EX-99.1 2 q322pressrelease.htm EX-99.1
Exhibit 99.1
Customers Bancorp, Inc. (NYSE:CUBI)
701 Reading Avenue
West Reading, PA 19611
Contact:
David W. Patti, Communications Director 610-451-9452

Customers Bancorp Reports Results for Third Quarter 2022

Third Quarter 2022 Results
Earnings |  | Earnings Per Share |  | Return on Assets |  | Return on Common Equity
$61.4 million |  | $1.85 |  | 1.24% |  | 19.33%
Net Income |  | Diluted Earnings Per Share |  | ROAA |  | ROCE
$82.3 million |  | $2.48 |  | 1.64% |  | 25.91%
Core Earnings* |  | Core Earnings Per Diluted Share* |  | Core ROAA* |  | Core ROCE*
$76.4 million |  | $2.30 |  | 1.95% |  | 31.01%
Core Earnings, excluding PPP* |  | Core Earnings Per Diluted Share, excluding PPP* |  | Pre-tax and Pre-provision Adjusted ROAA* |  | Pre-tax and Pre-provision Adjusted ROCE*

Third Quarter 2022 Highlights
•Q3 2022 net income available to common shareholders was $61.4 million, or $1.85 per diluted share; ROAA was 1.24% and ROCE was 19.33%.
•Q3 2022 core earnings* were $82.3 million, or $2.48 per diluted share; Core ROAA* was 1.64% and Core ROCE* was 25.91%.
•Q3 2022 core earnings excluding Paycheck Protection Program* ("PPP") were $76.4 million, or $2.30 per diluted share, up 134.9% over Q3 2021, and bringing year-to-date core earnings (excluding PPP)* to $5.15.
•Q3 2022 adjusted pre-tax pre-provision net income* was $101.0 million; ROAA* was 1.95%, ROCE* was 31.01%.
•Year-over-year loan growth (excluding loans to mortgage companies and PPP*) was $4.5 billion, or 57.3%, led by our low-risk variable rate specialty lending verticals.

*Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount is included at the end of this document.

1

•Year-over-year deposit growth was $551.4 million, up 3.2%. Total demand deposits increased $141.0 million, or 1.4% year-over-year. Time deposits increased $1.3 billion, or 220.0%. CBIT-related deposits had a balance of $1.9 billion at September 30, 2022, down $191.7 million from June 30, 2022.
•Q3 2022 net interest margin, tax equivalent* was 3.16%. Q3 2022 net interest margin, tax equivalent, excluding the impact of PPP loans* was 3.18%.
•Onboarded 111 new CBIT customers in Q3 2022, bringing total customers to 301.
•Total operating expenses were flat in Q3 2022 compared to Q2 2022 and down $3.8 million over Q3 2021.
•Q3 2022 benefit to provision for credit losses on loans and leases of $7.8 million was largely driven by the sale of $500.0 million of consumer installment loans, offset in part by the impact of loan growth and our recognition of weaker macroeconomic forecasts.
•Non-performing assets were $28.0 million, or 0.14% of total assets, at September 30, 2022 compared to $28.2 million, or 0.14% of total assets, at June 30, 2022 and $52.4 million, or 0.27% of total assets, at September 30, 2021. Allowance for credit losses on loans and leases equaled 466% of non-performing loans at September 30, 2022, compared to 558% at June 30, 2022 and 253% at September 30, 2021.
•Extended one-year common stock repurchase program an additional year, resulting in approximately 2.0 million shares available to be repurchased through September 2023.
•Tangible book value per share* grew year over year by $3.23, or 9.2%, despite increased AOCI losses of $157.6 million over the same time period. Tangible book value per share* has grown by 74.5% over the past 5 years.
CEO Commentary
West Reading, PA, October 26, 2022 - “We delivered another solid quarter and are extremely pleased with our third quarter results despite the challenging interest rate and economic environment,” remarked Customers Bancorp Chairman and CEO, Jay Sidhu. “We remain laser focused on our responsible organic growth strategy and have taken prudent risk management strategic actions over the past several quarters to ensure we are well positioned from a capital, credit, liquidity and earnings perspective. We are also pleased to report that we have already beat our 2022 core earnings per share, excluding PPP* target of $4.75 - $5.00. Core earnings per share, excluding PPP* for third quarter 2022 were $2.30, bringing year-to-date September 2022 core earnings per share, excluding PPP* to $5.15. In addition, core ROAA* was 1.64% and core ROCE* was 25.91% for the third quarter. Q3 2022 net interest income generated by the core bank was up 2% (~10% annualized) over Q2 2022 and 38% year-over-year. Core loan growth was led by increases in low-risk variable rate specialty lending verticals of $0.5 billion, which were largely offset by a decline in loans to mortgage companies of $0.3 billion and a sale of $0.5 billion of consumer installment loans executed as part of our balance sheet optimization initiatives. Asset quality remains exceptional and credit reserves are robust. Our loan and deposit pipelines remain strong and we are very focused on maintaining our margins, moderating our growth, improving our capital ratios, and controlling our expenses. We remain very optimistic about our future,” Mr. Jay Sidhu continued.
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Financial Highlights

(Dollars in thousands, except per share data) |  |  |  |  |  | At or Three Months Ended |  | Increase (Decrease) |  | Nine Months Ended |  | Increase (Decrease)
|  |  |  |  |  | September 30, 2022 |  | September 30, 2021 |  |  | September 30, 2022 |  | September 30, 2021 |
Profitability Metrics: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income available for common shareholders |  |  |  |  |  |  |  |  |  | $ | 61,364 |  |  | $ | 110,241 |  |  | $ | (48,877) |  |  | (44.3) | % |  | $ | 192,779 |  |  | $ | 201,487 |  |  | $ | (8,708) |  |  | (4.3) | %
Diluted earnings per share |  |  |  |  |  |  |  |  |  | $ | 1.85 |  |  | $ | 3.25 |  |  | $ | (1.40) |  |  | (43.1) | % |  | $ | 5.72 |  |  | $ | 6.02 |  |  | $ | (0.30) |  |  | (5.0) | %
Core earnings* |  |  |  |  |  |  |  |  |  | $ | 82,270 |  |  | $ | 113,876 |  |  | $ | (31,606) |  |  | (27.8) | % |  | $ | 217,047 |  |  | $ | 243,487 |  |  | $ | (26,440) |  |  | (10.9) | %
Core earnings per share* |  |  |  |  |  |  |  |  |  | $ | 2.48 |  |  | $ | 3.36 |  |  | $ | (0.88) |  |  | (26.2) | % |  | $ | 6.44 |  |  | $ | 7.27 |  |  | $ | (0.83) |  |  | (11.4) | %
Core earnings, excluding PPP* |  |  |  |  |  |  |  |  |  | $ | 76,424 |  |  | $ | 32,539 |  |  | $ | 43,885 |  |  | 134.9 | % |  | $ | 173,422 |  |  | $ | 112,759 |  |  | $ | 60,663 |  |  | 53.8 | %
Core earnings per share, excluding PPP* |  |  |  |  |  |  |  |  |  | $ | 2.30 |  |  | $ | 0.96 |  |  | $ | 1.34 |  |  | 139.6 | % |  | $ | 5.15 |  |  | $ | 3.37 |  |  | $ | 1.78 |  |  | 52.8 | %
Return on average assets ("ROAA") |  |  |  |  |  |  |  |  |  | 1.24 | % |  | 2.33 | % |  | (1.09) |  |  |  |  | 1.34 | % |  | 1.49 | % |  | (0.15) |  |  |
Core ROAA* |  |  |  |  |  |  |  |  |  | 1.64 | % |  | 2.35 | % |  | (0.71) |  |  |  |  | 1.50 | % |  | 1.76 | % |  | (0.26) |  |  |
Return on average common equity ("ROCE") |  |  |  |  |  |  |  |  |  | 19.33 | % |  | 40.82 | % |  | (21.49) |  |  |  |  | 20.58 | % |  | 26.99 | % |  | (6.41) |  |  |
Core ROCE* |  |  |  |  |  |  |  |  |  | 25.91 | % |  | 42.16 | % |  | (16.25) |  |  |  |  | 23.17 | % |  | 32.61 | % |  | (9.44) |  |  |
Adjusted pre-tax pre-provision net income* |  |  |  |  |  |  |  |  |  | $ | 100,994 |  |  | $ | 167,215 |  |  | $ | (66,221) |  |  | (39.6) | % |  | $ | 319,335 |  |  | $ | 340,451 |  |  | $ | (21,116) |  |  | (6.2) | %
Net interest margin, tax equivalent* |  |  |  |  |  |  |  |  |  | 3.16 | % |  | 4.59 | % |  | (1.43) |  |  |  |  | 3.38 | % |  | 3.55 | % |  | (0.17) |  |  |
Net interest margin, tax equivalent, excluding PPP loans* |  |  |  |  |  |  |  |  |  | 3.18 | % |  | 3.24 | % |  | (0.06) |  |  |  |  | 3.27 | % |  | 3.17 | % |  | 0.10 |  |  |
Loan yield, excluding PPP* |  |  |  |  |  |  |  |  |  | 5.15 | % |  | 4.42 | % |  | 0.73 |  |  |  |  | 4.75 | % |  | 4.36 | % |  | 0.39 |  |  |
Cost of deposits |  |  |  |  |  |  |  |  |  | 1.48 | % |  | 0.42 | % |  | 1.06 |  |  |  |  | 0.80 | % |  | 0.47 | % |  | 0.33 |  |  |
Efficiency ratio |  |  |  |  |  |  |  |  |  | 50.00 | % |  | 33.42 | % |  | 16.58 |  |  |  |  | 43.46 | % |  | 41.07 | % |  | 2.39 |  |  |
Core efficiency ratio* |  |  |  |  |  |  |  |  |  | 42.57 | % |  | 30.36 | % |  | 12.21 |  |  |  |  | 41.23 | % |  | 37.31 | % |  | 3.92 |  |  |
Balance Sheet Trends: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total assets |  |  |  |  |  |  |  |  |  | $ | 20,367,621 |  |  | $ | 19,108,922 |  |  | $ | 1,258,699 |  |  | 6.6 | % |  |  |  |  |  |  |  |
Total assets, excluding PPP* |  |  |  |  |  |  |  |  |  | $ | 19,212,989 |  |  | $ | 14,151,565 |  |  | $ | 5,061,424 |  |  | 35.8 | % |  |  |  |  |  |  |  |
Total loans and leases |  |  |  |  |  |  |  |  |  | $ | 15,336,688 |  |  | $ | 15,515,537 |  |  | $ | (178,849) |  |  | (1.2) | % |  |  |  |  |  |  |  |
Total loans and leases, excluding PPP* |  |  |  |  |  |  |  |  |  | $ | 14,182,056 |  |  | $ | 10,558,180 |  |  | $ | 3,623,876 |  |  | 34.3 | % |  |  |  |  |  |  |  |
Non-interest bearing demand deposits |  |  |  |  |  |  |  |  |  | $ | 2,993,793 |  |  | $ | 4,954,331 |  |  | $ | (1,960,538) |  |  | (39.6) | % |  |  |  |  |  |  |  |
Total deposits |  |  |  |  |  |  |  |  |  | $ | 17,522,438 |  |  | $ | 16,971,025 |  |  | $ | 551,413 |  |  | 3.2 | % |  |  |  |  |  |  |  |
Capital Metrics: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common Equity |  |  |  |  |  |  |  |  |  | $ | 1,249,137 |  |  | $ | 1,146,505 |  |  | $ | 102,632 |  |  | 9.0 | % |  |  |  |  |  |  |  |
Tangible Common Equity* |  |  |  |  |  |  |  |  |  | $ | 1,245,508 |  |  | $ | 1,142,711 |  |  | $ | 102,797 |  |  | 9.0 | % |  |  |  |  |  |  |  |
Tangible Common Equity to Tangible Assets* |  |  |  |  |  |  |  |  |  | 6.12 | % |  | 5.98 | % |  | 0.14 |  |  |  |  |  |  |  |  |  |  |
Tangible Common Equity to Tangible Assets, excluding PPP* |  |  |  |  |  |  |  |  |  | 6.48 | % |  | 8.08 | % |  | (1.60) |  |  |  |  |  |  |  |  |  |  |
Tangible Book Value per common share* |  |  |  |  |  |  |  |  |  | $ | 38.35 |  |  | $ | 35.12 |  |  | $ | 3.23 |  |  | 9.2 | % |  |  |  |  |  |  |  |
Common equity Tier 1 capital ratio (1) |  |  |  |  |  |  |  |  |  | 10.1 | % |  | 10.4 | % |  | (0.3) |  |  |  |  |  |  |  |  |  |  |
Total risk based capital ratio (1) |  |  |  |  |  |  |  |  |  | 12.8 | % |  | 13.6 | % |  | (0.8) |  |  |  |  |  |  |  |  |  |  |
(1) Regulatory capital ratios as of September 30, 2022 are estimates.
*Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount is included at the end of this document.

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Customers Bank Instant Token (CBIT TM)
"Despite significant market volatility that continues in the digital asset space, we are very pleased with our progress to date. In Q3 2022, we onboarded 111 new CBIT-related customers to the Digital Bank, once again beating our internal target, and bringing total customers to 301. Our digital asset-related deposits have stabilized and ended the third quarter at $1.9 billion. We continue to expect digital asset-related deposits to grow in fourth quarter 2022 as our pipelines remain strong, giving us an opportunity to further transform our deposits into a high quality, low-cost, stable and growing deposit franchise. We believe our technology, compliance and customer service and support systems remain among the best in the country," commented Mr. Sam Sidhu, President and CEO of Customers Bank.
Paycheck Protection Program (PPP)
We funded, either directly or indirectly, about 256,000 PPP loans totaling $5.2 billion in 2021, bringing total PPP loans funded to approximately 358,000 and $10.3 billion. We also earned close to $350 million of deferred origination fees from the SBA through the PPP loans, which is significantly accretive to our earnings and capital levels as these loans are forgiven by the government. In Q3 2022, we recognized $11 million of these fees in earnings, bringing total fees recognized to date to $318 million, resulting in approximately $30 million remaining to be recognized throughout 2022 and early 2023. "A s we've stated previously, it is difficult to predict the timing of PPP forgiveness. We expect most of the fees to be recognized over the next two quarters," commented Customers Bancorp CFO, Carla Leibold.
Key Balance Sheet Trends
Loans and Leases
The following table presents the composition of total loans and leases as of the dates indicated:

(Dollars in thousands) | September 30, 2022 |  | % of Total |  | June 30, 2022 |  | % of Total |  | September 30, 2021 |  | % of Total
Commercial: |  |  |  |  |  |  |  |  |  |  |
Specialty lending | $ | 5,103,974 |  |  | 33.3 | % |  | $ | 4,599,640 |  |  | 29.4 | % |  | $ | 1,736,966 |  |  | 11.2 | %
Other commercial & industrial | 1,064,332 |  |  | 7.0 |  |  | 1,037,443 |  |  | 6.6 |  |  | 867,401 |  |  | 5.6 |
Multi-family | 2,267,376 |  |  | 14.8 |  |  | 2,012,920 |  |  | 12.9 |  |  | 1,387,166 |  |  | 8.9 |
Loans to mortgage companies | 1,708,587 |  |  | 11.1 |  |  | 1,975,189 |  |  | 12.6 |  |  | 2,626,483 |  |  | 16.9 |
Commercial real estate owner occupied | 726,670 |  |  | 4.7 |  |  | 710,577 |  |  | 4.5 |  |  | 656,044 |  |  | 4.2 |
Loans receivable, PPP | 1,154,632 |  |  | 7.5 |  |  | 1,570,160 |  |  | 10.0 |  |  | 4,957,357 |  |  | 32.0 |
Commercial real estate non-owner occupied | 1,263,211 |  |  | 8.2 |  |  | 1,152,869 |  |  | 7.4 |  |  | 1,144,643 |  |  | 7.4 |
Construction | 136,133 |  |  | 0.9 |  |  | 195,687 |  |  | 1.2 |  |  | 198,607 |  |  | 1.3 |
Total commercial loans and leases | 13,424,915 |  |  | 87.5 |  |  | 13,254,485 |  |  | 84.6 |  |  | 13,574,667 |  |  | 87.5 |
Consumer: |  |  |  |  |  |  |  |  |  |  |
Residential | 466,888 |  |  | 3.0 |  |  | 460,228 |  |  | 2.9 |  |  | 260,820 |  |  | 1.7 |
Manufactured housing | 46,990 |  |  | 0.3 |  |  | 48,570 |  |  | 0.3 |  |  | 55,635 |  |  | 0.3 |
Personal | 1,079,267 |  |  | 7.0 |  |  | 1,641,748 |  |  | 10.5 |  |  | 1,342,650 |  |  | 8.7 |
Other | 318,628 |  |  | 2.2 |  |  | 259,322 |  |  | 1.7 |  |  | 281,765 |  |  | 1.8 |
Total consumer loans | 1,911,773 |  |  | 12.5 |  |  | 2,409,868 |  |  | 15.4 |  |  | 1,940,870 |  |  | 12.5 |
Total loans and leases | $ | 15,336,688 |  |  | 100.0 | % |  | $ | 15,664,353 |  |  | 100.0 | % |  | $ | 15,515,537 |  |  | 100.0 | %

C&I loans and leases, including specialty lending, increased $3.6 billion, or 136.8% year-over-year, to $6.2 billion. Practically all of the increases in outstanding balances were in the low-risk variable rate secured categories of Fund Finance and Lender Finance. Multi-family loans increased $880.2 million, or 63.5%, to $2.3 billion, residential loans increased $206.1 million, or 79.0%, to $466.9 million, commercial real estate non-owner occupied loans increased $118.6 million, or 10.4% year-over-year to $1.3 billion and commercial real estate owner occupied loans increased $70.6 million, or 10.8%, to $726.7 million. These increases in loans and leases were partially offset by a decrease in total consumer installment loans of $226.5 million, or 13.9%, to $1.4 billion primarily due to the sale of a $500.0 million of consumer installment loans and a decrease in construction loans of $62.5 million, or 31.5%, to $136.1 million.
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Allowance for Credit Losses on Loans and Leases

The following table presents allowance for credit losses on loans and leases (information as of the dates and periods indicated):

| At or Three Months Ended |  | Increase (Decrease) |  | At or Three Months Ended |  | Increase (Decrease) |  |  |  |
(Dollars in thousands) | September 30, 2022 |  | June 30, 2022 |  |  | September 30, 2022 |  | September 30, 2021 |  |  |  |  |  |
Allowance for credit losses on loans and leases | $ | 130,197 |  |  | $ | 156,530 |  |  | $ | (26,333) |  |  | $ | 130,197 |  |  | $ | 131,496 |  |  | $ | (1,299) |  |  |  |  |  |  |
Provision (benefit) for credit losses on loans and leases | (7,836) |  |  | 24,164 |  |  | (32,000) |  |  | (7,836) |  |  | 13,164 |  |  | (21,000) |  |  |  |  |  |  |
Net charge-offs (recoveries) | 18,498 |  |  | 13,481 |  |  | 5,017 |  |  | 18,498 |  |  | 7,104 |  |  | 11,394 |  |  |  |  |  |  |
Annualized net charge-offs (recoveries) to average loans and leases | 0.47 | % |  | 0.36 | % |  |  |  | 0.47 | % |  | 0.17 | % |  |  |  |  |  |  |  |
Coverage of credit loss reserves for loans and leases held for investment | 0.95 | % |  | 1.14 | % |  |  |  | 0.95 | % |  | 1.02 | % |  |  |  |  |  |  |  |
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP* | 1.03 | % |  | 1.28 | % |  |  |  | 1.03 | % |  | 1.65 | % |  |  |  |  |  |  |  |
*Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount is included at the end of this document.

The increase in net charge-offs in Q3 2022 compared to Q2 2022 was primarily due to a partial charge-off of $7.0 million for one performing commercial real estate collateral dependent loan that we felt prudent in exiting at this time. Our consumer net charge-offs were flat in Q3 2022 compared to Q2 2022.
Provision (Benefit) for Credit Losses

|  | Three Months Ended |  | Increase (Decrease) |  |  |  |  |  |  |  |
(Dollars in thousands) |  | September 30, 2022 |  | June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
Provision (benefit) for credit losses on loans and leases |  | $ | (7,836) |  |  | $ | 24,164 |  |  | $ | (32,000) |  |  |  |  |  |  |  |  |  |  |  |  |
Provision (benefit) for credit losses on unfunded commitments |  | 254 |  |  | 608 |  |  | (354) |  |  |  |  |  |  |  |  |  |  |  |  |
Provision (benefit) for credit losses on available for sale debt securities |  | (158) |  |  | (317) |  |  | 159 |  |  |  |  |  |  |  |  |  |  |  |  |
Total provision (benefit) for credit losses |  | $ | (7,740) |  |  | $ | 24,455 |  |  | $ | (32,195) |  |  |  |  |  |  |  |  |  |  |  |  |

The benefit to provision for credit losses on loans and leases in Q3 2022 was $7.8 million, compared to provision expense of $24.2 million in Q2 2022. The benefit to provision in Q3 2022 was primarily due to the sale of $500.0 million of unsecured consumer installment loans in connection with the Company's balance sheet optimization initiatives, partially offset by loan growth and our recognition of weaker macroeconomic forecasts. This sale transaction resulted in approximately $36.8 million of release in allowance for credit losses, which is included in core earnings*. The benefit to provision for credit losses on available for sale investment securities in Q3 2022 was $0.2 million compared to $0.3 million in Q2 2022.
5

Asset Quality
The following table presents asset quality metrics as of the dates indicated:

(Dollars in thousands) | September 30, 2022 |  | June 30, 2022 |  | Increase (Decrease) |  | September 30, 2022 |  | September 30, 2021 |  | Increase (Decrease)
Non-performing assets ("NPAs"): |  |  |  |  |  |  |  |  |  |  |
Nonaccrual / non-performing loans ("NPLs") | $ | 27,919 |  |  | $ | 28,064 |  |  | $ | (145) |  |  | $ | 27,919 |  |  | $ | 52,041 |  |  | $ | (24,122) |
Non-performing assets | 27,965 |  |  | 28,150 |  |  | (185) |  |  | 27,965 |  |  | 52,377 |  |  | (24,412) |
NPLs to total loans and leases (1) | 0.18 | % |  | 0.18 | % |  |  |  | 0.18 | % |  | 0.34 | % |  |
Reserves to NPLs (1) | 466.34 | % |  | 557.76 | % |  |  |  | 466.34 | % |  | 252.68 | % |  |
NPAs to total assets | 0.14 | % |  | 0.14 | % |  |  |  | 0.14 | % |  | 0.27 | % |  |
Loans and leases risk ratings: |  |  |  |  |  |  |  |  |  |  |
Commercial loans and leases (1) |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 10,262,647 |  |  | $ | 9,355,846 |  |  | $ | 906,801 |  |  | $ | 10,262,647 |  |  | $ | 5,586,462 |  |  | $ | 4,676,185 |
Special Mention | 104,560 |  |  | 106,566 |  |  | (2,006) |  |  | 104,560 |  |  | 195,663 |  |  | (91,103) |
Substandard | 329,878 |  |  | 343,175 |  |  | (13,297) |  |  | 329,878 |  |  | 260,271 |  |  | 69,607 |
Total commercial loans and leases | 10,697,085 |  |  | 9,805,587 |  |  | 891,498 |  |  | 10,697,085 |  |  | 6,042,396 |  |  | 4,654,689 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |
Performing | 1,893,977 |  |  | 2,392,852 |  |  | (498,875) |  |  | 1,893,977 |  |  | 1,912,393 |  |  | (18,416) |
Non-performing | 16,680 |  |  | 14,556 |  |  | 2,124 |  |  | 16,680 |  |  | 15,810 |  |  | 870 |
Total consumer loans | 1,910,657 |  |  | 2,407,408 |  |  | (496,751) |  |  | 1,910,657 |  |  | 1,928,203 |  |  | (17,546) |
Loans and leases receivable | $ | 12,607,742 |  |  | $ | 12,212,995 |  |  | $ | 394,747 |  |  | $ | 12,607,742 |  |  | $ | 7,970,599 |  |  | $ | 4,637,143 |

(1) Excludes loan receivable, PPP, as PPP loans are fully guaranteed by the Small Business Administration.
Over the last decade, we have developed a suite of commercial loan products with one particularly important common denominator: relatively low credit risk assumption. The Bank’s C&I, loans to mortgage companies, corporate and specialty lending lines of business, and multi-family loans for example, are characterized by conservative underwriting standards and low loss rates. Because of this emphasis, the Bank’s credit quality to date has been incredibly healthy despite a highly adverse economic environment. Maintaining strong asset quality also requires a highly active portfolio monitoring process. In addition to frequent client outreach and monitoring at the individual loan level, we employ a bottom-up data driven approach to analyze the commercial portfolio. Exposure to industry segments and CRE significantly impacted by COVID-19 initially is not substantial.
Total consumer installment loans were approximately 6.9% of total assets at September 30, 2022 and 9.9% of core loans* were supported by an allowance for credit losses of $71.7 million. At September 30, 2022, our consumer installment portfolio had the following characteristics: average original FICO score of 736, average debt-to-income of 17.9% and average borrower income of $106 thousand.
Non-performing loans at September 30, 2022 were essentially flat at 0.18% of total loans and leases, compared to 0.18% at June 30, 2022 and 0.34% at September 30, 2021.
Deposits
The following table presents the composition of our deposit portfolio as of the dates indicated:

(Dollars in thousands) | September 30, 2022 |  | % of Total |  | June 30, 2022 |  | % of Total |  | September 30, 2021 |  | % of Total
Demand, non-interest bearing | $ | 2,993,793 |  |  | 17.1 | % |  | $ | 4,683,030 |  |  | 27.6 | % |  | $ | 4,954,331 |  |  | 29.2 | %
Demand, interest bearing | 7,124,663 |  |  | 40.7 |  |  | 6,644,398 |  |  | 39.2 |  |  | 5,023,081 |  |  | 29.6 |
Total demand deposits | 10,118,456 |  |  | 57.8 |  |  | 11,327,428 |  |  | 66.8 |  |  | 9,977,412 |  |  | 58.8 |
Savings | 592,002 |  |  | 3.4 |  |  | 640,062 |  |  | 3.8 |  |  | 1,310,343 |  |  | 7.7 |
Money market | 4,913,967 |  |  | 28.0 |  |  | 4,254,205 |  |  | 25.1 |  |  | 5,090,121 |  |  | 30.0 |
Time deposits | 1,898,013 |  |  | 10.8 |  |  | 723,024 |  |  | 4.3 |  |  | 593,149 |  |  | 3.5 |
Total deposits | $ | 17,522,438 |  |  | 100.0 | % |  | $ | 16,944,719 |  |  | 100.0 | % |  | $ | 16,971,025 |  |  | 100.0 | %

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Total deposits increased $551.4 million, or 3.2%, to $17.5 billion at September 30, 2022 as compared to a year ago. Time deposits increased $1.3 billion, or 220.0%, to $1.9 billion and total demand deposits increased $141.0 million, or 1.4%, to $10.1 billion. These increases were offset partially by decreases in savings deposits of $718.3 million, or 54.8%, to $592.0 million and money market deposits of $176.2 million, or 3.5%, to $4.9 billion. The total cost of deposits increased by 106 basis points to 1.48% in Q3 2022 from 0.42% in the prior year primarily due to higher market interest rates and a shift in deposit mix.
Capital
The following table presents certain capital amounts and ratios as of the dates indicated:

(Dollars in thousands except per share data) | September 30, 2022 |  | June 30, 2022 |  | September 30, 2021
Customers Bancorp, Inc. |  |  |  |  |
Common Equity | $ | 1,249,137 |  |  | $ | 1,215,596 |  |  | $ | 1,146,505 |
Tangible Common Equity* | 1,245,508 |  |  | 1,211,967 |  |  | 1,142,711 |
Tangible Common Equity to Tangible Assets* | 6.12 | % |  | 5.99 | % |  | 5.98 | %
Tangible Common Equity to Tangible Assets, excluding PPP* | 6.48 | % |  | 6.49 | % |  | 8.08 | %
Tangible Book Value per common share* | $ | 38.35 |  |  | $ | 37.35 |  |  | $ | 35.12 |
Common equity Tier 1 capital ratio (1) | 10.1 | % |  | 9.7 | % |  | 10.4 | %
Total risk based capital ratio (1) | 12.8 | % |  | 12.6 | % |  | 13.6 | %
(1) Regulatory capital ratios as of September 30, 2022 are estimates.
*Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount is included at the end of this document.

Customers Bancorp's tangible common equity* increased $102.8 million to $1.2 billion at September 30, 2022 compared to a year ago, as earnings of $291.4 million more than offset a negative impact to accumulated other comprehensive income ("AOCI") from increased unrealized losses on investment securities of $157.6 million (net of taxes). Similarly, tangible book value per common share* increased to $38.35 at September 30, 2022 from $35.12 at September 30, 2021. Customers remains well capitalized by all regulatory measures.
At the Customers Bancorp level, the total risk based capital ratio (estimate) and tangible common equity to tangible assets ratio ("TCE ratio"), excluding PPP loans*, were 12.8% and 6.48%, respectively, at September 30, 2022. "We expect our TCE ratio to be about 7.5% over the next 3 - 4 quarters, supported by growth in retained earnings and prudent balance sheet management," stated Mr. Sam Sidhu.
At the Customers Bank level, capital levels remained strong and well above regulatory minimums. At September 30, 2022, estimated Tier 1 capital and total risk-based capital were 11.7% and 13.0%, respectively.
Key Profitability Trends
Net Interest Income
Net interest income totaled $159.0 million in Q3 2022, a decrease of $5.8 million from Q2 2022, primarily due to lower PPP interest income of $5.9 million resulting from reduced recognition of deferred fees of $4.8 million driven by lower loan forgiveness in Q3 2022. This decrease was offset in part by increased net interest income earned by the core bank of $3.5 million, up 2% (~10% annualized) over Q2 2022, including increased interest income on investment securities and core loans* of $5.1 million and $37.4 million, respectively, mostly due to higher average balances. In addition, higher expenses paid on deposits, fed funds, FHLB advances and other borrowings of $45.4 million resulted mainly from a shift in deposit mix and higher interest rates during Q3 2022. Excluding PPP loans, average interest-earning assets increased $1.0 billion. Interest-earning asset growth was primarily driven by increases in C&I loans and leases, mostly in specialty lending, and some lower-yielding multi-family loans that didn't close until Q3 2022. Compared to Q2 2022, total loan yields increased 54 basis points to 5.08% primarily due to higher interest rates on variable rate loans in specialty lending. Excluding PPP loans, the Q3 2022 total loan yield was 59 basis points higher than Q2 2022 reflecting increased interest rates and the variable rate nature of the loan portfolio.
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Non-Interest Income
The following table presents details of non-interest income for the periods indicated:

| Three Months Ended |  | Increase (Decrease) |  |  |  |  |  |  |  |
(Dollars in thousands) | September 30, 2022 |  | June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
Interchange and card revenue | $ | 72 |  |  | $ | 24 |  |  | $ | 48 |  |  |  |  |  |  |  |  |  |  |  |  |
Deposit fees | 989 |  |  | 964 |  |  | 25 |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial lease income | 7,097 |  |  | 6,592 |  |  | 505 |  |  |  |  |  |  |  |  |  |  |  |  |
Bank-owned life insurance | 3,449 |  |  | 1,947 |  |  | 1,502 |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage warehouse transactional fees | 1,545 |  |  | 1,883 |  |  | (338) |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on sale of SBA and other loans | 106 |  |  | 1,542 |  |  | (1,436) |  |  |  |  |  |  |  |  |  |  |  |  |
Loss on sale of consumer installment loans | (23,465) |  |  | — |  |  | (23,465) |  |  |  |  |  |  |  |  |  |  |  |  |
Loan fees | 3,008 |  |  | 2,618 |  |  | 390 |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking income (loss) | 125 |  |  | 173 |  |  | (48) |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on sale of investment securities | (2,135) |  |  | (3,029) |  |  | 894 |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gain (loss) on investment securities | (259) |  |  | (203) |  |  | (56) |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gain (loss) on derivatives | 563 |  |  | 821 |  |  | (258) |  |  |  |  |  |  |  |  |  |  |  |  |
Other | (112) |  |  | (586) |  |  | 474 |  |  |  |  |  |  |  |  |  |  |  |  |
Total non-interest income | $ | (9,017) |  |  | $ | 12,746 |  |  | $ | (21,763) |  |  |  |  |  |  |  |  |  |  |  |  |

Non-interest income totaled $(9.0) million for Q3 2022, a decrease of $21.8 million compared to Q2 2022. The decrease was primarily due to $23.5 million of loss realized from the sale of $500 million of consumer installment loans as part of our balance sheet optimization initiatives, which included the write-off of deferred origination costs and other transaction-related expenses, and lower gains realized on sales of SBA loans in Q3 2022 compared to Q2 2022, partially offset by higher bank-owned life insurance income primarily due to death benefits, lower realized losses from the sale of investment securities and higher commercial lease income and loan fees from continued growth.
Non-Interest Expense
The following table presents details of non-interest expense for the periods indicated:

| Three Months Ended |  | Increase (Decrease) |  |  |  |  |  |  |  |
(Dollars in thousands) | September 30, 2022 |  | June 30, 2022 |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits | $ | 31,230 |  |  | $ | 25,334 |  |  | $ | 5,896 |  |  |  |  |  |  |  |  |  |  |  |  |
Technology, communication and bank operations | 19,588 |  |  | 22,738 |  |  | (3,150) |  |  |  |  |  |  |  |  |  |  |  |  |
Professional services | 6,269 |  |  | 7,415 |  |  | (1,146) |  |  |  |  |  |  |  |  |  |  |  |  |
Occupancy | 2,605 |  |  | 4,279 |  |  | (1,674) |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial lease depreciation | 5,966 |  |  | 5,552 |  |  | 414 |  |  |  |  |  |  |  |  |  |  |  |  |
FDIC assessments, non-income taxes and regulatory fees | 2,528 |  |  | 1,619 |  |  | 909 |  |  |  |  |  |  |  |  |  |  |  |  |
Loan servicing | 3,851 |  |  | 4,341 |  |  | (490) |  |  |  |  |  |  |  |  |  |  |  |  |
Loan workout | 217 |  |  | 179 |  |  | 38 |  |  |  |  |  |  |  |  |  |  |  |  |
Advertising and promotion | 762 |  |  | 353 |  |  | 409 |  |  |  |  |  |  |  |  |  |  |  |  |
Other | 3,182 |  |  | 4,395 |  |  | (1,213) |  |  |  |  |  |  |  |  |  |  |  |  |
Total non-interest expense | $ | 76,198 |  |  | $ | 76,205 |  |  | $ | (7) |  |  |  |  |  |  |  |  |  |  |  |  |

The management of non-interest expenses remains a priority for us. However, this will not be at the expense of not making adequate investments with new technologies to support efficient and responsible growth.
Non-interest expenses totaled $76.2 million in Q3 2022, relatively unchanged from Q2 2022 and $3.8 million lower than Q3 2021. The offsetting items this quarter included a $3.2 million decrease in technology, processing and deposit servicing-related expenses mostly due to lower deposit servicing fees paid to BM Technologies, $1.7 million decrease in occupancy mostly due to $0.9 million of impairment charges for consolidation of five branches into other existing locations in Southeastern Pennsylvania recorded in Q2 2022 and $1.1 million decrease in professional fees primarily associated with the PPP loan forgiveness. These decreases were offset in part by higher salaries and employee benefits of $5.9 million primarily due to higher average headcount, incentives and $1.4 million in one-time severance expenses.
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Taxes
Income tax expense from continuing operations decreased by $1.0 million to $17.9 million in Q3 2022 from $18.9 million in Q2 2022 primarily due to higher investment tax credits and death benefits on bank owned life insurance policies. The effective tax rate from continuing operations for Q3 2022 and for the nine months ended September 30, 2022 was 22%. Customers expects the full-year 2022 effective tax rate from continuing operations to be approximately 21% to 23%.
Outlook
“Looking ahead, we envision moderate sustainable and responsible organic core growth, maintenance of our margins, improved capital ratios, and higher profitability and are very optimistic about the prospects of our company. We are focused on improving the quality of our balance sheet and deposit franchise and are not focused on growth just for the sake of growth. With about $500 million of loan growth expected in our low-risk specialty lending verticals in fourth quarter 2022, we will have mostly completed our portfolio remix into lower credit risk variable rate loans. As such, we believe that our margin will likely trough in 2022 and we expect margin expansion in 2023 or through the projected rate-hike cycle. Through a combination of revenue growth and prudent expense management, we expect our efficiency ratio to be in the low to mid 40's by early 2023. Customers Bancorp stock at the close of business on October 21, 2022 was trading at $31.17, only 0.8 times tangible book value* at September 30, 2022. Even after selling $500 million of higher yielding consumer installment loans, we continue to expect over $6.00 of core earnings in 2023, two to three years ahead of our previous guidance of $6.00 by 2025/2026,” concluded Mr. Jay Sidhu.

*Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount is included at the end of this document.

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Webcast
Date: Thursday, October 27, 2022
Time: 9:00 AM EDT
The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com/investor-relations/ and at the Customers Bancorp 3rd Quarter Earnings Webcast.
You may submit questions in advance of the live webcast by emailing our Communications Director, David Patti at dpatti@customersbank.com; questions may also be asked during the webcast through the webcast application.
The webcast will be archived for viewing on the Customers Bank Investor Relations page and available beginning approximately two hours after the conclusion of the live event.
Institutional Background
Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation’s top-performing banking companies with over $20 billion in assets, making it one of the 100 largest bank holding companies in the US. Through its primary subsidiary, Customers Bank, commercial and consumer clients benefit from a full suite of technology-enabled tailored product experience delivered by best-in-class customer service. A pioneer in Banking-as-a-Service and digital banking products, Customers Bank is one of the very few banks that provides a blockchain-based 24/7/365 digital payment solution. In addition to traditional lines such as C&I lending, commercial real estate lending, and multi-family lending, Customers Bank also provides a number of national corporate banking services for Lender Finance, Fund Finance, Financial Institutions, Technology and Venture, and Healthcare clients. Major accolades include:
•#3 top-performing bank with over $10 billion in assets at year-end 2021 per S&P Global S&P Global Market Intelligence,
•#6 in top-performing banks with assets between $10 billion and 50 billion in 2021 per American Banker, and
•#21 out of the 100 largest publicly traded banks in 2022 per Forbes.
A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: www.customersbank.com.
“Safe Harbor” Statement
In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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,” “project,” 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 events and 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, including: the impact of the ongoing pandemic on the U.S. economy and customer behavior, the impact that changes in the economy have on the performance of our loan and lease portfolio, the market value of our investment securities, the continued success and acceptance of our blockchain payments system, the demand for our products and services and the availability of sources of funding; the effects of actions by the federal government, including the Board of Governors of the Federal Reserve System and other government agencies, that affect market interest rates and the money supply, actions that we and our customers take in response to these developments and the effects such actions have on our operations, products, services and customer relationships, higher inflation and its impacts, and the effects of any changes in accounting standards or policies. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any
10

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 for the year ended December 31, 2021, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. 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, except as may be required under applicable law.
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Q3 2022 Overview
The following table presents a summary of key earnings and performance metrics for the quarter ended September 30, 2022 and the preceding four quarters:

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
EARNINGS SUMMARY - UNAUDITED |
(Dollars in thousands, except per share data and stock price data) | Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Nine Months Ended September 30, |
2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021 |
GAAP Profitability Metrics: |
Net income available to common shareholders (from continuing and discontinued operations) | $ | 61,364 |  |  | $ | 56,519 |  |  | $ | 74,896 |  |  | $ | 98,647 |  |  | $ | 110,241 |  |  | $ | 192,779 |  |  | $ | 201,487 |  |
Per share amounts: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Earnings per share - basic | $ | 1.89 |  |  | $ | 1.73 |  |  | $ | 2.27 |  |  | $ | 3.02 |  |  | $ | 3.40 |  |  | $ | 5.89 |  |  | $ | 6.26 |  |
| Earnings per share - diluted | $ | 1.85 |  |  | $ | 1.68 |  |  | $ | 2.18 |  |  | $ | 2.87 |  |  | $ | 3.25 |  |  | $ | 5.72 |  |  | $ | 6.02 |  |
| Book value per common share (1) | $ | 38.46 |  |  | $ | 37.46 |  |  | $ | 37.61 |  |  | $ | 37.32 |  |  | $ | 35.24 |  |  | $ | 38.46 |  |  | $ | 35.24 |  |
| CUBI stock price (1) | $ | 29.48 |  |  | $ | 33.90 |  |  | $ | 52.14 |  |  | $ | 65.37 |  |  | $ | 43.02 |  |  | $ | 29.48 |  |  | $ | 43.02 |  |
| CUBI stock price as % of book value (1) | 77 | % |  | 90 | % |  | 139 | % |  | 175 | % |  | 122 | % |  | 77 | % |  | 122 | % |
Average shares outstanding - basic | 32,455,814 |  |  | 32,712,616 |  |  | 32,957,033 |  |  | 32,625,960 |  |  | 32,449,853 |  |  | 32,706,652 |  |  | 32,206,547 |  |
Average shares outstanding - diluted | 33,226,607 |  |  | 33,579,013 |  |  | 34,327,065 |  |  | 34,320,327 |  |  | 33,868,553 |  |  | 33,706,864 |  |  | 33,487,672 |  |
Shares outstanding (1) | 32,475,502 |  |  | 32,449,486 |  |  | 32,957,847 |  |  | 32,913,267 |  |  | 32,537,976 |  |  | 32,475,502 |  |  | 32,537,976 |  |
Return on average assets ("ROAA") | 1.24 | % |  | 1.17 | % |  | 1.63 | % |  | 2.08 | % |  | 2.33 | % |  | 1.34 | % |  | 1.49 | % |
Return on average common equity ("ROCE") | 19.33 | % |  | 18.21 | % |  | 24.26 | % |  | 33.18 | % |  | 40.82 | % |  | 20.58 | % |  | 26.99 | % |
Efficiency ratio | 50.00 | % |  | 42.14 | % |  | 39.42 | % |  | 38.70 | % |  | 33.42 | % |  | 43.46 | % |  | 41.07 | % |
Non-GAAP Profitability Metrics (2): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core earnings | $ | 82,270 |  |  | $ | 59,367 |  |  | $ | 75,410 |  |  | $ | 101,213 |  |  | $ | 113,876 |  |  | $ | 217,047 |  |  | $ | 243,487 |  |
Adjusted pre-tax pre-provision net income | $ | 100,994 |  |  | $ | 105,692 |  |  | $ | 112,649 |  |  | $ | 130,595 |  |  | $ | 167,215 |  |  | $ | 319,335 |  |  | $ | 340,451 |  |
Per share amounts: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Core earnings per share - diluted | $ | 2.48 |  |  | $ | 1.77 |  |  | $ | 2.20 |  |  | $ | 2.95 |  |  | $ | 3.36 |  |  | $ | 6.44 |  |  | $ | 7.27 |  |
| Tangible book value per common share (1) | $ | 38.35 |  |  | $ | 37.35 |  |  | $ | 37.50 |  |  | $ | 37.21 |  |  | $ | 35.12 |  |  | $ | 38.35 |  |  | $ | 35.12 |  |
| CUBI stock price as % of tangible book value (1) | 77 | % |  | 91 | % |  | 139 | % |  | 176 | % |  | 122 | % |  | 77 | % |  | 122 | % |
Core ROAA | 1.64 | % |  | 1.23 | % |  | 1.64 | % |  | 2.13 | % |  | 2.35 | % |  | 1.50 | % |  | 1.76 | % |
Core ROCE | 25.91 | % |  | 19.13 | % |  | 24.43 | % |  | 34.04 | % |  | 42.16 | % |  | 23.17 | % |  | 32.61 | % |
Adjusted ROAA - pre-tax and pre-provision | 1.95 | % |  | 2.11 | % |  | 2.39 | % |  | 2.70 | % |  | 3.36 | % |  | 2.14 | % |  | 2.37 | % |
Adjusted ROCE - pre-tax and pre-provision | 31.01 | % |  | 33.37 | % |  | 35.89 | % |  | 43.25 | % |  | 60.81 | % |  | 33.40 | % |  | 44.30 | % |
Net interest margin, tax equivalent | 3.16 | % |  | 3.39 | % |  | 3.60 | % |  | 4.14 | % |  | 4.59 | % |  | 3.38 | % |  | 3.55 | % |
Net interest margin, tax equivalent, excluding PPP loans | 3.18 | % |  | 3.32 | % |  | 3.32 | % |  | 3.12 | % |  | 3.24 | % |  | 3.27 | % |  | 3.17 | % |
Core efficiency ratio | 42.57 | % |  | 41.74 | % |  | 39.47 | % |  | 38.14 | % |  | 30.36 | % |  | 41.23 | % |  | 37.31 | % |
Asset Quality: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net charge-offs | $ | 18,498 |  |  | $ | 13,481 |  |  | $ | 7,226 |  |  | $ | 7,582 |  |  | $ | 7,104 |  |  | $ | 39,205 |  |  | $ | 26,216 |  |
Annualized net charge-offs to average total loans and leases | 0.47 | % |  | 0.36 | % |  | 0.21 | % |  | 0.21 | % |  | 0.17 | % |  | 0.36 | % |  | 0.22 | % |
Non-performing loans ("NPLs") to total loans and leases (1) | 0.18 | % |  | 0.18 | % |  | 0.31 | % |  | 0.34 | % |  | 0.34 | % |  | 0.18 | % |  | 0.34 | % |
Reserves to NPLs (1) | 466.34 | % |  | 557.76 | % |  | 333.15 | % |  | 277.72 | % |  | 252.68 | % |  | 466.34 | % |  | 252.68 | % |
Non-performing assets ("NPAs") to total assets | 0.14 | % |  | 0.14 | % |  | 0.23 | % |  | 0.25 | % |  | 0.27 | % |  | 0.14 | % |  | 0.27 | % |
Customers Bank Capital Ratios (3): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common equity Tier 1 capital to risk-weighted assets | 11.73 | % |  | 11.46 | % |  | 11.60 | % |  | 11.83 | % |  | 12.77 | % |  | 11.73 | % |  | 12.77 | % |
Tier 1 capital to risk-weighted assets | 11.73 | % |  | 11.46 | % |  | 11.60 | % |  | 11.83 | % |  | 12.77 | % |  | 11.73 | % |  | 12.77 | % |
Total capital to risk-weighted assets | 12.98 | % |  | 12.91 | % |  | 13.03 | % |  | 13.11 | % |  | 14.16 | % |  | 12.98 | % |  | 14.16 | % |
Tier 1 capital to average assets (leverage ratio) | 8.10 | % |  | 8.09 | % |  | 8.21 | % |  | 7.93 | % |  | 8.66 | % |  | 8.10 | % |  | 8.66 | % |
(1) Metric is a spot balance for the last day of each quarter presented. |
(2) Customers' reasons for the use of these non-GAAP measures and a detailed reconciliation between the non-GAAP measures and the comparable GAAP amounts are included at the end of this document. |
(3) Regulatory capital ratios are estimated for Q3 2022 and actual for the remaining periods. In accordance with regulatory capital rules, Customers elected to apply the CECL capital transition provisions which delayed the effects of CECL on regulatory capital for two years until January 1, 2022, followed by a three-year transition period. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million will be phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of September 30, 2022, our regulatory capital ratios reflected 75%, or $46.2 million, benefit associated with the CECL transition provisions. |

12

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(Dollars in thousands, except per share data) |  |  |  |  |  |  |  |  |  |  | Nine Months Ended
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | September 30,
| 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and leases | $ | 200,457 |  |  | $ | 168,941 |  |  | $ | 157,175 |  |  | $ | 198,000 |  |  | $ | 233,097 |  |  | $ | 526,573 |  |  | $ | 538,822 |
Investment securities | 30,546 |  |  | 25,442 |  |  | 20,295 |  |  | 15,202 |  |  | 8,905 |  |  | 76,283 |  |  | 25,211 |
Other | 4,913 |  |  | 1,951 |  |  | 6,006 |  |  | 835 |  |  | 849 |  |  | 12,870 |  |  | 2,814 |
Total interest income | 235,916 |  |  | 196,334 |  |  | 183,476 |  |  | 214,037 |  |  | 242,851 |  |  | 615,726 |  |  | 566,847 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits | 65,380 |  |  | 22,781 |  |  | 13,712 |  |  | 15,415 |  |  | 15,915 |  |  | 101,873 |  |  | 47,226 |
FHLB advances | 4,684 |  |  | 2,316 |  |  | — |  |  | 51 |  |  | 5 |  |  | 7,000 |  |  | 6,160 |
Subordinated debt | 2,689 |  |  | 2,689 |  |  | 2,689 |  |  | 2,688 |  |  | 2,689 |  |  | 8,067 |  |  | 8,067 |
FRB PPP liquidity facility, federal funds purchased and other borrowings | 4,131 |  |  | 3,696 |  |  | 2,376 |  |  | 2,189 |  |  | 4,350 |  |  | 10,203 |  |  | 14,014 |
Total interest expense | 76,884 |  |  | 31,482 |  |  | 18,777 |  |  | 20,343 |  |  | 22,959 |  |  | 127,143 |  |  | 75,467 |
Net interest income | 159,032 |  |  | 164,852 |  |  | 164,699 |  |  | 193,694 |  |  | 219,892 |  |  | 488,583 |  |  | 491,380 |
Provision (benefit) for credit losses | (7,994) |  |  | 23,847 |  |  | 15,997 |  |  | 13,890 |  |  | 13,164 |  |  | 31,850 |  |  | 13,536 |
Net interest income after provision (benefit) for credit losses | 167,026 |  |  | 141,005 |  |  | 148,702 |  |  | 179,804 |  |  | 206,728 |  |  | 456,733 |  |  | 477,844 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |  |
Interchange and card revenue | 72 |  |  | 24 |  |  | 76 |  |  | 84 |  |  | 83 |  |  | 172 |  |  | 252 |
Deposit fees | 989 |  |  | 964 |  |  | 940 |  |  | 1,026 |  |  | 994 |  |  | 2,893 |  |  | 2,748 |
Commercial lease income | 7,097 |  |  | 6,592 |  |  | 5,895 |  |  | 5,378 |  |  | 5,213 |  |  | 19,584 |  |  | 15,729 |
Bank-owned life insurance | 3,449 |  |  | 1,947 |  |  | 8,326 |  |  | 1,984 |  |  | 1,988 |  |  | 13,722 |  |  | 6,432 |
Mortgage warehouse transactional fees | 1,545 |  |  | 1,883 |  |  | 2,015 |  |  | 2,262 |  |  | 3,100 |  |  | 5,443 |  |  | 10,612 |
Gain (loss) on sale of SBA and other loans | 106 |  |  | 1,542 |  |  | 1,507 |  |  | 2,493 |  |  | 5,359 |  |  | 3,155 |  |  | 8,834 |
Loss on sale of consumer installment loans | (23,465) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (23,465) |  |  | — |
Loan fees | 3,008 |  |  | 2,618 |  |  | 2,545 |  |  | 2,513 |  |  | 1,909 |  |  | 8,171 |  |  | 5,015 |
Mortgage banking income (loss) | 125 |  |  | 173 |  |  | 481 |  |  | 262 |  |  | 425 |  |  | 779 |  |  | 1,274 |
Gain (loss) on sale of investment securities | (2,135) |  |  | (3,029) |  |  | (1,063) |  |  | (49) |  |  | 6,063 |  |  | (6,227) |  |  | 31,441 |
Unrealized gain (loss) on investment securities | (259) |  |  | (203) |  |  | (276) |  |  | — |  |  | — |  |  | (738) |  |  | 2,720 |
Loss on sale of foreign subsidiaries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,840) |
Unrealized gain (loss) on derivatives | 563 |  |  | 821 |  |  | 964 |  |  | 586 |  |  | 524 |  |  | 2,348 |  |  | 2,622 |
Loss on cash flow hedge derivative terminations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (24,467) |
Other | (112) |  |  | (586) |  |  | (212) |  |  | 452 |  |  | (72) |  |  | (910) |  |  | 504 |
Total non-interest income | (9,017) |  |  | 12,746 |  |  | 21,198 |  |  | 16,991 |  |  | 25,586 |  |  | 24,927 |  |  | 60,876 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits | 31,230 |  |  | 25,334 |  |  | 26,607 |  |  | 29,940 |  |  | 26,268 |  |  | 83,171 |  |  | 78,262 |
Technology, communication and bank operations | 19,588 |  |  | 22,738 |  |  | 24,068 |  |  | 22,657 |  |  | 21,281 |  |  | 66,394 |  |  | 60,887 |
Professional services | 6,269 |  |  | 7,415 |  |  | 6,956 |  |  | 7,058 |  |  | 6,871 |  |  | 20,640 |  |  | 19,630 |
Occupancy | 2,605 |  |  | 4,279 |  |  | 3,050 |  |  | 4,336 |  |  | 2,704 |  |  | 9,934 |  |  | 7,807 |
Commercial lease depreciation | 5,966 |  |  | 5,552 |  |  | 4,942 |  |  | 4,625 |  |  | 4,493 |  |  | 16,460 |  |  | 13,199 |
FDIC assessments, non-income taxes and regulatory fees | 2,528 |  |  | 1,619 |  |  | 2,383 |  |  | 2,427 |  |  | 2,313 |  |  | 6,530 |  |  | 7,634 |
Loan servicing | 3,851 |  |  | 4,341 |  |  | 2,371 |  |  | 4,361 |  |  | 4,265 |  |  | 10,563 |  |  | 6,402 |
Merger and acquisition related expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 418 |
Loan workout | 217 |  |  | 179 |  |  | (38) |  |  | 226 |  |  | 198 |  |  | 358 |  |  | 39 |
Advertising and promotion | 762 |  |  | 353 |  |  | 315 |  |  | 344 |  |  | 302 |  |  | 1,430 |  |  | 1,176 |
Deposit relationship adjustment fees | — |  |  | — |  |  | — |  |  | — |  |  | 6,216 |  |  | — |  |  | 6,216 |
Other | 3,182 |  |  | 4,395 |  |  | 3,153 |  |  | 5,574 |  |  | 5,098 |  |  | 10,730 |  |  | 11,089 |
Total non-interest expense | 76,198 |  |  | 76,205 |  |  | 73,807 |  |  | 81,548 |  |  | 80,009 |  |  | 226,210 |  |  | 212,759 |
Income before income tax expense | 81,811 |  |  | 77,546 |  |  | 96,093 |  |  | 115,247 |  |  | 152,305 |  |  | 255,450 |  |  | 325,961 |
Income tax expense | 17,899 |  |  | 18,896 |  |  | 19,332 |  |  | 12,993 |  |  | 36,263 |  |  | 56,127 |  |  | 73,947 |
Net income from continuing operations | $ | 63,912 |  |  | $ | 58,650 |  |  | $ | 76,761 |  |  | $ | 102,254 |  |  | $ | 116,042 |  |  | $ | 199,323 |  |  | $ | 252,014 |
|  |  |  |  | (continued) |  |  |  |

13

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data) |  |  |  |  |  |  |  |  |  |  | Nine Months Ended
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | September 30,
| 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021
Loss from discontinued operations before income taxes | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (20,354) |
Income tax expense (benefit) from discontinued operations | — |  |  | — |  |  | — |  |  | 1,585 |  |  | — |  |  | — |  |  | 17,682 |
Net loss from discontinued operations | — |  |  | — |  |  | — |  |  | (1,585) |  |  | — |  |  | — |  |  | (38,036) |
Net income | 63,912 |  |  | 58,650 |  |  | 76,761 |  |  | 100,669 |  |  | 116,042 |  |  | 199,323 |  |  | 213,978 |
Preferred stock dividends | 2,548 |  |  | 2,131 |  |  | 1,865 |  |  | 2,022 |  |  | 2,981 |  |  | 6,544 |  |  | 9,671 |
Loss on redemption of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | 2,820 |  |  | — |  |  | 2,820 |
Net income available to common shareholders | $ | 61,364 |  |  | $ | 56,519 |  |  | $ | 74,896 |  |  | $ | 98,647 |  |  | $ | 110,241 |  |  | $ | 192,779 |  |  | $ | 201,487 |
Basic earnings per common share from continuing operations | $ | 1.89 |  |  | $ | 1.73 |  |  | $ | 2.27 |  |  | $ | 3.07 |  |  | $ | 3.40 |  |  | $ | 5.89 |  |  | $ | 7.44 |
Basic earnings per common share | 1.89 |  |  | 1.73 |  |  | 2.27 |  |  | 3.02 |  |  | 3.40 |  |  | 5.89 |  |  | 6.26 |
Diluted earnings per common share from continuing operations | 1.85 |  |  | 1.68 |  |  | 2.18 |  |  | 2.92 |  |  | 3.25 |  |  | 5.72 |  |  | 7.15 |
Diluted earnings per common share | 1.85 |  |  | 1.68 |  |  | 2.18 |  |  | 2.87 |  |  | 3.25 |  |  | 5.72 |  |  | 6.02 |

14

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET - UNAUDITED
(Dollars in thousands)
| September 30, |  | June 30, |  | March 31, |  | December 31, |  | September 30,
| 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
ASSETS |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 41,520 |  |  | $ | 66,703 |  |  | $ | 55,515 |  |  | $ | 35,238 |  |  | $ | 51,169 |
Interest earning deposits | 362,945 |  |  | 178,475 |  |  | 219,085 |  |  | 482,794 |  |  | 1,000,885 |
Cash and cash equivalents | 404,465 |  |  | 245,178 |  |  | 274,600 |  |  | 518,032 |  |  | 1,052,054 |
Investment securities, at fair value | 2,943,694 |  |  | 3,144,882 |  |  | 4,169,853 |  |  | 3,817,150 |  |  | 1,866,697 |
Investment securities held to maturity | 886,294 |  |  | 495,039 |  |  | — |  |  | — |  |  | — |
Loans held for sale | 5,224 |  |  | 6,595 |  |  | 3,003 |  |  | 16,254 |  |  | 29,957 |
Loans receivable, mortgage warehouse, at fair value | 1,569,090 |  |  | 1,874,603 |  |  | 1,755,758 |  |  | 2,284,325 |  |  | 2,557,624 |
Loans receivable, PPP | 1,154,632 |  |  | 1,570,160 |  |  | 2,195,902 |  |  | 3,250,008 |  |  | 4,957,357 |
Loans and leases receivable | 12,607,742 |  |  | 12,212,995 |  |  | 10,118,855 |  |  | 9,018,298 |  |  | 7,970,599 |
Allowance for credit losses on loans and leases | (130,197) |  |  | (156,530) |  |  | (145,847) |  |  | (137,804) |  |  | (131,496) |
Total loans and leases receivable, net of allowance for credit losses on loans and leases | 15,201,267 |  |  | 15,501,228 |  |  | 13,924,668 |  |  | 14,414,827 |  |  | 15,354,084 |
FHLB, Federal Reserve Bank, and other restricted stock | 64,112 |  |  | 74,626 |  |  | 54,553 |  |  | 64,584 |  |  | 57,184 |
Accrued interest receivable | 107,621 |  |  | 98,727 |  |  | 94,669 |  |  | 92,239 |  |  | 93,514 |
Bank premises and equipment, net | 6,610 |  |  | 6,755 |  |  | 8,233 |  |  | 8,890 |  |  | 9,944 |
Bank-owned life insurance | 336,130 |  |  | 335,153 |  |  | 332,239 |  |  | 333,705 |  |  | 331,423 |
Goodwill and other intangibles | 3,629 |  |  | 3,629 |  |  | 3,678 |  |  | 3,736 |  |  | 3,794 |
Other assets | 408,575 |  |  | 340,184 |  |  | 298,212 |  |  | 305,611 |  |  | 310,271 |
Total assets | $ | 20,367,621 |  |  | $ | 20,251,996 |  |  | $ | 19,163,708 |  |  | $ | 19,575,028 |  |  | $ | 19,108,922 |
LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |
Demand, non-interest bearing deposits | $ | 2,993,793 |  |  | $ | 4,683,030 |  |  | $ | 4,594,428 |  |  | $ | 4,459,790 |  |  | $ | 4,954,331 |
Interest bearing deposits | 14,528,645 |  |  | 12,261,689 |  |  | 11,821,132 |  |  | 12,318,134 |  |  | 12,016,694 |
Total deposits | 17,522,438 |  |  | 16,944,719 |  |  | 16,415,560 |  |  | 16,777,924 |  |  | 16,971,025 |
Federal funds purchased | 365,000 |  |  | 770,000 |  |  | 700,000 |  |  | 75,000 |  |  | — |
FHLB advances | 500,000 |  |  | 635,000 |  |  | — |  |  | 700,000 |  |  | — |
Other borrowings | 123,515 |  |  | 123,450 |  |  | 223,230 |  |  | 223,086 |  |  | 223,151 |
Subordinated debt | 181,882 |  |  | 181,812 |  |  | 181,742 |  |  | 181,673 |  |  | 181,603 |
Accrued interest payable and other liabilities | 287,855 |  |  | 243,625 |  |  | 265,770 |  |  | 251,128 |  |  | 448,844 |
Total liabilities | 18,980,690 |  |  | 18,898,606 |  |  | 17,786,302 |  |  | 18,208,811 |  |  | 17,824,623 |
Preferred stock | 137,794 |  |  | 137,794 |  |  | 137,794 |  |  | 137,794 |  |  | 137,794 |
Common stock | 34,948 |  |  | 34,922 |  |  | 34,882 |  |  | 34,722 |  |  | 33,818 |
Additional paid in capital | 549,066 |  |  | 545,670 |  |  | 542,402 |  |  | 542,391 |  |  | 525,894 |
Retained earnings | 898,511 |  |  | 837,147 |  |  | 780,628 |  |  | 705,732 |  |  | 607,085 |
Accumulated other comprehensive income (loss), net | (156,126) |  |  | (124,881) |  |  | (62,548) |  |  | (4,980) |  |  | 1,488 |
Treasury stock, at cost | (77,262) |  |  | (77,262) |  |  | (55,752) |  |  | (49,442) |  |  | (21,780) |
Total shareholders' equity | 1,386,931 |  |  | 1,353,390 |  |  | 1,377,406 |  |  | 1,366,217 |  |  | 1,284,299 |
Total liabilities and shareholders' equity | $ | 20,367,621 |  |  | $ | 20,251,996 |  |  | $ | 19,163,708 |  |  | $ | 19,575,028 |  |  | $ | 19,108,922 |

15

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Three Months Ended |
| September 30, 2022 |  | June 30, 2022 |  | September 30, 2021 |
| Average Balance |  | Interest Income or Expense |  | Average Yield or Cost (%) |  | Average Balance |  | Interest Income or Expense |  | Average Yield or Cost (%) |  | Average Balance |  | Interest Income or Expense |  | Average Yield or Cost (%) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest earning deposits | $ | 528,001 |  |  | $ | 2,949 |  |  | 2.22% |  | $ | 434,950 |  |  | $ | 919 |  |  | 0.85% |  | $ | 1,279,983 |  |  | $ | 490 |  |  | 0.15% |
Investment securities (1) | 3,770,922 |  |  | 30,546 |  |  | 3.24% |  | 4,104,463 |  |  | 25,442 |  |  | 2.48% |  | 1,511,319 |  |  | 8,905 |  |  | 2.36% |
Loans and leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Specialty lending loans and leases (2) | 5,064,730 |  |  | 64,753 |  |  | 5.07% |  | 4,068,175 |  |  | 39,160 |  |  | 3.86% |  | 1,732,323 |  |  | 16,393 |  |  | 3.75% |
Other commercial & industrial loans (2) | 1,585,136 |  |  | 18,794 |  |  | 4.70% |  | 1,509,655 |  |  | 14,706 |  |  | 3.91% |  | 1,292,297 |  |  | 12,259 |  |  | 3.76% |
Commercial loans to mortgage companies | 1,623,624 |  |  | 17,092 |  |  | 4.18% |  | 1,898,554 |  |  | 15,615 |  |  | 3.30% |  | 2,658,020 |  |  | 21,065 |  |  | 3.14% |
Multi-family loans | 2,206,953 |  |  | 20,427 |  |  | 3.67% |  | 1,845,527 |  |  | 17,313 |  |  | 3.76% |  | 1,443,846 |  |  | 13,259 |  |  | 3.64% |
Loans receivable, PPP | 1,349,403 |  |  | 14,666 |  |  | 4.31% |  | 1,863,429 |  |  | 20,572 |  |  | 4.43% |  | 5,778,367 |  |  | 117,102 |  |  | 8.04% |
Non-owner occupied commercial real estate loans | 1,372,244 |  |  | 15,595 |  |  | 4.51% |  | 1,307,995 |  |  | 12,749 |  |  | 3.91% |  | 1,346,629 |  |  | 12,656 |  |  | 3.73% |
Residential mortgages | 513,694 |  |  | 5,008 |  |  | 3.87% |  | 515,612 |  |  | 4,898 |  |  | 3.81% |  | 325,851 |  |  | 2,874 |  |  | 3.50% |
Installment loans | 1,938,199 |  |  | 44,122 |  |  | 9.03% |  | 1,909,551 |  |  | 43,928 |  |  | 9.23% |  | 1,615,411 |  |  | 37,489 |  |  | 9.21% |
Total loans and leases (3) | 15,653,983 |  |  | 200,457 |  |  | 5.08% |  | 14,918,498 |  |  | 168,941 |  |  | 4.54% |  | 16,192,744 |  |  | 233,097 |  |  | 5.71% |
Other interest-earning assets | 68,549 |  |  | 1,964 |  |  | 11.37% |  | 68,025 |  |  | 1,032 |  |  | 6.09% |  | 49,780 |  |  | 359 |  |  | 2.86% |
Total interest-earning assets | 20,021,455 |  |  | 235,916 |  |  | 4.68% |  | 19,525,936 |  |  | 196,334 |  |  | 4.03% |  | 19,033,826 |  |  | 242,851 |  |  | 5.06% |
Non-interest-earning assets | 492,911 |  |  |  |  |  |  | 530,084 |  |  |  |  |  |  | 705,514 |  |  |  |  |  |
Total assets | $ | 20,514,366 |  |  |  |  |  |  | $ | 20,056,020 |  |  |  |  |  |  | $ | 19,739,340 |  |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest checking accounts | 6,669,787 |  |  | 33,685 |  |  | 2.00% |  | 6,409,617 |  |  | 13,644 |  |  | 0.85% |  | 4,537,421 |  |  | 7,677 |  |  | 0.67% |
Money market deposit accounts | 5,789,991 |  |  | 24,348 |  |  | 1.67% |  | 4,704,767 |  |  | 7,523 |  |  | 0.64% |  | 5,131,433 |  |  | 5,569 |  |  | 0.43% |
Other savings accounts | 625,908 |  |  | 1,818 |  |  | 1.15% |  | 695,176 |  |  | 758 |  |  | 0.44% |  | 1,376,077 |  |  | 1,750 |  |  | 0.50% |
Certificates of deposit | 1,141,970 |  |  | 5,529 |  |  | 1.92% |  | 530,180 |  |  | 856 |  |  | 0.65% |  | 614,404 |  |  | 919 |  |  | 0.59% |
Total interest-bearing deposits (4) | 14,227,656 |  |  | 65,380 |  |  | 1.82% |  | 12,339,740 |  |  | 22,781 |  |  | 0.74% |  | 11,659,335 |  |  | 15,915 |  |  | 0.54% |
Federal funds purchased | 513,011 |  |  | 2,871 |  |  | 2.22% |  | 642,747 |  |  | 1,429 |  |  | 0.89% |  | — |  |  | — |  |  | —% |
FRB PPP liquidity facility | — |  |  | — |  |  | —% |  | — |  |  | — |  |  | —% |  | 2,788,897 |  |  | 2,460 |  |  | 0.35% |
Borrowings | 874,497 |  |  | 8,633 |  |  | 3.92% |  | 940,068 |  |  | 7,272 |  |  | 3.10% |  | 371,077 |  |  | 4,584 |  |  | 4.90% |
Total interest-bearing liabilities | 15,615,164 |  |  | 76,884 |  |  | 1.95% |  | 13,922,555 |  |  | 31,482 |  |  | 0.91% |  | 14,819,309 |  |  | 22,959 |  |  | 0.62% |
Non-interest-bearing deposits (4) | 3,245,963 |  |  |  |  |  |  | 4,491,574 |  |  |  |  |  |  | 3,335,198 |  |  |  |  |  |
Total deposits and borrowings | 18,861,127 |  |  |  |  | 1.62% |  | 18,414,129 |  |  |  |  | 0.69% |  | 18,154,507 |  |  |  |  | 0.50% |
Other non-interest-bearing liabilities | 255,735 |  |  |  |  |  |  | 259,279 |  |  |  |  |  |  | 310,519 |  |  |  |  |  |
Total liabilities | 19,116,862 |  |  |  |  |  |  | 18,673,408 |  |  |  |  |  |  | 18,465,026 |  |  |  |  |  |
Shareholders' equity | 1,397,504 |  |  |  |  |  |  | 1,382,612 |  |  |  |  |  |  | 1,274,314 |  |  |  |  |  |
Total liabilities and shareholders' equity | $ | 20,514,366 |  |  |  |  |  |  | $ | 20,056,020 |  |  |  |  |  |  | $ | 19,739,340 |  |  |  |  |  |
Net interest income |  |  | 159,032 |  |  |  |  |  |  | 164,852 |  |  |  |  |  |  | 219,892 |  |  |  |
Tax-equivalent adjustment (5) |  |  | 334 |  |  |  |  |  |  | 270 |  |  |  |  |  |  | 290 |  |  |  |
Net interest earnings |  |  | $ | 159,366 |  |  |  |  |  |  | $ | 165,122 |  |  |  |  |  |  | $ | 220,182 |  |  |  |
Interest spread |  |  |  |  | 3.06% |  |  |  |  |  | 3.35% |  |  |  |  |  | 4.56% |
Net interest margin |  |  |  |  | 3.16% |  |  |  |  |  | 3.38% |  |  |  |  |  | 4.58% |
Net interest margin tax equivalent (5) |  |  |  |  | 3.16% |  |  |  |  |  | 3.39% |  |  |  |  |  | 4.59% |
Net interest margin tax equivalent excl. PPP (6) |  |  |  |  | 3.18% |  |  |  |  |  | 3.32% |  |  |  |  |  | 3.24% |
|  |  |  |  |  |  | (continued) |  |  |  |  |  |  |

16

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED) |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts. |
(2) Includes owner occupied commercial real estate loans. |
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees. |
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 1.48%, 0.54% and 0.42% for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively. |
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. |
(6) Non-GAAP tax-equivalent basis, as described in note (5) for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. |

17

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED)
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |
| Nine Months Ended
| September 30, 2022 |  | September 30, 2021
| Average Balance |  | Interest Income or Expense |  | Average Yield or Cost (%) |  | Average Balance |  | Interest Income or Expense |  | Average Yield or Cost (%)
Assets |  |  |  |  |  |  |  |  |  |  |
Interest earning deposits | $ | 595,305 |  |  | $ | 4,197 |  |  | 0.94% |  | $ | 1,034,923 |  |  | $ | 980 |  |  | 0.13%
Investment securities (1) | 3,969,809 |  |  | 76,283 |  |  | 2.56% |  | 1,461,070 |  |  | 25,211 |  |  | 2.30%
Loans and leases: |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial: |  |  |  |  |  |  |  |  |  |  |
Specialty lending loans and leases (2) | 3,963,180 |  |  | 127,304 |  |  | 4.29% |  | 1,560,615 |  |  | 43,658 |  |  | 3.74%
Other commercial & industrial loans (2) | 1,496,772 |  |  | 46,768 |  |  | 4.18% |  | 1,357,028 |  |  | 38,631 |  |  | 3.81%
Commercial loans to mortgage companies | 1,785,495 |  |  | 46,713 |  |  | 3.50% |  | 2,837,549 |  |  | 65,925 |  |  | 3.11%
Multi-family loans | 1,863,915 |  |  | 51,506 |  |  | 3.69% |  | 1,560,565 |  |  | 44,120 |  |  | 3.78%
Loans receivable, PPP | 1,946,651 |  |  | 72,132 |  |  | 4.95% |  | 5,515,819 |  |  | 197,071 |  |  | 4.78%
Non-owner occupied commercial real estate loans | 1,331,037 |  |  | 40,551 |  |  | 4.07% |  | 1,354,745 |  |  | 38,637 |  |  | 3.81%
Residential mortgages | 482,263 |  |  | 13,586 |  |  | 3.77% |  | 348,369 |  |  | 9,486 |  |  | 3.64%
Installment loans | 1,881,160 |  |  | 128,013 |  |  | 9.10% |  | 1,470,024 |  |  | 101,294 |  |  | 9.21%
Total loans and leases (3) | 14,750,473 |  |  | 526,573 |  |  | 4.77% |  | 16,004,714 |  |  | 538,822 |  |  | 4.50%
Other interest-earning assets | 62,955 |  |  | 8,673 |  |  | NM (7) |  | 62,205 |  |  | 1,834 |  |  | 3.94%
Total interest-earning assets | 19,378,542 |  |  | 615,726 |  |  | 4.25% |  | 18,562,912 |  |  | 566,847 |  |  | 4.08%
Non-interest-earning assets | 526,437 |  |  |  |  |  |  | 632,202 |  |  |  |  |
Total assets | $ | 19,904,979 |  |  |  |  |  |  | $ | 19,195,114 |  |  |  |  |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Interest checking accounts | $ | 6,286,224 |  |  | $ | 55,059 |  |  | 1.17% |  | $ | 3,584,223 |  |  | $ | 19,929 |  |  | 0.74%
Money market deposit accounts | 5,128,270 |  |  | 36,545 |  |  | 0.95% |  | 4,811,540 |  |  | 17,278 |  |  | 0.48%
Other savings accounts | 732,801 |  |  | 3,359 |  |  | 0.61% |  | 1,415,595 |  |  | 6,227 |  |  | 0.59%
Certificates of deposit | 710,130 |  |  | 6,910 |  |  | 1.30% |  | 646,257 |  |  | 3,792 |  |  | 0.78%
Total interest-bearing deposits (4) | 12,857,425 |  |  | 101,873 |  |  | 1.06% |  | 10,457,615 |  |  | 47,226 |  |  | 0.60%
Federal funds purchased | 416,344 |  |  | 4,374 |  |  | 1.40% |  | 29,286 |  |  | 15 |  |  | 0.07%
FRB PPP liquidity facility | — |  |  | — |  |  | —% |  | 3,525,560 |  |  | 9,229 |  |  | 0.35%
Borrowings | 783,644 |  |  | 20,896 |  |  | 3.57% |  | 659,334 |  |  | 18,997 |  |  | 3.85%
Total interest-bearing liabilities | 14,057,413 |  |  | 127,143 |  |  | 1.21% |  | 14,671,795 |  |  | 75,467 |  |  | 0.69%
Non-interest-bearing deposits (4) | 4,206,778 |  |  |  |  |  |  | 3,016,837 |  |  |  |  |
Total deposits and borrowings | 18,264,191 |  |  |  |  | 0.93% |  | 17,688,632 |  |  |  |  | 0.57%
Other non-interest-bearing liabilities | 250,783 |  |  |  |  |  |  | 295,752 |  |  |  |  |
Total liabilities | 18,514,974 |  |  |  |  |  |  | 17,984,384 |  |  |  |  |
Shareholders' equity | 1,390,005 |  |  |  |  |  |  | 1,210,730 |  |  |  |  |
Total liabilities and shareholders' equity | $ | 19,904,979 |  |  |  |  |  |  | $ | 19,195,114 |  |  |  |  |
Net interest income |  |  | 488,583 |  |  |  |  |  |  | 491,380 |  |  |
Tax-equivalent adjustment (5) |  |  | 843 |  |  |  |  |  |  | 871 |  |  |
Net interest earnings |  |  | $ | 489,426 |  |  |  |  |  |  | $ | 492,251 |  |  |
Interest spread |  |  |  |  | 3.32% |  |  |  |  |  | 3.51%
Net interest margin |  |  |  |  | 3.37% |  |  |  |  |  | 3.54%
Net interest margin tax equivalent (5) |  |  |  |  | 3.38% |  |  |  |  |  | 3.55%
Net interest margin tax equivalent excl. PPP (6) |  |  |  |  | 3.27% |  |  |  |  |  | 3.17%
(1) For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes owner occupied commercial real estate loans.
(3) Includes non-accrual loans, the effect of which is to reduce the yield earned on loans and leases, and deferred loan fees.
(4) Total costs of deposits (including interest bearing and non-interest bearing) were 0.80% and 0.47% for the nine months ended September 30, 2022 and 2021, respectively.
| (continued) |  |  |  |  |  |

18

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEET / NET INTEREST MARGIN - UNAUDITED (CONTINUED)
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |
(5) Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the nine months ended September 30, 2022 and 2021, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
(6) Non-GAAP tax-equivalent basis as described in note (5), for the nine months ended September 30, 2022 and 2021, excluding net interest income from PPP loans and related borrowings, along with the related PPP loan balances and PPP fees receivable from interest-earning assets. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.
(7) Not meaningful.

19

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END LOAN AND LEASE COMPOSITION - UNAUDITED
(Dollars in thousands) |  |  |  |  |  |  |  |  |
| September 30, |  | June 30, |  | March 31, |  | December 31, |  | September 30,
| 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
Commercial: |  |  |  |  |  |  |  |  |
Commercial & industrial: |  |  |  |  |  |  |  |  |
Specialty lending | $ | 5,103,974 |  |  | $ | 4,599,640 |  |  | $ | 2,973,544 |  |  | $ | 2,403,991 |  |  | $ | 1,736,966 |
Other commercial & industrial | 1,064,332 |  |  | 1,037,443 |  |  | 947,895 |  |  | 942,679 |  |  | 867,401 |
Multi-family | 2,267,376 |  |  | 2,012,920 |  |  | 1,705,027 |  |  | 1,486,308 |  |  | 1,387,166 |
Loans to mortgage companies | 1,708,587 |  |  | 1,975,189 |  |  | 1,830,121 |  |  | 2,362,438 |  |  | 2,626,483 |
Commercial real estate owner occupied | 726,670 |  |  | 710,577 |  |  | 701,893 |  |  | 654,922 |  |  | 656,044 |
Loans receivable, PPP | 1,154,632 |  |  | 1,570,160 |  |  | 2,195,902 |  |  | 3,250,008 |  |  | 4,957,357 |
Commercial real estate non-owner occupied | 1,263,211 |  |  | 1,152,869 |  |  | 1,140,311 |  |  | 1,121,238 |  |  | 1,144,643 |
Construction | 136,133 |  |  | 195,687 |  |  | 161,024 |  |  | 198,981 |  |  | 198,607 |
Total commercial loans and leases | 13,424,915 |  |  | 13,254,485 |  |  | 11,655,717 |  |  | 12,420,565 |  |  | 13,574,667 |
Consumer: |  |  |  |  |  |  |  |  |
Residential | 466,888 |  |  | 460,228 |  |  | 469,426 |  |  | 350,984 |  |  | 260,820 |
Manufactured housing | 46,990 |  |  | 48,570 |  |  | 50,669 |  |  | 52,861 |  |  | 55,635 |
Installment: |  |  |  |  |  |  |  |  |
Personal | 1,079,267 |  |  | 1,641,748 |  |  | 1,618,096 |  |  | 1,433,538 |  |  | 1,342,650 |
Other | 318,628 |  |  | 259,322 |  |  | 279,610 |  |  | 310,937 |  |  | 281,765 |
Total consumer loans | 1,911,773 |  |  | 2,409,868 |  |  | 2,417,801 |  |  | 2,148,320 |  |  | 1,940,870 |
Total loans and leases | $ | 15,336,688 |  |  | $ | 15,664,353 |  |  | $ | 14,073,518 |  |  | $ | 14,568,885 |  |  | $ | 15,515,537 |

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
PERIOD END DEPOSIT COMPOSITION - UNAUDITED
(Dollars in thousands) |  |  |  |  |  |  |  |  |
| September 30, |  | June 30, |  | March 31, |  | December 31, |  | September 30,
| 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021
Demand, non-interest bearing | $ | 2,993,793 |  |  | $ | 4,683,030 |  |  | $ | 4,594,428 |  |  | $ | 4,459,790 |  |  | $ | 4,954,331 |
Demand, interest bearing | 7,124,663 |  |  | 6,644,398 |  |  | 5,591,468 |  |  | 6,488,406 |  |  | 5,023,081 |
Total demand deposits | 10,118,456 |  |  | 11,327,428 |  |  | 10,185,896 |  |  | 10,948,196 |  |  | 9,977,412 |
Savings | 592,002 |  |  | 640,062 |  |  | 802,395 |  |  | 973,317 |  |  | 1,310,343 |
Money market | 4,913,967 |  |  | 4,254,205 |  |  | 4,981,077 |  |  | 4,349,073 |  |  | 5,090,121 |
Time deposits | 1,898,013 |  |  | 723,024 |  |  | 446,192 |  |  | 507,338 |  |  | 593,149 |
Total deposits | $ | 17,522,438 |  |  | $ | 16,944,719 |  |  | $ | 16,415,560 |  |  | $ | 16,777,924 |  |  | $ | 16,971,025 |

20

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES |
ASSET QUALITY - UNAUDITED |
(Dollars in thousands) | As of September 30, 2022 |  | As of June 30, 2022 |  | As of September 30, 2021 |
| Total loans |  | Non accrual /NPLs |  | Allowance for credit losses |  | Total NPLs to total loans |  | Total reserves to total NPLs |  | Total loans |  | Non accrual /NPLs |  | Allowance for credit losses |  | Total NPLs to total loans |  | Total reserves to total NPLs |  | Total loans |  | Non accrual /NPLs |  | Allowance for credit losses |  | Total NPLs to total loans |  | Total reserves to total NPLs |
Loan type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial, including specialty lending (1) | $ | 6,307,803 |  |  | $ | 4,078 |  |  | $ | 15,131 |  |  | 0.06 | % |  | 371.04 | % |  | $ | 5,737,670 |  |  | $ | 4,061 |  |  | $ | 11,081 |  |  | 0.07 | % |  | 272.86 | % |  | $ | 2,673,226 |  |  | $ | 6,951 |  |  | $ | 10,860 |  |  | 0.26 | % |  | 156.24 | % |
Multi-family | 2,263,268 |  |  | 1,158 |  |  | 14,244 |  |  | 0.05 | % |  | 1230.05 | % |  | 2,008,784 |  |  | 1,153 |  |  | 9,765 |  |  | 0.06 | % |  | 846.92 | % |  | 1,369,876 |  |  | 24,524 |  |  | 4,397 |  |  | 1.79 | % |  | 17.93 | % |
Commercial real estate owner occupied | 726,670 |  |  | 2,198 |  |  | 6,220 |  |  | 0.30 | % |  | 282.98 | % |  | 710,577 |  |  | 2,913 |  |  | 4,745 |  |  | 0.41 | % |  | 162.89 | % |  | 656,044 |  |  | 2,412 |  |  | 3,617 |  |  | 0.37 | % |  | 149.96 | % |
Commercial real estate non-owner occupied | 1,263,211 |  |  | — |  |  | 11,332 |  |  | — | % |  | — | % |  | 1,152,869 |  |  | — |  |  | 8,880 |  |  | — | % |  | — | % |  | 1,144,643 |  |  | 2,845 |  |  | 7,375 |  |  | 0.25 | % |  | 259.23 | % |
Construction | 136,133 |  |  | — |  |  | 1,614 |  |  | — | % |  | — | % |  | 195,687 |  |  | — |  |  | 1,179 |  |  | — | % |  | — | % |  | 198,607 |  |  | — |  |  | 886 |  |  | — | % |  | — | % |
Total commercial loans and leases receivable | 10,697,085 |  |  | 7,434 |  |  | 48,541 |  |  | 0.07 | % |  | 652.96 | % |  | 9,805,587 |  |  | 8,127 |  |  | 35,650 |  |  | 0.08 | % |  | 438.66 | % |  | 6,042,396 |  |  | 36,732 |  |  | 27,135 |  |  | 0.61 | % |  | 73.87 | % |
Residential | 465,772 |  |  | 6,438 |  |  | 5,453 |  |  | 1.38 | % |  | 84.70 | % |  | 457,768 |  |  | 6,258 |  |  | 5,578 |  |  | 1.37 | % |  | 89.13 | % |  | 248,153 |  |  | 7,738 |  |  | 1,912 |  |  | 3.12 | % |  | 24.71 | % |
Manufactured housing | 46,990 |  |  | 2,584 |  |  | 4,482 |  |  | 5.50 | % |  | 173.45 | % |  | 48,570 |  |  | 3,071 |  |  | 4,080 |  |  | 6.32 | % |  | 132.86 | % |  | 55,635 |  |  | 3,520 |  |  | 4,410 |  |  | 6.33 | % |  | 125.28 | % |
Installment | 1,397,895 |  |  | 6,848 |  |  | 71,721 |  |  | 0.49 | % |  | 1047.33 | % |  | 1,901,070 |  |  | 5,965 |  |  | 111,222 |  |  | 0.31 | % |  | 1864.58 | % |  | 1,624,415 |  |  | 3,544 |  |  | 98,039 |  |  | 0.22 | % |  | 2766.34 | % |
Total consumer loans receivable | 1,910,657 |  |  | 15,870 |  |  | 81,656 |  |  | 0.83 | % |  | 514.53 | % |  | 2,407,408 |  |  | 15,294 |  |  | 120,880 |  |  | 0.64 | % |  | 790.38 | % |  | 1,928,203 |  |  | 14,802 |  |  | 104,361 |  |  | 0.77 | % |  | 705.05 | % |
Loans and leases receivable (1) | 12,607,742 |  |  | 23,304 |  |  | 130,197 |  |  | 0.18 | % |  | 558.69 | % |  | 12,212,995 |  |  | 23,421 |  |  | 156,530 |  |  | 0.19 | % |  | 668.33 | % |  | 7,970,599 |  |  | 51,534 |  |  | 131,496 |  |  | 0.65 | % |  | 255.16 | % |
Loans receivable, PPP | 1,154,632 |  |  | — |  |  | — |  |  | — | % |  | — | % |  | 1,570,160 |  |  | — |  |  | — |  |  | — | % |  | — | % |  | 4,957,357 |  |  | — |  |  | — |  |  | — | % |  | — | % |
Loans receivable, mortgage warehouse, at fair value | 1,569,090 |  |  | — |  |  | — |  |  | — | % |  | — | % |  | 1,874,603 |  |  | — |  |  | — |  |  | — | % |  | — | % |  | 2,557,624 |  |  | — |  |  | — |  |  | — | % |  | — | % |
Total loans held for sale | 5,224 |  |  | 4,615 |  |  | — |  |  | 88.34 | % |  | — | % |  | 6,595 |  |  | 4,643 |  |  | — |  |  | 70.40 | % |  | — | % |  | 29,957 |  |  | 507 |  |  | — |  |  | 1.69 | % |  | — | % |
Total portfolio | $ | 15,336,688 |  |  | $ | 27,919 |  |  | $ | 130,197 |  |  | 0.18 | % |  | 466.34 | % |  | $ | 15,664,353 |  |  | $ | 28,064 |  |  | $ | 156,530 |  |  | 0.18 | % |  | 557.76 | % |  | $ | 15,515,537 |  |  | $ | 52,041 |  |  | $ | 131,496 |  |  | 0.34 | % |  | 252.68 | % |

(1) Excluding loans receivable, PPP from total loans and leases receivable is a non-GAAP measure. Management believes the use of these non-GAAP measures provides additional clarity when assessing Customers' financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. Please refer to the reconciliation schedules that follow this table.
21

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NET CHARGE-OFFS/(RECOVERIES) - UNAUDITED
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |
| Q3 |  | Q2 |  | Q1 |  | Q4 |  | Q3 |  | Nine Months Ended September 30,
| 2022 |  | 2022 |  | 2022 |  | 2021 |  | 2021 |  | 2022 |  | 2021
Loan type |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & industrial, including specialty lending | $ | 2,581 |  |  | $ | (416) |  |  | $ | (59) |  |  | $ | 240 |  |  | $ | 116 |  |  | $ | 2,106 |  |  | $ | 208 |
Multi-family | — |  |  | 1,990 |  |  | (337) |  |  | — |  |  | — |  |  | 1,653 |  |  | 1,132 |
Commercial real estate owner occupied | — |  |  | (42) |  |  | (7) |  |  | 66 |  |  | 50 |  |  | (49) |  |  | 183 |
Commercial real estate non-owner occupied | 4,831 |  |  | 159 |  |  | (8) |  |  | (14) |  |  | 943 |  |  | 4,982 |  |  | 874 |
Construction | (10) |  |  | (103) |  |  | (113) |  |  | (3) |  |  | (3) |  |  | (226) |  |  | (122) |
Residential | (13) |  |  | (39) |  |  | (2) |  |  | (6) |  |  | 54 |  |  | (54) |  |  | 82 |
Installment | 11,109 |  |  | 11,932 |  |  | 7,752 |  |  | 7,299 |  |  | 5,944 |  |  | 30,793 |  |  | 23,859 |
Total net charge-offs (recoveries) from loans held for investment | $ | 18,498 |  |  | $ | 13,481 |  |  | $ | 7,226 |  |  | $ | 7,582 |  |  | $ | 7,104 |  |  | $ | 39,205 |  |  | $ | 26,216 |

22

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED

We believe that the non-GAAP measurements disclosed within this document are useful for investors, regulators, management and others to evaluate our core results of operations and financial condition relative to other financial institutions. These non-GAAP financial measures are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. These non-GAAP financial measures exclude from corresponding GAAP measures the impact of certain elements that we do not believe are representative of our ongoing financial results, which we believe enhance an overall understanding of our performance and increases comparability of our period to period results. Investors should consider our performance and financial condition as reported under GAAP and all other relevant information when assessing our performance or financial condition. The non-GAAP measures presented are not necessarily comparable to non-GAAP measures that may be presented by other financial institutions. Although non-GAAP financial measures are frequently used in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results of operations or financial condition as reported under GAAP.
The following tables present reconciliations of GAAP to non-GAAP measures disclosed within this document.

Core Earnings - Customers Bancorp |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
(Dollars in thousands except per share data) | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share
GAAP net income to common shareholders | $ | 61,364 |  | $ | 1.85 |  |  | $ | 56,519 |  | $ | 1.68 |  |  | $ | 74,896 |  | $ | 2.18 |  |  | $ | 98,647 |  | $ | 2.87 |  |  | $ | 110,241 |  | $ | 3.25 |  |  | $ | 192,779 |  | $ | 5.72 |  |  | $ | 201,487 |  | $ | 6.02 |
Reconciling items (after tax): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss from discontinued operations | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 1,585 |  | 0.05 |  |  | — |  | — |  |  | — |  | — |  |  | 38,036 |  | 1.14 |
Severance expense | 1,058 |  | 0.03 |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 1,058 |  | 0.03 |  |  | 1,517 |  | 0.05 |
Impairments on fixed assets and leases | 126 |  | 0.00 |  |  | 705 |  | 0.02 |  |  | 220 |  | 0.01 |  |  | 1,118 |  | 0.03 |  |  | — |  | — |  |  | 1,051 |  | 0.03 |  |  | — |  | — |
Merger and acquisition related expenses | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 320 |  | 0.01 |
Loss on sale of consumer installment loans | 18,221 |  | 0.55 |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 18,221 |  | 0.54 |  |  | — |  | — |
Legal reserves | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 897 |  | 0.03 |  |  | — |  | — |  |  | 897 |  | 0.03 |
(Gains) losses on investment securities | 1,859 |  | 0.06 |  |  | 2,494 |  | 0.07 |  |  | 1,030 |  | 0.03 |  | 43 |  | 0.00 |  |  | (4,591) |  | (0.14) |  |  | 5,383 |  | 0.16 |  |  | (26,058) |  | (0.78) |
Loss on sale of foreign subsidiaries | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 2,150 |  | 0.06 |
Loss on cash flow hedge derivative terminations | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 18,716 |  | 0.56 |
Derivative credit valuation adjustment | (358) |  | (0.01) |  |  | (351) |  | (0.01) |  |  | (736) |  | (0.02) |  |  | (180) |  | (0.01) |  |  | (198) |  | (0.01) |  |  | (1,445) |  | (0.04) |  |  | (1,105) |  | (0.03) |
Deposit relationship adjustment fees | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 4,707 |  | 0.14 |  |  | — |  | — |  |  | 4,707 |  | 0.14 |
Loss on redemption of preferred stock | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 2,820 |  | 0.08 |  |  | — |  | — |  |  | 2,820 |  | 0.08 |
Core earnings | $ | 82,270 |  | $ | 2.48 |  |  | $ | 59,367 |  | $ | 1.77 |  |  | $ | 75,410 |  | $ | 2.20 |  |  | $ | 101,213 |  | $ | 2.95 |  |  | $ | 113,876 |  | $ | 3.36 |  |  | $ | 217,047 |  | $ | 6.44 |  |  | $ | 243,487 |  | $ | 7.27 |

23

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Core Earnings, excluding PPP - Customers Bancorp |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
(Dollars in thousands except per share data) | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share |  | USD | Per share
GAAP net income to common shareholders | $ | 61,364 |  | $ | 1.85 |  |  | $ | 56,519 |  | $ | 1.68 |  |  | $ | 74,896 |  | $ | 2.18 |  |  | $ | 98,647 |  | $ | 2.87 |  |  | $ | 110,241 |  | $ | 3.25 |  |  | $ | 192,779 |  | $ | 5.72 |  |  | $ | 201,487 |  | $ | 6.02 |
Less: PPP net income (after tax) | 5,846 |  | 0.18 |  |  | 13,066 |  | 0.39 |  |  | 24,713 |  | 0.72 |  |  | 64,323 |  | 1.87 |  |  | 81,337 |  | 2.40 |  |  | 43,625 |  | 1.29 |  |  | 130,728 |  | 3.90 |
Net income to common shareholders, excluding PPP | 55,518 |  | 1.67 |  |  | 43,453 |  | 1.29 |  |  | 50,183 |  | 1.46 |  |  | 34,324 |  | 1.00 |  |  | 28,904 |  | 0.85 |  |  | 149,154 |  | 4.43 |  |  | 70,759 |  | 2.11 |
Reconciling items (after tax): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss from discontinued operations | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 1,585 |  | 0.05 |  |  | — |  | — |  |  | — |  | — |  |  | 38,036 |  | 1.14 |
Severance expense | 1,058 |  | 0.03 |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 1,058 |  | 0.03 |  |  | 1,517 |  | 0.05 |
Impairments on fixed assets and leases | 126 |  | 0.00 |  |  | 705 |  | 0.02 |  |  | 220 |  | 0.01 |  |  | 1,118 |  | 0.03 |  |  | — |  | — |  |  | 1,051 |  | 0.03 |  |  | — |  | — |
Merger and acquisition related expenses | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 320 |  | 0.01 |
Loss on sale of consumer installment loans | 18,221 |  | 0.55 |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 18,221 |  | 0.54 |  |  | — |  | — |
Legal reserves | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 897 |  | 0.03 |  |  | — |  | — |  |  | 897 |  | 0.03 |
(Gains) losses on investment securities | 1,859 |  | 0.06 |  |  | 2,494 |  | 0.07 |  | 1,030 |  | 0.03 |  | 43 |  | 0.00 |  |  | (4,591) |  | (0.14) |  |  | 5,383 |  | 0.16 |  |  | (26,058) |  | (0.78) |
Loss on sale of foreign subsidiaries | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 2,150 |  | 0.06 |
Loss on cash flow hedge derivative terminations | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 18,716 |  | 0.56 |
Derivative credit valuation adjustment | (358) |  | (0.01) |  |  | (351) |  | (0.01) |  |  | (736) |  | (0.02) |  |  | (180) |  | (0.01) |  |  | (198) |  | (0.01) |  |  | (1,445) |  | (0.04) |  |  | (1,105) |  | (0.03) |
Deposit relationship adjustment fees | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 4,707 |  | 0.14 |  |  | — |  | — |  |  | 4,707 |  | 0.14 |
Loss on redemption of preferred stock | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | — |  | — |  |  | 2,820 |  | 0.08 |  |  | — |  | — |  |  | 2,820 |  | 0.08 |
Core earnings, excluding PPP | $ | 76,424 |  | $ | 2.30 |  |  | $ | 46,301 |  | $ | 1.38 |  |  | $ | 50,697 |  | $ | 1.48 |  |  | $ | 36,890 |  | $ | 1.07 |  |  | $ | 32,539 |  | $ | 0.96 |  |  | $ | 173,422 |  | $ | 5.15 |  |  | $ | 112,759 |  | $ | 3.37 |

24

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Core Return on Average Assets - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net income | $ | 63,912 |  |  | $ | 58,650 |  |  | $ | 76,761 |  |  | $ | 100,669 |  |  | $ | 116,042 |  |  | $ | 199,323 |  |  | $ | 213,978 |
Reconciling items (after tax): |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss from discontinued operations | — |  |  | — |  |  | — |  |  | 1,585 |  |  | — |  |  | — |  |  | 38,036 |
Severance expense | 1,058 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,058 |  |  | 1,517 |
Impairments on fixed assets and leases | 126 |  |  | 705 |  |  | 220 |  |  | 1,118 |  |  | — |  |  | 1,051 |  |  | — |
Merger and acquisition related expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 320 |
Loss on sale of consumer installment loans | 18,221 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,221 |  |  | — |
Legal reserves | — |  |  | — |  |  | — |  |  | — |  |  | 897 |  |  | — |  |  | 897 |
(Gains) losses on investment securities | 1,859 |  |  | 2,494 |  |  | 1,030 |  |  | 43 |  |  | (4,591) |  |  | 5,383 |  |  | (26,058) |
Loss on sale of foreign subsidiaries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,150 |
Loss on cash flow hedge derivative terminations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,716 |
Derivative credit valuation adjustment | (358) |  |  | (351) |  |  | (736) |  |  | (180) |  |  | (198) |  |  | (1,445) |  |  | (1,105) |
Deposit relationship adjustment fees | — |  |  | — |  |  | — |  |  | — |  |  | 4,707 |  |  | — |  |  | 4,707 |
Core net income | $ | 84,818 |  |  | $ | 61,498 |  |  | $ | 77,275 |  |  | $ | 103,235 |  |  | $ | 116,857 |  |  | $ | 223,591 |  |  | $ | 253,158 |
Average total assets | $ | 20,514,366 |  |  | $ | 20,056,020 |  |  | $ | 19,129,330 |  |  | $ | 19,214,241 |  |  | $ | 19,739,340 |  |  | $ | 19,904,979 |  |  | $ | 19,195,114 |
Core return on average assets | 1.64 | % |  | 1.23 | % |  | 1.64 | % |  | 2.13 | % |  | 2.35 | % |  | 1.50 | % |  | 1.76 | %

Adjusted Net Income and Adjusted ROAA - Pre-Tax Pre-Provision - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net income | $ | 63,912 |  |  | $ | 58,650 |  |  | $ | 76,761 |  |  | $ | 100,669 |  |  | $ | 116,042 |  |  | $ | 199,323 |  |  | $ | 213,978 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |
Income tax expense | 17,899 |  |  | 18,896 |  |  | 19,332 |  |  | 12,993 |  |  | 36,263 |  |  | 56,127 |  |  | 73,947 |
Provision (benefit) for credit losses | (7,994) |  |  | 23,847 |  |  | 15,997 |  |  | 13,890 |  |  | 13,164 |  |  | 31,850 |  |  | 13,536 |
Provision (benefit) for credit losses on unfunded commitments | 254 |  |  | 608 |  |  | (109) |  |  | 352 |  |  | 669 |  |  | 753 |  |  | (572) |
Severance expense | 1,363 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,363 |  |  | 2,004 |
Net loss from discontinued operations | — |  |  | — |  |  | — |  |  | 1,585 |  |  | — |  |  | — |  |  | 38,036 |
Impairments on fixed assets and leases | 162 |  |  | 914 |  |  | 286 |  |  | 1,260 |  |  | — |  |  | 1,362 |  |  | — |
Merger and acquisition related expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 418 |
Loss on sale of consumer installment loans | 23,465 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 23,465 |  |  | — |
Legal reserves | — |  |  | — |  |  | — |  |  | — |  |  | 1,185 |  |  | — |  |  | 1,185 |
(Gains) losses on investment securities | 2,394 |  |  | 3,232 |  |  | 1,339 |  |  | 49 |  |  | (6,063) |  |  | 6,965 |  |  | (34,161) |
Loss on sale of foreign subsidiaries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,840 |
Loss on cash flow hedge derivative terminations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 24,467 |
Derivative credit valuation adjustment | (461) |  |  | (455) |  |  | (957) |  |  | (203) |  |  | (261) |  |  | (1,873) |  |  | (1,443) |
Deposit relationship adjustment fees | — |  |  | — |  |  | — |  |  | — |  |  | 6,216 |  |  | — |  |  | 6,216 |
Adjusted net income - pre-tax pre-provision | $ | 100,994 |  |  | $ | 105,692 |  |  | $ | 112,649 |  |  | $ | 130,595 |  |  | $ | 167,215 |  |  | $ | 319,335 |  |  | $ | 340,451 |
Average total assets | $ | 20,514,366 |  |  | $ | 20,056,020 |  |  | $ | 19,129,330 |  |  | $ | 19,214,241 |  |  | $ | 19,739,340 |  |  | $ | 19,904,979 |  |  | $ | 19,195,114 |
Adjusted ROAA - pre-tax pre-provision | 1.95 | % |  | 2.11 | % |  | 2.39 | % |  | 2.70 | % |  | 3.36 | % |  | 2.14 | % |  | 2.37 | %

25

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Core Return on Average Common Equity - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net income to common shareholders | $ | 61,364 |  |  | $ | 56,519 |  |  | $ | 74,896 |  |  | $ | 98,647 |  |  | $ | 110,241 |  |  | $ | 192,779 |  |  | $ | 201,487 |
Reconciling items (after tax): |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss from discontinued operations | — |  |  | — |  |  | — |  |  | 1,585 |  |  | — |  |  | — |  |  | 38,036 |
Severance expense | 1,058 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,058 |  |  | 1,517 |
Impairments on fixed assets and leases | 126 |  |  | 705 |  |  | 220 |  |  | 1,118 |  |  | — |  |  | 1,051 |  |  | — |
Merger and acquisition related expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 320 |
Loss on sale of consumer installment loans | 18,221 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,221 |  |  | — |
Legal reserves | — |  |  | — |  |  | — |  |  | — |  |  | 897 |  |  | — |  |  | 897 |
(Gains) losses on investment securities | 1,859 |  |  | 2,494 |  |  | 1,030 |  |  | 43 |  |  | (4,591) |  |  | 5,383 |  |  | (26,058) |
Loss on sale of foreign subsidiaries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,150 |
Loss on cash flow hedge derivative terminations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18,716 |
Derivative credit valuation adjustment | (358) |  |  | (351) |  |  | (736) |  |  | (180) |  |  | (198) |  |  | (1,445) |  |  | (1,105) |
Deposit relationship adjustment fees | — |  |  | — |  |  | — |  |  | — |  |  | 4,707 |  |  | — |  |  | 4,707 |
Loss on redemption of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | 2,820 |  |  | — |  |  | 2,820 |
Core earnings | $ | 82,270 |  |  | $ | 59,367 |  |  | $ | 75,410 |  |  | $ | 101,213 |  |  | $ | 113,876 |  |  | $ | 217,047 |  |  | $ | 243,487 |
Average total common shareholders' equity | $ | 1,259,711 |  |  | $ | 1,244,819 |  |  | $ | 1,252,022 |  |  | $ | 1,179,478 |  |  | $ | 1,071,566 |  |  | $ | 1,252,212 |  |  | $ | 998,221 |
Core return on average common equity | 25.91 | % |  | 19.13 | % |  | 24.43 | % |  | 34.04 | % |  | 42.16 | % |  | 23.17 | % |  | 32.61 | %

Adjusted ROCE - Pre-Tax Pre-Provision - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net income to common shareholders | $ | 61,364 |  |  | $ | 56,519 |  |  | $ | 74,896 |  |  | $ | 98,647 |  |  | $ | 110,241 |  |  | $ | 192,779 |  |  | $ | 201,487 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |
Income tax expense | 17,899 |  |  | 18,896 |  |  | 19,332 |  |  | 12,993 |  |  | 36,263 |  |  | 56,127 |  |  | 73,947 |
Provision (benefit) for credit losses | (7,994) |  |  | 23,847 |  |  | 15,997 |  |  | 13,890 |  |  | 13,164 |  |  | 31,850 |  |  | 13,536 |
Provision (benefit) for credit losses on unfunded commitments | 254 |  |  | 608 |  |  | (109) |  |  | 352 |  |  | 669 |  |  | 753 |  |  | (572) |
Net loss from discontinued operations | — |  |  | — |  |  | — |  |  | 1,585 |  |  | — |  |  | — |  |  | 38,036 |
Severance expense | 1,363 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,363 |  |  | 2,004 |
Impairments on fixed assets and leases | 162 |  |  | 914 |  |  | 286 |  |  | 1,260 |  |  | — |  |  | 1,362 |  |  | — |
Merger and acquisition related expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 418 |
Loss on sale of consumer installment loans | 23,465 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 23,465 |  |  | — |
Legal reserves | — |  |  | — |  |  | — |  |  | — |  |  | 1,185 |  |  | — |  |  | 1,185 |
(Gains) losses on investment securities | 2,394 |  |  | 3,232 |  |  | 1,339 |  |  | 49 |  |  | (6,063) |  |  | 6,965 |  |  | (34,161) |
Loss on sale of foreign subsidiaries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,840 |
Loss on cash flow hedge derivative terminations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 24,467 |
Derivative credit valuation adjustment | (461) |  |  | (455) |  |  | (957) |  |  | (203) |  |  | (261) |  |  | (1,873) |  |  | (1,443) |
Deposit relationship adjustment fees | — |  |  | — |  |  | — |  |  | — |  |  | 6,216 |  |  | — |  |  | 6,216 |
Loss on redemption of preferred stock | — |  |  | — |  |  | — |  |  | — |  |  | 2,820 |  |  | — |  |  | 2,820 |
Pre-tax pre-provision adjusted net income available to common shareholders | $ | 98,446 |  |  | $ | 103,561 |  |  | $ | 110,784 |  |  | $ | 128,573 |  |  | $ | 164,234 |  |  | $ | 312,791 |  |  | $ | 330,780 |
Average total common shareholders' equity | $ | 1,259,711 |  |  | $ | 1,244,819 |  |  | $ | 1,252,022 |  |  | $ | 1,179,478 |  |  | $ | 1,071,566 |  |  | $ | 1,252,212 |  |  | $ | 998,221 |
Adjusted ROCE - pre-tax pre-provision | 31.01 | % |  | 33.37 | % |  | 35.89 | % |  | 43.25 | % |  | 60.81 | % |  | 33.40 | % |  | 44.30 | %

26

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Net Interest Margin, Tax Equivalent - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net interest income | $ | 159,032 |  |  | $ | 164,852 |  |  | $ | 164,699 |  |  | $ | 193,694 |  |  | $ | 219,892 |  |  | $ | 488,583 |  |  | $ | 491,380 |
Tax-equivalent adjustment | 334 |  |  | 270 |  |  | 239 |  |  | 276 |  |  | 290 |  |  | 843 |  |  | 871 |
Net interest income tax equivalent | $ | 159,366 |  |  | $ | 165,122 |  |  | $ | 164,938 |  |  | $ | 193,970 |  |  | $ | 220,182 |  |  | $ | 489,426 |  |  | $ | 492,251 |
Average total interest earning assets | $ | 20,021,455 |  |  | $ | 19,525,936 |  |  | $ | 18,572,308 |  |  | $ | 18,576,433 |  |  | $ | 19,033,826 |  |  | $ | 19,378,542 |  |  | $ | 18,562,912 |
Net interest margin, tax equivalent | 3.16 | % |  | 3.39 | % |  | 3.60 | % |  | 4.14 | % |  | 4.59 | % |  | 3.38 | % |  | 3.55 | %

Net Interest Margin, Tax Equivalent, excluding PPP - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net interest income | $ | 159,032 |  |  | $ | 164,852 |  |  | $ | 164,699 |  |  | $ | 193,694 |  |  | $ | 219,892 |  |  | $ | 488,583 |  |  | $ | 491,380 |
PPP net interest income | (9,632) |  |  | (18,946) |  |  | (34,615) |  |  | (78,647) |  |  | (112,005) |  |  | (63,193) |  |  | (182,632) |
Tax-equivalent adjustment | 334 |  |  | 270 |  |  | 239 |  |  | 276 |  |  | 290 |  |  | 843 |  |  | 871 |
Net interest income, tax equivalent, excluding PPP | $ | 149,734 |  |  | $ | 146,176 |  |  | $ | 130,323 |  |  | $ | 115,323 |  |  | $ | 108,177 |  |  | $ | 426,233 |  |  | $ | 309,619 |
GAAP average total interest earning assets | $ | 20,021,455 |  |  | $ | 19,525,936 |  |  | $ | 18,572,308 |  |  | $ | 18,576,433 |  |  | $ | 19,033,826 |  |  | $ | 19,378,542 |  |  | $ | 18,562,912 |
Average PPP loans | (1,349,403) |  |  | (1,863,429) |  |  | (2,641,318) |  |  | (3,898,607) |  |  | (5,778,367) |  |  | (1,946,651) |  |  | (5,515,819) |
Adjusted average total interest earning assets | $ | 18,672,052 |  |  | $ | 17,662,507 |  |  | $ | 15,930,990 |  |  | $ | 14,677,826 |  |  | $ | 13,255,459 |  |  | $ | 17,431,891 |  |  | $ | 13,047,093 |
Net interest margin, tax equivalent, excluding PPP | 3.18 | % |  | 3.32 | % |  | 3.32 | % |  | 3.12 | % |  | 3.24 | % |  | 3.27 | % |  | 3.17 | %

Loan Yield, excluding PPP |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
Interest income on loans and leases | $ | 200,457 |  |  | $ | 168,941 |  |  | $ | 157,175 |  |  | $ | 198,000 |  |  | $ | 233,097 |  |  | $ | 526,573 |  |  | $ | 538,822 |
PPP interest income | (14,666) |  |  | (20,572) |  |  | (36,894) |  |  | (82,086) |  |  | (117,102) |  |  | (72,132) |  |  | (197,071) |
Interest income on core loans (Loans and leases, excluding PPP) | $ | 185,791 |  |  | $ | 148,369 |  |  | $ | 120,281 |  |  | $ | 115,914 |  |  | $ | 115,995 |  |  | $ | 454,441 |  |  | $ | 341,751 |
Average total loans and leases | $ | 15,653,983 |  |  | $ | 14,918,498 |  |  | $ | 13,656,991 |  |  | $ | 14,335,370 |  |  | $ | 16,192,744 |  |  | $ | 14,750,473 |  |  | $ | 16,004,714 |
Average PPP loans | (1,349,403) |  |  | (1,863,429) |  |  | (2,641,318) |  |  | (3,898,607) |  |  | (5,778,367) |  |  | (1,946,651) |  |  | (5,515,819) |
Adjusted average total loans and leases | $ | 14,304,580 |  |  | $ | 13,055,069 |  |  | $ | 11,015,673 |  |  | $ | 10,436,763 |  |  | $ | 10,414,377 |  |  | $ | 12,803,822 |  |  | $ | 10,488,895 |
Loan yield, excluding PPP | 5.15 | % |  | 4.56 | % |  | 4.43 | % |  | 4.41 | % |  | 4.42 | % |  | 4.75 | % |  | 4.36 | %

27

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Core Efficiency Ratio - Customers Bancorp |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30,
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  | 2022 |  | 2021
GAAP net interest income | $ | 159,032 |  |  | $ | 164,852 |  |  | $ | 164,699 |  |  | $ | 193,694 |  |  | $ | 219,892 |  |  | $ | 488,583 |  |  | $ | 491,380 |
GAAP non-interest income | $ | (9,017) |  |  | $ | 12,746 |  |  | $ | 21,198 |  |  | $ | 16,991 |  |  | $ | 25,586 |  |  | $ | 24,927 |  |  | $ | 60,876 |
Loss on sale of consumer installment loans | 23,465 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 23,465 |  |  | — |
(Gains) losses on investment securities | 2,394 |  |  | 3,232 |  |  | 1,339 |  |  | 49 |  |  | (6,063) |  |  | 6,965 |  |  | (34,161) |
Derivative credit valuation adjustment | (461) |  |  | (455) |  |  | (957) |  |  | (203) |  |  | (261) |  |  | (1,873) |  |  | (1,443) |
Loss on cash flow hedge derivative terminations | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 24,467 |
Loss on sale of foreign subsidiaries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,840 |
Core non-interest income | 16,381 |  |  | 15,523 |  |  | 21,580 |  |  | 16,837 |  |  | 19,262 |  |  | 53,484 |  |  | 52,579 |
Core revenue | $ | 175,413 |  |  | $ | 180,375 |  |  | $ | 186,279 |  |  | $ | 210,531 |  |  | $ | 239,154 |  |  | $ | 542,067 |  |  | $ | 543,959 |
GAAP non-interest expense | $ | 76,198 |  |  | $ | 76,205 |  |  | $ | 73,807 |  |  | $ | 81,548 |  |  | $ | 80,009 |  |  | $ | 226,210 |  |  | $ | 212,759 |
Severance expense | (1,363) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (1,363) |  |  | (2,004) |
Impairments on fixed assets and leases | (162) |  |  | (914) |  |  | (286) |  |  | (1,260) |  |  | — |  |  | (1,362) |  |  | — |
Legal reserves | — |  |  | — |  |  | — |  |  | — |  |  | (1,185) |  |  | — |  |  | (1,185) |
Merger and acquisition related expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (418) |
Deposit relationship adjustment fees | — |  |  | — |  |  | — |  |  | — |  |  | (6,216) |  |  | — |  |  | (6,216) |
Core non-interest expense | $ | 74,673 |  |  | $ | 75,291 |  |  | $ | 73,521 |  |  | $ | 80,288 |  |  | $ | 72,608 |  |  | $ | 223,485 |  |  | $ | 202,936 |
Core efficiency ratio (1) | 42.57 | % |  | 41.74 | % |  | 39.47 | % |  | 38.14 | % |  | 30.36 | % |  | 41.23 | % |  | 37.31 | %

(1) Core efficiency ratio calculated as core non-interest expense divided by core revenue.

Tangible Common Equity to Tangible Assets - Customers Bancorp |  |  |  |  |  |  |  |  |
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021
GAAP total shareholders' equity | $ | 1,386,931 |  |  | $ | 1,353,390 |  |  | $ | 1,377,406 |  |  | $ | 1,366,217 |  |  | $ | 1,284,299 |
Reconciling items: |  |  |  |  |  |  |  |  |
Preferred stock | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  | (137,794) |
Goodwill and other intangibles | (3,629) |  |  | (3,629) |  |  | (3,678) |  |  | (3,736) |  |  | (3,794) |
Tangible common equity | $ | 1,245,508 |  |  | $ | 1,211,967 |  |  | $ | 1,235,934 |  |  | $ | 1,224,687 |  |  | $ | 1,142,711 |
GAAP total assets | $ | 20,367,621 |  |  | $ | 20,251,996 |  |  | $ | 19,163,708 |  |  | $ | 19,575,028 |  |  | $ | 19,108,922 |
Reconciling items: |  |  |  |  |  |  |  |  |
Goodwill and other intangibles | (3,629) |  |  | (3,629) |  |  | (3,678) |  |  | (3,736) |  |  | (3,794) |
Tangible assets | $ | 20,363,992 |  |  | $ | 20,248,367 |  |  | $ | 19,160,030 |  |  | $ | 19,571,292 |  |  | $ | 19,105,128 |
Tangible common equity to tangible assets | 6.12 | % |  | 5.99 | % |  | 6.45 | % |  | 6.26 | % |  | 5.98 | %

28

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Tangible Common Equity to Tangible Assets, excluding PPP - Customers Bancorp |  |  |  |  |  |  |  |  |
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021
GAAP total shareholders' equity | $ | 1,386,931 |  |  | $ | 1,353,390 |  |  | $ | 1,377,406 |  |  | $ | 1,366,217 |  |  | $ | 1,284,299 |
Reconciling items: |  |  |  |  |  |  |  |  |
Preferred stock | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  | (137,794) |
Goodwill and other intangibles | (3,629) |  |  | (3,629) |  |  | (3,678) |  |  | (3,736) |  |  | (3,794) |
Tangible common equity | $ | 1,245,508 |  |  | $ | 1,211,967 |  |  | $ | 1,235,934 |  |  | $ | 1,224,687 |  |  | $ | 1,142,711 |
GAAP total assets | $ | 20,367,621 |  |  | $ | 20,251,996 |  |  | $ | 19,163,708 |  |  | $ | 19,575,028 |  |  | $ | 19,108,922 |
Loans receivable, PPP | (1,154,632) |  |  | (1,570,160) |  |  | (2,195,902) |  |  | (3,250,008) |  |  | (4,957,357) |
Total assets, excluding PPP | $ | 19,212,989 |  |  | $ | 18,681,836 |  |  | $ | 16,967,806 |  |  | $ | 16,325,020 |  |  | $ | 14,151,565 |
Reconciling items: |  |  |  |  |  |  |  |  |
Goodwill and other intangibles | (3,629) |  |  | (3,629) |  |  | (3,678) |  |  | (3,736) |  |  | (3,794) |
Tangible assets, excluding PPP | $ | 19,209,360 |  |  | $ | 18,678,207 |  |  | $ | 16,964,128 |  |  | $ | 16,321,284 |  |  | $ | 14,147,771 |
Tangible common equity to tangible assets, excluding PPP | 6.48 | % |  | 6.49 | % |  | 7.29 | % |  | 7.50 | % |  | 8.08 | %

Tangible Book Value per Common Share - Customers Bancorp |  |  |  |  |  |  |  |  |  |  |
(Dollars in thousands except share and per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021 |  |  |  |
GAAP total shareholders' equity | $ | 1,386,931 |  |  | $ | 1,353,390 |  |  | $ | 1,377,406 |  |  | $ | 1,366,217 |  |  | $ | 1,284,299 |  |  |  |  |
Reconciling Items: |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  | (137,794) |  |  |  |  |
Goodwill and other intangibles | (3,629) |  |  | (3,629) |  |  | (3,678) |  |  | (3,736) |  |  | (3,794) |  |  |  |  |
Tangible common equity | $ | 1,245,508 |  |  | $ | 1,211,967 |  |  | $ | 1,235,934 |  |  | $ | 1,224,687 |  |  | $ | 1,142,711 |  |  |  |  |
Common shares outstanding | 32,475,502 |  |  | 32,449,486 |  |  | 32,957,847 |  |  | 32,913,267 |  |  | 32,537,976 |  |  |  |  |
Tangible book value per common share | $ | 38.35 |  |  | $ | 37.35 |  |  | $ | 37.50 |  |  | $ | 37.21 |  |  | $ | 35.12 |  |  |  |  |

Core Loans (Total Loans and Leases, excluding PPP) |  |  |  |  |  |  |  |  |
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021
Total loans and leases | $ | 15,336,688 |  |  | $ | 15,664,353 |  |  | $ | 14,073,518 |  |  | $ | 14,568,885 |  |  | $ | 15,515,537 |
Loans receivable, PPP | (1,154,632) |  |  | (1,570,160) |  |  | (2,195,902) |  |  | (3,250,008) |  |  | (4,957,357) |
Core Loans (Loans and leases, excluding PPP) | $ | 14,182,056 |  |  | $ | 14,094,193 |  |  | $ | 11,877,616 |  |  | $ | 11,318,877 |  |  | $ | 10,558,180 |

Total loans and leases, excluding loans to mortgage companies and PPP |  |  |  |  |  |  |  |  |
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021
Total loans and leases | $ | 15,336,688 |  |  | $ | 15,664,353 |  |  | $ | 14,073,518 |  |  | $ | 14,568,885 |  |  | $ | 15,515,537 |
Loans to mortgage companies | (1,708,587) |  |  | (1,975,189) |  |  | (1,830,121) |  |  | (2,362,438) |  |  | (2,626,483) |
Loans receivable, PPP | (1,154,632) |  |  | (1,570,160) |  |  | (2,195,902) |  |  | (3,250,008) |  |  | (4,957,357) |
Total loans and leases, excluding loans to mortgage companies and PPP | $ | 12,473,469 |  |  | $ | 12,119,004 |  |  | $ | 10,047,495 |  |  | $ | 8,956,439 |  |  | $ | 7,931,697 |

Total Assets, excluding PPP |  |  |  |  |  |  |  |  |
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021
Total assets | $ | 20,367,621 |  |  | $ | 20,251,996 |  |  | $ | 19,163,708 |  |  | $ | 19,575,028 |  |  | $ | 19,108,922 |
Loans receivable, PPP | (1,154,632) |  |  | (1,570,160) |  |  | (2,195,902) |  |  | (3,250,008) |  |  | (4,957,357) |
Total assets, excluding PPP | $ | 19,212,989 |  |  | $ | 18,681,836 |  |  | $ | 16,967,806 |  |  | $ | 16,325,020 |  |  | $ | 14,151,565 |

29

CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP MEASURES - UNAUDITED (CONTINUED)
(Dollars in thousands, except per share data)

Coverage of credit loss reserves for loans and leases held for investment, excluding PPP |  |  |  |  |  |  |  |  |
(Dollars in thousands except per share data) | Q3 2022 |  | Q2 2022 |  | Q1 2022 |  | Q4 2021 |  | Q3 2021
Loans and leases receivable | $ | 13,762,374 |  |  | $ | 13,783,155 |  |  | $ | 12,314,757 |  |  | $ | 12,268,306 |  |  | $ | 12,927,956 |
Loans receivable, PPP | (1,154,632) |  |  | (1,570,160) |  |  | (2,195,902) |  |  | (3,250,008) |  |  | (4,957,357) |
Loans and leases held for investment, excluding PPP | $ | 12,607,742 |  |  | $ | 12,212,995 |  |  | $ | 10,118,855 |  |  | $ | 9,018,298 |  |  | $ | 7,970,599 |
Allowance for credit losses on loans and leases | $ | 130,197 |  |  | $ | 156,530 |  |  | $ | 145,847 |  |  | $ | 137,804 |  |  | $ | 131,496 |
Coverage of credit loss reserves for loans and leases held for investment, excluding PPP | 1.03 | % |  | 1.28 | % |  | 1.44 | % |  | 1.53 | % |  | 1.65 | %

30