Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| This is the second consecutive quarter that we've been able to materially increase our CET1 ratio |
| Number four, we achieved tremendous improvement in our capital ratios |
| our healthcare business, has great opportunities that with a good pipeline building, as does our commercial finance business, colloquially known as our equipment finance business |
| And that gives us a very strong jumping off point, for next year, when you sort of think about the organic capital creation, maintaining that range and that discipline and thinking about what that means for loan growth, relative to our 75% plus or minus loan or deposit ratio |
| We've reached the range that feels like a good operating range for us |
| I'm the largest individual shareholder in the company and I'm very excited about the opportunities for us |
| I'm so pleased that our shareholders will benefit from the fact that we are running three years ahead of plan |
| And as you can imagine, the management team is very excited and we are personally supporting those efforts |
| Our platform is extremely efficient and at current levels is able to drive positive operating leverage and profitability |
| We have strong opportunities to further strengthen our deposit franchise |
| As an example, we are so proud of our team members in the Tech Inventure Banking Group that have not only met, but exceeded our expectations |
| Our loan portfolio remix is complete and we're well positioned for growth over the next year |
| And there is excellent momentum to build our client base, our brand, and generate attractive deposit and loan opportunities going forward |
| Lastly, as we look towards 2024, despite the challenges in the banking industry today, the future is very bright for Customers Bank |
| This is a testament to our strong earnings power and balance sheet discipline |
| Number three, our recurring net interest margin improvement this year is significant and sustainable |
| Number two, despite industry headwinds, we continue to materially improve the quality of our deposit franchise |
| To conclude, to wrap up, this was clearly an incredibly strong quarter |
| We look forward to providing you our financial outlook for 2024 and the new-year, but as you can imagine with the results we've achieved so far this year, we are very optimistic about our prospects in 2024 |
| And finally, we are very proud that we have already achieved our CET1 intangible book value per share targets |
| We set an ambitious goal of $6 in EPS at the beginning of this year, and I'm pleased to report that we anticipate significantly exceeding that target |
| Fourth, credit quality, which is always a key focus and part of our DNA at customer's bank remains incredibly strong |
| As Carla mentioned already, the remixing of our loan portfolios complete the transformation of our deposit franchise through taking market share due to market disruption as I described earlier, is well underway and has a fantastic runway ahead |
| Finally, we remain very optimistic about our future performance |
| We are pleased with our quarter's results and expect to significantly exceed our 2023 full-year core EPS guidance of $6 a year and report stronger core results in 2024 and beyond |
| Before going through the details, I want to reiterate that our top focus areas remain strengthening our balance sheet, improving our deposit franchise, as well as maintaining industry-leading levels of liquidity with a strong and growing capital base |
| We are firm believers that management must remain highly focused on credit risk during strong economic times, which is why we feel we are very well positioned despite the uncertain macroeconomic environment today |
| We remain extremely well positioned for the potential challenges ahead for the commercial real estate market |
| This quarter's results demonstrate the strength of our franchise with continued positive momentum across all our top financial priorities that include deposits, margin, liquidity, profitability, and capital |
| First, in terms of quarterly performance, we delivered another strong quarter that significantly exceeded street estimates across every metric based on strong underlying performance, as measured by return on assets, return on equity, margin expansion, control of our expenses |
| Statement |
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| AOCI continues to negatively impact this ratio by about 70 basis points |
| Non-performing loans ended the third quarter at $30 million, and our non-performing asset ratio was low at just 14 basis points |
| This sale led to roughly 25% lower average consumer balances quarter over quarter |
| This is in the most challenging deposit environment that the industry has seen in recent history |
| The fund finance group, to address your question specific on deposits, has seen a tremendous amount of slow but steady and granular, as well as non-interest-bearing growth that's coming not just from, sort of the new venture banking team and their associated relationships, but also from just the dislocation and the banks that have been impacted that used to cover these customers |
| I'll also highlight that our provision expense of $18 million came in at the very low end of our guidance of $18 million to $22 million per quarter |
| Loans held for investment declined modestly by about $250 million in the third quarter, with decreases in our mortgage warehouse, consumer, commercial real estate, and multifamily portfolios from clients where we did not have meaningful deposit relationships |
| So firstly, on CBIT, the balances were below our, obviously, our 15% self-imposed cap |
| While a higher for longer rate environment may continue to cause industry headwinds, we do not expect to be meaningfully impacted by such a rate outlook because of the short duration on our securities portfolio |
| So, I think you saw on the consumer side on an aggregate basis, those charge-offs actually came down by $1.1 million in the quarter |
| We can say certainly, with certainty, we are the only bank in the industry to accomplish this decline |
| obviously there was credit normalization from the, from the unsustainably low levels |
| I'm just curious, given you talked about multifamily rolling off to a degree, you guys have been pretty negative on Cree overall, which has certainly been the right call, but just thinking about plenty of room there on that side if you were interested and I imagine with others shrinking their books, there's opportunity to pick up good business |
| While the consumer charge-off ratio appears higher, the decline is skewed by the $550 million consumer loan sale we executed at the very end of the second quarter |
| And we did say as the consumer HFI portfolio continues to, to mature and decline that you'll see those kind of continue to come down on, on that trajectory over time |
| Consumer charge-off declined by about $1.1 million in the third quarter |
| So, the fourth quarter will be flattish to, potentially a slight decline, in deposit balances |
| As a result of these efforts, in spite of the Fed again increasing rates, our average cost of deposits increased by only 13 basis points in the quarter, which we believe is one of the lowest increases in the entire industry |
| These forward-looking statements are subject to a number of risk and uncertainties that may cause actual performance results to differ materially from what is currently anticipated |
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