Customers Bancorp, Inc

Thank you for standing by. My name is JL and I will be your conference operator today. At this time, I would like to welcome everyone to the Customers Bancorp Inc. Q1 2024 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 during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to David Paddy, Communications Director for Customers, Bancorp. You may begin.

Thank you, JL, and good morning, everyone. Thank you for joining us for the Customers Bancorp earnings call for the first quarter of 2024. The presentation deck you will see during today's webcast has been posted on the investors' webpage of the bank's website at customersbank.com. You can scroll to Q1 24 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 At this time, it is my pleasure to introduce Customers Bank Corp Chair, Jay Sidhu. Jay?

Thank you, Dave, and good morning, ladies and gentlemen, on this beautiful spring morning. Welcome to Customers Bank Corp's 2024 First Quarter Earnings Call. Joining me this morning are President and CEO of Customers Bank, Sam Sidhu, and Customers Bank Corp CFO, Phil Watkins. Please join me in welcoming and congratulating Phil on his promotion to Customers Bank Corp CFO. We want to thank Carla Leibold, our former CFO, for her years of service and wish her well. I will provide some introductory comments and then my colleagues will provide details of the quarter. At the conclusion of our prepared remarks, We look forward to answering your questions. Let's move to slide three. Before we address our first quarter results, I just wanted to take a moment to briefly recap some of our positive trends over the past few years and one very significant activity that we announced in the recent press release, which we expect to have a material positive impact on our future performance. In our presentation last quarter, we highlighted the delivery on the promises we made to you five years ago across items like capital, tangible book value growth, profitability, and risk management. While I won't go through all of them, I will highlight the incredible effort and results from our team members as we continue to strengthen our franchise, especially transform our deposit franchise. While we have made significant strides, especially in 2023, our opportunity in 2024 looks even stronger. On that note, we are incredibly excited about the recent announcement we made about hiring 10 new high-performing business and commercial banking teams from Legacy Signature Bank. We expect this will accelerate the execution of our strategic priorities, especially helping to take the quality of our deposit franchise to the next level. These teams have an incredible track record with decades of experience working together, serving an awesome client base. We are so excited to welcome our new colleagues and their business to Customers Bank and providing both with a platform to succeed. We had another extremely strong quarter of business unit deposit growth, exceeding $1 billion, which we again used to reduce our wholesale certificates of deposits. Our capital levels continue to strengthen, with TCE to TA ratio increasing to 7.3%, and our CET1 ratio increasing to 12.5%. we have confidence in our ability to achieve the 7.5% TCE to TA very soon. And we had established that goal earlier in the year, and we expect to put some excess CET1 capital to work with relationship-based loan growth this year. Asset quality remains very strong, and our NPA ratio at 17 basis points, and we have ample reserve coverage. We remain very optimistic about the year with strong and growing loan and deposit pipelines. We are in an enviable position to continue to take market share and our new business and commercial banking teams serve to further accelerate and enhance those prospects. Let's move to slide four. Again, we reiterate our priorities to you, which broadly remain unchanged. We will continue to maintain a roughly flat balance sheet in 2024. However, we will execute disciplined loan growth of 10% to 15% in line with our previous guidance and focused on holistic client relationships. In fact, our loan growth in April alone exceeded our entire Q1 loan growth. Beginning on slide five, you can see some of the key metrics we focus on and which we believe differentiate the top-performing banks. These include growth in revenue, EPS, and tangible book value per share. We have recorded more than 15% annualized growth on each of these metrics over the last five years, and revenues have grown two times the expenses. We have accomplished this performance without raising a single dollar of common equity and diluting our existing shareholders. I want to express our gratitude and thanks to all the team members that make up Customers Bank Corp for their hard work and dedication to serving our clients. Our people are what drives customer bank success as they work day in and day out to make our customers say, wow. I know our new team members are totally aligned to that vision, as Sam and I have had the opportunity to meet each and every one of them over the last several weeks. Before I pass the call on to my colleagues, I also want to welcome Kelly Motto to the call. Kelly joins from KBW, where she recently assumed coverage of Customers Bancorp, and we look forward to collaborating and working with Kelly going forward. With that, I'll turn it over to Sam to cover the key activity and results of the quarter in much more detail.