DEF 14A: Customers Bancorp Reports Strong 2023 Performance, Focuses on Risk Management and Shareholder Value

Customers Bancorp was the number one performing publicly-traded bank stock in the U.S. in 2023, as measured by stock price and total shareholder return.

Summary

• Customers Bancorp reports strong performance in 2023, bucking industry trends and delivering shareholder value.
• The company was the number one performing publicly-traded bank stock in the U.S. in 2023.
• Full year 2023 Core EPS was $7.72 per share, Core Earnings were $248.2 million, and Core ROACE was 18.3%.
• Credit quality metrics were among the best in the industry, with Non-Performing Assets of only 0.13% and reserves that were 499% of non-performing loans at December 31, 2023.
• The company maintained strong capital buffers, with a total risk based capital ratio of 15.3% and a CET1 ratio of 11.2% after adjusting for AOCI.
• Looking ahead to 2024, the company will focus on strengthening the balance sheet, improving liquidity, capital ratios, and margins, and maintaining strong risk management principles.
• The company's annual meeting is scheduled for May 28, 2024, and includes proposals for electing directors, ratifying the accounting firm, executive compensation, and amending the stock incentive plan.

Sentiment

Score: 9

Explanation: The document expresses a highly positive sentiment due to the company's strong financial performance, strategic achievements, and commitment to shareholder value. The focus on risk management and corporate governance further contributes to the positive outlook.

Positives

• The company's differentiated strategy bucked industry trends, gaining strong momentum in 2023.
• The company made a substantial focus on corporate governance and social responsibility in 2023.
• The Board remains committed to its objectives of strong oversight, risk management and the creation of long-term shareholder value.
• The Board is focused on continual improvement of the Company's balance sheet, asset and deposit quality and overall liquidity.
• The company's turnover ratio is among the lowest in the industry and the majority of our team members, and 100% of our leadership team, own stock in the company.

Risks

• There is still a lot of uncertainty facing the banking industry.
• The world takes on the challenges of inflation, global conflict and general uncertainty.

Future Outlook

Looking ahead to 2024, the company will focus on strengthening the balance sheet, improving liquidity, capital ratios, and margins, and maintaining strong risk management principles.

Management Comments

• Customers Banks differentiated strategy bucked industry trends, gaining strong momentum in 2023, and we expect that to continue into 2024 and beyond.
• We are extremely proud of our management team, whose hard work, skillful forethought and experienced, decisive actions allowed our Company to emerge from the turmoil of 2023 stronger than we entered it.
• Our commitment to risk management and a client first mindset where clients say Wow is positioning us well to navigate this environment.

Industry Context

While the banking industry has largely recovered following the events of last year, there is still a lot of uncertainty facing our industry.

Comparison to Industry Standards

• The company's credit quality metrics are among the best in the industry.
• The company's turnover ratio is among the lowest in the industry.
• The dilution that would be experienced by the Amended 2019 Plan if Proposal 5 is approved (2.37%) ranks in the 25th (2.42%) percentile of dilution experienced by the 24 companies in our peer group that requested increases in shares available under their respective incentive compensation plans since their most recent plan s inception.

Stakeholder Impact

• The company's priority and focus will continue to be the financial security and well-being of our customers, team members and their families.
• Customers made a substantial focus on corporate governance and social responsibility, taking steps to positively impact the communities we and our customers operate in, and continued emphasis on revising and improving governance practices at all levels.

Next Steps

• The 2024 Annual Meeting of Shareholders will be held on May 28, 2024.
• Shareholders are encouraged to vote their shares by Internet, telephone, or complete, sign and return a proxy card prior to the Annual Meeting.

Key Dates

Keywords

shareholder value, risk management, corporate governance, financial performance, Customers Bancorp, executive compensation, stock incentive plan, annual meeting, banking