Customers Bancorp(US:CUBI)2020-11-06 21:44Financial Performance - Net income for the three months ended September 30, 2020, was $50,515 million, compared to $27,066 million in the same period of 2019, representing an increase of 86.2%[20] - Basic earnings per common share for the three months ended September 30, 2020, were $1.49, up from $0.75 in the same period of 2019, indicating an increase of 98.7%[20] - Net income available to common shareholders for the three months ended September 30, 2020, was $47,085,000, compared to $23,451,000 for the same period in 2019, representing a 100% increase[67] - Net income for the nine months ended September 30, 2020, was $76,332,000, compared to $51,801,000 for the same period in 2019, representing a 47.3% increase[31] - Comprehensive income for the three months ended September 30, 2020, was $44,729 million, compared to $28,885 million in the same period of 2019, representing an increase of 55.0%[24] Asset Growth - Total assets increased to $18.78 billion as of September 30, 2020, compared to $11.52 billion at December 31, 2019, reflecting a growth of approximately 63.5%[18] - Total loans and leases receivable reached $16.42 billion, up from $9.51 billion, marking a 72.5% increase year-over-year[18] - Total deposits grew to $10.84 billion, an increase of 25.3% from $8.65 billion at the end of 2019[18] - Total loans held for sale decreased to $26.69 million from $486.33 million, indicating a strategic shift in asset management[18] Credit Loss Provisions - The allowance for credit losses on loans and leases rose to $155.56 million from $56.38 million, indicating a significant increase in provisions due to credit risk[18] - The provision for credit losses on loans and leases was $12,955 million for the three months ended September 30, 2020, compared to $4,426 million in the same period of 2019, reflecting a significant increase of 192.5%[20] - Provision for credit losses on loans and lease losses increased significantly to $65,688,000 from $14,539,000, indicating a rise of 351.5%[31] Income and Expenses - Total interest income for the three months ended September 30, 2020, was $139,650 million, an increase from $126,718 million in the same period of 2019, representing a growth of 10.4%[20] - Non-interest income totaled $33,793 million for the three months ended September 30, 2020, up from $23,369 million in the same period of 2019, marking a significant increase of 44.6%[20] - Total non-interest expense increased to $65,561 million for the three months ended September 30, 2020, compared to $59,592 million in the same period of 2019, which is an increase of 9.9%[20] Capital Structure - Shareholders' equity slightly decreased to $1.05 billion from $1.05 billion, indicating a stable capital position despite market challenges[18] - The company issued 9 million preferred shares, maintaining a strong capital structure to support future growth initiatives[18] - The total shareholders' equity as of September 30, 2020, was $1,051,491,000, an increase from $1,007,847,000 as of June 30, 2020, representing a growth of 4.3%[26] Liquidity and Funding - The Federal Reserve PPP liquidity facility contributed $4.81 billion to the company's liquidity position, enhancing its financial stability during the pandemic[18] - Customers had $4.8 billion of borrowings under the PPPLF, with a borrowing capacity of up to $5.0 billion as of September 30, 2020[140] - Short-term debt as of September 30, 2020, totaled $1.53 billion, an increase from $1.038 billion as of December 31, 2019[137] Loan Portfolio and Risk Management - Customers had $5.0 billion in Paycheck Protection Program (PPP) loans outstanding as of September 30, 2020, fully guaranteed by the SBA, with interest income recognized at $24.3 million for the quarter[88] - Non-performing loans (NPLs) included in total loans held for sale were $19.7 million as of September 30, 2020, compared to $1.3 million at December 31, 2019, indicating a rise in credit risk[84] - The risk rating categories for loans include pass/satisfactory, special mention, substandard, doubtful, and loss, which are updated periodically to monitor credit quality[115] Derivatives and Fair Value - The company reported a balance of $60,810,000 in derivative assets as of September 30, 2020[193] - The total fair value of derivatives designated as cash flow hedges was recorded as $46,785,000 in liabilities as of September 30, 2020[193] - The fair value of financial instruments is determined using various methods, including quoted market prices and valuation techniques, with a focus on market conditions at the measurement date[1] Business Segments - The Customers Bank Business Banking segment primarily generates revenue through net interest income and other non-interest income, focusing on commercial customers in several states[208] - The BankMobile segment offers digital banking services and generates revenue mainly from interest income on consumer loans and various fees[208]