Customers Bancorp Inc. reported net income of $74.9 million, or $2.18 per diluted share, for the first quarter of fiscal 2022. This represents a 126% increase over the same period l last year.
Basic quarterly earnings were $75.2 million, or $2.19 per diluted share, up 7% from the same period last year.
The West Reading-based bank released its earnings statement after the close of trading on Wednesday April 27.
“We are extremely pleased with our first quarter results and are excited to have 2022 off to a good start,” Customers Bancorp Chairman and CEO Jay Sidhu said in a statement. “In a quarter impacted by geopolitical strife, rising interest rates, inverted yield curve, inflationary pressures and the ongoing effects of the pandemic, we continue to responsibly generate growth. remarkable organic lending.”
Sidhu added that customer base loans increased by $559 million in the first quarter, up 5% from the fourth quarter of 2021, and were above our average quarterly target of $500 million, despite lower corporate mortgage loan balances of $532 million.
“Continuing the momentum of record 2021 performance and strong first quarter results, our loan and deposit pipelines remain at record highs as market expansion in 2021 and new verticals continue to perform as well. or better than expected, a testament to our customer-centric business model supported by industry-leading service and technology,” he added.
In 2021, customers funded approximately 256,000 Paycheck Protection Program loans totaling $5.2 billion, bringing total funded PPP loans to approximately 358,000 and $10.3 billion. The bank earned nearly $350 million in deferred origination fees from the SBA through PPP loans. In the first quarter of 2022, Customers recognized $30 million of these charges in earnings, bringing the total charges recognized to date to $292 million. The remaining $58 million is expected to be recognized throughout 2022 and 2023.
“As we have previously indicated, it is difficult to predict when the PPP will be canceled,” Carla Leibold, chief financial officer of Customers Bancorp, said in a statement. “After a slow start, discount levels increased at the end of the quarter, resulting in higher deferred charge recognition in Q1 2022 than expected.”
Additionally, customers fully launched Customers Bank Instant Token (CBIT) on the TassatPay payment platform in January, following a pre-launch in Q4 2021. Seventy-four new CBIT-linked customers logged on to the bank digital, beating an internal target of at least 25 new customers, Sam Sidhu, president and chief executive of Customers Bank, said in a statement.
“We expect digital asset deposits to grow significantly in 2022 as our pipelines remain strong, giving us the opportunity to further transform our deposits into a high-quality, low-cost deposit franchise. , stable and growing. We believe our technology, compliance, customer service and support systems are among the best in the country,” he added.
As of March 31, $1.8 billion in low-fee or no-fee basic demand deposits had been received, increasing to about $2.3 billion as of April 15.
Other highlights of the quarter include:
Total deposits increased $3.9 billion, or 32%, year-over-year, which included a $4.3 billion, or 72%, increase in demand deposits.
Commercial and industrial loan growth was $574.8 million, up 17%; multifamily loan growth was $218.7 million, up 15%, and consumer loan growth was $269.5 million, up 13% from the fourth quarter of 2021.
The net interest margin was 3.60% for the quarter. The net interest margin, excluding the impact of PPP loans, was 3.32%.
“Looking forward, we continue to project sustainable and responsible organic growth and are very optimistic about the prospects for our business,” said Jay Sidhu. “We are focused on improving the quality of our balance sheet and our deposit allowance and not focusing on growth just for the sake of growth. We continue to expect, on average, quarterly loan growth of 500 million and significant growth in digital asset deposits by the end of 2022.”