Customers Bancorp, Inc

Ladies and gentlemen this is the operator. Today's conference is scheduled to begin momentarily. Until that time your lines will again be placed on music hold. Thank you for your patience. THE END THE END Good day. Thank you for standing by. Welcome to the Customers Bank Corp, Inc. First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you may press star 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would like to turn the call over to our first speaker today, Mr. David Petty. Please go ahead.

Thank you, Lisa, and good morning, everyone. Thank you for joining us for Customer Bank Corp's earnings call for the first quarter of 2021. The presentation deck you will see during today's webcast has been posted on the investor relations page of the bank's website at www.customersbank.com. You can access the deck by clicking a red button marked Latest Earnings Presentation. Our investor presentation includes important details that we will walk through on this morning's webcast. I encourage you to use, download, or print the documents. Before we begin, we would like to remind you that some of the statements we make today may be considered forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that may cause actual performance results to differ materially from what is currently anticipated. Please note that these forward-looking statements speak only after the date of this presentation, and we undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable securities laws. Please refer to our SEC filings, including our Form 10-K and Form 10-Q, for a more detailed description of the risk factors that may affect our results. Copies may be obtained from the SEC or by visiting the Investor Relations section of our website. At this time, it's my pleasure to introduce Customers Bank Corp Chair Jay Siddiqui.

Jay, you may begin. Thank you very much, David, and good morning, ladies and gentlemen. We really appreciate you taking the time to join us this morning. It's a very important call for us. Joining me today is Dick East, our President and Chief Executive Officer of Customs Bank, Sam Tadil, who is our incoming President and Chief Executive Officer of Customs Bank when Dick retires at the end of this quarter. And Carla Lavold, our Chief Financial Officer, as well as Andy Bowman, our Chief Credit Officer. Before I share with you and my colleagues and also join me in sharing with you the results of the first quarter, we'd like to talk a little bit about ESG. And ESG considerations are very much integrated across customer's bank, across different units, business units. and into our policies and principles that govern how our company operates. We put together our ESG report, which is on our website, and we encourage you to take a look at that. And every single year, we'll be updating that. And we are taking this very seriously at our board level and at our management level. Now on to slide six. which is the highlight of our performance, as well as our franchise, as you can see. We had exceptional core earnings, and the only difference between core earnings and gap earnings are something that we had shared with you earlier, that we had a gain on the disposition of VMs. technologies, and we had to pay tax on that because we passed on the entire amount of disposition to our shareholders, as well as there were severance payments or rewards made by us to the management of BMTX. This is all going to be historical, so we'd like for you to very much focus on the so-called core earnings. Very strong earnings, return on common equity of 31%, return on assets of 1.6%, and adjusted pre-tax, pre-provision ROAs of 1.9%. Very important also is, and you'll hear a lot more about this from Andy Bowman, is talking about our credit quality, and that improved about 25% this past quarter, with our non-performing assets only 26 basis points, as well as our reserve coverage of 171%. From a very important milestone also is a significant increase in our capital ratios, and our bank capital ratio was 13.2% at March 31st, and we'll talk a lot more about this during our presentation today. Moving on to slide seven, I'd like for you to join me in saluting my partner, friend, and colleague, Dick East. who joined us, joined me and a couple of other of our colleagues about 11 years ago to start New Century Bank. From New Century Bank, we became Customers Bank Hall. At that time, the bank, at the time of the launch of this bank, we took over a $250 million asset-failing bank. And today, you know, it's $13.6 billion in total core assets and about $18 billion including PPPs. We put together, fortunately, with significant contributions, a very highly experienced management team. And our team averages about 30 years of banking experience. And Dick was the one who recruited. We told Dick, you cannot retire. It doesn't matter whether you're 75 or 74 or 76 until you find a successor who you are very comfortable with. And he recruited Sam to do who the board appointed to be his successor. And Sam will be taken over as customer's bank chief executive officer effective July the 1st. We've also recruited several new teams, and we'll be talking more about those in the Q&A. And from a credit quality point of view, we are very, very comfortable with maintaining our credit profile over the next several quarters. And from the quality of the franchise point of view, you know what? Our demand deposits today are about 22% of our total deposits, and our CDs are only 5%, and the quality of the franchise has dramatically improved over the last couple of years. In terms of our focused strategy and long-term goals, what Jake and I and our colleagues have been very much focused on is building a bank which is built upon single point of contract or private banking for privately held businesses in a way that the customer feels the difference and wants to say wow. We will continue to develop, on top of that, in-house digital banking services for small and medium-sized businesses and consumers, and we will continue to focus on improving our balance sheet, and it's a very, we believe, a very high-quality and diversified earning asset base and a stable and growing core deposit franchise. At the company, capital allocation and risk management are always in the forefront of every single thing that we do. And we are very much engaged in not just short-term, quarter-by-quarter planning, but also on a longer-term planning. And we are pleased to share with you that we are comfortable in reporting gap earnings of at least $5 a share in 2021 and 2022. and we are very comfortable with our goal, achieving our goal of $6 in core earnings by 2026. So it's my pleasure at this time to hand it over to our thanks, incoming Chief Executive Officer, Sam Sidhu, to go over some of our business highlights. Sam?