Customers Bancorp Stock

Customers Bancorp, Inc. operates as the bank holding company for Customers Bank that provides commercial banking products, primarily loans and deposits.

The bank is a digital-forward financial institution that provides commercial and consumer customers the stability and trust inherent in working with an established and regulated financial institution. The bank has diversified lending activities that build overall franchise value and a high-tech, high-touch branch-light strategy that serves its customers through a single-point-of-contact private banking strategy with a focus on community banking businesses, including commercial and industrial and commercial real estate loans (to borrowers in Pennsylvania, New Jersey, New York City, New England, and other geographies), multifamily lending, SBA (the U.S. Small Business Administration) lending, and residential mortgage lending. The bank also serves specialty niche businesses nationwide, including its specialty lending, commercial loans to mortgage companies and commercial equipment financing.

The bank offers digital banking to commercial and consumer businesses nationwide, including Banking-as-a-Service to fintech companies, payments and treasury services, such as CBIT (Customers Bank Instant Token) to businesses, and consumer loans through relationships with fintech companies. In 2021, the bank launched CBIT on the TassatPay blockchain-based instant B2B (business-to-business) payments platform, which serves a growing array of B2B clients who want the benefit of instant payments, including key over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals.

The company serves businesses and consumers through its branches, limited production offices and administrative offices in Southeastern Pennsylvania (Bucks, Berks, Chester and Philadelphia counties); Rye Brook, New York (Westchester County); Hamilton, New Jersey (Mercer County); Boston, Massachusetts; Providence, Rhode Island; Portsmouth, New Hampshire (Rockingham County); Manhattan and Melville, New York; Chicago, Illinois; Dallas, Texas; Jacksonville, Florida and Wilmington, North Carolina and other locations. The bank has a diversified lending business consisting of geographically in-market community banking offerings, such as commercial and industrial loans, commercial real estate loans, multifamily loans and residential mortgage loans.

In addition, on a national level, the bank provides SBA lending and financing to specialty banking businesses, such as specialty lending, commercial loans to mortgage companies and commercial equipment financing. The bank also offers digital banking to commercial and consumer businesses nationwide, including Banking-as-a-Service to fintech companies, payments and treasury services to businesses, and consumer loans through relationships with fintech companies. The bank's specialty lending includes fund finance, real estate specialty finance, technology and venture, healthcare and financial institutions group. Customers' fund finance provides secured and variable rate financing to private debt funds and private equity funds and cash management services to the alternative investment industry. Customers' technology and venture capital banking provides loans to businesses with mission critical software products, recurring software revenues and funded by well-known venture capital firms. Customers' SBA lending also includes a digital small balance 7(a) lending.

Customers' strategic plan is to become a leading regional bank holding company through organic core loan and deposit growth and opportunistic value-added acquisitions. The primary customers of the bank are privately held businesses, business customers, large corporate clients, not-for-profit organizations, and consumers.

The bank’s lending activities are primarily funded by deposits from its branch-light business model, which seeks higher deposit levels per branch than a typical bank, combined with lower branch operating expenses, without sacrificing exceptional customer service and its digital bank deposit offerings. In 2021, Customers Bank launched CBIT on the TassatPay blockchain-based instant B2B payments platform, which serves a growing array of B2B clients who want the benefit of instant payments, including key over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals.

Current Markets

Customers' target market is broadly defined as extending from Washington D.C. to Boston, Massachusetts roughly following Interstate 95. In 2021, Customers expanded its target market to include Texas, Florida, North Carolina and other geographies. In 2022, Customers completed the consolidation of five branches into other existing locations in Southern Pennsylvania, as well as the relocation of a branch in Berks County, Pennsylvania into the Bancorp headquarters and the relocation of the bank headquarters that were previously announced in 2021. As of December 31, 2022, Customers (the company and the bank) had bank branches or LPOs serving businesses and consumers in various locations.

Customers (the company and the bank) had other locations with executive and administrative offices and LPOs serving mortgage companies and small businesses throughout the United States as of December 31, 2022.

Prospective Markets

The organic core loan and deposit growth strategy of Customers focuses on expanding market share in its existing and contiguous markets by generating deposits, loan and fee-based services through its Concierge Banking high-tech/high-touch single-point-of-contact personalized service supported by technology for its commercial, consumer, not-for-profit and specialized lending markets.

Products

Customers offers a broad range of traditional loan and deposit banking products and financial services, and non-traditional products and services, such as CBIT, to its commercial and consumer customers. Customers offers an array of lending products to cater to its customers’ needs, including specialty loans, commercial mortgage warehouse loans, multifamily and commercial real estate loans, business banking, small business loans, equipment financing, residential mortgage loans and installment loans. Customers also offers traditional deposit products, including commercial and consumer checking accounts, non-interest-bearing and interest-bearing demand accounts, MMDA, savings accounts, time deposit accounts and cash management services.

Lending Activities

Customers focuses its lending efforts on the following lending areas:

Commercial Lending – Customers' primary focus is on business banking (i.e., commercial and industrial lending), including small and middle market business banking (including SBA and PPP (Paycheck Protection Program) loans), specialty lending, commercial loans to mortgage companies, multifamily and commercial real estate lending and commercial equipment financing.

Consumer Lending – Local-market mortgage and home equity lending and the origination and purchase of installment loans through arrangements with third-party fintech companies and other market place lenders.

Commercial Lending

Customers' commercial lending activities are divided into six groups: Business Banking; Small and Middle Market Business Banking; Corporate and Specialty Banking; Multifamily and Commercial Real Estate Lending; Lending to Mortgage Banking Businesses; and SBA Lending.

The commercial lending group, including commercial and industrial loans, owner occupied commercial real estate loans and specialty lending, focus on building business relationships that provide a complete offering of financial services customized to the present and future needs of each business customer.

The small and middle market business banking platform originates loans, including SBA loans, through the branch network sales force and a team of dedicated relationship managers. The support administration of this platform is centralized, including technology, risk management, product management, marketing, performance tracking and overall strategy. Credit and sales training has been established for Customers' sales force, ensuring that it has small business experts in place providing appropriate financial solutions to the small business owners in its communities. A division approach focuses on industries that offer high asset quality and are deposit rich to drive profitability. Customers' SBA Lending includes digital small balance 7(a) lending.

Customers' Corporate and Specialty Banking includes lending to mortgage banking businesses, commercial equipment finance, healthcare lending, real estate specialty finance, fund finance, technology and venture and financial institutions group. Fund finance, which consists of capital call lines and lender finance verticals, provides secured and variable rate financing to the private debt funds and private equity funds and cash management services to the alternative investment industry. Customers' technology and venture capital banking provides loans to businesses with mission critical software products and recurring software revenues and funded by well-known venture capital firms.

Most of the individual mortgage loans that collateralize the company’s commercial loans to mortgage companies are insured or guaranteed by the U.S. Government through one of its programs, such as FHA, VA, or they are conventional loans eligible for sale to Fannie Mae and Freddie Mac. Customers is continuously expanding its product offerings to mortgage companies to meet a wider array of business needs.

Customers' Equipment Finance Group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. The Equipment Finance Group is primarily focused on serving the following segments: transportation, construction (includes crane and utility), marine, franchise, general manufacturing (includes machine tool), helicopter/fixed wing, solar, packaging, plastics and food processing.

Consumer Lending

Customers provides home equity and residential mortgage loans to customers.

Customers Bank has a community outreach program in Philadelphia to finance homeownership in urban communities.

Customers also originates and purchases installment loans to be held for investment or to be held for sale through arrangements with third-party fintech companies.

Private Banking

Customers has a Private Banking model for its commercial clients in the major markets within its geographic footprint. This unique model provides unparalleled service to customers through an in-market team of experienced private bankers.

Deposit Products and Other Funding Sources

Customers offers a variety of deposit products to its customers, including checking accounts, savings accounts, MMDA and other deposit accounts, including fixed-rate, fixed-maturity retail time deposits ranging in terms from 30 days to five years, individual retirement accounts, and non-retail time deposits consisting of jumbo certificates greater than or equal to $100,000. Customers also focuses on niche businesses as a source of lower-cost core deposits, including property management and mortgage banking businesses, title and escrow funds, health savings accounts, and Section 1031 of the IRS exchange deposits. Customers also utilizes wholesale deposit products, money market accounts and certificates of deposits obtained through listing services and borrowings from the FRB and FHLB as a source of funding.

In 2021, Customers Bank launched CBIT on the TassatPay blockchain-based instant B2B payments platform, which serves a growing array of B2B clients who want the benefit of instant payments, including key over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals.

Financial Products and Services

In addition to traditional banking activities, Customers provides other financial services to its customers, including mobile phone banking, internet banking, wire transfers, electronic bill payment, lock box services, remote deposit capture services, courier services, merchant processing services, cash vault, controlled disbursements, positive pay and cash management services (including account reconciliation, collections and sweep accounts).

Investment Securities

As of December 31, 2022, the company’s investment securities included asset-backed securities; agency-guaranteed residential collateralized mortgage obligations; collateralized loan obligations; commercial mortgage-backed securities; corporate notes; and private label collateralized mortgage obligations.

Supervision and Regulation

The company is subject to extensive regulation, examination and supervision by the Pennsylvania Department of Banking and Securities and, as a member of the Federal Reserve System, by the Federal Reserve Board.

Customers Bank is subject to the supervision, examination and enforcement jurisdiction of the CFPB and is subject to higher FDIC premium assessments applicable to institutions with assets exceeding $10 billion.

As a public company, the company also files reports with the United States Securities and Exchange Commission (SEC) and is subject to its regulatory authority, as well as the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, with respect to the company’s securities, financial reporting and certain governance matters.

Customers Bank’s deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to the limits set forth under applicable law and are subject to deposit insurance premium assessments.

The CFPB and the federal banking agencies continue to focus attention on consumer protection laws and regulations. The CFPB is responsible for promoting fairness and transparency for mortgages, credit cards, deposit accounts and installment financial products and services and for interpreting and enforcing the federal consumer financial laws that govern the provision of such products and services. Federal consumer financial laws enforced by the CFPB include, but are not limited to, the Equal Credit Opportunity Act (ECOA), Truth in Lending Act, the Truth in Savings Act, Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act. The Consumer Financial Protection Bureau (CFPB) is also authorized to prevent any institution under its authority from engaging in an unfair, deceptive, or abusive act or practice in connection with consumer financial products and services. Customers is subject to multiple federal consumer protection statutes and regulations, including but not limited to, those referenced above.

The bank is subject to regulations implementing the privacy protection provisions of the Gramm-Leach-Bliley Act of 1999.

The company is required to file an annual report with the Board of Governors of the Federal Reserve System (Federal Reserve Board or Federal Reserve) and any additional information that the Federal Reserve Board may require pursuant to the Bank Holding Company Act of 1956, as amended.

History

Customers Bancorp, Inc. was incorporated in Pennsylvania in 2010.