WYOMISSING, Pa., May 11, 2012 /PRNewswire/ -- Customers Bancorp, Inc. today announced that it reclassified its $270 million held to maturity investment portfolio to available for sale. Due to its strong outlook for loan growth, falling interest rates and its recent decision to delay its Initial Public Offering of stock, Customers Bancorp decided to proceed with this reclassification to provide higher liquidity and free up capital to deploy into loan growth.
The reclassification will boost equity by $5.3 million and enhance tangible book value per share by $0.46 per share or 3.5% to $13.53 (diluted tangible book value per share increases by $0.45 per share to $13.20). Future changes in the value of these investments will flow through other comprehensive income which is a component of equity. Customers Bank (the "Bank") now has $372 million of available for sale securities that can be used to fund loan growth in coming quarters.
In Q1 2011, the Bank purchased $397.5 million of mortgage backed securities and classified them in the held to maturity portfolio. At the time, the Bank was flush with liquidity and was holding close to half of its balance sheet in cash. The Bank intended to hold the portfolio until maturity given the high level of liquidity, the business plan that included an expectation of economic growth with rising interest rates and an IPO in the first half of 2012 for the Company. "We believe that this step of reclassifying our held to maturity portfolio to available for sale is prudent given the changing market conditions and circumstances," stated Thomas Brugger, Chief Financial Officer of Customers Bank. "We are an innovative and very entrepreneurial low risk, but high growth bank that is striving to achieve a return on assets (ROA) in the .9% to 1.0% range and return on equity (ROE) greater than 10%," stated Jay Sidhu, Customers Bank, Chairman and CEO. "We are hopeful about reaching these goals over the next two to three quarters by continuing to generate above average growth in high quality loans, keeping expenses controlled while delivering outstanding service to our customers," Sidhu concluded.
About Customers Bancorp and Customers Bank
Customers Bancorp, Inc. (the "Bancorp") is a bank holding company based in Wyomissing, Pennsylvania. Customers Bank, a wholly-owned subsidiary of the Bancorp, is a state-chartered, full-service bank headquartered in Phoenixville, Pennsylvania. The Bank is a member of the Federal Reserve System and is insured by the Federal Deposit Insurance Corporation (FDIC). With assets of about $2.0 billion, the Bancorp provides a full range of banking services to small and medium-sized businesses, professionals, individuals and families through branch locations in Pennsylvania, New York and New Jersey. The Bank is focused on serving its targeted markets with a growth strategy that includes strategically placed branches throughout its market area and continually expanding its portfolio of loans to small businesses and consumers.
"Safe Harbor" Statement
In addition to historical information, this press release may contain "forward-looking statements" which are made in good faith by the Bancorp, pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. These forward-looking statements include statements with respect to the Bancorp's strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, and financial condition, results of operations, future performance and business. Statements preceded by, followed by or that include the words "may," "could," "should," "pro forma," "looking forward," "would," "believe," "expect," "anticipate," "estimate," "intend," "plan," or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond the Bancorp's control). Numerous competitive, economic, regulatory, legal and technological factors, among others, could cause the Bancorp's financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. The Bancorp cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact that any future events may have on the Bancorp. 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 the Bancorp's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K, as well as any changes in risk factors that may be identified in its quarterly or other reports filed with the SEC. The Bancorp does not undertake to update any forwardlooking statement whether written or oral, that may be made from time to time by the Bancorp or by or on behalf of the Bank.
SOURCE Customers Bancorp, Inc.