Form 8-K Customers Bancorp, Inc. For: Jan 27

January 27, 2015 4:53 PM

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.��20549

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FORM 8-K

__________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported):��January 27, 2015

__________________

CUSTOMERS BANCORP, INC.

(Exact Name of Registrant as specified in its charter)

__________________

Pennsylvania	001-35542	27-2290659
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
of incorporation)	�	Identification No.)

1015 Penn Avenue

Suite 103

Wyomissing PA 19610

Registrant's telephone number, including area code:��(610) 933-2000

None

(Former name or former address, if changed since last report)�

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Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instructions A.2. below):

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�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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�	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02.��Results of Operations and Financial Condition

On January 27, 2015, Customers Bancorp, Inc. (the Company)��issued a press release announcing unaudited financial information for the quarter ended December 31, 2014, a copy of which is included as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 7.01.��Regulation FD.

The Company has posted to its website a slide presentation which is attached hereto as Exhibit 99.2 and incorporated into this Item 7.01 by reference.

The information in this Current Report on Form 8-K, including Exhibits 99.1 and��99.2 attached hereto and incorporated by reference into Items 2.02 and 7.01, respectively, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibits attached hereto, shall not be deemed incorporated by reference into any of the Companys reports or filings with the SEC, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing. The information in this Current Report on Form 8-K, including the exhibits attached hereto, shall not be deemed an admission as to the materiality of any information in this report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

Item�9.01.

Financial Statements and Exhibits

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(d) Exhibits.

�	�	�
Exhibit	��	Description
Exhibit�99.1	��	January 27, 2015 Press Release
Exhibit 99.2	�	Slides

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

�	CUSTOMERS BANCORP, INC.
�	�	�
�	�	�
�	�	�
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�	By:	/s/ Robert E. Wahlman
�	Name:	Robert E. Wahlman
�	Title:	Executive Vice President
�	�	and Chief Financial Officer
�	�	�
�	�	�
�	�	�
Date:��January 27, 2015	�	�

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EXHIBITS INDEX

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Exhibit	��	Description	�
Exhibit 99.1	�	January 27, 2015 Press Release	�
Exhibit 99.2	�	Slides	�

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Exhibit 99.1

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	Customers Bancorp 1015 Penn Avenue Wyomissing, PA 19610
�	�
�	Contacts: Jay Sidhu, Chairman & CEO 610-935-8693 Richard Ehst, President & COO 610-917-3263 Investor Contact: Robert Wahlman, CFO 610-743-8074

CUSTOMERS BANCORP REPORTS RECORD EARNINGS

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2014 Net Income Up 32.2% Over 2013 Net Income

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Q4 2014 Net Income Up 46.2% Over Q4 2013 and Up 13.0% Over Q3 2014

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Q4 2014 Return on Equity of almost 12.0%

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Net Interest Margin up 5 basis points during Q4 2014

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Tangible book value up 14.3% in 2014 to $16.43 per share

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Wyomissing, PA January 27, 2015 Customers Bancorp, Inc. (NYSE: CUBI), the parent company of Customers Bank (collectively Customers), reported earnings of $43.2 million for the full year of 2014 compared to earnings of $32.7 million for 2013, an increase of $10.5 million, or 32.2%.��Fully diluted earnings per share for 2014 was $1.55 compared to $1.30 fully diluted earnings per share for 2013, an increase of $0.25, or 19.2%.��Average fully diluted shares for 2014 were 27.9 million compared to average fully diluted shares for 2013 of 25.1 million shares.

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For the quarter ended December 31, 2014 (Q4 2014), Customers reported net income of $13.2 million compared to earnings of $9.0�million for the quarter ended December 31, 2013 (Q4 2013), an increase of $4.2 million, or 46.2%, and earnings of $11.7�million for the quarter ended September 30, 2014 (Q3 2014), an increase of $1.5 million, or 13.0%.��Q4 2014 fully diluted earnings per share was $0.47, compared to $0.32 in Q4 2013 and $0.42 in Q3 2014.��Average fully diluted shares for Q4 2014 and Q3 2014 were 28.0 million, compared to average fully diluted shares for Q4 2013 of 27.8 million.

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Jay Sidhu, Chairman and CEO of Customers reflected, We are extremely pleased with the level and trend in earnings for 2014, and we are especially pleased with our fourth quarter 2014 results.��As planned, in 2014 we continued expansion of our business and teams in the greater Philadelphia, metro New York, Boston, and Providence markets, advanced our client-centric single-point-of-contact model, and generated very strong loan and deposit growth.��We added six commercial banking teams during 2014, including a national Small Business Administration (SBA) team, laying the foundation for continued strong commercial and industrial loan growth in 2015.��We supported our loan and profitability growth by raising $135 million in holding company and bank debt used as bank regulatory capital. We also invested significantly in our future and are excited to have launched BankMobile, the first fee free full service mobile bank for consumers in the United States, on January 14, 2015.��We remain committed to increase our value to our shareholders, and to serve all of our communities.��I expect Customers to continue to outperform the industry in 2015 and beyond through execution of our High Tech/High Touch strategy resulting in superior organic growth of loans and deposits��coupled with a sound risk management discipline.

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2014 compared to 2013:

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Customers $10.5 million increase in earnings to $43.2 million, up 32.2%, for 2014 resulted principally from a $48.1 million increase, up 46.3%, in net interest income.��Higher net interest income resulted from a $2.5 billion increase in loan balances (including loans held for sale) during 2014 to $5.7 billion as of December 31, 2014, a 78.9% increase in loan balances during the year, offset in part by a decrease in the net interest margin to 2.87%.��The decrease in net interest margin was primarily as a result of raising $135 million of debt at the holding company and bank level to provide the bank regulatory capital necessary to support the growth in loans and profitability.��During 2014, loan balances increased $1.2 billion for multi-family loans, $0.6 billion for secured commercial loans to mortgage companies or warehouse loans, $0.4 billion for commercial and industrial loans (including owner occupied commercial real estate), and $0.2 billion for non-owner occupied commercial real estate loans from December 31, 2013.

Other financial highlights for full year 2014 include:

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Total deposits in 2014 increased by $1.6 billion, up approximately 53%.

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Customers raised $110 million in subordinated debt at the Customers Bank level and $25 million in senior debt at the holding company level to be used as regulatory capital at Customers Bank to support loan and profitability growth.

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Asset quality continued to improve with non-performing loans decreasing $7.4 million, or approximately 39%, to $11.7 million at December 31, 2014.��Non-performing loans as a percent of total loans outstanding declined to 0.20%, and total reserves as a percent of non-performing loans increased to 289.5%, at December 31, 2014 compared to 0.60% and 152.9%, respectively, at December 31, 2013.

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Excluding loans covered under FDIC loss sharing agreements, non-performing loans at December 31, 2014 were $7.5 million, or 0.13% of total non-covered loans, and reserves were 425.6% of non-performing non-covered loans.

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In 2014, Customers increased the allowance for loan losses by $6.9 million, or 29%, to $30.9 million at December 31, 2014 to support the loan growth.��Net 2014 provision for loan losses, including adjustments to the FDIC indemnification asset receivable, totaled $14.7 million in 2014 compared to $2.2 million in 2013.

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Customers Bank sold approximately $235 million in multi-family loans to other banks during the third and fourth quarters of 2014 at a gain of $2.2 million.��These sales also freed up approximately $1 million in reserves and added marginally to the Customers capital ratios.

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Non-interest expenses increased $24.9 million in 2014 to $98.9 million, up 33.6%, generally as a result of the increased size of the loan portfolio and related growth in operations and business activity.

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The effective tax rate for 2014 was approximately 32.0%, largely reflecting the one-time $1.5 million Q3 2014 adjustment for a return to provision and deferred tax analysis completed in the period.

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Capital ratios continue to exceed the well capitalized thresholds.

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The tangible book value per share continued to increase, reaching $16.43 at December 31, 2014, compared to $14.37 at December 31, 2013 and $15.79 at September 30, 2014, an increase of 14.3% year-over-year.

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Page 2 of 14

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Customers Bank is a business bank supported by its unique High Touch very experienced teams of commercial bankers supported by High Tech management information systems and client interface technology.��We also call this our Single Point of Contact private banking model.��We expect to add several new teams in 2015 and continue the franchise enhancing robust commercial and industrial loan growth in 2015 added Mr. Sidhu.

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Some additional significant accomplishments in 2014 included:

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Built and tested Customers BankMobile product offering, Customers solution to the banking needs and preferred delivery channel to millennials, middle income Americans and underserved segments of the U.S. population using mobile technology and smart web apps.��BankMobile was launched January 14, 2015.

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Implemented our single-point-of-contact (SPOC) customer service model across the entire Customers franchise leading to higher levels of customer satisfaction and improved customer acquisition and retention.

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Enhanced CB Access Mobile application for existing Customers bank clients and saw use of the mobile application increase by 54%, remote check deposit increase by 69%, and photo bill payers increase by 57%.

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Defined Customers risk appetite, completed enhanced risk assessments of all key operating and product functions considering the defined risk appetite, adopted or revised metrics and tolerances to manage to our risk appetite, and established semi-annual risk summit meetings to stimulate senior management and Board discussion of risk management.

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Developed and implemented new tools to better assess and manage our Community Reinvestment Act (CRA) performance, to help achieve our goal of a satisfactory CRA rating, and other areas of Fair and Responsible Banking.

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Introduced Customers Employee Stock Purchase Plan (ESPP), allowing employees to acquire ownership of Customers common stock through payroll deductions.

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Introduced and expanded Customers Wellness Initiative, a program to promote good employee health by offering physical check-ups, exercise programs, counseling, and other services.

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Changed Customers listing of its voting common stock and 6.375% senior notes due 2018 to the NYSE from the NASDAQ (the voting common stock trades as CUBI, and the 6.375% senior notes due 2018 trade as CUBS on the NYSE).

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Page 3 of 14

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Q4 2014 compared to Q4 2013 and Q3 2014:

Customers reported Q4 2014 earnings of $13.2 million, an increase of $4.2 million, or 46.2%, compared to Q4 2013, and an increase of $1.5 million, or 13.0%, compared to Q3 2014.��The increase in Q4 2014 compared to Q4 2013 earnings is principally the result of a $2.5 billion increase in loan balances (including loans held for sale) year-over-year to $5.7 billion at December 31, 2014.��The increase in the Q4 2014 compared to Q3 2014 earnings results from a $241.8 million increase in loan balances during Q4 2014 and the fourth quarter benefit of the prior quarter approximately $800 million loan portfolio increase.��During Q4 2014 loan balances increased $65 million for multi-family loans, $117 million for warehouse loans and $50 million for commercial and industrial loans (including owner occupied commercial real estate).��The benefit of increased loan balances was partially offset by a 21 basis point decrease in net interest margin to 2.84% in Q4 2014 compared to Q4 2013.��However, Customers net interest margin was enhanced by 5 basis points in Q4 2014 compared to Q3 2014 as a result of Customers disciplined pricing strategy and sale of lower yielding multi-family loans.

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Other financial highlights for Q4 2014 include:

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Customers intentionally slowed its balance sheet growth to approximately $300 million during Q4 2014, or 18%, a growth rate that in general reflects the growth in capital from current period earnings and results in capital ratios that are relatively consistent between periods.

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The Q4 2014 provision for loan losses was $2.5�million compared to a recovery of the provision in Q4 2013 of $512 thousand, and Q3 2014 provision of $5.0 million.

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Non-interest income decreased $1.9 million to $5.8 million in Q4 2014 compared to Q4 2013, and increased $0.7 million from Q3 2014. The Q4 2013 amount included gains on sales of securities of $1.3 million.

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Q4 2014 non-interest expense was $27.9 million, an increase of $5.6 million from Q4 2013, and an increase of $3.2 million from Q3 2014.��The Q4 2014 efficiency ratio was 54.9%, compared to the Q4 2013 efficiency ratio of 64.9% and the Q3 2014 efficiency ratio of 54.5%.��Included in Q4 2014 non-interest expenses were approximately $1.2 million of non-recurring expenses related to a legal settlement and one-time increase to the incentive pool.

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During Q4 2014, Customers sold approximately $134 million in multi-family loans at a gain of $1.5 million.

�2014 results reflect the hard work of our team members to successfully execute our organic growth and capital leverage strategies to create shareholder value, stated Robert Wahlman, Chief Financial Officer of Customers Bancorp, Inc.��We remain committed to reaching our goals of about a 1.0% return on assets within two to three years.��We are pleased to have reached our long term goal of about 12.0% return on equity during Q4 2014.��To manage our capital ratios we expect to moderate our asset growth to levels supported by growth in retained earnings, or approximately 10% to 15% for 2015.��Customers also expects to continue to sell a portion of its multi-family loan originations while growing the commercial and industrial and other relationship driven loan portfolios.��We believe Customers is on target to meet the 2015 earnings guidance of $1.95 to $2.00 per share we have provided.

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Page 4 of 14

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EARNINGS SUMMARY - UNAUDITED

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(Dollars in thousands, except per-share data)

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2014

�

2014

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2013

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Net income available to common shareholders

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13,178

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11,662

�

9,010

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Basic earnings per share ("EPS") (1)

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0.49

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0.44

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0.33

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Diluted EPS (1)

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0.47

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0.42

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0.32

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Average shares outstanding - diluted (1)

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28,009,532

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27,984,840

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27,818,182

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Return on average assets

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0.8

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0.8

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0.9

Return on average common equity

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11.9

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11.0

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9.1

Net interest margin, tax equivalent

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2.84

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2.79

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3.05

Efficiency ratio

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54.9

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54.5

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64.9

Non performing loans to total loans (including held for sale and FDIC covered loans)

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0.20

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0.25

�

0.60

Reserves to non performing loans (NPL's)

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289.5

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246.4

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152.9

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Tangible book value per common share (period end) (1) (2)

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16.43

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15.79

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14.37

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Period end stock price (1)

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19.46

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17.96

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18.60

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(1) Share and per share amounts have been adjusted to give effect to the 10% stock dividend declared on May 15, 2014 and issued on June 30, 2014.

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(2) Calculated as total equity less goodwill and other intangibles divided by common shares outstanding at period end.

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Net Income, Earnings Per Share and Tangible Book Value

Q4 2014 net income of $13.2�million was up $4.2�million, or 46.2%, from Q4 2013.��Q4 2014 fully diluted earnings per share was $0.47 with 28.0�million diluted shares, compared to Q4 2013 earnings of $9.0�million and fully diluted earnings per share of $0.32 with 27.8�million diluted shares.��Customers tangible book value per share increased to $16.43 as of December 31, 2014 compared to $14.37 as of December 31, 2013, an increase of 14.3%.��The increase in net income in Q4 2014 compared to Q4 2013 was primarily due to increased net interest income, fueled by a $2.5 billion increase in the loan portfolio while maintaining strong asset quality and growing deposits.��The increased tangible book value reflects Customers strategic commitment to consistently maintain and grow tangible book value per share through growth in earnings with the expectation that it will eventually result in superior shareholder value creation.

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Page 5 of 14

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Net Interest Margin

The net interest margin decreased 21 basis points from Q4 2013 and increased 5 basis points from Q3 2014.��Approximately 12 basis points of the Q4 2014 net interest margin decrease relative to Q4�2013 resulted from the issuance of $110 million of subordinated debt and $25 million of holding company senior notes in June 2014, and the remainder of the decrease resulted principally from lengthening the liability maturities and the growing investment in the very strong credit quality, but lower net interest margin, multi-family loan portfolio.��The increase in net interest margin during Q4 2014 resulted from a disciplined pricing strategy for multi-family loans and sale of lower yielding multi-family loans to other banks at a gain.

Non-Interest Income

Q4 2014 non-interest income of $5.8�million was down $1.9�million compared to $7.7 million in Q4 2013, and up $0.7�million compared to $5.1�million in Q3�2014.��The $1.9�million decrease in Q4 2014 non-interest income compared to Q4 2013 non-interest income resulted primarily from a $1.3 million gain realized from the sale of investment securities, and gains of $1.1 million from residential mortgage related activities, during Q4 2013 offset in part by gains on sale of multi-family loans of $1.5 million.��The $0.7 million Q4 2014 non-interest income increase compared to Q3 2014 resulted primarily from higher gains on sale of multi-family loans (up $1.2 million).

Non-Interest Expense

Operating expenses in Q4 2014 of $27.9�million increased $5.6�million, or 25.0%, compared to Q4 2013, and increased $3.2�million compared to Q3 2014 operating expenses of $24.7�million.��Q4 2014 compared to Q4 2013 operating expense increase of $5.6 million resulted from the $2.5 billion growth in Customers loan portfolio requiring increased staffing for loan origination and administrative support (approximately $2.8 million), and higher FDIC assessments, taxes, and other regulatory fees resulting from the increase in assets (approximately $1.2 million).��In addition, losses incurred on the disposition of other real estate owned and net write-downs of repossessed property related to legacy New Century and acquired loan portfolios, combined with associated work-out expenses, increased $1.3 million in Q4 2014 compared to Q4 2013.��Specifically, in Q4 2014 write-downs were taken upon receipt of new valuations on three properties that totaled approximately $1.3 million.��The increase in Q4 2014 compared to Q3 2014 non-interest expenses resulted from higher staffing levels and the write-downs for repossessed properties in Q4 2014 previously referenced as well as one-time expenses of $1.2 million related to a legal settlement and higher accrual to the incentive pool.��BankMobile start up expenses are also included in 2014 non-interest expenses.

Provision for Loan Losses and Asset Quality

The Q4 2014 provision for loan losses of $2.5�million was primarily due to the $202 million increase in loans held for investment during Q4 2014.��The Q4 2013 provision for loan losses was a recovery of $0.5 million.

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Customers separates its loan portfolio into covered and non-covered loans for purposes of analyzing and managing asset quality.��Covered loans are those loans that are covered by FDIC purchase and assumption, or loss sharing, agreements, and for which Customers is reimbursed 80% of allowable incurred losses.��Covered loans totaled $42.2�million at December 31, 2014, $66.7�million at December 31, 2013, and $44.5�million at September 30, 2014.��Non-accrual covered loans totaled $4.2�million at December 31, 2014, $5.6�million at December 31, 2013 and $4.1 million at September 30, 2014.��Covered real estate owned totaled $9.4�million at December 31, 2014, $7.0�million at December 31, 2013 and $10.2�million at September 30, 2014.

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Page 6 of 14

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Non-covered loans are all loans not covered by the FDIC loss share agreements.��Non-covered loans include loans accounted for as held for sale as well as loans accounted for as held for investment.��Non-covered loans totaled $5.7�billion at December 31, 2014, $3.1�billion at December 31, 2013, and $5.5�billion at September 30, 2014.��Non-accrual non-covered loans totaled $7.5�million at December 31, 2014 (0.13% of total non-covered loans), $13.5�million (0.43% of total non-covered loans) at December 31, 2013 and $9.9�million (0.18% of total non-covered loans) at September 30, 2014.��Non-covered loans 30 to 89 days delinquent at December 31, 2014 totaled $8.6�million (0.15% of non-covered loans).��Total reserves for loan and lease losses at December 31, 2014 were 425% of non-covered non-performing loans.

Diversified Loan Portfolio

Customers is a Business Bank that principally focuses on four lending activities; commercial and industrial loans to privately held businesses, multi-family loans principally to high net worth families in the New York City area, selected commercial real estate loans, and banking services to privately held mortgage companies. Commercial and industrial loans, including owner occupied commercial real estate loans were $1.1 billion at December 31, 2014, an increase of 51% from December 31, 2013. Multi-family loans were $2.2 billion, mortgage warehouse loans were $1.4 billion while non-owner occupied commercial real estate loans were $0.6 billion, respectively, at December 31, 2014.

Looking Ahead

Customers is looking forward to an exciting year in 2015.��We are off to a great start with our January 14, 2015 Phase 1 launch of Bank Mobile, Americas first mobile platform based full service consumer bank, that is designed to serve millennials, middle class American families and underserved consumers throughout America.��Bank Mobile will provide fee free banking to these segments of the U.S. population, Mr. Sidhu said.��We will also continue our focus on our core business at Customers, growing commercial loans and core deposits, as we look to build our franchise value.��Customers stock is currently trading at approximately 9.6 times estimated high 2015 earnings guidance.��Price to tangible book value is approximately 1.0 times estimated year end 2015 book value.��Customers has previously disclosed a 2015 earnings per share estimate of $1.95 to $2.00, Mr. Sidhu concluded.

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Conference Call

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Date:	January 28, 2015
Time:	10:00 am ET
US Dial-in:	888-438-5491
International Dial-in:	719-325-2376
Conference ID:	6182520
Webcast:	http://public.viavid.com/index.php?id=112692

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Page 7 of 14

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Institutional Background

Customers Bancorp, Inc. is a bank holding company located in Wyomissing, Pennsylvania engaged in banking and related businesses through its bank subsidiary, Customers Bank.��Customers Bank is a community-based, full-service bank with assets of approximately $6.8�billion.��A member of the Federal Reserve System and deposits insured by the Federal Deposit Insurance Corporation (FDIC), Customers Bank provides a range of banking services to small and medium-sized businesses, professionals, individuals and families through offices in Pennsylvania, New York, Rhode Island, Massachusetts, and New Jersey.��Committed to fostering customer loyalty, Customers Bank uses a High Tech/High Touch strategy that includes use of industry-leading technology to provide customers better access to their money, as well as a continually expanding portfolio of loans to small businesses, multi-family projects, mortgage companies and consumers.

Customers Bancorp, Inc. voting common shares are listed on the NYSE stock market under the symbol CUBI.��Additional information about Customers Bancorp, Inc. can be found on the companys website, www.customersbank.com.

Safe Harbor Statement

In addition to historical information, this press release may contain forward-looking statements which are made in good faith by Customers Bancorp, Inc., pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These forward-looking statements include statements with respect to Customers Bancorp, Inc.s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words may, could, should, pro forma, looking forward, would, believe, expect, anticipate, estimate, intend, plan, or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.s control). Numerous competitive, economic, regulatory, legal and technological factors, among others, could cause Customers Bancorp, Inc.s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management's current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequently filed quarterly reports on Form 10-Q. Customers Bancorp, Inc. does not undertake to update any forward looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank.

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Page 8 of 14

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CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED - UNAUDITED

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(Dollars in thousands, except per share data)

�

2014

�

2014

�

2013

�

Interest income:

�

Loans receivable, including fees

�

43,172

�

39,640

�

24,800

�

Loans held for sale

�

10,500

�

8,503

�

6,604

�

Investment securities

�

2,442

�

2,361

�

2,980

�

Other

�

1,047

�

794

�

333

�

Total interest income

�

57,161

�

51,298

�

34,717

�

Interest expense:

�

Deposits

�

7,133

�

6,179

�

5,279

�

Other borrowings

�

1,508

�

1,494

�

1,156

�

FHLB Advances

�

1,846

�

1,711

�

352

�

Subordinated debt

�

1,688

�

1,700

�

Total interest expense

�

12,175

�

11,084

�

6,803

�

Net interest income

�

44,986

�

40,214

�

27,914

�

Provision for loan losses

�

2,459

�

5,035

�

(512

)

Net interest income after provision for loan losses

�

42,527

�

35,179

�

28,426

�

Non-interest income:

�

Mortgage warehouse transactional fees

�

2,105

�

2,154

�

2,335

�

Mortgage loan and banking income (expense)

�

(127

)

�

212

�

1,092

�

Bank-owned life insurance income

�

1,056

�

976

�

825

�

Gain on sale of loans

�

1,859

�

695

�

450

�

Gain on sale of investment securities

�

1,274

�

Deposit fees

�

183

�

192

�

187

�

Other

�

728

�

873

�

1,532

�

Total non-interest income

�

5,804

�

5,102

�

7,695

�

Non-interest expense:

�

Salaries and employee benefits

�

13,415

�

12,070

�

10,625

�

FDIC assessments, taxes, and regulatory fees

�

3,283

�

3,320

�

2,058

�

Occupancy

�

2,848

�

2,931

�

2,521

�

Professional services

�

1,914

�

1,671

�

2,399

�

Technology, communication and bank operations

�

1,190

�

1,485

�

1,308

�

Other real estate owned expense

�

1,756

�

603

�

402

�

Loan workout

�

400

�

388

�

570

�

Advertising and promotion

�

221

�

261

�

301

�

Other

�

2,837

�

1,950

�

2,117

�

Total non-interest expense

�

27,864

�

24,679

�

22,301

�

Income before tax expense

�

20,467

�

15,602

�

13,820

�

Income tax expense

�

7,289

�

3,940

�

4,810

�

Net income

�

13,178

�

11,662

�

9,010

�

Basic earnings per share (1)

�

0.49

�

0.44

�

0.33

�

Diluted earnings per share (1)

�

0.47

�

0.42

�

0.32

�

(1) Earnings per share amounts have been adjusted to give effect to the 10% common stock dividend declared on May 15, 2014 and issued on June 30, 2014.

�

Page 9 of 14

�

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWELVE MONTHS ENDED - UNAUDITED								�
(Dollars in thousands, except per share data)	�	�		�	�	�		�
�	�	�		�	�	�		�
�	�	December 31,						�
�	�	2014		�	�	2013		�
Interest income:	�	�		�	�	�		�
Loans receivable, including fees	�	$	146,388	�	�	$	82,580	�
Loans held for sale	�	�	30,801	�	�	�	38,140	�
Investment securities	�	�	10,386	�	�	�	6,314	�
Other	�	�	2,852	�	�	�	1,122	�
Total interest income	�	�	190,427	�	�	�	128,156	�
�	�	�	�	�	�	�	�	�
Interest expense:	�	�	�	�	�	�	�	�
Deposits	�	�	24,454	�	�	�	21,020	�
Other borrowings	�	�	5,342	�	�	�	2,024	�
FHLB Advances	�	�	5,194	�	�	�	1,192	�
Subordinated debt	�	�	3,514	�	�	�	65	�
Total interest expense	�	�	38,504	�	�	�	24,301	�
Net interest income	�	�	151,923	�	�	�	103,855	�
Provision for loan losses	�	�	14,747	�	�	�	2,236	�
Net interest income after provision for loan losses	�	�	137,176	�	�	�	101,619	�
�	�	�	�	�	�	�	�	�
Non-interest income:	�	�	�	�	�	�	�	�
Mortgage warehouse transactional fees	�	�	8,233	�	�	�	12,962	�
Mortgage loan and banking income	�	�	2,048	�	�	�	1,142	�
Bank-owned life insurance income	�	�	3,702	�	�	�	2,482	�
Gain on sale of��loans	�	�	3,125	�	�	�	852	�
Gain on sale of investment securities	�	�	3,191	�	�	�	1,274	�
Deposit fees	�	�	801	�	�	�	675	�
Other	�	�	4,026	�	�	�	3,316	�
Total non-interest income	�	�	25,126	�	�	�	22,703	�
�	�	�	�	�	�	�	�	�
Non-interest expense:	�	�	�	�	�	�	�	�
Salaries and employee benefits	�	�	46,427	�	�	�	35,493	�
FDIC assessments, taxes, and regulatory fees	�	�	11,812	�	�	�	5,568	�
Occupancy	�	�	11,010	�	�	�	8,829	�
Professional services	�	�	7,748	�	�	�	5,548	�
Technology, communication and bank operations	�	�	5,856	�	�	�	4,330	�
Other real estate owned expense	�	�	3,601	�	�	�	1,365	�
Loan workout	�	�	1,706	�	�	�	2,245	�
Advertising and promotion	�	�	1,325	�	�	�	1,274	�
Loss contingency	�	�	-	�	�	�	2,000	�
Other	�	�	9,429	�	�	�	7,372	�
Total non-interest expense	�	�	98,914	�	�	�	74,024	�
Income before tax expense	�	�	63,388	�	�	�	50,298	�
Income tax expense	�	�	20,174	�	�	�	17,604	�
Net income	�	$	43,214	�	�	$	32,694	�
�	�	�	�	�	�	�	�	�
�Basic earnings per share (1)	�	$	1.62	�	�	�	1.34	�
�Diluted earnings per share (1)	�	�	1.55	�	�	�	1.30	�
�	�	�	�	�	�	�	�	�
(1) Earnings per share amounts have been adjusted to give effect to the 10% common stock dividend declared on May 15, 2014 and issued on June 30, 2014.								�
�	�	�	�	�	�	�	�	�

�

Page 10 of 14

�

CONSOLIDATED BALANCE SHEET - UNAUDITED	�	�		�	�	�		�
(Dollars in thousands)	�	�		�	�	�		�
�	�	�		�	�	�		�
�	�	December 31,		�	�	December 31,		�
�	�	2014		�	�	2013		�
ASSETS	�	�		�	�	�		�
Cash and due from banks	�	$	62,746	�	�	$	60,709	�
Interest-earning deposits	�	�	308,277	�	�	�	172,359	�
Cash and cash equivalents	�	�	371,023	�	�	�	233,068	�
Investment securities available for sale, at fair value	�	�	416,685	�	�	�	497,573	�
Loans held for sale	�	�	1,435,459	�	�	�	747,593	�
Loans receivable	�	�	4,312,173	�	�	�	2,465,078	�
Allowance for loan losses	�	�	(30,932	)	�	�	(23,998	)
Total loans receivable, net of allowance for loan losses	�	�	4,281,241	�	�	�	2,441,080	�
FHLB, Federal Reserve Bank, and other restricted stock	�	�	82,002	�	�	�	42,424	�
Accrued interest receivable	�	�	15,205	�	�	�	8,362	�
FDIC loss sharing receivable	�	�	2,320	�	�	�	10,046	�
Bank premises and equipment, net	�	�	10,810	�	�	�	11,625	�
Bank-owned life insurance	�	�	138,676	�	�	�	104,433	�
Other real estate owned	�	�	15,371	�	�	�	12,265	�
Goodwill and other intangibles	�	�	3,664	�	�	�	3,676	�
Other assets	�	�	52,914	�	�	�	41,028	�
Total assets	�	$	6,825,370	�	�	$	4,153,173	�
�	�	�	�	�	�	�	�	�
LIABILITIES AND SHAREHOLDERS' EQUITY	�	�	�	�	�	�	�	�
Demand, non-interest bearing	�	$	546,436	�	�	$	478,103	�
Interest-bearing deposits	�	�	3,986,102	�	�	�	2,481,819	�
Total deposits	�	�	4,532,538	�	�	�	2,959,922	�
Federal funds purchased	�	�	-	�	�	�	13,000	�
FHLB advances	�	�	1,618,000	�	�	�	706,500	�
Other borrowings	�	�	88,250	�	�	�	63,250	�
Subordinated debt	�	�	110,000	�	�	�	2,000	�
Accrued interest payable and other liabilities	�	�	33,437	�	�	�	21,878	�
Total liabilities	�	�	6,382,225	�	�	�	3,766,550	�
�	�	�	�	�	�	�	�	�
Common stock	�	�	27,278	�	�	�	24,756	�
Additional paid in capital	�	�	355,822	�	�	�	307,231	�
Retained earnings	�	�	68,421	�	�	�	71,008	�
Accumulated other comprehensive loss	�	�	(122	)	�	�	(8,118	)
Treasury stock, at cost	�	�	(8,254	)	�	�	(8,254	)
Total shareholders' equity	�	�	443,145	�	�	�	386,623	�
Total liabilities & shareholders' equity	�	$	6,825,370	�	�	$	4,153,173	�
�	�	�	�	�	�	�	�	�

�

Page 11 of 14

�

Average Balance Sheet / Net Interest Margin (Unaudited)

�

(Dollars in thousands)

�

Three Months Ended December 31,

�

2014

�

2013

�

Average Balance

�

Average yield or cost (%)

�

Average Balance

�

Average yield or cost (%)

�

Assets

�

Interest earning deposits

�

271,556

�

0.26

�

176,636

�

0.25

Investment securities

�

422,924

�

2.31

�

479,511

�

2.49

Loans held for sale

�

1,279,803

�

3.26

�

706,899

�

3.71

Loans held for investment

�

4,244,315

�

4.04

�

2,255,932

�

4.36

Other interest-earning assets

�

80,639

�

4.29

�

26,736

�

3.28

Total interest earning assets

�

6,299,237

�

3.60

�

3,645,714

�

3.78

Non-interest earning assets

�

246,796

�

189,880

�

Total assets

�

6,546,033

�

3,835,594

�

Liabilities

�

Total interest bearing deposits (1)

�

3,789,566

�

0.75

�

2,517,092

�

0.83

Borrowings

�

1,658,505

�

1.21

�

338,465

�

1.80

Total interest bearing liabilities

�

5,448,071

�

0.75

�

2,855,557

�

0.83

Non-interest bearing deposits (1)

�

633,525

�

572,883

�

Total deposits & borrowings

�

6,081,596

�

0.80

�

3,428,440

�

0.79

Other non-interest bearing liabilities

�

26,636

�

14,389

�

Total liabilities

�

6,108,232

�

3,442,829

�

Shareholders' equity

�

437,801

�

392,765

�

Total liabilities and shareholders' equity

�

6,546,033

�

3,835,594

�

Net interest margin

�

2.84

�

3.04

Net interest margin tax equivalent

�

2.84

�

3.05

�

(1) Total costs of deposits (including interest bearing and non-interest bearing) were 0.63% and 0.72% for the three months ended December 31, 2014 and 2013, respectively.

�

Page 12 of 14

�

Average Balance Sheet / Net Interest Margin (Unaudited)

�

(Dollars in thousands)

�

Twelve Months Ended December 31,

�

2014

�

2013

�

Average Balance

�

Average yield or cost (%)

�

Average Balance

�

Average yield or cost (%)

�

Assets

�

Interest earning deposits

�

228,668

�

0.25

�

190,298

�

0.25

Investment securities

�

451,932

�

2.30

�

260,862

�

2.42

Loans held for sale

�

911,594

�

3.38

�

992,421

�

3.84

Loans held for investment

�

3,656,891

�

4.00

�

1,842,310

�

4.48

Other interest-earning assets

�

66,669

�

3.41

�

27,095

�

2.36

Total interest earning assets

�

5,315,754

�

3.58

�

3,312,986

�

3.87

Non-interest earning assets

�

227,045

�

142,350

�

Total assets

�

5,542,799

�

3,455,336

�

Liabilities

�

Total interest bearing deposits (1)

�

3,220,305

�

0.76

�

2,435,520

�

0.86

Borrowings

�

1,268,205

�

1.11

�

278,297

�

1.18

Total interest bearing liabilities

�

4,488,510

�

0.86

�

2,713,817

�

0.90

Non-interest bearing deposits (1)

�

620,385

�

385,187

�

Total deposits & borrowings

�

5,108,895

�

0.75

�

3,099,044

�

0.78

Other non-interest bearing liabilities

�

17,905

�

11,779

�

Total liabilities

�

5,126,800

�

3,110,783

�

Shareholders' equity

�

415,999

�

344,553

�

Total liabilities and shareholders' equity

�

5,542,799

�

3,455,336

�

Net interest margin

�

2.86

�

3.13

Net interest margin tax equivalent

�

2.87

�

3.14

�

(1) Total costs of deposits (including interest bearing and non-interest bearing) were 0.64% and 0.77% for the twelve months ended December 31, 2014 and 2013, respectively.

�

Page 13 of 14

�

Asset Quality as of December 31, 2014 (Unaudited)

(Dollars in thousands)

�

Total

�

Non Accrual

�

Other Real Estate

�

Non Performing Assets

�

Allowance for loan

�

Cash

�

Total Credit

�

NPL's/ Total

�

Total Reserves to Total

�

Loan Type

�

Loans

�

�/NPL's

�

Owned

�

(NPA's)

�

losses

�

Reserve

�

Reserves

�

Loans

�

NPL's

�

New Century Originated Loans

�

Legacy

�

54,075

�

2,653

�

4,958

�

7,611

�

1,546

�

1,546

�

4.91

�

58.27

Troubled debt restructurings (TDR's)

�

1,060

�

5.85

�

48.39

Total New Century Originated Loans

�

55,135

�

2,715

�

4,958

�

7,673

�

1,576

�

1,576

�

4.92

�

58.05

�

Originated Loans

�

Multi-Family

�

2,188,134

�

8,491

�

8,491

�

0.00

�

0.00

Commercial Real Estate

�

731,287

�

1,340

�

1,340

�

7,610

�

7,610

�

0.18

�

567.91

Commercial & Industrial

�

687,585

�

1,432

�

335

�

1,767

�

3,418

�

3,418

�

0.21

�

238.69

Residential

�

160,224

�

160

�

160

�

1,171

�

1,171

�

0.10

�

731.88

Construction

�

65,824

�

424

�

424

�

0.00

�

0.00

Consumer

�

567

�

0.00

�

0.00

TDR's

�

576

�

0.00

�

0.00

Total Originated Loans

�

3,834,197

�

2,932

�

335

�

3,267

�

21,122

�

21,122

�

0.08

�

720.40

�

Acquired Loans

�

Covered

�

30,282

�

4,246

�

9,445

�

13,691

�

603

�

603

�

14.02

�

14.20

Non-Covered

�

332,047

�

979

�

633

�

1,612

�

617

�

3,042

�

3,659

�

0.29

�

373.75

TDR's Covered

�

532

�

0.00

�

0.00

TDR's Non-Covered

�

2,853

�

862

�

862

�

30.21

�

0.00

Total Acquired Loans

�

365,714

�

6,087

�

10,078

�

16,165

�

1,220

�

3,042

�

4,262

�

1.66

�

70.02

�

Acquired Purchased Credit-impaired Loans

�

Covered

�

11,367

�

1,669

�

1,669

�

0.00

�

0.00

Non-Covered

�

45,248

�

5,345

�

5,345

�

0.00

�

0.00

�

Total Acquired Purchased Credit-impaired Loans

�

56,615

�

7,014

�

7,014

�

0.00

�

0.00

Deferred Origination Fees/Unamortized Premium/Discounts

�

512

�

n/a

�

n/a

�

Total Loans Held for Investment

�

4,312,173

�

11,734

�

15,371

�

27,105

�

30,932

�

3,042

�

33,974

�

0.27

�

289.53

Total Loans Held for Sale

�

1,435,459

�

0.00

�

0.00

Total Portfolio

�

5,747,632

�

11,734

�

15,371

�

27,105

�

30,932

�

3,042

�

33,974

�

0.20

�

289.53

�

Page 14 of 14�

Highly Focused, Low Risk, Above Average Growth

Bank Holding Company

Investor Presentation

January, 2015

NYSE: CUBI

�

Forward-Looking Statements

This presentation as well as other written or oral communications made from time to time by us, may contain certain forward-looking information
within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These statements relate to future
events or future predictions, including events or predictions relating to our future financial performance, and are generally identifiable by the use of
forward-looking terminology such as believes, expects, may, will, should, plan, intend, target, or anticipates or the negative thereof
or comparable terminology, or by discussion of strategy or goals that involve risks and uncertainties. These forward-looking statements are only
predictions and estimates regarding future events and circumstances and involve known and unknown risks, uncertainties and other factors that may
cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by such forward-looking statements. This information is based on various assumptions by us that
may not prove to be correct.�Important factors to consider and evaluate in such forward-looking statements include:

"�� changes in the external competitive market factors that might impact our results of operations;

"�� changes in laws and regulations, including without limitation changes in capital requirements under the federal prompt corrective action regulations;

"�� changes in our business strategy or an inability to execute our strategy due to the occurrence of unanticipated events;

"�� our ability to identify potential candidates for, and consummate, acquisition or investment transactions;

"�� the timing of acquisition or investment transactions;

"�� constraints on our ability to consummate an attractive acquisition or investment transaction because of significant competition for these
opportunities;

"�� the failure of the Bank to complete any or all of the transactions described herein on the terms currently contemplated;

"�� local, regional and national economic conditions and events and the impact they may have on us and our customers;

"�� ability to attract deposits and other sources of liquidity;

"�� changes in the financial performance and/or condition of our borrowers;

"�� changes in the level of non-performing and classified assets and charge-offs;

"�� changes in estimates of future loan loss reserve requirements based upon the periodic review thereof under relevant regulatory and accounting
requirements;

"�� the integration of the Banks recent FDIC-assisted acquisitions may present unforeseen challenges;

"�� inflation, interest rate, securities market and monetary fluctuations;

"�� the timely development and acceptance of new banking products and services and perceived overall value of these products and services by users;

"�� changes in consumer spending, borrowing and saving habits;

"�� technological changes;

"�� the ability to increase market share and control expenses;

�

Forward-Looking Statements

"�continued volatility in the credit and equity markets and its effect on the general economy;

"�the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company
�Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters;

"�the businesses of the Bank and any acquisition targets or merger partners and subsidiaries not integrating successfully or such integration being
�more difficult, time-consuming or costly than expected;

"�material differences in the actual financial results of merger and acquisition activities compared with expectations, such as with respect to the full
�realization of anticipated cost savings and revenue enhancements within the expected time frame;

"�revenues following any merger being lower than expected;

"�deposit attrition, operating costs, customer loss and business disruption following the merger, including, without limitation, difficulties in
�maintaining relationships with employees being greater than expected.

�� These forward-looking statements are subject to significant uncertainties and contingencies, many of which are beyond our control. Although we
�believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
�performance or achievements. Accordingly, there can be no assurance that actual results will meet expectations or will not be materially lower
�than the results contemplated in this presentation. You are cautioned not to place undue reliance on these forward-looking statements, which
�speak only as of the date of this document or, in the case of documents referred to or incorporated by reference, the dates of those documents.
�We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after
�the date of this document or to reflect the occurrence of unanticipated events, except as may be required under applicable law.

�� This presentation is for discussion purposes only, and shall not constitute any offer to sell or the solicitation of an offer to buy any security, nor is it
�intended to give rise to any legal relationship between Customers Bancorp, Inc. (the Company) and you or any other person, nor is it a
�recommendation to buy any securities or enter into any transaction with the Company. The information contained herein is preliminary and
�material changes to such information may be made at any time. If any offer of securities is made, it shall be made pursuant to a definitive offering
�memorandum or prospectus (Offering Memorandum) prepared by or on behalf of the Company, which would contain material information not
�contained herein and which shall supersede, amend and supplement this information in its entirety.

�� Any decision to invest in the Companys securities should be made after reviewing an Offering Memorandum, conducting such investigations as the
�investor deems necessary or appropriate, and consulting the investors own legal, accounting, tax, and other advisors in order to make an
�independent determination of the suitability and consequences of an investment in such securities.�No offer to purchase securities of the
�Company will be made or accepted prior to receipt by an investor of an Offering Memorandum and relevant subscription documentation, all of
�which must be reviewed together with the Companys then-current financial statements and, with respect to the subscription documentation,
�completed and returned to the Company in its entirety. Unless purchasing in an offering of securities registered pursuant to the Securities Act of
�1933, as amended, all investors must be accredited investors as defined in the securities laws of the United States before they can invest in the
�Company.

�

Forward-Looking Statements

This presentation also includes estimated guidance regarding our fully diluted earnings per share for the year 2015, which we have
previously disclosed and is subject to the assumptions and qualifications included in that previous disclosure. The guidance consists
solely of estimates prepared by management based on currently available information and assumptions of future performance of the
company and the general economy.� Our independent registered public accounting firm has not audited, reviewed or performed any
procedures with respect to the guidance and, accordingly, does not express an opinion or any other form of assurance with respect to
this data.� Our actual results may differ from the guidance, and any such differences could be material.� Accordingly, undue reliance
should not be placed on this information. The factors discussed above should be considered and evaluated with respect to our
guidance.��

�

Investment Proposition

Strong Organic Growth, Well Capitalized, Branch Lite Bank in Attractive Markets

��$6.8 billion asset bank with only 19 sales offices

��Well capitalized at 11.2% total risk based capital (estimated), 6.7% tier 1 leverage, and 6.4% tangible equity to tangible
�assets

��Target market from Boston to Philadelphia along Interstate 95

Strong Profitability, Growth & Efficient Operations

��Q4 2014 earnings up 46% over Q4 2013 with an ROA of .80% and an ROE of 12%

��Full Year 2014 net income of $43.2 million up 32% over 2013

��ROA goal of 1% + and ROE of 12% + within 2-3 years, ROE goal already achieved

��DDA and total deposits compounded annual growth of 88% and 71% respectively since 2009

��Q4 net interest margin was 2.84%, up .05% over Sept 30, 2014

��Operating efficiencies offset tighter margins and generate sustainable profitability

��Efficiency ratio was 55% - Efficiency ratio expected to be in the 40s within 36 months

Strong Credit Quality & Low Interest Rate Risk

��0.20% non-performing loans at December 31, 2014 (0.08% NPLs on $3.8 billion of loans originated after 2009)

��No charge-offs on loans originated after 2009

��Total reserves to non-performing loans of 289.5%

��Minimal risk of margin compression from modestly higher short term rates and flatter curve

Attractive Valuation

��Current share price, as of January 26,2015,�$19.25 is 9.6x estimated 2015 earnings

��Price/tangible book only 1.0x�estimated for year end 2015 tangible book value

��Peers, by size, trading at 14x LTM earnings and 1.7x price/tangible book; Peers with unique models trading at much
�higher multiples

��December 31, 2014 tangible book value of $16.43, up 14% during 2014 and up 87% since July 2009 with a CAGR of 13%

�

Creating Shareholder Value

Our shareholder value creation strategy optimizes earnings growth, ROE and
book value accretion

��Build a high credit quality loan portfolio by marketing to high quality borrowers and charging them
�a little less interest rate

��Build a stable core deposit platform by paying a little more to attract core depositors and DDAs
�and then WOWing them with service

��Operate our businesses at a significantly lower cost with a branch lite, high touch strategy
�supported by high technology

��Use new technologies and products to both disrupt the market and improve our operating
�efficiencies

��Control our risks; credit, interest rate, compliance, cyber security and talent attraction/retention

��Resulting in sustainable above average ROE and growth rate in earnings in rising or stable interest
�rate environments

�

Current Company Overview

Source: SNL Financial and Company data.

Note: Branch proposed in northeastern Philadelphia

~$6.8 bn Business Bank with 19 sales offices with
target market from Boston to Philadelphia

Operating in key Mid-Atlantic and Northeast
markets

��Greater New York City area (Westchester County
�Manhattan & Long Island)

��Philadelphia area (Bucks, Berks, Chester, Delaware
�and Philadelphia Counties in southeastern
�Pennsylvania and Greater Princeton area in New
�Jersey)

��Greater Boston area (Boston and Providence)

High-touch, supported with high-tech value
proposition

��Very experienced teams using Single Point of
�Contact model

��Provides exceptional customer service supported by
�state-of-the-art technology support

��Incentive compensation plans based upon P&L by
�teams

Branches and Loan Production Offices

�

Our Competitive Advantage:�A Highly Experienced Management Team

�

Execution Timeline

��We invested in and
�took control of a $270
�million asset
�Customers Bank (FKA
�New Century Bank)

��Identified existing
�credit problems,
�adequately reserved
�and recapitalized the
�bank

��Actively worked out
�very extensive loan
�problems

��Recruited experienced
�management team

��Enhanced credit and risk
�management

��Developed infrastructure
�for organic growth

��Built out warehouse
�lending platform and
�doubled deposit and loan
�portfolio

��Completed 3 small
�acquisitions:

��ISN Bank (FDIC-
�assisted) ~ $70 mm

��USA Bank (FDIC-
�assisted) ~ $170 mm

��Berkshire Bancorp
�(Whole bank) ~ $85
�mm

��Recruited proven lending
�teams

��Built out Commercial and
�Multi-family lending
�platforms

��De Novo expansion;4-6
�sales offices or teams
�added each year

��Continue to show strong
�loan and deposit growth

��Built a branch lite high
�growth Community Bank
�and model for future
�growth

��Goals to ~12%+ ROE;
�~1% ROA

2009

Assets: $350M

Equity: $22M

2010-2011

Assets: $2.1B

Equity: $148M

2012-2013

Assets: $4.2B

Equity: $387M

4Q 2014

Assets: $6.8B

Equity: $443M

ROE: 12%

��Single Point of Contact
�Private Banking model
�executed - commercial
�focus

��Introduce bankmobile -
�banking of the future
�for consumers

��Continue to show
�strong loan and
�deposit growth

��~12%+ ROE; ~1%
�ROA expected within
�36 months

��~$6.5+ billion asset
�bank by end of 2014

��~$9 billion asset bank
�by end of 2017

�

Banking Strategy

Business Banking Focus - ~95% of revenues come from business segments

�"�Loan and deposit business through these segments:

�"�Banking Privately Held Businesses

�"�Banking High Net Worth Families

�"�Banking Mortgage Companies

�"�Selected Commercial Real Estate

All Consumer
Products

All Business
Products

All Non-Credit
Products

Client
Makes
One Call

Client

Private /
Personal
Bankers

Concierge
Bankers

Single Point of Contact

High Touch / High Tech

�

Deposit Strategy - High Touch, High Tech

��Implementation of
�technology suite
�allows for unique
�product offerings:

��Remote account
�opening &
�deposit capture

��Internet/mobile
�banking

��Free ATM
�deployment in
�U.S.

Cost of Funds + Branch Operating Expense - Fees�=�ALL-IN-Cost < Competitors

CUBI All-in cost of about 1.75% is less than competitors all-in cost over the long-term

�

�Technology

��Low cost banking
�model allows for
�more pricing
�flexibility

��Significantly lower
�overhead costs vs. a
�traditional branch

��Pricing/profitability
�measured across
�relationship

�Pricing

��Experienced
�bankers who own a
�portfolio of
�customers

��Customer
�acquisition &
�retention strongly
�incentivized

��Takes banker to the
�customers home or
�office, 12 hours a
�day, 7 days a week

��Appointment
�banking approach

��Customer access to
�private bankers

��Virtual Branches
�out of sales offices

�Sales Force

�Concierge Banking

�

Deposit Rates

Pay a Little More for Core Deposits, Emphasize DDAs

Deposit and Borrowing Mix

Source: SNL Financial, Company documents. Peer data consists of Northeast, Southeast, and Mid-Atlantic banks and thrifts with assets between $3.0 billion and $8.0 billion.

Peer: 11%

Peer: 89%

"Borrowings principally fund our Mortgage
Warehouse business and assist in interest rate
risk management

�

Results in:�Organic Growth of Deposits with Controlled Costs

Total Deposit Growth�($mm)

Average DDA Growth�($mm)

Customers strategies of single point of contact and recruiting known teams in target markets produce
rapid deposit growth with low total cost

�

Lending Strategy

�High Growth with Strong Credit Quality

��Continuous recruitment of high quality teams

��Centralized credit committee approval for all loans

��Loans are stress tested for higher rates and a slower economy

��No losses on loans originated since new management team took over

��Creation of solid foundation for future earnings

Source: Company documents.

�

Accept a Little Less Yield from Strong Credit Quality Customers

Loan�Quality, Product
Mix, Duration and
Collateral Influences
Yield

Source: SNL Financial, Company documents. Peer data consists of Northeast, Southeast, and Mid-Atlantic banks and thrifts with assets between $3.0 billion and $8.0 billion.

Peer: 39%

Peer: 61%

Loan Product Mix

Focus on Commercial
Borrowers

�

NPL

Source: SNL Financial, Company documents. Peer data consists of Northeast, Southeast, and Mid-Atlantic banks and thrifts with assets between $3.0 billion and $8.0 billion. Industry data includes all FDIC
insured banks.�Peer and Industry data as of Sep 2014 pending final CALL reports.

Build an Outstanding Loan Quality Portfolio

Charge Offs

Customers non-performing loans at December 2014
excluding loans guaranteed by the FDIC were 0.13% of
total loans.

Charge-offs excluding FDIC guaranteed loans at
December 2014 were .02% of total loans.

�

C&I & Owner Occupied CRE Banking Strategy

�Private & Commercial Banking

��Target companies with up to $100 million
�annual revenues

��Very experienced teams

��Single point of contact

��NE, NY, PA & NJ markets

�Small Business

��Target companies with less than $5.0 million
�annual revenue

��Principally SBA loans originated by small
�business relationship managers or branch
�network

��Current focus PA & NJ markets.�Expanding
�to National Markets

�Banking Privately Held Business

Source: Company documents.

�

Multi-Family Banking Strategy

�Banking High Net Worth Families

�Multi-Family Loan and Deposit Growth ($mm)

��Focus on families that have income
�producing real estate in their portfolios

��Private banking approach

��Focus Markets: New York & Philadelphia
�MSAs

��Average Loan Size: $4.0 - $7.0 million

��Remote banking for deposits and other
�relationship based loans

��Portfolio grown organically from a start up
�with very experienced teams hired in the
�past 3 years

��Strong credit quality niche

��Interest rate risk managed actively

Source: Company documents.

�

Mortgage Warehouse Banking Strategy

��Private banking focused on mortgage
�companies with $5 to $10 million equity

��Very strong credit quality relationship
�business with good fee income and deposits

��~75 strong warehouse clients

��All outstanding loans are variable rate�and
�classified as held for sale

��All deposits are non-interest bearing DDAs

��Balances rebounding from 2013 low and
�expected to stay at this level

�Banking Mortgage Companies

Source: Company documents.

�

Staff Expense Ratio

Build Efficient Operations

Source: SNL Financial, Company documents. Peer data consists of Northeast, Southeast, and Mid-Atlantic banks and thrifts with assets between $3.0 billion and $8.0 billion. Industry data includes all FDIC
insured banks. Peer and Industry data as of Sep 2014 pending final CALL reports.

Occupancy Expense Ratio

Total Costs as a % of Assets

Total Revenue per Employee ($000s)

Assets per Employee ($mm)

�

Deposit, Lending and Efficiency Strategies Results in
Disciplined & Profitable Growth

Core Revenue ($mm)

Core Net Income ($mm)�(1)

(1)Core income is net income before extraordinary items.

(2)CAGR calculated from Dec-09 to Sep-14 (annualized).

Net Interest Income ($mm)

"�Strategy execution has produced superior growth in revenues and earnings

Income / Expense Growth�($mm)

�

Tangible BV per Share

Source:

Building Customers to Provide Superior Returns to Investors

Recent Performance Results

Financial Performance Targets

Earnings per Share Guidance / Valuation Multiples

Source: Company documents.

�

Startling Facts about Banks

��Banks each year charge $32 billion in overdraft fees - thats
�allowing or creating over 1 billion overdrafts each year&.Why??

��Payday lenders charge consumers another $7 billion in fees

��Thats more than 3x what America spends on Breast Cancer and
�Lung Cancer combined

��This is about 50% of all America spends on Food Stamps

��Some of banking industries most profitable consumer customers
�hate banks

��Another estimated 25% consumers are unbanked or under banked

This should not be happening in America

We hope to start, in a small way, a new revolution
�to profitably address this problem

�

��New no fee banking, 25 bps higher interest savings, line of credit, 55,000 ATMs, Personal
�Banker and more, all in the palm of your hand

��Marketing Strategy

��Target technology dependent younger consumers; including underserved /
�underbanked and middle income Americans

��Capitalize on retaining at least 25% of our ~ one million student customers over a 5
�year period

��Reach middle income markets also through Affinity Banking Groups

��Revenue generation from debit card interchange and margin from low cost core
�deposits

��Durbin Amendment a unique opportunity for Bank Mobile

��Total investment not to exceed about $6.0 million by end of 2015

��Expected to achieve profitability in 2-3 years and above average, franchise value, ROA and
�ROE within 5 years

Creating a Virtual Bank for the Future for Consumers

�

App features at launch

"�Photo bill pay

"�P2P payments

"�Remote check deposit

"�Debit card on/off

"�Account balance quick access

"�4 digit password

"�ATM Locator

"�Artificial intelligence knowledge base

"�Part of Apple Pay

"�Phase 1

�

App screenshots

"�Welcome screen & Onboarding

�

App screenshots

"�Some Features/Functionalities

�

website

"�Young, fun feel!

�

Summary

��Strong high performing $6.8 billion bank with significant growth opportunities

��Very experienced management team delivers strong results

��Ranked #1 overall by Bank Director Magazine in the 2012 and 2013 Growth
�Leader Rankings

��High touch, high tech processes and technologies result in superior growth,
�returns and efficiencies

��Shareholder value results from the combination of increasing tangible book, ROE
�and strong and consistent earnings growth

��Attractive risk-reward: growing several times faster than industry average but
�yet trading at a significant discount to peers

��Introducing the first real mobile bank in the palm of your hand for consumers in
�the U.S.

�

Contacts

Company:

Robert Wahlman, CFO

Tel: 610-743-8074
[email protected]

www.customersbank.com

Jay Sidhu

Chairman & CEO

Tel: 610-301-6476
[email protected]

www.customersbank.com

Investor Relations:

Ted Haberfield

President, MZ North America

Tel: 760-755-2716

[email protected]

www.mzgroup.us

�

Appendix

�

Balance Sheet

�

Income Statement

(1) Earnings per share amounts have been adjusted to give
effect to the 10% common stock dividend declared on May
15, 2014 and issued on June 30,2014.

�

Income Statement

(1) Earnings per share amounts have been adjusted to give
effect to the 10% common stock dividend declared on May
15, 2014 and issued on June 30,2014.

�

Net Interest Margin

�

Net Interest Margin

�

Asset Quality

�

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