behavior, the impact that changes in the economy have on the performance of our loan and lease portfolio, the market value of our investment securities, the continued success and acceptance of our blockchain payments system, the demand for our products and services and the availability of sources of funding, the effects of actions by the federal government, including the Board of Governors of the Federal Reserve System and other government agencies, that affect market interest rates and the money supply, actions that we and our customers take in response to these developments and the effects such actions have on our operations, products, services and customer relationships, higher inflation and its impacts, and the effects of any changes in accounting standards or policies. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management's current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.'s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K for the year ended December 31, 2023, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank, except as may be required under applicable law.

Q1 2024 Overview

The following table presents a summary of key earnings and performance metrics for the quarter ended March 31, 2024 and the preceding four quarters:

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
EARNINGS SUMMARY - UNAUDITED
(Dollars in thousands, except per share data and stock price data)		Q1				Q4				Q3				Q2				Q1
		2024				2023				2023				2023				2023
GAAP Profitability Metrics:
Net income available to common shareholders		$	45,926			$	58,223			$	82,953			$	44,007			$	50,265
Per share amounts:
	Earnings per share - basic	$	1.46			$	1.86			$	2.65			$	1.41			$	1.58
	Earnings per share - diluted	$	1.40			$	1.79			$	2.58			$	1.39			$	1.55
	Book value per common share (1)	$	49.29			$	47.73			$	45.47			$	42.16			$	41.08
	CUBI stock price (1)	$	53.06			$	57.62			$	34.45			$	30.26			$	18.52
	CUBI stock price as % of book value (1)		108	%			121	%			76	%			72	%			45	%
Average shares outstanding - basic			31,473,424				31,385,043				31,290,581				31,254,125				31,819,203
Average shares outstanding - diluted			32,854,534				32,521,787				32,175,084				31,591,142				32,345,017
Shares outstanding (1)			31,521,931				31,440,906				31,311,254				31,282,318				31,239,750
Return on average assets ("ROAA")			0.94	%			1.16	%			1.57	%			0.88	%			1.03	%
Return on average common equity ("ROCE")			12.08	%			15.93	%			23.97	%			13.22	%			16.00	%
Net interest margin, tax equivalent			3.10	%			3.31	%			3.70	%			3.15	%			2.96	%
Efficiency ratio			54.58	%			49.08	%			41.01	%			49.25	%			47.71	%
Non-GAAP Profitability Metrics (2):
Core earnings		$	46,532			$	61,633			$	83,294			$	52,163			$	51,143
Core pre-tax pre-provision net income		$	83,674			$	101,884			$	128,564			$	96,833			$	89,282
Per share amounts:
	Core earnings per share - diluted	$	1.42			$	1.90			$	2.59			$	1.65			$	1.58
	Tangible book value per common share (1)	$	49.18			$	47.61			$	45.36			$	42.04			$	40.96
	CUBI stock price as % of tangible book value (1)		108	%			121	%			76	%			72	%			45	%
Core ROAA			0.95	%			1.22	%			1.57	%			1.03	%			1.05	%
Core ROCE			12.24	%			16.87	%			24.06	%			15.67	%			16.28	%
Core pre-tax pre-provision ROAA			1.58	%			1.90	%			2.32	%			1.79	%			1.72	%
Core pre-tax pre-provision ROCE			21.01	%			26.82	%			36.04	%			28.01	%			27.33	%
Core efficiency ratio			54.24	%			46.70	%			41.04	%			47.84	%			47.09	%
Asset Quality:
Net charge-offs		$	17,968			$	17,322			$	17,498			$	15,564			$	18,651
Annualized net charge-offs to average total loans and leases			0.55	%			0.51	%			0.50	%			0.42	%			0.49	%
Non-performing loans ("NPLs") to total loans and leases (1)			0.27	%			0.21	%			0.22	%			0.20	%			0.21	%
Reserves to NPLs (1)			373.86	%			499.12	%			466.11	%			494.46	%			405.56	%
Non-performing assets ("NPAs") to total assets			0.17	%			0.13	%			0.14	%			0.13	%			0.15	%
Customers Bank Capital Ratios (3):
Common equity Tier 1 capital to risk-weighted assets			14.0	%			13.77	%			12.97	%			11.96	%			11.31	%
Tier 1 capital to risk-weighted assets			14.0	%			13.77	%			12.97	%			11.96	%			11.31	%
Total capital to risk-weighted assets			15.7	%			15.28	%			14.45	%			13.38	%			12.64	%
Tier 1 capital to average assets (leverage ratio)			8.8	%			8.71	%			8.25	%			8.00	%			8.09	%
(1) Metric is a spot balance for the last day of each quarter presented.
(2) Customers' reasons for the use of these non-GAAP measures and a detailed reconciliation between the non-GAAP measures and the comparable GAAP amounts are included at the end of this document.
(3) Regulatory capital ratios are estimated for Q1 2024 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected to apply the CECL capital transition provisions which delayed the effects of CECL on regulatory capital for two years until January 1, 2022, followed by a three-year transition period. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million will be phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of March 31, 2024, our regulatory capital ratios reflected 25%, or $15.4 million, benefit associated with the CECL transition provisions.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data)
	Q1				Q4				Q3				Q2				Q1
	2024				2023				2023				2023				2023
Interest income:
Loans and leases	$	217,999			$	239,453			$	271,107			$	241,745			$	244,212
Investment securities		46,802				51,074				54,243				48,026				47,316
Interest earning deposits		52,817				44,104				43,800				27,624				10,395
Loans held for sale		12,048				8,707				4,664				11,149				11,701
Other		2,111				2,577				2,526				1,616				1,321
Total interest income		331,777				345,915				376,340				330,160				314,945
Interest expense:
Deposits		153,725				150,307				145,825				136,375				143,930
FHLB advances		13,485				18,868				26,485				24,285				10,370
FRB advances		-				-				-				-				6,286
Subordinated debt		2,689				2,688				2,689				2,689				2,689
Other borrowings		1,493				1,546				1,568				1,540				1,771
Total interest expense		171,392				173,409				176,567				164,889				165,046
Net interest income		160,385				172,506				199,773				165,271				149,899
Provision for credit losses		17,070				13,523				17,856				23,629				19,603
Net interest income after provision for credit losses		143,315				158,983				181,917				141,642				130,296
Non-interest income:
Commercial lease income		9,683				9,035				8,901				8,917				9,326
Loan fees		5,280				5,926				6,029				4,271				3,990
Bank-owned life insurance		3,261				2,160				1,973				4,997				2,647
Mortgage finance transactional fees		946				927				1,018				1,376				1,074
Gain (loss) on sale of loans		10				(91	)			(348	)			(761	)			-
Loss on sale of capital call lines of credit		-				-				-				(5,037	)			-
Net gain (loss) on sale of investment securities		(30	)			(145	)			(429	)			-				-
Other		2,081				860				631				2,234				1,084
Total non-interest income		21,231				18,672				17,775				15,997				18,121
Non-interest expense:
Salaries and employee benefits		36,025				33,965				33,845				33,120				32,345
Technology, communication and bank operations		21,904				16,887				15,667				16,407				16,589
Commercial lease depreciation		7,970				7,357				7,338				7,328				7,875
Professional services		6,353				9,820				8,569				9,192				7,596
Loan servicing		4,031				3,779				3,858				4,777				4,661
Occupancy		2,347				2,320				2,471				2,519				2,760
FDIC assessments, non-income taxes and regulatory fees		13,469				13,977				8,551				9,780				2,728
Advertising and promotion		682				850				650				546				1,049
Legal settlement expense		-				-				4,096				-				-
Other		6,388				4,812				4,421				5,628				4,530
Total non-interest expense		99,169				93,767				89,466				89,297				80,133
Income before income tax expense		65,377				83,888				110,226				68,342				68,284
Income tax expense		15,651				21,796				23,470				20,768				14,563
Net income		49,726				62,092				86,756				47,574				53,721
Preferred stock dividends		3,800				3,869				3,803				3,567				3,456
Net income available to common shareholders	$	45,926			$	58,223			$	82,953			$	44,007			$	50,265
Basic earnings per common share	$	1.46			$	1.86			$	2.65			$	1.41			$	1.58
Diluted earnings per common share		1.40				1.79				2.58				1.39				1.55

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
	March 31,				December 31,				September 30,				June 30,				March 31,
	2024				2023				2023				2023				2023
ASSETS
Cash and due from banks	$	51,974			$	45,210			$	68,288			$	54,127			$	77,251
Interest earning deposits		3,649,146				3,801,136				3,351,686				3,101,097				1,969,434
Cash and cash equivalents		3,701,120				3,846,346				3,419,974				3,155,224				2,046,685
Investment securities, at fair value		2,604,868				2,405,640				2,773,207				2,824,638				2,926,969
Investment securities held to maturity		1,032,037				1,103,170				1,178,370				1,258,560				870,294
Loans held for sale		357,640				340,317				150,368				78,108				424,057
Loans and leases receivable		11,936,621				11,963,855				12,600,548				12,826,531				13,391,610
Loans receivable, mortgage finance, at fair value		962,610				897,912				962,566				1,006,268				1,247,367
Allowance for credit losses on loans and leases		(133,296	)			(135,311	)			(139,213	)			(139,656	)			(130,281	)
Total loans and leases receivable, net of allowance for credit losses on loans and leases		12,765,935				12,726,456				13,423,901				13,693,143				14,508,696
FHLB, Federal Reserve Bank, and other restricted stock		100,067				109,548				126,098				126,240				124,733
Accrued interest receivable		120,123				114,766				123,984				119,501				123,754
Bank premises and equipment, net		7,253				7,371				7,789				8,031				8,581
Bank-owned life insurance		293,400				292,193				291,670				290,322				339,607
Goodwill and other intangibles		3,629				3,629				3,629				3,629				3,629
Other assets		361,295				366,829				358,162				471,169				374,609
Total assets	$	21,347,367			$	21,316,265			$	21,857,152			$	22,028,565			$	21,751,614
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand, non-interest bearing deposits	$	4,688,880			$	4,422,494			$	4,758,682			$	4,490,198			$	3,487,517
Interest bearing deposits		13,272,503				13,497,742				13,436,682				13,460,233				14,236,100
Total deposits		17,961,383				17,920,236				18,195,364				17,950,431				17,723,617
FHLB advances		1,195,088				1,203,207				1,529,839				2,046,142				2,052,143
Other borrowings		123,905				123,840				123,775				123,710				123,645
Subordinated debt		182,300				182,230				182,161				182,091				182,021
Accrued interest payable and other liabilities		193,074				248,358				264,406				269,539				249,168
Total liabilities		19,655,750				19,677,871				20,295,545				20,571,913				20,330,594
Preferred stock		137,794				137,794				137,794				137,794				137,794
Common stock		35,540				35,459				35,330				35,301				35,258
Additional paid in capital		567,490				564,538				559,346				555,737				552,255
Retained earnings		1,205,508				1,159,582				1,101,359				1,018,406				974,399
Accumulated other comprehensive income (loss), net		(132,305	)			(136,569	)			(149,812	)			(168,176	)			(156,276	)
Treasury stock, at cost		(122,410	)			(122,410	)			(122,410	)			(122,410	)			(122,410	)
Total shareholders' equity		1,691,617				1,638,394				1,561,607				1,456,652				1,421,020
Total liabilities and shareholders' equity	$	21,347,367			$	21,316,265			$	21,857,152			$	22,028,565			$	21,751,614

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED
(Dollars in thousands)
	Three Months Ended
	March 31, 2024									December 31, 2023									March 31, 2023
	Average Balance			Interest Income or Expense			Average Yield or Cost (%)			Average Balance			Interest Income or Expense			Average Yield or Cost (%)			Average Balance			Interest Income or Expense			Average Yield or Cost (%)
Assets
Interest earning deposits	$	3,865,028		$	52,817		5.50	%		$	3,191,677		$	44,104		5.48	%		$	914,149		$	10,395		4.61	%
Investment securities (1)		3,771,097			46,802		4.99	%			4,007,418			51,074		5.10	%			4,031,247			47,316		4.69	%
Loans and leases:
Commercial & industrial:
Specialized lending loans and leases (2)		5,268,345			115,590		8.82	%			5,574,149			130,838		9.31	%			5,694,168			103,688		7.38	%
Other commercial & industrial loans (2)(3)		1,654,665			26,714		6.49	%			1,666,052			28,053		6.68	%			2,594,440			49,121		7.68	%
Mortgage finance loans		1,033,177			12,830		4.99	%			997,353			13,726		5.46	%			1,262,139			17,412		5.59	%
Multifamily loans		2,121,650			21,255		4.03	%			2,131,750			22,347		4.16	%			2,206,600			20,470		3.76	%
Non-owner occupied commercial real estate loans		1,348,468			20,179		6.02	%			1,392,684			20,686		5.89	%			1,449,722			20,199		5.65	%
Residential mortgages		522,528			5,708		4.39	%			526,422			5,942		4.48	%			542,909			5,598		4.18	%
Installment loans		1,179,721			27,771		9.47	%			1,198,043			26,568		8.80	%			1,727,995			39,425		9.25	%
Total loans and leases (4)		13,128,554			230,047		7.05	%			13,486,453			248,160		7.30	%			15,477,973			255,913		6.70	%
Other interest-earning assets		107,525			2,111		7.90	%			116,756			2,577		8.75	%			91,308			1,321		5.87	%
Total interest-earning assets		20,872,204			331,777		6.39	%			20,802,304			345,915		6.61	%			20,514,677			314,945		6.21	%
Non-interest-earning assets		463,025									449,969									538,243
Total assets	$	21,335,229								$	21,252,273								$	21,052,920
Liabilities
Interest checking accounts	$	5,538,846		$	61,531		4.47	%		$	5,656,212		$	62,041		4.35	%		$	7,494,379		$	70,485		3.81	%
Money market deposit accounts		3,233,103			36,811		4.58	%			2,802,309			29,990		4.25	%			2,470,004			20,783		3.41	%
Other savings accounts		1,753,118			21,399		4.91	%			1,218,118			13,849		4.51	%			822,312			6,286		3.10	%
Certificates of deposit		2,750,788			33,984		4.97	%			3,625,311			44,427		4.86	%			4,504,333			46,376		4.18	%
Total interest-bearing deposits (5)		13,275,855			153,725		4.66	%			13,301,950			150,307		4.48	%			15,291,028			143,930		3.82	%
Federal funds purchased		-			-		-	%			-			-		-	%			15,333			188		4.97	%
Borrowings		1,506,707			17,667		4.72	%			1,816,047			23,102		5.05	%			1,788,116			20,928		4.75	%
Total interest-bearing liabilities		14,782,562			171,392		4.66	%			15,117,997			173,409		4.55	%			17,094,477			165,046		3.91	%
Non-interest-bearing deposits (5)		4,620,986									4,270,557									2,299,295
Total deposits and borrowings		19,403,548					3.55	%			19,388,554					3.55	%			19,393,772					3.45	%
Other non-interest-bearing liabilities		264,677									276,198									247,575
Total liabilities		19,668,225									19,664,752									19,641,347
Shareholders' equity		1,667,004									1,587,521									1,411,573
Total liabilities and shareholders' equity	$	21,335,229								$	21,252,273								$	21,052,920
Net interest income					160,385									172,506									149,899
Tax-equivalent adjustment					394									398									375
Net interest earnings				$	160,779								$	172,904								$	150,274
Interest spread							2.84	%								3.06	%								2.76	%
Net interest margin							3.09	%								3.30	%								2.95	%
Net interest margin tax equivalent (6)							3.10	%								3.31	%								2.96	%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes PPP loans.
(4) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(5) Total costs of deposits (including interest bearing and non-interest bearing) were 3.45%, 3.39% and 3.32% for the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively.
(6) Tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended March 31, 2024, December 31, 2023 and March 31, 2023, presented to approximate interest income as a taxable asset.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands)
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Loans and leases held for investment
Commercial:
Commercial & industrial:
Specialized lending	$	5,104,405		$	5,006,693		$	5,422,161		$	5,534,832		$	5,519,176
Other commercial & industrial (1)		1,113,517			1,162,317			1,252,427			1,240,908			1,414,419
Mortgage finance		1,071,146			1,014,742			1,042,549			1,108,598			1,374,894
Multifamily		2,123,675			2,138,622			2,130,213			2,151,734			2,195,211
Commercial real estate owner occupied		806,278			797,319			794,815			842,042			895,314
Commercial real estate non-owner occupied		1,182,084			1,177,650			1,178,203			1,211,091			1,245,248
Construction		185,601			166,393			252,588			212,214			188,123
Total commercial loans and leases		11,586,706			11,463,736			12,072,956			12,301,419			12,832,385
Consumer:
Residential		482,537			484,435			483,133			487,199			494,815
Manufactured housing		37,382			38,670			40,129			41,664			43,272
Installment:
Personal		492,892			555,533			629,843			752,470			849,420
Other		299,714			319,393			337,053			250,047			419,085
Total installment loans		792,606			874,926			966,896			1,002,517			1,268,505
Total consumer loans		1,312,525			1,398,031			1,490,158			1,531,380			1,806,592
Total loans and leases held for investment	$	12,899,231		$	12,861,767		$	13,563,114		$	13,832,799		$	14,638,977
Loans held for sale
Commercial:
Multifamily	$	-		$	-		$	-		$	-		$	4,051
Commercial real estate non-owner occupied		-			-			-			-			16,000
Total commercial loans and leases		-			-			-			-			20,051
Consumer:
Residential		870			1,215			1,005			1,234			821
Installment:
Personal		137,755			151,040			124,848			76,874			307,336
Other		219,015			188,062			24,515			-			95,849
Total installment loans		356,770			339,102			149,363			76,874			403,185
Total consumer loans		357,640			340,317			150,368			78,108			404,006
Total loans held for sale	$	357,640		$	340,317		$	150,368		$	78,108		$	424,057
Total loans and leases portfolio	$	13,256,871		$	13,202,084		$	13,713,482		$	13,910,907		$	15,063,034
(1) Includes PPP loans.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands)
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Demand, non-interest bearing	$	4,688,880		$	4,422,494		$	4,758,682		$	4,490,198		$	3,487,517
Demand, interest bearing		5,661,775			5,580,527			5,824,410			5,551,037			5,791,302
Total demand deposits		10,350,655			10,003,021			10,583,092			10,041,235			9,278,819
Savings		2,080,374			1,402,941			1,118,353			1,048,229			924,359
Money market		3,347,843			3,226,395			2,499,593			2,004,264			2,019,633
Time deposits		2,182,511			3,287,879			3,994,326			4,856,703			5,500,806
Total deposits	$	17,961,383		$	17,920,236		$	18,195,364		$	17,950,431		$	17,723,617

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
ASSET QUALITY - UNAUDITED
(Dollars in thousands)	As of March 31, 2024															As of December 31, 2023															As of March 31, 2023
	Total loans			Non accrual /NPLs			Allowance for credit losses			Total NPLs to total loans			Total reserves to total NPLs			Total loans			Non accrual /NPLs			Allowance for credit losses			Total NPLs to total loans			Total reserves to total NPLs			Total loans			Non accrual /NPLs			Allowance for credit losses			Total NPLs to total loans			Total reserves to total NPLs
Loan type
Commercial & industrial, including specialized lending (1)	$	6,326,458		$	3,608		$	23,003		0.06	%		637.56	%		$	6,285,840		$	4,436		$	23,503		0.07	%		529.82	%		$	7,061,122		$	3,886		$	20,050		0.06	%		515.95	%
Multifamily		2,123,675			5,161			18,307		0.24	%		354.72	%			2,138,622			-			16,343		-	%		-	%			2,195,211			881			15,084		0.04	%		1712.15	%
Commercial real estate owner occupied		806,278			8,920			10,201		1.11	%		114.36	%			797,319			5,869			9,882		0.74	%		168.38	%			895,314			3,621			8,472		0.40	%		233.97	%
Commercial real estate non-owner occupied		1,182,084			62			18,320		0.01	%		29548.39	%			1,177,650			-			16,859		-	%		-	%			1,245,248			-			11,032		-	%		-	%
Construction		185,601			-			1,866		-	%		-	%			166,393			-			1,482		-	%		-	%			188,123			-			2,336		-	%		-	%
Total commercial loans and leases receivable		10,624,096			17,751			71,697		0.17	%		403.90	%			10,565,824			10,305			68,069		0.10	%		660.54	%			11,585,018			8,388			56,974		0.07	%		679.23	%
Residential		482,537			8,089			6,707		1.68	%		82.92	%			484,435			6,802			6,586		1.40	%		96.82	%			494,815			6,473			6,853		1.31	%		105.87	%
Manufactured housing		37,382			2,268			4,160		6.07	%		183.42	%			38,670			2,331			4,239		6.03	%		181.85	%			43,272			2,568			4,339		5.93	%		168.96	%
Installment		792,606			6,958			50,732		0.88	%		729.12	%			874,926			7,211			56,417		0.82	%		782.37	%			1,268,505			8,720			62,115		0.69	%		712.33	%
Total consumer loans receivable		1,312,525			17,315			61,599		1.32	%		355.76	%			1,398,031			16,344			67,242		1.17	%		411.42	%			1,806,592			17,761			73,307		0.98	%		412.74	%
Loans and leases receivable		11,936,621			35,066			133,296		0.29	%		380.13	%			11,963,855			26,649			135,311		0.22	%		507.75	%			13,391,610			26,149			130,281		0.20	%		498.23	%
Loans receivable, mortgage finance, at fair value		962,610			-			-		-	%		-	%			897,912			-			-		-	%		-	%			1,247,367			-			-		-	%		-	%
Loans held for sale		357,640			588			-		0.16	%		-	%			340,317			461			-		0.14	%		-	%			424,057			5,975			-		1.41	%		-	%
Total portfolio	$	13,256,871		$	35,654		$	133,296		0.27	%		373.86	%		$	13,202,084		$	27,110		$	135,311		0.21	%		499.12	%		$	15,063,034		$	32,124		$	130,281		0.21	%		405.56	%
(1) Includes PPP loans.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands)
	Q1			Q4				Q3			Q2				Q1
	2024			2023				2023			2023 (1)				2023
Loan type
Commercial & industrial, including specialized lending	$	3,672		$	5,282			$	2,974		$	258			$	(71	)
Multifamily		473			127				1,999			1,448				-
Commercial real estate owner occupied		22			-				39			(34	)			-
Commercial real estate non-owner occupied		-			(288	)			-			266				4,234
Construction		-			-				-			-				(116	)
Residential		18			(1	)			13			24				(2	)
Installment		13,783			12,202				12,473			13,602				14,606
Total net charge-offs (recoveries) from loans held for investment	$	17,968		$	17,322			$	17,498		$	15,564			$	18,651
(1) Excludes $6.2 million of charge-offs for certain PCD loans acquired from the FDIC that were immediately applied against $8.7 million of allowance for credit losses on PCD loans recognized upon the acquisition of the loan portfolio on June 15, 2023. Subsequent recoveries and charge-offs of these PCD loans will be included in the period in which they occur.

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED

We believe that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our ongoing financial results, which we believe enhance an overall understanding of our performance and increases comparability of our period to period results. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. The non-GAAP measures presented are not necessarily comparable to non-GAAP measures that may be presented by other financial institutions. Although non-GAAP financial measures are frequently used in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results of operations or financial condition as reported under GAAP.

The following tables present reconciliations of GAAP to non-GAAP measures disclosed within this document.

Core Earnings and Adjusted Core Earnings - Customers Bancorp
	Q1 2024					Q4 2023						Q3 2023						Q2 2023						Q1 2023
(Dollars in thousands, except per share data)	USD		Per share			USD			Per share			USD			Per share			USD			Per share			USD			Per share
GAAP net income to common shareholders	$	45,926	$	1.40		$	58,223		$	1.79		$	82,953		$	2.58		$	44,007		$	1.39		$	50,265		$	1.55
Reconciling items (after tax):
Severance expense		-		-			473			0.01			-			-			141			0.00			637			0.02
Impairments on fixed assets and leases		-		-			-			-			-			-			12			0.00			86			0.00
Loss on sale of capital call lines of credit		-		-			-			-			-			-			3,914			0.12			-			-
(Gains) losses on investment securities		57		0.00			(85	)		0.00			492			0.02			49			0.00			(49	)		0.00
Derivative credit valuation adjustment		169		0.01			267			0.01			(151	)		0.00			(101	)		0.00			204			0.01
Tax on surrender of bank-owned life insurance policies		-		-			-			-			-			-			4,141			0.13			-			-
FDIC special assessment		380		0.01			2,755			0.08			-			-			-			-			-			-
Core earnings	$	46,532	$	1.42		$	61,633		$	1.90		$	83,294		$	2.59		$	52,163		$	1.65		$	51,143		$	1.58
One-time non-interest expense items recorded during Q1 2024 (after-tax):
Deposit servicing fees prior to 2024		5,405		0.16
FDIC premiums prior to 2024		3,200		0.10
Total one-time non-interest expense items		8,605		0.26
Adjusted core earnings (adjusted for one-time non-interest expense items)	$	55,137	$	1.68

Core Return on Average Assets and Adjusted Core Return on Average Assets - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP net income	$	49,726			$	62,092			$	86,756			$	47,574			$	53,721
Reconciling items (after tax):
Severance expense		-				473				-				141				637
Impairments on fixed assets and leases		-				-				-				12				86
Loss on sale of capital call lines of credit		-				-				-				3,914				-
(Gains) losses on investment securities		57				(85	)			492				49				(49	)
Derivative credit valuation adjustment		169				267				(151	)			(101	)			204
Tax on surrender of bank-owned life insurance policies		-				-				-				4,141				-
FDIC special assessment		380				2,755				-				-				-
Core net income	$	50,332			$	65,502			$	87,097			$	55,730			$	54,599
One-time non-interest expense items recorded during Q1 2024 (after-tax):
Deposit servicing fees prior to 2024		5,405
FDIC premiums prior to 2024		3,200
Total one-time non-interest expense items		8,605
Adjusted core net income (adjusted for one-time non-interest expense items)	$	58,937
Average total assets	$	21,335,229			$	21,252,273			$	21,978,010			$	21,654,735			$	21,052,920
Core return on average assets		0.95	%			1.22	%			1.57	%			1.03	%			1.05	%
Adjusted core return on average assets (adjusted for one-time non-interest expense items)		1.11	%

Core Pre-Tax Pre-Provision Net Income and ROAA and Adjusted Core Pre-Tax Pre-Provision Net Income and ROAA - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP net income	$	49,726			$	62,092			$	86,756			$	47,574			$	53,721
Reconciling items:
Income tax expense		15,651				21,796				23,470				20,768				14,563
Provision (benefit) for credit losses		17,070				13,523				17,856				23,629				19,603
Provision (benefit) for credit losses on unfunded commitments		430				(136	)			48				(304	)			280
Severance expense		-				639				-				182				809
Impairments on fixed assets and leases		-				-				-				15				109
Loss on sale of capital call lines of credit		-				-				-				5,037				-
(Gains) losses on investment securities		75				(114	)			626				62				(62	)
Derivative credit valuation adjustment		222				361				(192	)			(130	)			259
FDIC special assessment		500				3,723				-				-				-
Core pre-tax pre-provision net income	$	83,674			$	101,884			$	128,564			$	96,833			$	89,282
One-time non-interest expense items recorded during Q1 2024:
Deposit servicing fees prior to 2024		7,106
FDIC premiums prior to 2024		4,208
Total one-time non-interest expense items		11,314
Adjusted core pre-tax pre-provision net income (adjusted for one-time non-interest expense items)	$	94,988
Average total assets	$	21,335,229			$	21,252,273			$	21,978,010			$	21,654,735			$	21,052,920
Core pre-tax pre-provision ROAA		1.58	%			1.90	%			2.32	%			1.79	%			1.72	%
Adjusted core pre-tax pre-provision ROAA (adjusted for one-time non-interest expense items)		1.79	%

Core Return on Average Common Equity and Adjusted Core Return on Average Common Equity - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP net income to common shareholders	$	45,926			$	58,223			$	82,953			$	44,007			$	50,265
Reconciling items (after tax):
Severance expense		-				473				-				141				637
Impairments on fixed assets and leases		-				-				-				12				86
Loss on sale of capital call lines of credit		-				-				-				3,914				-
(Gains) losses on investment securities		57				(85	)			492				49				(49	)
Derivative credit valuation adjustment		169				267				(151	)			(101	)			204
Tax on surrender of bank-owned life insurance policies		-				-				-				4,141				-
FDIC special assessment		380				2,755				-				-				-
Core earnings	$	46,532			$	61,633			$	83,294			$	52,163			$	51,143
One-time non-interest expense items recorded during Q1 2024 (after-tax):
Deposit servicing fees prior to 2024		5,405
FDIC premiums prior to 2024		3,200
Total one-time non-interest expense items		8,605
Adjusted core earnings (adjusted for one-time non-interest expense items)	$	55,137
Average total common shareholders' equity	$	1,529,211			$	1,449,728			$	1,373,244			$	1,335,408			$	1,273,780
Core return on average common equity		12.24	%			16.87	%			24.06	%			15.67	%			16.28	%
Adjusted core return on average common equity (adjusted for one-time non-interest expense items)		14.50	%

Core Pre-Tax Pre-Provision ROCE and Adjusted Core Pre-Tax Pre-Provision ROCE - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP net income to common shareholders	$	45,926			$	58,223			$	82,953			$	44,007			$	50,265
Reconciling items:
Income tax expense		15,651				21,796				23,470				20,768				14,563
Provision (benefit) for credit losses		17,070				13,523				17,856				23,629				19,603
Provision (benefit) for credit losses on unfunded commitments		430				(136	)			48				(304	)			280
Severance expense		-				639				-				182				809
Impairments on fixed assets and leases		-				-				-				15				109
Loss on sale of capital call lines of credit		-				-				-				5,037				-
(Gains) losses on investment securities		75				(114	)			626				62				(62	)
Derivative credit valuation adjustment		222				361				(192	)			(130	)			259
FDIC special assessment		500				3,723				-				-				-
Core pre-tax pre-provision net income available to common shareholders	$	79,874			$	98,015			$	124,761			$	93,266			$	85,826
One-time non-interest expense items recorded during Q1 2024:
Deposit servicing fees prior to 2024		7,106
FDIC premiums prior to 2024		4,208
Total one-time non-interest expense items		11,314
Adjusted core pre-tax pre-provision net income available to common shareholders	$	91,188
Average total common shareholders' equity	$	1,529,211			$	1,449,728			$	1,373,244			$	1,335,408			$	1,273,780
Core pre-tax pre-provision ROCE		21.01	%			26.82	%			36.04	%			28.01	%			27.33	%
Adjusted core pre-tax pre-provision ROCE (adjusted for one-time non-interest expense items)		23.98	%

Core Efficiency Ratio and Adjusted Core Efficiency Ratio - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP net interest income	$	160,385			$	172,506			$	199,773			$	165,271			$	149,899
GAAP non-interest income	$	21,231			$	18,672			$	17,775			$	15,997			$	18,121
Loss on sale of capital call lines of credit		-				-				-				5,037				-
(Gains) losses on investment securities		75				(114	)			626				62				(62	)
Derivative credit valuation adjustment		222				361				(192	)			(130	)			259
Core non-interest income		21,528				18,919				18,209				20,966				18,318
Core revenue	$	181,913			$	191,425			$	217,982			$	186,237			$	168,217
GAAP non-interest expense	$	99,169			$	93,767			$	89,466			$	89,297			$	80,133
Severance expense		-				(639	)			-				(182	)			(809	)
Impairments on fixed assets and leases		-				-				-				(15	)			(109	)
FDIC special assessment		(500	)			(3,723	)			-				-				-
Core non-interest expense	$	98,669			$	89,405			$	89,466			$	89,100			$	79,215
One-time non-interest expense items recorded during Q1 2024:
Deposit servicing fees prior to 2024		(7,106	)
FDIC premiums prior to 2024		(4,208	)
Total one-time non-interest expense items		(11,314	)
Adjusted core non-interest expense	$	87,355
Core efficiency ratio (1)		54.24	%			46.70	%			41.04	%			47.84	%			47.09	%
Adjusted core efficiency ratio (adjusted for one-time non-interest expense items) (2)		48.02	%
(1) Core efficiency ratio calculated as core non-interest expense divided by core revenue.
(2) Adjusted core efficiency ratio calculated as adjusted core non-interest expense divided by core revenue.

Core Non-Interest Expense to Average Total Assets and Adjusted Core Non-Interest Expense to Average Total Assets- Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP non-interest expense	$	99,169			$	93,767			$	89,466			$	89,297			$	80,133
Severance expense		-				(639	)			-				(182	)			(809	)
Impairments on fixed assets and leases		-				-				-				(15	)			(109	)
FDIC special assessment		(500	)			(3,723	)			-				-				-
Core non-interest expense	$	98,669			$	89,405			$	89,466			$	89,100			$	79,215
One-time non-interest expense items recorded during Q1 2024:
Deposit servicing fees prior to 2024		(7,106	)
FDIC premiums prior to 2024		(4,208	)
Total one-time non-interest expense items		(11,314	)
Adjusted core non-interest expense	$	87,355
Average total assets	$	21,335,229			$	21,252,273			$	21,978,010			$	21,654,735			$	21,052,920
Core non-interest expense to average total assets		1.86	%			1.67	%			1.62	%			1.65	%			1.53	%
Adjusted core non-interest expense to average total assets (adjusted for one-time non-interest expense items)		1.65	%

Business Unit Deposits (formerly, Core Deposits, Total Deposits, excluding Wholesale CDs and BMTX student deposits) - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024			Q4 2023			Q3 2023			Q2 2023			Q1 2023
Total deposits	$	17,961,383		$	17,920,236		$	18,195,364		$	17,950,431		$	17,723,617
Reconciling items:
Wholesale CDs		1,809,573			2,970,615			3,713,933			4,651,054			5,311,083
BMTX student deposits		850			1,157			636,951			407,118			506,922
Business Unit Deposits (formerly, Core Deposits, Total deposits, excluding wholesale CDs and BMTX student deposits)	$	16,150,960		$	14,948,464		$	13,844,480		$	12,892,259		$	11,905,612

Tangible Common Equity to Tangible Assets - Customers Bancorp
(Dollars in thousands, except per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP total shareholders' equity	$	1,691,617			$	1,638,394			$	1,561,607			$	1,456,652			$	1,421,020
Reconciling items:
Preferred stock		(137,794	)			(137,794	)			(137,794	)			(137,794	)			(137,794	)
Goodwill and other intangibles		(3,629	)			(3,629	)			(3,629	)			(3,629	)			(3,629	)
Tangible common equity	$	1,550,194			$	1,496,971			$	1,420,184			$	1,315,229			$	1,279,597
GAAP total assets	$	21,347,367			$	21,316,265			$	21,857,152			$	22,028,565			$	21,751,614
Reconciling items:
Goodwill and other intangibles		(3,629	)			(3,629	)			(3,629	)			(3,629	)			(3,629	)
Tangible assets	$	21,343,738			$	21,312,636			$	21,853,523			$	22,024,936			$	21,747,985
Tangible common equity to tangible assets		7.3	%			7.0	%			6.5	%			6.0	%			5.9	%

Tangible Book Value per Common Share - Customers Bancorp
(Dollars in thousands, except share and per share data)	Q1 2024				Q4 2023				Q3 2023				Q2 2023				Q1 2023
GAAP total shareholders' equity	$	1,691,617			$	1,638,394			$	1,561,607			$	1,456,652			$	1,421,020
Reconciling Items:
Preferred stock		(137,794	)			(137,794	)			(137,794	)			(137,794	)			(137,794	)
Goodwill and other intangibles		(3,629	)			(3,629	)			(3,629	)			(3,629	)			(3,629	)
Tangible common equity	$	1,550,194			$	1,496,971			$	1,420,184			$	1,315,229			$	1,279,597
Common shares outstanding		31,521,931				31,440,906				31,311,254				31,282,318				31,239,750
Tangible book value per common share	$	49.18			$	47.61			$	45.36			$	42.04			$	40.96

Contacts

David W. Patti, Communications Director 610-451-9452