Customers Bancorp, Inc

Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Customers Bank Corp third quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, Again, press star 1. Thank you. It is now my pleasure to turn today's call over to Mr. David Patti. Sir, please go ahead.

Thank you, Brent, and good morning, everyone. Thank you for joining us for the Customer Bank Corp earnings call for the third quarter of 2022. The presentation deck you will see during today's webcast has been posted on the investor relations page of the bank's website at customersbank.com. You can scroll to Q3 22 results and click download presentation. You can also download a PDF of the full press release at that spot. Our investor presentation includes important details that we will walk through on this morning's webcast. I encourage you to download and use the document. 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 as of 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 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 Corps Chair, Jay Sidhu.

Jay, the audience is yours. Thank you, David, and good morning, ladies and gentlemen. It's really a pleasure to welcome you to our third quarter 2022 earnings call. Joining me here today from Malvern, Pennsylvania, the new headquarters of Customers Bank are Sam Sidhu, a president of our holding company, as well as the CEO of our Customers Bank subsidiary, Carla Leibold, our chief financial officer, and Andy Bowman, our chief credit officer. As you can see on slide three, Customers Bank is a digital-focused super community bank with diversified niches, several with a nationwide footprint, that supplements our community banking business platforms located in Rhode Island, New York, Pennsylvania, North Carolina, and Florida. We operate our $20 billion asset bank with only 672 team members. working out of 39 private banking offices or loan production offices located across many states, from Portsmouth, New Hampshire, to Boston, to New York, to Greater Philadelphia, and then on to Wilmington, North Carolina, in Florida, as well as Dallas, Texas. We are pleased this morning to present to you another solid quarter, despite the challenging interest rate and economic environment. We remain laser-focused on our responsible organic growth strategy and have taken prudent risk management strategic actions over the past several quarters to ensure that we are well positioned from a capital, credit, liquidity, and earnings perspective in this challenging environment. We are also pleased to report that we have already beaten our 2022 core earnings per share guidance, excluding PPP, of between $4.75 to $5 in earnings per share for 2022. Our Q3 core earnings, excluding PPP, were $2.30, up 135% over Q3 2021. Our core ROAA, or return on average assets, was 1.64%, and core return on common equity was 25.9%. All these numbers are excluding PPP, and that's a good way to look at our numbers. Year-to-date, September 30, 2022, core earnings per share, excluding PPP, were $5.15. Q3 2022 net interest income generated by the core bank was up 38% year-over-year, while our total operating expenses were down by $4 million year-over-year. Core loan growth this quarter was led by increases in low-risk variable rate specialty lending verticals of $500 million, which were largely offset by an expected decline in loans to mortgage companies of $300 million and a sale of $500 million of consumer installment loans at a net gain to the company of about $13 million. This was executed as part of our balance sheet optimization and capital enhancement strategy. Asset quality remains exceptional and credit reserves are robust. Our loan and deposit pipelines remain strong and we are very focused on maintaining our margins, moderating our growth, improving our capital ratios while controlling our expenses, and meeting or beating what the street expects from us in earnings per share. We remain very optimistic about our future. I would now like to hand it over to Sam Sidhu, President and CEO of Customers Bank, to describe in detail our strategic initiatives and our results for Q3. Sam?