株探米国株
英語
エドガーで原本を確認する
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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
Form 10-Q
☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2025
☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     .
001-35542
(Commission File number)

Capture.jpg

(Exact name of registrant as specified in its charter)
Customers Bancorp, Inc.

Pennsylvania   27-2290659
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)
701 Reading Avenue
West Reading, PA 19611
(Address of principal executive offices)
(610) 933-2000
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbols Name of Each Exchange on which Registered
Voting Common Stock, par value $1.00 per share CUBI New York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual
Preferred Stock, Series E, par value $1.00 per share		 CUBI/PE New York Stock Exchange
Fixed-to-Floating Rate Non-Cumulative Perpetual
Preferred Stock, Series F, par value $1.00 per share		 CUBI/PF New York Stock Exchange
5.375% Subordinated Notes due 2034 CUBB New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated Filer ☐
Non-accelerated filer
o 
 Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ☐    No  x




________________________________________ 
On May 6, 2025, 31,587,794 shares of Voting Common Stock were outstanding.


Table of Contents
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
Table of Contents
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

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GLOSSARY OF ABBREVIATIONS AND ACRONYMS
The following list of abbreviations and acronyms may be used throughout this Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Unaudited Consolidated Financial Statements and the Notes to the Unaudited Consolidated Financial Statements.
2024 Share Repurchase Program
Share repurchase program authorized by the Board of Directors of Customers Bancorp in 2024
ACL Allowance for credit losses
AFS Available for sale
AOCI Accumulated other comprehensive income (loss)
ASC Accounting Standards Codification
ASU Accounting Standards Update
Bancorp Customers Bancorp, Inc.
Bank Customers Bank
BBB spread BBB rated corporate bond spreads to U.S. Treasury securities
BM Technologies BM Technologies, Inc.
BOLI Bank-owned life insurance
CECL Current expected credit losses
CMO
 Collateralized Mortgage Obligation
CODM
Chief operating decision maker
Commission U.S. Securities and Exchange Commission
Company Customers Bancorp, Inc. and subsidiaries
COVID-19
Coronavirus Disease 2019
CPI Consumer Price Index
CRA Community Reinvestment Act
CUBI Symbol for Customers Bancorp, Inc. common stock traded on the NYSE
Customers Customers Bancorp, Inc. and Customers Bank, collectively
Customers Bancorp Customers Bancorp, Inc.
DCF Discounted cash flow
EPS Earnings per share
EVE Economic value of equity
Exchange Act Securities Exchange Act of 1934
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
Fed Funds
Federal Reserve Board’s Effective Federal Funds Rate
Federal Reserve,
Federal Reserve Board		 Board of Governors of the Federal Reserve System
FHLB Federal Home Loan Bank
FICO Fair, Isaac and Company
Fintech Third-Party Financial Technology
FMV Fair Market Value
FRB Federal Reserve Bank of Philadelphia
GDP Gross domestic product
HTM Held to maturity
LIBOR London Interbank Offered Rate
LPO Limited Purpose Office
MMDA Money market deposit accounts
NIM Net interest margin, tax equivalent
NM Not meaningful
NPA Non-performing asset
NPL Non-performing loan
NYSE New York Stock Exchange
OCI Other comprehensive income (loss)
OREO Other real estate owned
PCD Purchased Credit-Deteriorated
PPP Paycheck Protection Program
PUT Purchase Upon Termination
Rate Shocks Interest rates rising or falling immediately
ROU Right-of-use
3
Table of Contents
SBA U.S. Small Business Administration
SBA loans Loans originated pursuant to the rules and regulations of the SBA
SEC U.S. Securities and Exchange Commission
Securities Act Securities Act of 1933, as amended
Series E Preferred Stock Fixed-to-floating rate non-cumulative perpetual preferred stock, series E
Series F Preferred Stock Fixed-to-floating rate non-cumulative perpetual preferred stock, series F
SERP Supplemental Executive Retirement Plan
Share Repurchase Program Share repurchase program authorized by the Board of Directors of Customers Bancorp in 2021
SOFR Secured Overnight Financing Rate
TRAC Terminal Rental Adjustment Clause
U.S. GAAP Accounting principles generally accepted in the United States of America
VIE Variable interest entity


4
Table of Contents
CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET — UNAUDITED
(amounts in thousands, except share and per share data)
March 31,
2025		 December 31,
2024
ASSETS
Cash and due from banks $ 62,146  $ 56,787 
Interest earning deposits 3,366,544  3,729,144 
Cash and cash equivalents 3,428,690  3,785,931 
Investment securities, at fair value (includes allowance for credit losses of $13,127 and $7,604, respectively)
 2,057,555  2,019,694 
Investment securities held to maturity 938,161  991,937 
Loans held for sale (includes $1,529 and $163,891, respectively, at fair value)
 37,529  204,794 
Loans and leases receivable 13,555,820  13,127,634 
Loans receivable, mortgage finance, at fair value
 1,366,460  1,321,128 
Loans receivable, installment, at fair value 138,159  — 
Allowance for credit losses on loans and leases (141,076) (136,775)
Total loans and leases receivable, net of allowance for credit losses on loans and leases 14,919,363  14,311,987 
FHLB, Federal Reserve Bank, and other restricted stock 96,758  96,214 
Accrued interest receivable 105,800  108,351 
Bank premises and equipment, net 6,653  6,668 
Bank-owned life insurance 298,551  297,641 
Goodwill and other intangibles 3,629  3,629 
Other assets 530,355  481,395 
Total assets $ 22,423,044  $ 22,308,241 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand, non-interest bearing $ 5,552,605  $ 5,608,288 
Interest bearing 13,380,320  13,238,173 
Total deposits 18,932,925  18,846,461 
FHLB advances 1,133,456  1,128,352 
Other borrowings 99,103  99,068 
Subordinated debt 182,579  182,509 
Accrued interest payable and other liabilities 210,421  215,168 
Total liabilities 20,558,484  20,471,558 
Commitments and contingencies (NOTE 17)
Shareholders’ equity:
Preferred stock, par value $1.00 per share; liquidation preference $25.00 per share; 100,000,000 shares authorized, 5,700,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024
 137,794  137,794 
Common stock, par value $1.00 per share; 200,000,000 shares authorized; 35,995,077 and 35,758,246 shares issued as of March 31, 2025 and December 31, 2024; 31,479,132 and 31,346,507 shares outstanding as of March 31, 2025 and December 31, 2024
 35,995  35,758 
Additional paid in capital 570,172  575,333 
Retained earnings 1,335,534  1,326,011 
Accumulated other comprehensive income (loss), net (67,641) (96,560)
Treasury stock, at cost (4,515,945 and 4,411,739 shares as of March 31, 2025 and December 31, 2024)
 (147,294) (141,653)
Total shareholders’ equity 1,864,560  1,836,683 
Total liabilities and shareholders’ equity $ 22,423,044  $ 22,308,241 
See accompanying notes to the unaudited consolidated financial statements.
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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) — UNAUDITED
(amounts in thousands, except per share data)
Three Months Ended
March 31,
  2025 2024
Interest income:
Loans and leases $ 231,008  $ 217,999 
Investment securities 34,339  46,802 
Interest earning deposits 42,914  52,817 
Loans held for sale 4,761  12,048 
Other 1,887  2,111 
Total interest income 314,909  331,777 
Interest expense:
Deposits 131,308  153,725 
FHLB advances 11,801  13,485 
Subordinated debt 3,212  2,689 
Other borrowings 1,142  1,493 
Total interest expense 147,463  171,392 
Net interest income 167,446  160,385 
Provision for credit losses
 28,297  17,070 
Net interest income after provision for credit losses
 139,149  143,315 
Non-interest income:
Commercial lease income 10,668  9,683 
Loan fees 7,235  5,280 
Bank-owned life insurance 4,660  3,261 
Mortgage finance transactional fees 933  946 
Net gain (loss) on sale of loans and leases 2  10 
Net gain (loss) on sale of investment securities —  (30)
Impairment loss on investment securities (51,319) — 
Other 3,331  2,081 
Total non-interest income (loss)
 (24,490) 21,231 
Non-interest expense:
Salaries and employee benefits 42,674  36,025 
Technology, communication and bank operations 11,312  21,904 
Commercial lease depreciation 8,463  7,970 
Professional services 11,857  6,353 
Loan servicing 4,630  4,031 
Occupancy 3,412  2,347 
FDIC assessments, non-income taxes and regulatory fees 11,750  13,469 
Advertising and promotion 528  682 
Other 8,145  6,388 
Total non-interest expense 102,771  99,169 
Income before income tax expense (benefit) 11,888  65,377 
Income tax expense (benefit) (1,024) 15,651 
Net income 12,912  49,726 
Preferred stock dividends 3,389  3,800 
Net income available to common shareholders $ 9,523  $ 45,926 
Basic earnings per common share $ 0.30  $ 1.46 
Diluted earnings per common share 0.29  1.40 
See accompanying notes to the unaudited consolidated financial statements.
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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — UNAUDITED
(amounts in thousands)
  Three Months Ended
March 31,
  2025 2024
Net income $ 12,912  $ 49,726 
Unrealized gains (losses) on available for sale debt securities:
Unrealized gains (losses) arising during the period (13,249) 4,480 
Income tax effect 3,484  (1,138)
Reclassification adjustments for (gains) losses included in net income 51,319  30 
Income tax effect (13,497) (8)
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity 1,169  1,206 
Income tax effect (307) (306)
Net unrealized gains (losses) on available for sale debt securities 28,919  4,264 
Other comprehensive income (loss), net of income tax effect 28,919  4,264 
Comprehensive income (loss) $ 41,831  $ 53,990 
See accompanying notes to the unaudited consolidated financial statements.
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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY — UNAUDITED
(amounts in thousands, except shares outstanding data)
Three Months Ended March 31, 2025
Preferred Stock Common Stock
Shares of
Preferred
Stock
Outstanding		 Preferred
Stock		 Shares of
Common
Stock
Outstanding		 Common
Stock		 Additional
Paid in
Capital		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income (Loss)		 Treasury
Stock		 Total
Balance, December 31, 2024 5,700,000  $ 137,794  31,346,507  $ 35,758  $ 575,333  $ 1,326,011  $ (96,560) $ (141,653) $ 1,836,683 
Net income —  —  —  —  —  12,912  —  —  12,912 
Other comprehensive income (loss) —  —  —  —  —  —  28,919  —  28,919 
Preferred stock dividends (1)
 —  —  —  —  —  (3,389) —  —  (3,389)
Share-based compensation expense —  —  —  —  4,295  —  —  —  4,295 
Issuance of common stock under share-based compensation arrangements —  —  236,831  237  (9,456) —  —  —  (9,219)
Repurchase of common shares —  —  (104,206) —  —  —  —  (5,641) (5,641)
Balance, March 31, 2025 5,700,000  $ 137,794  31,479,132  $ 35,995  $ 570,172  $ 1,335,534  $ (67,641) $ (147,294) $ 1,864,560 
Three Months Ended March 31, 2024
Preferred Stock Common Stock
Shares of
Preferred
Stock
Outstanding		 Preferred Stock Shares of
Common
Stock
Outstanding		 Common
Stock		 Additional
Paid in
Capital		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income (Loss)		 Treasury
Stock		 Total
Balance, December 31, 2023 5,700,000  $ 137,794  31,440,906  $ 35,459  $ 564,538  $ 1,159,582  $ (136,569) $ (122,410) $ 1,638,394 
Net income —  —  —  —  —  49,726  —  —  49,726 
Other comprehensive income (loss) —  —  —  —  —  —  4,264  —  4,264 
Preferred stock dividends (1)
 —  —  —  —  —  (3,800) —  —  (3,800)
Share-based compensation expense —  —  —  —  3,976  —  —  —  3,976 
Issuance of common stock under share-based compensation arrangements —  —  81,025  81  (1,024) —  —  —  (943)
Balance, March 31, 2024 5,700,000  $ 137,794  31,521,931  $ 35,540  $ 567,490  $ 1,205,508  $ (132,305) $ (122,410) $ 1,691,617 
(1)Dividends per share of $0.616789 and $0.592902 were declared on Series E and F preferred stock, respectively, for the three months ended March 31, 2025. Dividends per share of $0.681630 and $0.657743 were declared on Series E and F preferred stock, respectively, for the three months ended March 31, 2024.
See accompanying notes to the unaudited consolidated financial statements.
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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
(amounts in thousands)
  Three Months Ended
March 31,
  2025 2024
Cash Flows from Operating Activities
Net income $ 12,912  $ 49,726 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses 28,297  17,070 
Depreciation and amortization 15,639  8,246 
Share-based compensation expense 4,246  3,890 
Deferred taxes (24,941) (276)
Net amortization (accretion) of investment securities premiums and discounts (725) (2,286)
Unrealized (gain) loss on investment securities (160) 45 
Impairment loss on investment securities 51,319  — 
Net (gain) loss on sale of investment securities —  30 
Unrealized (gain) loss on derivatives (712) (661)
Fair value adjustment on loans held for sale 667  — 
Net (gain) loss on sale of loans and leases (2) (68)
Origination and purchases of loans held for sale (299,808) (340,536)
Proceeds from the sales and repayments of loans held for sale 326,356  322,413 
Amortization (accretion) of loan net deferred fees, discounts and premiums (4,365) (7,367)
Earnings on investment in bank-owned life insurance (4,660) (3,261)
(Increase) decrease in accrued interest receivable and other assets (10,470) (10,576)
Increase (decrease) in accrued interest payable and other liabilities 528  (55,207)
Net Cash Provided By (Used In) Operating Activities 94,121  (18,818)
Cash Flows from Investing Activities
Proceeds from maturities, calls and principal repayments of investment securities available for sale 99,521  113,323 
Proceeds from maturities, calls and principal repayments of investment securities held to maturity 69,058  72,327 
Proceeds from sales of investment securities available for sale —  21,970 
Purchases of investment securities available for sale (156,689) (328,905)
Purchases of investment securities held to maturity (14,022) — 
Origination of mortgage finance loans (5,329,199) (4,936,887)
Proceeds from repayments of mortgage finance loans 5,287,252  4,880,422 
Net (increase) decrease in loans and leases, excluding mortgage finance loans
 (337,435) 16,634 
Proceeds from sales of loans and leases 1,081  — 
Purchases of loans (106,020) (7,403)
Purchases of bank-owned life insurance (1,462) — 
Proceeds from bank-owned life insurance 5,102  176 
Net (purchases of) proceeds from sale of FHLB, Federal Reserve Bank, and other restricted stock (544) 9,481 
Purchases of bank premises and equipment (686) (418)
Proceeds from sale of other real estate owned —  33 
Proceeds from sales of leased assets under lessor operating leases 413  94 
Purchases of leased assets under lessor operating leases (16,398) (4,007)
Net Cash Provided By (Used In) Investing Activities (500,028) (163,160)
(continued)
Three Months Ended
March 31,
2025 2024
Cash Flows from Financing Activities
Net increase (decrease) in deposits 66,911  41,501 
Proceeds from long-term borrowed funds from FHLB and FRB 100,000  — 
Repayments of long-term borrowed funds from FHLB and FRB (100,000) — 
Preferred stock dividends paid (3,434) (3,804)
Purchase of treasury stock (5,641) — 
Payments of employee taxes withheld from share-based awards (9,815) (1,426)
Proceeds from issuance of common stock 645  481 
Net Cash Provided By (Used In) Financing Activities 48,666  36,752 
Net Increase (Decrease) in Cash and Cash Equivalents (357,241) (145,226)
Cash and Cash Equivalents – Beginning 3,785,931  3,846,346 
Cash and Cash Equivalents – Ending $ 3,428,690  $ 3,701,120 
Non-cash Investing and Financing Activities:
Transfer of loans held for sale to held for investment $ 135,815  $ 858 
See accompanying notes to the unaudited consolidated financial statements.
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CUSTOMERS BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 1 — DESCRIPTION OF THE BUSINESS
Customers Bancorp, Inc. (“Customers Bancorp”) is a bank holding company engaged in banking activities through its wholly owned subsidiary, Customers Bank (“the Bank”), collectively referred to as “Customers” herein.
Customers Bancorp and its wholly owned subsidiaries, the Bank, and non-bank subsidiaries, serve businesses and residents in Berks County and Southeastern Pennsylvania (Bucks, Chester and Philadelphia Counties); New York (Westchester and Suffolk Counties, and Manhattan); Hamilton, New Jersey; Boston, Massachusetts; Providence, Rhode Island; Portsmouth, New Hampshire; California (Southern California and the Bay Area); Nevada (Las Vegas and Reno); and nationally for certain loan and deposit products. The Bank has seven branches and provides commercial banking products, primarily loans and deposits. In addition, the Bank also administratively supports loan and other financial products, including equipment finance leases, to customers through its limited-purpose offices. The Bank also serves specialized businesses nationwide, including its mortgage finance loans, commercial equipment financing, SBA lending, specialized lending and consumer loans through relationships with fintech companies.
The Bank is subject to regulation of the Pennsylvania Department of Banking and Securities and the Federal Reserve Bank and is periodically examined by those regulatory authorities.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Basis of Presentation
The interim unaudited consolidated financial statements have been prepared in conformity with U.S. GAAP and pursuant to the rules and regulations of the SEC. These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Customers Bancorp and subsidiaries for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted from these interim unaudited consolidated financial statements as permitted by SEC rules and regulations. The December 31, 2024 consolidated balance sheet presented in this report has been derived from Customers Bancorp’s audited 2024 consolidated financial statements. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2024 consolidated financial statements of Customers Bancorp and subsidiaries included in Customers’ Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 28, 2025 (the “2024 Form 10-K”). The 2024 Form 10-K describes Customers Bancorp’s significant accounting policies. There have been no material changes to Customers Bancorp’s significant accounting policies noted above for the three months ended March 31, 2025.
Recently Issued Accounting Standards
Presented below are recently issued accounting standards that Customers has adopted as well as those that the FASB has issued but are not yet effective.
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Accounting Standards Adopted in 2025
Standard Summary of Guidance Effects on Financial Statements
ASU 2023-08,
Intangibles - Goodwill and Other - Crypto Assets (Subtopic 250-60)

Issued December 2023
• Requires crypto assets meeting certain criteria to be subsequently measured at fair value with changes recognized in net income each reporting period.
• Requires crypto assets measured at fair value to be presented separately from other intangible assets in the balance sheet and changes from the remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income statement.
• Requires cash receipts arising from crypto assets that are received as noncash consideration in the ordinary course of business and converted nearly immediately into cash as operating activities in the statement of cash flows.
• Effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued.
• Customers adopted this guidance on January 1, 2025. This guidance did not have any impact on Customers’ financial condition, results of operations and consolidated financial statements.
ASU 2025-02,
Liabilities (Topic 450) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122

Issued March 2025
• Rescinds interpretive guidance regarding the SEC staff’s views on how an entity that has an obligation to safeguard crypto-assets for another party should account for that obligation. An entity with a safeguarding obligation recognizes a safeguarding liability with an accompanying safeguarding asset, measured at the fair value of the safeguarded crypto-asset.
• Effective for the annual period beginning after December 15, 2024, on a fully retrospective basis.
• Customers adopted this guidance on January 1, 2025. This guidance did not have any impact on Customers’ financial condition, results of operations and consolidated financial statements.
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Accounting Standards Issued But Not Yet Adopted
Standard Summary of Guidance Effects on Financial Statements
ASU 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures

Issued December 2023
• Requires public entities to disclose annually a tabular reconciliation of specific reconciling items, including those items exceeding five percent of the amount computed by multiplying income from continuing operations before income taxes by the statutory income tax rate, in the income tax rate reconciliation of the effective tax rate to the statutory tax rate.
• Requires disclosures of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and by individual jurisdictions where income taxes paid is equal to or greater than five percent of total income taxes paid, net of refunds received.
• Effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued.
• Customers will adopt this ASU and provide the newly required disclosures in the consolidated financial statements for the year ending December 31, 2025.
ASU 2024-03,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)

Issued November 2024

and

ASU 2025-01,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date

Issued January 2025
• Requires disclosure in the notes to financial statements at each interim and annual reporting period of specified information about certain costs and expenses including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities.
• Requires disclosure of certain amounts already required to be disclosed under U.S. GAAP in the same disclosure as the other disaggregation requirements.
• Requires disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.
• Requires disclosure of the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses.
• Effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted.
• Customers is currently evaluating the expected impact of this ASU on Customers’ consolidated financial statements.
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NOTE 3 — EARNINGS (LOSS) PER SHARE
The following are the components and results of Customers’ earnings per common share calculations for the periods presented.
  Three Months Ended
March 31,
(amounts in thousands, except share and per share data) 2025 2024
Net income available to common shareholders $ 9,523  $ 45,926 
Weighted-average number of common shares outstanding – basic 31,447,623  31,473,424 
Share-based compensation plans 1,042,949  1,381,110 
Weighted-average number of common shares – diluted 32,490,572  32,854,534 
Basic earnings per common share $ 0.30  $ 1.46 
Diluted earnings per common share 0.29  1.40 
The following are securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because either the performance conditions for certain of the share-based compensation awards have not been met or to do so would have been anti-dilutive for the periods presented.
  Three Months Ended
March 31,
  2025 2024
Anti-dilutive securities:
Share-based compensation awards 22,027  1,680 

NOTE 4 — CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT
The following table presents the changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2025 and 2024. Amounts in parentheses indicate reductions to AOCI.
Unrealized Gains (Losses) on Available for Sale Securities (1)
Three Months Ended March 31,
(amounts in thousands) 2025 2024
Balance at January 1
 $ (96,560) $ (136,569)
Unrealized gains (losses) arising during period, before tax (13,249) 4,480 
Income tax effect 3,484  (1,138)
Other comprehensive income (loss) before reclassifications (9,765) 3,342 
Reclassification adjustments for (gains) losses included in net income, before tax 51,319  30 
Income tax effect (13,497) (8)
Amounts reclassified from accumulated other comprehensive income (loss) to net income
 37,822  22 
Amortization of unrealized loss on securities transferred from available for sale to held to maturity 1,169  1,206 
Income tax effect (307) (306)
Amortization of unrealized loss on securities transferred from available for sale to held to maturity 862  900 
Net current-period other comprehensive income (loss) 28,919  4,264 
Balance at March 31
 $ (67,641) $ (132,305)
(1)    Reclassification amounts for AFS debt securities are reported as net gain (loss) on sale of investment securities or impairment loss on investment securities, and amortization of unrealized losses on debt securities transferred from available-for-sale to held-to-maturity is reported within interest income on the consolidated statements of income.

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NOTE 5 — INVESTMENT SECURITIES
Investment securities at fair value
The amortized cost, approximate fair value and allowance for credit losses of investment securities at fair value as of March 31, 2025 and December 31, 2024 are summarized as follows:
 
March 31, 2025 (1)
(amounts in thousands) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available for sale debt securities:
Asset-backed securities $ 169,570  $ (353) $ —  $ (742) $ 168,475 
Agency-guaranteed residential mortgage-backed securities 322,646  —  1,349  (1,111) 322,884 
Agency-guaranteed residential collateralized mortgage obligations 236,386  —  2,037  (10,080) 228,343 
Agency-guaranteed commercial collateralized mortgage obligations 95,734  —  269  (2,256) 93,747 
Collateralized loan obligations 187,703  —  66  (290) 187,479 
Commercial mortgage-backed securities 76,008  —  —  —  76,008 
Corporate notes 518,545  (12,774) 914  (24,324) 482,361 
Private label collateralized mortgage obligations 488,626  —  —  (23,486) 465,140 
Available for sale debt securities $ 2,095,218  $ (13,127) $ 4,635  $ (62,289) 2,024,437 
Equity securities (2)
 33,118 
Total investment securities, at fair value $ 2,057,555 
 
December 31, 2024 (1)
(amounts in thousands) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value
Available for sale debt securities:
Asset-backed securities $ 14,820  $ (362) $ —  $ (1,222) $ 13,236 
Agency-guaranteed residential mortgage-backed securities 330,637  —  146  (3,745) 327,038 
Agency-guaranteed residential collateralized mortgage obligations 242,858  —  —  (16,112) 226,746 
Agency-guaranteed commercial collateralized mortgage obligations 95,850  —  44  (2,819) 93,075 
Collateralized loan obligations 257,500  —  100  (2,193) 255,407 
Commercial mortgage-backed securities 78,707  —  —  (999) 77,708 
Corporate notes 564,524  (7,135) 347  (41,406) 516,330 
Private label collateralized mortgage obligations 502,985  (107) 95  (27,075) 475,898 
Available for sale debt securities $ 2,087,881  $ (7,604) $ 732  $ (95,571) 1,985,438 
Equity securities (2)
 34,256 
Total investment securities, at fair value $ 2,019,694 
(1)Accrued interest on AFS debt securities totaled $12.4 million and $15.0 million at March 31, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable on the consolidated balance sheet.
(2)Includes perpetual preferred stock issued by domestic banks and domestic bank holding companies and equity securities issued by fintech companies, without a readily determinable fair value, and CRA-qualified mutual fund shares at March 31, 2025 and December 31, 2024. No impairments or measurement adjustments have been recorded on the equity securities without a readily determinable fair value since acquisition.
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Customers’ transactions with unconsolidated VIEs include sales of consumer installment loans and investments in the securities issued by the VIEs. Customers is not the primary beneficiary of the VIEs because Customers has no right to make decisions that will most significantly affect the economic performance of the VIEs. Customers’ continuing involvement with the unconsolidated VIEs is not significant. Customers’ continuing involvement is not considered to be significant where Customers only invests in securities issued by the VIE and was not involved in the design of the VIE or where Customers has transferred financial assets to the VIE for only cash consideration. Customers’ investments in the securities issued by the VIEs are classified as AFS or HTM debt securities on the consolidated balance sheets, and represent Customers’ maximum exposure to loss.
There was no sale of AFS debt securities for the three months ended March 31, 2025. Proceeds from the sale of AFS debt securities were $22.0 million for the three months ended March 31, 2024. The following table presents gross realized gains and realized losses from the sale of AFS debt securities for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(amounts in thousands) 2025 2024
Gross realized gains $ —  $ — 
Gross realized losses —  (30)
Net realized gains (losses) on sale of available for sale debt securities $ —  $ (30)
These gains (losses) were determined using the specific identification method and were reported as net gain (loss) on sale of investment securities within non-interest income on the consolidated statements of income.
The following table presents AFS debt securities by stated maturity. Debt securities backed by mortgages and other assets have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, these debt securities are classified separately with no specific maturity date.
  March 31, 2025
(amounts in thousands) Amortized
Cost		 Fair
Value
Due in one year or less $ 20,195  $ 19,816 
Due after one year through five years 422,613  391,589 
Due after five years through ten years 68,214  65,011 
Due after ten years 7,523  5,945 
Asset-backed securities 169,570  168,475 
Agency-guaranteed residential mortgage-backed securities 322,646  322,884 
Agency-guaranteed residential collateralized mortgage obligations 236,386  228,343 
Agency-guaranteed commercial collateralized mortgage obligations 95,734  93,747 
Collateralized loan obligations 187,703  187,479 
Commercial mortgage-backed securities 76,008  76,008 
Private label collateralized mortgage obligations 488,626  465,140 
Total available for sale debt securities $ 2,095,218  $ 2,024,437 
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Gross unrealized losses and fair value of Customers’ AFS debt securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2025 and December 31, 2024 were as follows:
  March 31, 2025
  Less Than 12 Months 12 Months or More Total
(amounts in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
Available for sale debt securities:
Agency-guaranteed residential mortgage-backed securities $ 191,812  $ (1,111) $ —  $ —  $ 191,812  $ (1,111)
Agency-guaranteed residential collateralized mortgage obligations —  —  99,860  (10,080) 99,860  (10,080)
Agency-guaranteed commercial collateralized mortgage obligations 59,818  (1,571) 16,881  (685) 76,699  (2,256)
Collateralized loan obligations —  —  131,203  (290) 131,203  (290)
Corporate notes 68,532  (716) 266,678  (12,087) 335,210  (12,803)
Private label collateralized mortgage obligations 89,058  (261) 385,532  (23,225) 474,590  (23,486)
Total $ 409,220  $ (3,659) $ 900,154  $ (46,367) $ 1,309,374  $ (50,026)
  December 31, 2024
  Less Than 12 Months 12 Months or More Total
(amounts in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses
Available for sale debt securities:
Agency-guaranteed residential mortgage-backed securities $ 266,568  $ (3,745) $ —  $ —  $ 266,568  $ (3,745)
Agency-guaranteed residential collateralized mortgage obligations 126,602  (2,717) 100,144  (13,395) 226,746  (16,112)
Agency-guaranteed commercial collateralized mortgage obligations 85,902  (2,819) —  —  85,902  (2,819)
Collateralized loan obligations 35,710  (265) 205,639  (1,928) 241,349  (2,193)
Commercial mortgage-backed securities —  —  77,708  (999) 77,708  (999)
Corporate notes 74,373  (976) 239,509  (16,064) 313,882  (17,040)
Private label collateralized mortgage obligations 29,419  (581) 351,040  (24,552) 380,459  (25,133)
Total $ 618,574  $ (11,103) $ 974,040  $ (56,938) $ 1,592,614  $ (68,041)
At March 31, 2025, there were 24 AFS debt securities with unrealized losses in the less-than-twelve-months category and 37 AFS debt securities with unrealized losses in the twelve-months-or-more category. Except for certain AFS debt securities where there was a change in future estimated cash flows as further discussed below, the unrealized losses were principally due to changes in market interest rates and credit spreads that resulted in a negative impact on the respective securities’ fair value and expected to be recovered when market prices recover or at maturity. Customers does not intend to sell any of the 61 securities with unrealized losses, and it is not more likely than not that Customers will be required to sell any of the 61 securities before recovery of the amortized cost basis. At December 31, 2024, there were 117 AFS debt securities in an unrealized loss position.
Customers recorded an allowance for credit losses on certain AFS debt securities where there was a change in future estimated cash flows during the three months ended March 31, 2025 and 2024. A discounted cash flow approach is used to determine the amount of the allowance. The cash flows expected to be collected, after considering expected prepayments, are discounted at the original effective interest rate. The amount of the allowance is limited to the difference between the amortized cost basis of the security and its estimated fair value.
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The following table presents the activity in the allowance for credit losses on AFS debt securities, by major security type, for the periods presented:
Three Months Ended March 31,
2025 2024
(amounts in thousands) Asset-backed securities Corporate notes
Private label CMOs
 Total Asset-backed securities Corporate notes Total
Balance at January 1
 $ 362  $ 7,135  $ 107  $ 7,604  $ 483  $ 3,469  $ 3,952 
Credit losses on securities for which credit losses were not previously recorded —  —  —  —  —  502  502 
Credit losses on previously impaired securities 66  7,007  —  7,073  —  648  648 
Decrease in allowance for credit losses on previously impaired securities (75) (146) —  (221) (33) —  (33)
Reduction due to sales and intent to sell
 —  (1,222) (107) (1,329) —  —  — 
Balance at March 31
 $ 353  $ 12,774  $ —  $ 13,127  $ 450  $ 4,619  $ 5,069 
Customers has elected to not estimate an ACL on accrued interest receivable on AFS debt securities, as it already has a policy in place to reverse or write-off accrued interest, through interest income, for debt securities in nonaccrual status in a timely manner. At March 31, 2025, there were four corporate notes from two issuers in nonaccrual status. At December 31, 2024, there was one corporate note in nonaccrual status. Customers recorded a reversal of $4.1 million for the corporate notes in accrued interest income for the three months ended March 31, 2025. No accrued interest income was reversed for the three months ended March 31, 2024.
At March 31, 2025 and December 31, 2024, no AFS investment securities holding of any one issuer, other than the U.S. government and its agencies, amounted to greater than 10% of shareholders’ equity.
At March 31, 2025 and December 31, 2024, Customers Bank had pledged AFS investment securities aggregating $1.3 billion in fair value as collateral primarily for immediately available liquidity from the FRB. The counterparty does not have the ability to sell or repledge these securities.
Investment securities held to maturity
The amortized cost, approximate fair value and allowance for credit losses of investment securities held to maturity as of March 31, 2025 and December 31, 2024 are summarized as follows:
March 31, 2025 (1)
(amounts in thousands) Amortized Cost Allowance for Credit Losses Net Carrying Value Gross Unrealized Gains Gross Unrealized Losses Fair Value
Held to maturity debt securities:
Asset-backed securities $ 409,904  $ —  $ 409,904  $ 397  $ (1,631) $ 408,670 
Agency-guaranteed residential mortgage-backed securities 6,833  —  6,833  —  (822) 6,011 
Agency-guaranteed commercial mortgage-backed securities 1,750  —  1,750  —  (262) 1,488 
Agency-guaranteed residential collateralized mortgage obligations 165,521  —  165,521  —  (16,848) 148,673 
Agency-guaranteed commercial collateralized mortgage obligations 171,307  —  171,307  —  (21,702) 149,605 
Private label collateralized mortgage obligations 182,846  —  182,846  372  (11,127) 172,091 
Total held to maturity debt securities $ 938,161  $ —  $ 938,161  $ 769  $ (52,392) $ 886,538 
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December 31, 2024 (1)
(amounts in thousands) Amortized Cost Allowance for Credit Losses Net Carrying Value Gross Unrealized Gains Gross Unrealized Losses Fair Value
Held to maturity debt securities:
Asset-backed securities $ 471,996  $ —  $ 471,996  $ 1,775  $ (401) $ 473,370 
Agency-guaranteed residential mortgage-backed securities 6,880  —  6,880  —  (940) 5,940 
Agency-guaranteed commercial mortgage-backed securities 1,770  —  1,770  —  (146) 1,624 
Agency-guaranteed residential collateralized mortgage obligations 169,754  —  169,754  —  (21,984) 147,770 
Agency-guaranteed commercial collateralized mortgage obligations 158,320  —  158,320  —  (22,689) 135,631 
Private label collateralized mortgage obligations 183,217  —  183,217  574  (13,449) 170,342 
Total held to maturity debt securities $ 991,937  $ —  $ 991,937  $ 2,349  $ (59,609) $ 934,677 
(1)Accrued interest on HTM debt securities totaled $2.2 million and $2.4 million at March 31, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable on the consolidated balance sheet.
The following table presents HTM debt securities by stated maturity, including debt securities backed by mortgages and other assets with expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, are classified separately with no specific maturity date:
  March 31, 2025
(amounts in thousands) Amortized
Cost		 Fair
Value
Asset-backed securities $ 409,904  $ 408,670 
Agency-guaranteed residential mortgage-backed securities 6,833  6,011 
Agency-guaranteed commercial mortgage-backed securities 1,750  1,488 
Agency-guaranteed residential collateralized mortgage obligations 165,521  148,673 
Agency-guaranteed commercial collateralized mortgage obligations 171,307  149,605 
Private label collateralized mortgage obligations 182,846  172,091 
Total held to maturity debt securities $ 938,161  $ 886,538 
Customers recorded no allowance for credit losses on investment securities classified as held to maturity at March 31, 2025 and December 31, 2024. The U.S. government agency securities represent obligations issued by a U.S. government-sponsored enterprise or other federal government agency that are explicitly or implicitly guaranteed by the U.S. federal government and therefore, assumed to have zero credit losses. The private label collateralized mortgage obligations that are highly rated with sufficient overcollateralization are estimated to have no expected credit losses. Customers recorded no allowance for its investments in the asset-backed securities. Customers considered the seniority of its beneficial interests, which include overcollateralization of these asset-backed securities in the estimate of the ACL at March 31, 2025 and December 31, 2024. The unrealized losses on HTM debt securities with no ACL were primarily due to changes in market interest rates that resulted in a negative impact on the respective securities’ fair value and are expected to be recovered when market prices recover or at maturity.
Credit Quality Indicators
Customers monitors the credit quality of HTM debt securities primarily through credit ratings provided by rating agencies. Investment grade debt securities are rated BBB- or higher by S&P Global Ratings, Baa3 or higher by Moody’s Investors Service or equivalent ratings by other rating agencies, and are generally considered to be of low credit risk. Except for the asset-backed securities and a private label collateralized mortgage obligation, all of the HTM debt securities held by Customers were investment grade or U.S. government agency guaranteed securities that were not rated at March 31, 2025 and December 31, 2024. The asset-backed securities and a private label collateralized mortgage obligation are not rated by rating agencies. Customers monitors the credit quality of these asset-backed securities and a private label collateralized mortgage obligation by evaluating the performance of the sold consumer installment loans and other underlying loans against the overcollateralization available for these securities.
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The following table presents the amortized cost of HTM debt securities based on their lowest credit rating available:
March 31, 2025
(amounts in thousands) AAA AA Not Rated Total
Held to maturity debt securities:
Asset-backed securities $ —  $ —  $ 409,904  $ 409,904 
Agency-guaranteed residential mortgage-backed securities —  —  6,833  6,833 
Agency-guaranteed commercial mortgage-backed securities —  —  1,750  1,750 
Agency-guaranteed residential collateralized mortgage obligations —  —  165,521  165,521 
Agency-guaranteed commercial collateralized mortgage obligations —  —  171,307  171,307 
Private label collateralized mortgage obligations 82,060  26,323  74,463  182,846 
Total held to maturity debt securities $ 82,060  $ 26,323  $ 829,778  $ 938,161 
Customers has elected to not estimate an ACL on accrued interest receivable on HTM debt securities, as it already has a policy in place to reverse or write-off accrued interest, through interest income, for debt securities in nonaccrual status in a timely manner. At March 31, 2025 and December 31, 2024, there were no HTM debt securities past due under the terms of their agreements or in nonaccrual status.
At March 31, 2025 and December 31, 2024, Customers Bank had pledged HTM investment securities aggregating $403.0 million and $386.4 million in fair value, respectively, as collateral primarily for immediately available liquidity from the FRB and unused lines of credit with another financial institution. The counterparties do not have the ability to sell or repledge these securities.
NOTE 6 – LOANS HELD FOR SALE
The composition of loans held for sale as of March 31, 2025 and December 31, 2024 was as follows:
(amounts in thousands) March 31, 2025 December 31, 2024
Residential mortgage loans, at fair value $ 1,465  $ 1,836 
Personal installment loans, at lower of cost or fair value 36,000  40,903 
Other installment loans, at fair value
 64  162,055 
Total loans held for sale
 $ 37,529  $ 204,794 
Total loans held for sale included NPLs of $0.4 million and $2.8 million as of March 31, 2025 and December 31, 2024, respectively.
Refer to NOTE 7 — LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES for additional information on the transfer of other consumer installment loans, at fair value, from loans held for sale to held for investment during the three months ended March 31, 2025.
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NOTE 7 — LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES
The following table presents loans and leases receivable as of March 31, 2025 and December 31, 2024.
(amounts in thousands) March 31, 2025 December 31, 2024
Loans and leases receivable:
Commercial:
Commercial and industrial:
Specialized lending (1)
 $ 6,070,093  $ 5,842,420 
Other commercial and industrial
 1,174,369  1,182,350 
Multifamily 2,322,123  2,252,246 
Commercial real estate owner occupied 1,139,126  1,100,944 
Commercial real estate non-owner occupied 1,438,906  1,359,130 
Construction 154,647  147,209 
Total commercial loans and leases receivable 12,299,264  11,884,299 
Consumer:
Residential real estate 496,772  496,559 
Manufactured housing 31,775  33,123 
Installment:
Personal 493,276  463,854 
Other 234,733  249,799 
Total consumer loans receivable 1,256,556  1,243,335 
Loans and leases receivable 13,555,820  13,127,634 
Loans receivable, mortgage finance, at fair value 1,366,460  1,321,128 
Loans receivable, installment, at fair value 138,159  — 
Allowance for credit losses on loans and leases (141,076) (136,775)
Total loans and leases receivable, net of allowance for credit losses on loans and leases (2)
 $ 14,919,363  $ 14,311,987 
(1)Includes direct finance and sales-type equipment leases of $269.2 million and $262.7 million at March 31, 2025 and December 31, 2024, respectively.
(2)Includes deferred (fees) costs and unamortized (discounts) premiums, net of $(22.2) million and $(20.8) million at March 31, 2025 and December 31, 2024, respectively.
Customers’ total loans and leases receivable includes loans receivable reported at fair value based on an election made to account for these loans at fair value and loans and leases receivable predominately reported at their outstanding unpaid principal balance, net of charge-offs, deferred costs and fees and unamortized premiums and discounts, and evaluated for impairment. The total amount of accrued interest recorded for total loans was $86.2 million and $88.2 million at March 31, 2025 and December 31, 2024, respectively, and is presented in accrued interest receivable in the consolidated balance sheet. At March 31, 2025 and December 31, 2024, there were $33.5 million and $31.9 million of individually evaluated loans that were collateral-dependent, respectively. Substantially all individually evaluated loans are collateral-dependent and consisted primarily of commercial and industrial, commercial real estate, and residential real estate loans. Collateral-dependent commercial and industrial loans were secured by accounts receivable, inventory and equipment; collateral-dependent commercial real estate loans were secured by commercial real estate assets; and residential real estate loans were secured by residential real estate assets.
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Loans and leases receivable
The following tables summarize loans and leases receivable by loan and lease type and performance status as of March 31, 2025 and December 31, 2024:
  March 31, 2025
(amounts in thousands)
30-59 Days past due (1)
60-89 Days past due (1)
90 Days or more past due (2)
 Total past due
Loans and leases not past due (3)(4)
Total loans and leases (4)
Commercial and industrial, including specialized lending $ 6,933  $ 3,999  $ 18,519  $ 29,451  $ 7,196,323  $ 7,225,774 
Multifamily 6,427  —  —  6,427  2,315,696  2,322,123 
Commercial real estate owner occupied 118  —  7,792  7,910  1,131,216  1,139,126 
Commercial real estate non-owner occupied 16,653  —  62  16,715  1,422,191  1,438,906 
Construction —  —  —  —  154,647  154,647 
Residential real estate 9,013  2,616  2,093  13,722  483,050  496,772 
Manufactured housing 465  239  1,984  2,688  29,087  31,775 
Installment 9,124  2,757  4,659  16,540  711,469  728,009 
Total $ 48,733  $ 9,611  $ 35,109  $ 93,453  $ 13,443,679  $ 13,537,132 
  December 31, 2024
(amounts in thousands)
30-59 Days past due (1)
60-89 Days past due (1)
90 Days or more past due (2)
 Total past due
Loans and leases not past due (3)(4)
Total loans and leases (4)
Commercial and industrial, including specialized lending
 $ 3,655  $ 19,854  $ 3,606  $ 27,115  $ 6,974,904  $ 7,002,019 
Multifamily —  —  11,834  11,834  2,240,412  2,252,246 
Commercial real estate owner occupied 11,395  —  8,071  19,466  1,081,478  1,100,944 
Commercial real estate non-owner occupied —  —  17,007  17,007  1,342,123  1,359,130 
Construction —  —  —  —  147,209  147,209 
Residential real estate 9,541  4,560  3,384  17,485  479,074  496,559 
Manufactured housing 766  155  2,262  3,183  29,940  33,123 
Installment 7,918  5,108  5,613  18,639  695,014  713,653 
Total $ 33,275  $ 29,677  $ 51,777  $ 114,729  $ 12,990,154  $ 13,104,883 
(1)Includes past due loans and leases that are accruing interest because collection is considered probable.
(2)Includes loans amounting to $0.4 million and $17.1 million as of March 31, 2025 and December 31, 2024, respectively, that are still accruing interest because collection is considered probable.
(3)Loans and leases where next payment due is less than 30 days from the report date. The tables exclude PPP loans.
(4)Includes PCD loans of $122.9 million and $126.4 million at March 31, 2025 and December 31, 2024, respectively.
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Nonaccrual Loans and Leases
The following table presents the amortized cost of loans and leases held for investment on nonaccrual status.
  March 31, 2025 December 31, 2024
(amounts in thousands) Nonaccrual loans with no related allowance Nonaccrual loans with related allowance Total nonaccrual loans Nonaccrual loans with no related allowance Nonaccrual loans with related allowance Total nonaccrual loans
Commercial and industrial, including specialized lending $ 18,754  $ —  $ 18,754  $ 4,041  $ —  $ 4,041 
Multifamily —  —  —  11,834  —  11,834 
Commercial real estate owner occupied 7,793  —  7,793  8,090  —  8,090 
Commercial real estate non-owner occupied 62  —  62  354  —  354 
Residential real estate 7,714  437  8,151  8,274  440  8,714 
Manufactured housing —  1,653  1,653  —  1,852  1,852 
Installment —  4,659  4,659  —  5,613  5,613 
Total $ 34,323  $ 6,749  $ 41,072  $ 32,593  $ 7,905  $ 40,498 
Interest income recognized on nonaccrual loans was insignificant for the three months ended March 31, 2025 and 2024. Accrued interest reversed when the loans went to nonaccrual status was insignificant for the three months ended March 31, 2025 and 2024.
Loans receivable, mortgage finance, at fair value
Mortgage finance loans consist of commercial loans to mortgage companies. These mortgage finance lending transactions are subject to master repurchase agreements. As a result of the contractual provisions, for accounting purposes, control of the underlying mortgage loan has not transferred and the rewards and risks of the mortgage loans are not assumed by Customers. The mortgage finance loans are designated as loans held for investment and reported at fair value based on an election made to account for the loans at fair value. Pursuant to the agreements, Customers funds the pipelines for these mortgage lenders by sending payments directly to the closing agents for funded mortgage loans and receives proceeds directly from third party investors when the underlying mortgage loans are sold into the secondary market. The fair value of the mortgage finance loans is estimated as the amount of cash initially advanced to fund the mortgage, plus accrued interest and fees, as specified in the respective agreements. The interest rates on these loans are variable, and the lending transactions are short-term, with an average life under 30 days from purchase to sale. The primary goal of these lending transactions is to provide liquidity to mortgage companies.
At March 31, 2025 and December 31, 2024, all of Customers’ mortgage finance loans were current in terms of payment. As these loans are reported at their fair value, they do not have an ACL and are therefore excluded from ACL-related disclosures.
Loans receivable, installment, at fair value
Customers has a lending arrangement with a fintech company, which recently was acquired by a bank, whereby Customers has been originating consumer installment loans and holding these loans prior to sale. These consumer installment loans were designated as loans held for sale and reported at fair value based on an election made to account for the loans at fair value. The lending arrangement with this fintech company expires in the second quarter of 2025. Accordingly, Customers transferred these consumer installment loans from held for sale to held for investment during the three months ended March 31, 2025, and continue to be reported at fair value based on an election made to account for the loans at fair value.
At March 31, 2025, Customers had $2.1 million of consumer installment loans, at fair value, of nonaccrual status. As these loans are reported at their fair value, they do not have an ACL and are therefore excluded from ACL-related disclosures.
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Allowance for credit losses on loans and leases
The changes in the ACL on loans and leases by loan and lease type for the three months ended March 31, 2025 and 2024 are presented in the tables below.
(amounts in thousands)
Commercial and industrial (1)
 Multifamily Commercial real estate owner occupied Commercial real estate non-owner occupied Construction Residential real estate Manufactured housing Installment Total
Three Months Ended
March 31, 2025
Ending Balance,
December 31, 2024
 $ 29,379  $ 18,511  $ 10,755  $ 17,405  $ 1,250  $ 5,968  $ 3,829  $ 49,678  $ 136,775 
Charge-offs (4,507) (3,834) (19) —  —  —  —  (12,403) (20,763)
Recoveries 1,276  —  3  —  3  —  —  2,337  3,619 
Provision (benefit) for credit losses on loans and leases 4,436  4,113  41  653  11  195  (29) 12,025  21,445 
Ending Balance,
March 31, 2025		 $ 30,584  $ 18,790  $ 10,780  $ 18,058  $ 1,264  $ 6,163  $ 3,800  $ 51,637  $ 141,076 
(amounts in thousands)
Commercial and industrial (1)
 Multifamily Commercial real estate owner occupied Commercial real estate non-owner occupied Construction Residential real estate Manufactured housing Installment Total
Three Months Ended
March 31, 2024
Ending Balance,
December 31, 2023
 $ 23,503  $ 16,343  $ 9,882  $ 16,859  $ 1,482  $ 6,586  $ 4,239  $ 56,417  $ 135,311 
Charge-offs (5,396) (473) (22) —  —  (19) —  (16,917) (22,827)
Recoveries 1,724  —  —  —  —  1  —  3,134  4,859 
Provision (benefit) for credit losses on loans and leases 3,172  2,437  341  1,461  384  139  (79) 8,098  15,953 
Ending Balance,
March 31, 2024		 $ 23,003  $ 18,307  $ 10,201  $ 18,320  $ 1,866  $ 6,707  $ 4,160  $ 50,732  $ 133,296 
(1)    Includes specialized lending.
At March 31, 2025, the ACL on loans and leases was $141.1 million, an increase of $4.3 million from the December 31, 2024 balance of $136.8 million. The increase in ACL for the three months ended March 31, 2025 was primarily attributable to slight deterioration in macroeconomic forecasts and an increase in loan balances held for investment.
Loan Modifications for Borrowers Experiencing Financial Difficulty
A borrower is considered to be experiencing financial difficulty when there is a significant doubt about the borrower’s ability to make the required principal and interest payments on the loan or to get an equivalent financing from another creditor at a market rate for a similar loan.
When borrowers are experiencing financial difficulty, Customers may make certain loan modifications as part of loss mitigation strategies to maximize expected payment. To be classified as a modification made to a borrower experiencing financial difficulty, the modification must be in the form of an interest rate reduction, principal forgiveness, or an other-than-insignificant payment delay (payment deferral), term extension, or combinations thereof.
Customers will generally try other forms of relief before principal forgiveness. Any contractual reduction in the amount of principal due without receiving payment or assets is considered forgiveness. For the purpose of this disclosure, Customers considers any contractual change in interest rate that results in a reduction in interest rate relative to the current stated interest rate as an interest rate reduction. Generally, Customers considers any delay in payment of greater than 90 days in the last twelve months to be significant. Term extensions extend the original contractual maturity of the loan. For the purpose of this disclosure, modification of contingent payment features or covenants that would have accelerated payment are not considered term extensions.
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The following tables present the amortized cost of loans that were modified to borrowers experiencing financial difficulty for the three months ended March 31, 2025 and 2024, disaggregated by class of financing receivable and type of modification granted.
Three Months Ended March 31, 2025
(dollars in thousands) Term Extension Payment Deferral Debt Forgiveness Interest Rate Reduction and Term Extension Total Percentage of Total by Financing Class
Commercial and industrial, including specialized lending
 $ 731  $ 766  $ —  $ —  $ 1,497  0.02  %
Personal installment 2,616  1,440  118  128  4,302  0.87  %
Total $ 3,347  $ 2,206  $ 118  $ 128  $ 5,799 

Three Months Ended March 31, 2024
(dollars in thousands) Term Extension Payment Deferral Debt Forgiveness Interest Rate Reduction and Term Extension Total Percentage of Total by Financing Class
Commercial and industrial, including specialized lending
 $ —  $ 1,980  $ —  $ —  $ 1,980  0.03  %
Multifamily —  10,688  —  —  10,688  0.50  %
Residential real estate —  57  —  —  57  0.01  %
Personal installment 3,747  198  36  —  3,981  0.50  %
Total $ 3,747  $ 12,923  $ 36  $ —  $ 16,706 
As of March 31, 2025, there were no commitments to lend additional funds to debtors experiencing financial difficulty whose loans have been modified during the three months ended March 31, 2025.
The following table summarizes the impacts of loan modifications made to borrowers experiencing financial difficulty for the three months ended March 31, 2025 and 2024.
Three Months Ended March 31, 2025 Three Months Ended March 31, 2024
Weighted Average Weighted Average
(dollars in thousands) Interest Rate Reduction (%) Term Extension
(in months)		 Payment Deferral
(in months)		 Debt Forgiven Interest Rate Reduction (%) Term Extension
(in months)		 Payment Deferral
(in months)		 Debt Forgiven
Commercial and industrial, including specialized lending —% 11 6 $ —  —% 0 3 $ — 
Multifamily — 0 0 —  — 0 12 — 
Residential real estate — 0 0 —  — 0 5 — 
Personal installment 13.2 5 7 73  — 6 6 100 
The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. Loans are considered to be in payment default at 90 days or more past due. The following tables present an aging analysis of loan modifications made to borrowers experiencing financial difficulty in the twelve months ended March 31, 2025 and 2024.
March 31, 2025
(dollars in thousands) 30-59 Days past due 60-89 Days past due 90 Days or more past due Current Total
Commercial and industrial, including specialized lending
 $ —  $ —  $ —  $ 11,179  $ 11,179 
Residential real estate —  —  —  302  302 
Manufactured housing —  —  17  299  316 
Personal installment 188  347  136  5,951  6,622 
Total $ 188  $ 347  $ 153  $ 17,731  $ 18,419 
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March 31, 2024
(dollars in thousands) 30-59 Days past due 60-89 Days past due 90 Days or more past due Current Total
Commercial and industrial, including specialized lending
 $ 1,980  $ —  $ —  $ 15,348  $ 17,328 
Multifamily —  —  —  10,688  10,688 
Residential real estate 57  —  —  46  103 
Manufactured housing —  92  31  620  743 
Personal installment 943  626  546  12,131  14,246 
Total $ 2,980  $ 718  $ 577  $ 38,833  $ 43,108 
The loans to borrowers experiencing financial difficulty that were modified during the twelve months ended March 31, 2025 and 2024, respectively, that subsequently defaulted were not material. Customers’ ACL is influenced by loan level characteristics that inform the assessed propensity to default. As such, the provision for credit losses is impacted by changes in such loan level characteristics, such as payment performance. Loans made to borrowers experiencing financial difficulty can be classified as either accrual or nonaccrual.
Credit Quality Indicators
The ACL represents management’s estimate of expected losses in Customers’ loans and leases receivable portfolio, excluding mortgage finance and consumer installment loans reported at fair value pursuant to a fair value option election and PPP loans as these loans are fully guaranteed by the SBA, provided that the eligibility criteria are met. Commercial and industrial including specialized lending, multifamily, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loans are rated based on an internally assigned risk rating system which is assigned at the time of loan origination and reviewed on a periodic, or on an “as needed” basis. Residential real estate, manufactured housing and installment loans are evaluated based on the payment activity of the loan.
To facilitate the monitoring of credit quality within the commercial and industrial including specialized lending, multifamily, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loan portfolios, and as an input in the ACL lifetime loss rate model for the commercial and industrial loan portfolio, the Bank utilizes the following categories of risk ratings: pass/satisfactory (includes risk rating 1 through 6), special mention, substandard, doubtful, and loss. The risk rating categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass ratings, which are assigned to those borrowers who do not have identified potential or well-defined weaknesses and for whom there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter. While assigning risk ratings involves judgment, the risk-rating process allows management to identify riskier credits in a timely manner and allocate the appropriate resources to manage those loans and leases. The 2024 Form 10-K describes Customers Bancorp’s risk rating grades.
Risk ratings are not established for certain consumer loans, including residential real estate, home equity, manufactured housing, and installment loans, mainly because these portfolios consist of a larger number of homogeneous loans with smaller balances. Instead, these portfolios are evaluated for risk mainly based upon aggregate payment history through the monitoring of delinquency levels and trends and are classified as performing and non-performing. The following tables present the credit ratings of loans and leases receivable and current period gross write-offs as of March 31, 2025 and December 31, 2024.

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Term Loans Amortized Cost Basis by Origination Year as of
March 31, 2025
(amounts in thousands) 2025 2024 2023 2022 2021 Prior Revolving loans amortized cost basis Revolving loans converted to term Total
Commercial and industrial loans and leases, including specialized lending:
Pass $ 870,173  $ 1,568,549  $ 757,704  $ 1,095,070  $ 296,349  $ 156,307  $ 2,000,301  $ 276,874  $ 7,021,327 
Special mention 7,200  19,278  466  18,920  107  —  6,145  8,159  60,275 
Substandard —  1,005  531  36,248  9,663  65,051  28,981  2,693  144,172 
Doubtful —  —  —  —  —  —  —  — 
Total commercial and industrial loans and leases $ 877,373  $ 1,588,832  $ 758,701  $ 1,150,238  $ 306,119  $ 221,358  $ 2,035,427  $ 287,726  $ 7,225,774 
Commercial and industrial loans and leases charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ 103  $ 4,013  $ 12  $ 379  $ —  $ —  $ 4,507 
Multifamily loans:
Pass $ 126,248  $ 238,962  $ 803  $ 1,171,382  $ 285,480  $ 393,640  $ —  $ —  $ 2,216,515 
Special mention —  —  —  18,572  —  30,800  —  —  49,372 
Substandard —  —  —  —  12,023  44,213  —  —  56,236 
Doubtful —  —  —  —  —  —  —  —  — 
Total multifamily loans $ 126,248  $ 238,962  $ 803  $ 1,189,954  $ 297,503  $ 468,653  $ —  $ —  $ 2,322,123 
Multifamily loans charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ —  $ —  $ —  $ 3,834  $ —  $ 3,834 
Commercial real estate owner occupied loans:
Pass $ 61,337  $ 394,556  $ 53,922  $ 209,748  $ 194,376  $ 168,200  $ 7,604  $ 97  $ 1,089,840 
Special mention —  —  —  156  16,362  4,650  —  11,091  32,259 
Substandard —  —  2,944  703  —  13,380  —  —  17,027 
Doubtful —  —  —  —  —  —  —  —  — 
Total commercial real estate owner occupied loans $ 61,337  $ 394,556  $ 56,866  $ 210,607  $ 210,738  $ 186,230  $ 7,604  $ 11,188  $ 1,139,126 
Commercial real estate owner occupied loans charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ —  $ —  $ —  $ 19  $ —  $ —  $ 19 
Commercial real estate non-owner occupied loans:
Pass $ 101,960  $ 163,009  $ 30,307  $ 389,600  $ 95,827  $ 560,208  $ 2,000  $ —  $ 1,342,911 
Special mention —  —  12,000  24,855  —  557  —  —  37,412 
Substandard —  —  —  —  —  58,583  —  —  58,583 
Doubtful —  —  —  —  —  —  —  —  — 
Total commercial real estate non-owner occupied loans $ 101,960  $ 163,009  $ 42,307  $ 414,455  $ 95,827  $ 619,348  $ 2,000  $ —  $ 1,438,906 
Commercial real estate non-owner occupied loans charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Construction loans:
Pass $ —  $ 22,382  $ 28,779  $ 93,649  $ —  $ —  $ —  $ —  $ 144,810 
Special mention —  —  9,837  —  —  —  —  —  9,837 
Substandard —  —  —  —  —  —  —  —  — 
Doubtful —  —  —  —  —  —  —  —  — 
Total construction loans $ —  $ 22,382  $ 38,616  $ 93,649  $ —  $ —  $ —  $ —  $ 154,647 
Construction loans charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Total commercial loans and leases receivable $ 1,166,918  $ 2,407,741  $ 897,293  $ 3,058,903  $ 910,187  $ 1,495,589  $ 2,045,031  $ 298,914  $ 12,280,576 
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Term Loans Amortized Cost Basis by Origination Year as of
March 31, 2025
(amounts in thousands) 2025 2024 2023 2022 2021 Prior Revolving loans amortized cost basis Revolving loans converted to term Total
Total commercial loans and leases receivable charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ 103  $ 4,013  $ 12  $ 4,232  $ —  $ —  $ 8,360 
Residential real estate loans:
Performing $ 8,055  $ 45,794  $ 20,557  $ 160,993  $ 121,810  $ 83,313  $ 48,752  $ —  $ 489,274 
Non-performing —  137  268  1,211  1,059  4,536  287  —  7,498 
Total residential real estate loans $ 8,055  $ 45,931  $ 20,825  $ 162,204  $ 122,869  $ 87,849  $ 49,039  $ —  $ 496,772 
Residential real estate loans charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Manufactured housing loans:
Performing $ —  $ —  $ —  $ —  $ —  $ 30,653  $ —  $ —  $ 30,653 
Non-performing —  —  —  —  —  1,122  —  —  1,122 
Total manufactured housing loans $ —  $ —  $ —  $ —  $ —  $ 31,775  $ —  $ —  $ 31,775 
Manufactured housing loans charge-offs:
Three Months Ended March 31, 2025 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Installment loans:
Performing $ 9,618  $ 80,834  $ 229,157  $ 228,396  $ 79,363  $ 49,056  $ 46,399  $ 3  $ 722,826 
Non-performing —  1,138  1,522  1,084  645  583  211  —  5,183 
Total installment loans $ 9,618  $ 81,972  $ 230,679  $ 229,480  $ 80,008  $ 49,639  $ 46,610  $ 3  $ 728,009 
Installment loans charge-offs:
Three Months Ended March 31, 2025 $ 217  $ 658  $ 3,299  $ 4,829  $ 2,564  $ 836  $ —  $ —  $ 12,403 
Total consumer loans $ 17,673  $ 127,903  $ 251,504  $ 391,684  $ 202,877  $ 169,263  $ 95,649  $ 3  $ 1,256,556 
Total consumer loans charge-offs:
Three Months Ended March 31, 2025 $ 217  $ 658  $ 3,299  $ 4,829  $ 2,564  $ 836  $ —  $ —  $ 12,403 
Loans and leases receivable $ 1,184,591  $ 2,535,644  $ 1,148,797  $ 3,450,587  $ 1,113,064  $ 1,664,852  $ 2,140,680  $ 298,917  $ 13,537,132 
Loans and leases receivable charge-offs:
Three Months Ended March 31, 2025 $ 217  $ 658  $ 3,402  $ 8,842  $ 2,576  $ 5,068  $ —  $ —  $ 20,763 

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Term Loans Amortized Cost Basis by Origination Year as of
December 31, 2024
(amounts in thousands) 2024 2023 2022 2021 2020 Prior Revolving loans amortized cost basis Revolving loans converted to term Total
Commercial and industrial loans and leases, including specialized lending:
Pass $ 2,103,150  $ 738,456  $ 1,278,246  $ 333,068  $ 107,840  $ 6,742  $ 1,907,480  $ 336,100  $ 6,811,082 
Special mention 16,905  —  6,933  1,522  —  62  8,144  3,630  37,196 
Substandard —  1,631  43,668  11,525  4,178  62,095  27,830  2,814  153,741 
Doubtful —  —  —  —  —  —  —  —  — 
Total commercial and industrial loans and leases $ 2,120,055  $ 740,087  $ 1,328,847  $ 346,115  $ 112,018  $ 68,899  $ 1,943,454  $ 342,544  $ 7,002,019 
Commercial and industrial loans and leases charge-offs:
For the Year Ended December 31, 2024 (1)
 $ 312  $ 2,765  $ 5,833  $ 4,865  $ 2,429  $ 7,531  $ —  $ —  $ 23,735 
Multifamily loans:
Pass $ 235,685  $ 813  $ 1,182,371  $ 288,055  $ 124,779  $ 314,967  $ —  $ —  $ 2,146,670 
Special mention —  —  14,040  12,093  —  32,316  —  —  58,449 
Substandard —  —  —  —  —  47,127  —  —  47,127 
Doubtful —  —  —  —  —  —  —  —  — 
Total multifamily loans $ 235,685  $ 813  $ 1,196,411  $ 300,148  $ 124,779  $ 394,410  $ —  $ —  $ 2,252,246 
Multifamily loans charge-offs:
For the Year Ended December 31, 2024
 $ —  $ —  $ —  $ —  $ —  $ 4,073  $ —  $ —  $ 4,073 
Commercial real estate owner occupied loans:
Pass $ 395,522  $ 54,356  $ 211,300  $ 195,169  $ 42,078  $ 118,677  $ 7,605  $ 104  $ 1,024,811 
Special mention —  —  159  16,429  10,000  15,885  —  11,136  53,609 
Substandard —  2,944  703  —  —  18,877  —  —  22,524 
Doubtful —  —  —  —  —  —  —  —  — 
Total commercial real estate owner occupied loans $ 395,522  $ 57,300  $ 212,162  $ 211,598  $ 52,078  $ 153,439  $ 7,605  $ 11,240  $ 1,100,944 
Commercial real estate owner occupied loans charge-offs:
For the Year Ended December 31, 2024
 $ —  $ —  $ —  $ —  $ —  $ 365  $ —  $ —  $ 365 
Commercial real estate non-owner occupied loans:
Pass $ 163,429  $ 30,367  $ 412,352  $ 96,656  $ 165,111  $ 413,336  $ 2,000  $ —  $ 1,283,251 
Special mention —  12,000  4,277  —  —  431  —  —  16,708 
Substandard —  —  —  —  —  59,171  —  —  59,171 
Doubtful —  —  —  —  —  —  —  —  — 
Total commercial real estate non-owner occupied loans $ 163,429  $ 42,367  $ 416,629  $ 96,656  $ 165,111  $ 472,938  $ 2,000  $ —  $ 1,359,130 
Commercial real estate non-owner occupied loans charge-offs:
For the Year Ended December 31, 2024
 $ —  $ —  $ —  $ —  $ 145  $ —  $ —  $ —  $ 145 
Construction loans:
Pass $ 16,103  $ 22,610  $ 94,957  $ —  $ —  $ 4,446  $ —  $ —  $ 138,116 
Special mention —  9,093  —  —  —  —  —  —  9,093 
Substandard —  —  —  —  —  —  —  —  — 
Doubtful —  —  —  —  —  —  —  —  — 
Total construction loans $ 16,103  $ 31,703  $ 94,957  $ —  $ —  $ 4,446  $ —  $ —  $ 147,209 
Construction loans charge-offs:
For the Year Ended December 31, 2024
 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Total commercial loans and leases receivable $ 2,930,794  $ 872,270  $ 3,249,006  $ 954,517  $ 453,986  $ 1,094,132  $ 1,953,059  $ 353,784  $ 11,861,548 
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Term Loans Amortized Cost Basis by Origination Year as of
December 31, 2024
(amounts in thousands) 2024 2023 2022 2021 2020 Prior Revolving loans amortized cost basis Revolving loans converted to term Total
Total commercial loans and leases receivable charge-offs:
For the Year Ended December 31, 2024
 $ 312  $ 2,765  $ 5,833  $ 4,865  $ 2,574  $ 11,969  $ —  $ —  $ 28,318 
Residential real estate loans:
Performing $ 45,757  $ 20,701  $ 163,473  $ 123,170  $ 5,827  $ 77,989  $ 50,807  $ —  $ 487,724 
Non-performing 138  273  925  1,077  317  5,425  680  —  8,835 
Total residential real estate loans $ 45,895  $ 20,974  $ 164,398  $ 124,247  $ 6,144  $ 83,414  $ 51,487  $ —  $ 496,559 
Residential real estate loans charge-offs:
For the Year Ended December 31, 2024
 $ —  $ —  $ —  $ —  $ —  $ 38  $ —  $ —  $ 38 
Manufactured housing loans:
Performing $ —  $ —  $ —  $ —  $ —  $ 31,570  $ —  $ —  $ 31,570 
Non-performing —  —  —  —  —  1,553  —  —  1,553 
Total manufactured housing loans $ —  $ —  $ —  $ —  $ —  $ 33,123  $ —  $ —  $ 33,123 
Manufactured housing loans charge-offs:
For the Year Ended December 31, 2024
 $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Installment loans:
Performing $ 86,018  $ 164,223  $ 255,777  $ 98,375  $ 31,808  $ 25,733  $ 46,126  $ 5  $ 708,065 
Non-performing 238  1,829  1,698  918  260  504  141  —  5,588 
Total installment loans $ 86,256  $ 166,052  $ 257,475  $ 99,293  $ 32,068  $ 26,237  $ 46,267  $ 5  $ 713,653 
Installment loans charge-offs:
For the Year Ended December 31, 2024
 $ 2,797  $ 8,791  $ 22,707  $ 15,211  $ 2,811  $ 3,792  $ —  $ —  $ 56,109 
Total consumer loans $ 132,151  $ 187,026  $ 421,873  $ 223,540  $ 38,212  $ 142,774  $ 97,754  $ 5  $ 1,243,335 
Total consumer loans charge-offs:
For the Year Ended December 31, 2024
 $ 2,797  $ 8,791  $ 22,707  $ 15,211  $ 2,811  $ 3,830  $ —  $ —  $ 56,147 
Loans and leases receivable $ 3,062,945  $ 1,059,296  $ 3,670,879  $ 1,178,057  $ 492,198  $ 1,236,906  $ 2,050,813  $ 353,789  $ 13,104,883 
Loans and leases receivable charge-offs:
For the Year Ended December 31, 2024
 $ 3,109  $ 11,556  $ 28,540  $ 20,076  $ 5,385  $ 15,799  $ —  $ —  $ 84,465 
(1)    Charge-offs for the year ended December 31, 2024 included $5.0 million of commercial and industrial loans originated under the PPP that were subsequently determined to be ineligible for SBA forgiveness and guarantee and were ultimately deemed uncollectible.
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Loan Purchases and Sales
Purchases and sales of loans held for investment were as follows for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(amounts in thousands) 2025 2024
Purchases (1)
Other commercial and industrial $ 1,079  $ 7,403 
Personal installment (2)
 104,941  — 
Total $ 106,020  $ 7,403 
Sales
Multifamily $ 8,000  $ — 
Personal installment
 281  — 
Total $ 8,281  $ — 
(1)Amounts reported in the above table are the unpaid principal balance at time of purchase. The purchase price was 99.5% and 100.0% of the loans’ unpaid principal balance for the three months ended March 31, 2025 and 2024, respectively.
(2)Installment loan purchases for the three months ended March 31, 2025 consist of third-party originated unsecured consumer loans. None of the loans held for investment are considered sub-prime at the time of origination. Customers considers sub-prime borrowers to be those with FICO scores below 660.
Loans Pledged as Collateral
Customers has pledged eligible commercial and residential real estate, multifamily, commercial and industrial, PPP and consumer installment loans as collateral for borrowings outstanding or available immediately from the FHLB and FRB in the amount of $8.2 billion and $8.0 billion at March 31, 2025 and December 31, 2024, respectively.
NOTE 8 — LEASES
Lessee
Customers has operating leases for its branches, certain LPOs, and administrative offices, with remaining lease terms ranging between one month and eleven years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands) Classification March 31, 2025 December 31, 2024
ASSETS
Operating lease ROU assets Other assets $ 33,755  $ 35,322 
LIABILITIES
Operating lease liabilities Other liabilities $ 36,877  $ 37,882 
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
Three Months Ended March 31,
(amounts in thousands) Classification 2025 2024
Operating lease cost (1)
 Occupancy expenses $ 1,949  $ 1,185 
(1) There were no variable lease costs for the three months ended March 31, 2025 and 2024, and sublease income for operating leases was immaterial.
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Maturities of non-cancelable operating lease liabilities were as follows at March 31, 2025:
(amounts in thousands) March 31, 2025
2025 $ 4,414 
2026 6,647 
2027 6,161 
2028 5,546 
2029 4,802 
Thereafter 17,171 
Total minimum payments 44,741 
Less: interest
 7,864 
Present value of lease liabilities $ 36,877 
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to the operating lease liabilities was $1.5 million and $1.4 million for the three months ended March 31, 2025 and 2024, respectively. These payments were reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at March 31, 2025 and December 31, 2024:
March 31, 2025 December 31, 2024
Weighted average remaining lease term (years)
Operating leases 8.1 years 8.2 years
Weighted average discount rate
Operating leases 4.13  % 4.22  %
Equipment Lessor
Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. The commercial equipment financing group is primarily focused on serving the following industries: transportation, construction (includes crane and utility), marine, franchise, general manufacturing (includes machine tool), helicopter/fixed wing, solar, packaging, plastics and food processing. Lease terms typically range from 24 months to 120 months. The commercial equipment financing group offers the following products: Loans, Capital Lease, PUT, TRAC, Split-TRAC, and FMV. Customers’ commercial equipment financing group leases equipment under direct finance, sales-type or operating leases.
The estimated residual values for direct finance, sales-type and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only Customers’ Split-TRAC leases have residual risk and the unguaranteed portions are typically nominal. Expected credit losses on direct financing and sales-type leases and the related estimated residual values are included in the ACL on loans and leases.
Direct finance and sales-type equipment leases, are included in commercial and industrial loans and leases receivable and are recorded at the discounted amounts of lease payments receivable and the estimated residual value of the leased assets. Interest income on direct finance and sales-type leases is recognized over the term of the leases using the effective interest method. Any difference between the lower of the fair value of the underlying leased asset or the sum of the lease receivables and the carrying amount of the underlying leased asset would result to a gain or loss at the lease commencement date. Customers’ direct finance and sales-type lease activity primarily relates to leasing of new equipment.
Customers’ commercial equipment financing group executed leases of commercial clean vehicles that qualified for investment tax credits. Customers accounted for these leases as sales-type leases and were included in loans and leases receivable on the balance sheet. Customers did not enter into sales-type leases of commercial clean vehicles that qualified for investment tax credits during the three months ended March 31, 2025 and 2024.
Customers’ commercial equipment financing group had total interest income, including from direct financing and sales-type leases of $14.6 million and $9.5 million for the three months ended March 31, 2025 and 2024, respectively.
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Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at March 31, 2025 and December 31, 2024:
(amounts in thousands) Classification March 31, 2025 December 31, 2024
ASSETS
Direct financing and sales-type leases
Lease receivables Loans and leases receivable $ 257,347  $ 251,507 
Guaranteed residual assets Loans and leases receivable 25,979  24,045 
Unguaranteed residual assets Loans and leases receivable 11,217  10,463 
Deferred initial direct costs Loans and leases receivable 1,415  1,352 
Unearned income Loans and leases receivable (26,711) (24,673)
Net investment in direct financing and sales-type leases
 $ 269,247  $ 262,694 
Operating leases
Investment in operating leases Other assets $ 321,183  $ 308,993 
Accumulated depreciation Other assets (98,769) (95,053)
Deferred initial direct costs Other assets 1,083  978 
Net investment in operating leases 223,497  214,918 
Total lease assets $ 492,744  $ 477,612 
Maturities of operating and direct financing and sales-type lease receivables were as follows at March 31, 2025:
(amounts in thousands) Operating leases
Direct financing and sales-type leases
2025 $ 38,255  $ 56,794 
2026 52,784  64,124 
2027 40,258  55,477 
2028 63,825  36,780 
2029 26,839  24,778 
Thereafter 34,790  19,394 
Total minimum payments $ 256,751  257,347 
Less: interest 26,711 
Present value of lease receivables $ 230,636 
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NOTE 9 – DEPOSITS
The components of deposits at March 31, 2025 and December 31, 2024 were as follows:
March 31, 2025 December 31, 2024
(amounts in thousands)
Demand, non-interest bearing $ 5,552,605  $ 5,608,288 
Demand, interest bearing 5,137,961  5,553,698 
Savings, including money market deposit accounts 5,385,312  4,976,270 
Time 2,857,047  2,708,205 
Total deposits $ 18,932,925  $ 18,846,461 
The scheduled maturities for time deposits at March 31, 2025 were as follows:
(amounts in thousands) March 31, 2025
2025 $ 686,247 
2026 724,239 
2027 398,495 
2028 529,527 
2029 394,689 
Thereafter 123,850 
Total time deposits $ 2,857,047 
Time deposits greater than the FDIC limit of $250,000 totaled $764.4 million and $803.1 million at March 31, 2025 and December 31, 2024, respectively.
Demand deposit overdrafts reclassified as loans were $0.9 million and $1.2 million at March 31, 2025 and December 31, 2024, respectively.
At March 31, 2025 and December 31, 2024, the Bank had $1.5 billion in deposits, to which it had pledged $1.5 billion of available borrowing capacity through the FHLB to the depositors through a standby letter of credit arrangement, respectively.
NOTE 10 - BORROWINGS
Short-term debt
Short-term debt at March 31, 2025 and December 31, 2024 was as follows:
  March 31, 2025 December 31, 2024
(dollars in thousands) Amount Rate Amount Rate
FHLB advances $ 100,000  4.49  % $ 100,000  4.61  %
Total short-term debt $ 100,000  $ 100,000 
The following is a summary of additional information relating to Customers’ short-term debt:
 
(dollars in thousands)
March 31, 2025 (1)
December 31, 2024 (2)
FHLB advances
Maximum outstanding at any month end $ 100,000  $ 150,000 
Average balance during the period 45,556  8,880 
Weighted-average interest rate during the period 4.64  % 5.71  %
(1)    For the three months ended March 31, 2025.
(2)    For the year ended December 31, 2024.
At March 31, 2025 and December 31, 2024, Customers Bank had aggregate availability under federal funds lines totaling $1.7 billion.
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Long-term debt
FHLB and FRB advances
Long-term FHLB and FRB advances at March 31, 2025 and December 31, 2024 were as follows:
March 31, 2025 December 31, 2024
(dollars in thousands) Amount Rate Amount Rate
FHLB advances (1)
 $ 1,033,456 
(2)
 4.14  %
(3)
 $ 1,028,352 
(2)
 4.11  %
(3)
Total long-term FHLB and FRB advances $ 1,033,456  $ 1,028,352 
(1)    Amounts reported in the above table include fixed rate long-term advances from FHLB of $850.0 million with maturities ranging from September 2025 to March 2028, and variable rate long-term advances from FHLB of $180.0 million with maturities ranging from December 2026 to December 2028 with a returnable option that can be repaid without penalty on certain predetermined dates at Customers Bank’s option, at March 31, 2025.
(2)    Includes $3.5 million and $(1.6) million of unamortized basis adjustments from interest rate swaps designated as fair value hedges of long-term advances from FHLB at March 31, 2025 and December 31, 2024, respectively. Refer to NOTE 16 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES for additional information.
(3)    Excludes the effect of interest rate swaps designated as fair value hedges of long-term advances from FHLB.
Maturities of long-term FHLB advances were as follows at March 31, 2025:
March 31, 2025
(dollars in thousands)
Amount (1)
Rate (2)
2025 $ 100,000  4.42  %
2026 250,000  4.42  %
2027 500,000  3.81  %
2028 180,000  4.54  %
2029 —  —  %
Thereafter —  —  %
Total long-term FHLB advances $ 1,030,000 
(1)    Amounts reported in the above table include variable rate long-term advances from FHLB of $180.0 million with maturities ranging from December 2026 to December 2028 with a returnable option that can be repaid without penalty on certain predetermined dates at Customers Bank’s option.
(2)    Excludes the effect of interest rate swaps designated as fair value hedges of long-term advances from FHLB.
The maximum borrowing capacity with the FHLB and FRB at March 31, 2025 and December 31, 2024 was as follows:
(amounts in thousands) March 31, 2025 December 31, 2024
Total maximum borrowing capacity with the FHLB $ 3,908,969  $ 3,562,171 
Total maximum borrowing capacity with the FRB
 3,986,593  4,357,519 
Qualifying loans and securities serving as collateral against FHLB and FRB advances
 9,835,910  9,722,736 
Senior and Subordinated Debt
Long-term senior notes and subordinated debt at March 31, 2025 and December 31, 2024 were as follows:
(dollars in thousands) Carrying Amount
Issued by Ranking March 31, 2025 December 31, 2024 Rate Issued Amount Date Issued Maturity Price
Customers Bancorp
Senior (1)
 $ 99,103  $ 99,068  2.875  % $ 100,000  August 2021 August 2031 100.000  %
Total other borrowings $ 99,103  $ 99,068 
Customers Bancorp
Subordinated (2)(3)
 $ 72,993  $ 72,947  5.375  % $ 74,750  December 2019 December 2034 100.000  %
Customers Bank
Subordinated (2)(4)
 109,586  109,562  6.125  % 110,000  June 2014 June 2029 100.000  %
Total subordinated debt $ 182,579  $ 182,509 
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(1)The senior notes will bear an annual fixed rate of 2.875% until August 15, 2026. From August 15, 2026 until maturity, the notes will bear an annual interest rate equal to a benchmark rate, which is expected to be the three-month term SOFR, plus 235 basis points. Customers Bancorp has the ability to call the senior notes, in whole, or in part, at a redemption price equal to 100% of the principal balance at certain times on or after August 15, 2026.
(2)The subordinated notes qualify as Tier 2 capital for regulatory capital purposes.
(3)Customers Bancorp has the ability to call the subordinated notes, in whole, or in part, at a redemption price equal to 100% of the principal balance at certain times on or after December 30, 2029.
(4)The subordinated notes had an annual fixed rate of 6.125% until June 26, 2024. From June 26, 2024 until maturity, the notes bear an annual interest rate equal to the three-month LIBOR plus 344.3 basis points. Pursuant to the Adjustable Interest Rate (LIBOR) Act enacted by Congress on March 15, 2022, Customers substituted three-month term SOFR plus a tenor spread adjustment of 26.161 basis points for three-month LIBOR as the benchmark reference rate in order to calculate the annual interest rate after June 26, 2024. Customers Bank has the ability to call the subordinated notes, in whole, or in part, at a redemption price equal to 100% of the principal balance at certain times on or after June 26, 2024.
NOTE 11 — SHAREHOLDERS’ EQUITY
Common Stock
On June 26, 2024, the Board of Directors of Customers Bancorp authorized a new common stock repurchase program, the 2024 Share Repurchase Program, to repurchase up to 497,509 shares of the Company’s common stock. The term of the 2024 Share Repurchase Program will extend for one year from June 26, 2024, unless earlier terminated. Purchases of shares under the 2024 Share Repurchase Program may be executed through open market purchases, privately negotiated transactions, through the use of Rule 10b5-1 plans, or otherwise. The exact number of shares, timing for such purchases, and the price and terms at and on which such purchases are to be made will be at the discretion of the Company and will comply with all applicable regulatory limitations. Customers Bancorp purchased 104,206 shares of its common stock for $5.6 million under the 2024 Share Repurchase Program during the three months ended March 31, 2025.
Preferred Stock
As of March 31, 2025 and December 31, 2024, Customers Bancorp has two series of preferred stock outstanding. The table below summarizes Customers’ issuances of preferred stock that remain outstanding at March 31, 2025 and December 31, 2024 and the dividends paid per share.
(amounts in thousands except share and per share data) Shares at Carrying value at
Initial Fixed Rate
 Date at which dividend rate becomes floating and earliest redemption date
Floating rate of Three-Month SOFR (1) Plus:
Dividend Paid Per Share in 2025 (2)
Fixed-to-floating rate: Issue Date March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024
Series E April 28, 2016 2,300,000 2,300,000 $ 55,593  $ 55,593  6.45  % June 15, 2021 5.140  % $ 0.62 
Series F September 16, 2016 3,400,000 3,400,000 82,201  82,201  6.00  % December 15, 2021 4.762  % $ 0.59 
Totals 5,700,000 5,700,000 $ 137,794  $ 137,794 
(1)    Pursuant to the Adjustable Interest Rate (LIBOR) Act enacted by Congress on March 15, 2022, Customers substituted three-month term SOFR plus a tenor spread adjustment of 26.161 basis points for three-month LIBOR as the benchmark reference rate on Series E and F Preferred Stock, plus 5.14% and 4.762%, respectively, beginning with dividends declared on October 25, 2023.
(2)    For the three months ended March 31, 2025.
NOTE 12 — SHARE BASED COMPENSATION
Customers’ 2019 Plan is administered by the Leadership Development and Compensation Committee of the Board of Directors. At March 31, 2025 and December 31, 2024, the aggregate number of shares of common stock available for grant under the 2019 Plan was 567,093 and 841,513 shares, respectively.
Share-based compensation expense relating to stock options and restricted stock units is recognized on a straight-line basis over the vesting periods of the awards and is a component of salaries and employee benefits expense. Total share-based compensation expense for the three months ended March 31, 2025 and 2024 was $3.9 million and $3.5 million, respectively. At March 31, 2025, there was $31.1 million of unrecognized compensation cost related to all non-vested share-based compensation awards. This cost is expected to be recognized through 2029.
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Restricted Stock Units
The fair value of restricted stock units granted under the 2019 Plan is determined based on the closing market price of Customers’ common stock on the date of grant, except for the performance based restricted stock units with market conditions under a long-term incentive compensation plan. There were 278,815 and 204,275 restricted stock units granted under the 2019 Plan during the three months ended March 31, 2025 and 2024, respectively. The grants are mostly subject to either a three-year waterfall vesting (with one third of the amount vesting annually) or a three-year cliff vesting.
The table below presents the status of the restricted stock units at March 31, 2025 and 2024, and changes during the three months ended March 31, 2025 and 2024 :
Restricted
Stock Units
Weighted-
Average Grant-
Date Fair Value
Outstanding and unvested at December 31, 2024
 1,110,122  $ 32.61 
Granted 278,815  50.68 
Vested (403,777) 28.75 
Forfeited (4,239) 39.30 
Outstanding and unvested at March 31, 2025
 980,921  39.18 
Restricted
Stock Units
Weighted-
Average Grant-
Date Fair Value
Outstanding and unvested at December 31, 2023
 1,159,782  $ 26.78 
Granted 204,275  49.82 
Vested (84,638) 37.07 
Forfeited (5,824) 25.43 
Outstanding and unvested at March 31, 2024
 1,273,595  29.69 
NOTE 13 — FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
Customers is involved with financial instruments and other commitments with off-balance sheet risks. Financial instruments with off-balance sheet risks are incurred in the normal course of business to meet the financing needs of the Bank’s customers. These financial instruments include commitments to extend credit, including unused portions of lines of credit, and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the balance sheet.
As of March 31, 2025 and December 31, 2024, the following off-balance sheet commitments, financial instruments and other arrangements were outstanding:
(amounts in thousands) March 31, 2025 December 31, 2024
Commitments to fund loans and leases $ 145,252  $ 165,881 
Unfunded commitments to fund mortgage finance loans 1,581,033  1,562,593 
Unfunded commitments under lines of credit and credit cards 3,812,979  3,825,727 
Letters of credit 34,114  31,832 
Other unused and unfunded commitments 25,810  28,904 
Allowance For Credit Losses on Lending- Related Commitments
ACL on lending related commitments is a liability account, calculated in accordance with ASC 326, Financial Instruments - Credit Losses (“ASC 326”), representing expected credit losses over the contractual period for which Customers is exposed to credit risk resulting from a contractual obligation to extend credit. Customers recognized a provision for credit losses of $1.2 million during the three months ended March 31, 2025 resulting in an ACL of $6.1 million as of March 31, 2025. Customers recognized a provision for credit losses of $0.4 million during the three months ended March 31, 2024 resulting in an ACL of $3.3 million as of March 31, 2024. The ACL on lending-related commitments is recorded in accrued interest payable and other liabilities in the consolidated balance sheet and the credit loss expense is recorded as a provision for credit losses within other non-interest expense in the consolidated statement of income.
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NOTE 14 — REGULATORY CAPITAL
The Bank and the Bancorp are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on Customers’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank and the Bancorp must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items, as calculated under the regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
In first quarter 2020, the U.S federal banking regulatory agencies permitted banking organizations to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years. As part of its response to the impact of COVID-19, on March 31, 2020, the U.S. federal banking regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule allowed banking organizations to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. Customers elected to adopt the interim final rule, which is reflected in the regulatory capital data presented below. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million was phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of March 31, 2025, our regulatory capital ratios reflected the full impact of the CECL transition provisions.
Quantitative measures established by regulation to ensure capital adequacy require the Bank and the Bancorp to maintain minimum amounts and ratios (set forth in the following table) of common equity Tier 1, Tier 1, and total capital to risk-weighted assets, and Tier 1 capital to average assets (as defined in the regulations). At March 31, 2025 and December 31, 2024, the Bank and the Bancorp satisfied all capital requirements to which they were subject.
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Generally, to comply with the regulatory definition of adequately capitalized, or well capitalized, respectively, or to comply with the Basel III capital requirements, an institution must at least maintain the common equity Tier 1, Tier 1 and total risk-based capital ratios and the Tier 1 leverage ratio in excess of the related minimum ratios as set forth in the following table:
Minimum Capital Levels to be Classified as:
  Actual Adequately Capitalized Well Capitalized Basel III Compliant
(dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio
As of March 31, 2025:
Common equity Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,787,928  11.718  % $ 686,596  4.500  % N/A N/A $ 1,068,039  7.000  %
Customers Bank $ 1,890,194  12.403  % $ 685,793  4.500  % $ 990,590  6.500  % $ 1,066,789  7.000  %
Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,925,721  12.621  % $ 915,462  6.000  % N/A N/A $ 1,296,904  8.500  %
Customers Bank $ 1,890,194  12.403  % $ 914,391  6.000  % $ 1,219,188  8.000  % $ 1,295,387  8.500  %
Total capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 2,229,628  14.613  % $ 1,220,616  8.000  % N/A N/A $ 1,602,058  10.500  %
Customers Bank $ 2,121,108  13.918  % $ 1,219,188  8.000  % $ 1,523,985  10.000  % $ 1,600,184  10.500  %
Tier 1 capital (to average assets)
Customers Bancorp, Inc. $ 1,925,721  8.582  % $ 897,534  4.000  % N/A N/A $ 897,534  4.000  %
Customers Bank $ 1,890,194  8.430  % $ 896,849  4.000  % $ 1,121,061  5.000  % $ 896,849  4.000  %
As of December 31, 2024:
Common equity Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,803,601  12.087  % $ 671,841  4.500  % N/A N/A $ 1,044,526  7.000  %
Customers Bank $ 1,930,951  12.955  % $ 670,719  4.500  % $ 968,817  6.500  % $ 1,043,341  7.000  %
Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,941,394  13.011  % $ 895,308  6.000  % N/A N/A $ 1,268,353  8.500  %
Customers Bank $ 1,930,951  12.955  % $ 894,292  6.000  % $ 1,192,390  8.000  % $ 1,266,914  8.500  %
Total capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 2,219,984  14.878  % $ 1,193,744  8.000  % N/A N/A $ 1,566,789  10.500  %
Customers Bank $ 2,136,594  14.335  % $ 1,192,390  8.000  % $ 1,490,487  10.000  % $ 1,565,012  10.500  %
Tier 1 capital (to average assets)
Customers Bancorp, Inc. $ 1,941,394  8.694  % $ 893,254  4.000  % N/A N/A $ 893,254  4.000  %
Customers Bank $ 1,930,951  8.652  % $ 892,755  4.000  % $ 1,115,944  5.000  % $ 892,755  4.000  %
The Basel III Capital Rules require that we maintain a 2.500% capital conservation buffer with respect to each of common equity Tier 1, Tier 1 and total capital to risk-weighted assets, which provides for capital levels that exceed the minimum risk-based capital adequacy requirements. A financial institution with a conservation buffer of less than the required amount is subject to limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers.
NOTE 15 — DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
Customers uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. ASC 825, Financial Instruments, requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For Customers, as for most financial institutions, the majority of its assets and liabilities are considered to be financial instruments. Many of these instruments lack an available trading market as characterized by a willing buyer and a willing seller engaging in an exchange transaction. For fair value disclosure purposes, Customers utilized certain fair value measurement criteria under ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), as explained below.
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In accordance with ASC 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for Customers’ various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.
The fair value guidance provides a consistent definition of fair value, focusing on an exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements.
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3: Prices or valuation techniques that require adjustments to inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
The following methods and assumptions were used to estimate the fair values of Customers’ financial instruments as of March 31, 2025 and December 31, 2024:
Financial Instruments Recorded at Fair Value on a Recurring Basis
Investment securities:
The fair values of equity securities with a readily determinable fair value, AFS debt securities and debt securities reported at fair value based on a fair value option election are determined by obtaining quoted market prices on nationally recognized and foreign securities exchanges (Level 1), quoted prices in markets that are not active (Level 2), matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices, or internally and externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3).
When quoted market prices are not available, Customers employs an independent pricing service that utilizes matrix pricing to calculate fair value. Such fair value measurements consider observable data such as dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayments speeds, credit information, and respective terms and conditions for debt instruments. Management maintains procedures to monitor the pricing service’s results and has an established process to challenge their valuations, or methodologies, that appear unusual or unexpected.
Customers also utilizes internally and externally developed models that use unobservable inputs due to limited or no market activity of the instrument. These models use unobservable inputs that are inherently judgmental and reflect our best estimates of the assumptions a market participant would use to calculate fair value. Certain unobservable inputs in isolation may have either a directionally consistent or opposite impact on the fair value of the instrument for a given change in that input. When multiple inputs are used within the valuation techniques, a change in one input in a certain direction may be offset by an opposite change from another input. These assets are classified as Level 1, 2 or 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.
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Loans held for sale - Residential mortgage loans (fair value option):
Customers generally estimates the fair values of residential mortgage loans held for sale based on commitments on hand from investors within the secondary market for loans with similar characteristics. These assets are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements.
Loans held for sale and Loans receivable - Consumer other installment loans (fair value option):
The fair value of medical and home improvement installment loans within consumer other installment loans is the amount of cash initially advanced to fund the loan, as specified in the agreement with fintech companies, and generally held for up to 90 days prior to sale. During the three months ended March 31, 2025, Customers transferred medical installment loans from held for sale to held for investment in connection with a lending arrangement with a fintech company expiring in the second quarter of 2025. These assets are classified as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.
Loans receivable - Mortgage finance loans (fair value option):
The fair value of mortgage finance loans is the amount of cash initially advanced to fund the mortgage, plus accrued interest and fees, as specified in the respective agreements. The loan is used by mortgage companies as short-term bridge financing between the funding of the mortgage loans and the finalization of the sale of the loans to an investor. Changes in fair value are not generally expected to be recognized because at inception of the transaction the underlying mortgage loans have already been sold to an approved investor. Additionally, the interest rate is variable, and the transaction is short-term, with an average life of under 30 days from purchase to sale. These assets are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements.
Derivatives (assets and liabilities):
The fair values of interest rate swaps, interest rate caps and credit derivatives are determined using models that incorporate readily observable market data into a market standard methodology. This methodology nets the discounted future cash receipts and the discounted expected cash payments. The discounted variable cash receipts and payments are based on expectations of future interest rates derived from observable market interest rate curves. In addition, fair value is adjusted for the effect of nonperformance risk by incorporating credit valuation adjustments for Customers and its counterparties. These assets and liabilities are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements.
Derivative assets and liabilities are presented in other assets and accrued interest payable and other liabilities on the consolidated balance sheet.
Financial Instruments Recorded at Fair Value on a Nonrecurring Basis
Collateral-dependent loans:
Collateral-dependent loans are those loans that are accounted for under ASC 326, in which the Bank has measured impairment generally based on the fair value of the loan’s collateral or DCF analysis. Fair value is generally determined based upon independent third-party appraisals of the properties that collateralize the loans, DCF based upon the expected proceeds, sales agreements or letters of intent with third parties. These assets are generally classified as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.
The following information should not be interpreted as an estimate of Customers’ fair value in its entirety because fair value calculations are only provided for a limited portion of Customers’ assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making these estimates, comparisons between Customers’ disclosures and those of other companies may not be meaningful.
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The estimated fair values of Customers’ financial instruments at March 31, 2025 and December 31, 2024 were as follows:
      Fair Value Measurements at March 31, 2025
(amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)
Assets:
Cash and cash equivalents $ 3,428,690  $ 3,428,690  $ 3,428,690  $ —  $ — 
Debt securities, available for sale 2,024,437  2,024,437  —  1,855,962  168,475 
Debt securities, held to maturity 938,161  886,538  —  477,868  408,670 
Loans held for sale 37,529  37,529  —  1,465  36,064 
Total loans and leases receivable, net of allowance for credit losses on loans and leases 14,919,363  14,745,924  —  1,366,460  13,379,464 
FHLB, Federal Reserve Bank, and other restricted stock 96,758  96,758  —  96,758  — 
Derivatives 14,146  14,146  —  14,047  99 
Liabilities:
Deposits $ 18,932,925  $ 18,939,936  $ 16,075,878  $ 2,864,058  $ — 
FHLB advances 1,133,456  1,122,779  —  1,122,779  — 
Other borrowings 99,103  82,500  —  82,500  — 
Subordinated debt 182,579  168,275  —  168,275  — 
Derivatives 20,185  20,185  —  20,185  — 

      Fair Value Measurements at December 31, 2024
(amounts in thousands) Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)
Assets:
Cash and cash equivalents $ 3,785,931  $ 3,785,931  $ 3,785,931  $ —  $ — 
Debt securities, available for sale 1,985,438  1,985,438  —  1,972,202  13,236 
Debt securities, held to maturity 991,937  934,677  —  461,307  473,370 
Loans held for sale 204,794  204,794  —  1,836  202,958 
Total loans and leases receivable, net of allowance for credit losses on loans and leases 14,311,987  14,104,884  —  1,321,128  12,783,756 
FHLB, Federal Reserve Bank, and other restricted stock 96,214  96,214  —  96,214  — 
Derivatives 15,263  15,263  —  15,223  40 
Liabilities:
Deposits $ 18,846,461  $ 18,842,810  $ 16,138,256  $ 2,704,554  $ — 
FHLB advances 1,128,352  1,103,324  —  1,103,324  — 
Other borrowings 99,068  88,000  —  88,000  — 
Subordinated debt 182,509  167,601  —  167,601  — 
Derivatives 22,570  22,570  —  22,570  — 

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For financial assets and liabilities measured at fair value on a recurring and nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2025 and December 31, 2024 were as follows:
  March 31, 2025
  Fair Value Measurements at the End of the Reporting Period Using
(amounts in thousands) Quoted Prices in Active Markets for Identical Assets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)		 Total
Measured at Fair Value on a Recurring Basis:
Assets
Available for sale debt securities:
Asset-backed securities $ —  $ —  $ 168,475  $ 168,475 
Agency-guaranteed residential mortgage-backed securities —  322,884  —  322,884 
Agency-guaranteed residential collateralized mortgage obligations —  228,343  —  228,343 
Agency-guaranteed commercial collateralized mortgage obligations —  93,747  —  93,747 
Collateralized loan obligations —  187,479  —  187,479 
Commercial mortgage-backed securities —  76,008  —  76,008 
Corporate notes —  482,361  —  482,361 
Private label collateralized mortgage obligations —  465,140  —  465,140 
Derivatives —  14,047  99  14,146 
Loans held for sale – fair value option —  1,465  64  1,529 
Loans receivable, mortgage finance – fair value option —  1,366,460  —  1,366,460 
Loans receivable, installment – fair value option —  —  138,159  138,159 
Total assets – recurring fair value measurements $ —  $ 3,237,934  $ 306,797  $ 3,544,731 
Liabilities
Derivatives  $ —  $ 20,185  $ —  $ 20,185 
Measured at Fair Value on a Nonrecurring Basis:
Assets
Collateral-dependent loans $ —  $ —  $ 21,119  $ 21,119 
Total assets – nonrecurring fair value measurements $ —  $ —  $ 21,119  $ 21,119 
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  December 31, 2024
  Fair Value Measurements at the End of the Reporting Period Using
(amounts in thousands) Quoted Prices in Active Markets for Identical Assets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)		 Total
Measured at Fair Value on a Recurring Basis:
Assets
Available for sale debt securities:
Asset-backed securities $ —  $ —  $ 13,236  $ 13,236 
Agency-guaranteed residential mortgage–backed securities —  327,038  —  327,038 
Agency-guaranteed residential collateralized mortgage obligations —  226,746  —  226,746 
Agency-guaranteed commercial collateralized mortgage obligations —  93,075  —  93,075 
Collateralized loan obligations —  255,407  —  255,407 
Commercial mortgage-backed securities —  77,708  —  77,708 
Corporate notes —  516,330  —  516,330 
Private label collateralized mortgage obligations —  475,898  —  475,898 
Derivatives —  15,223  40  15,263 
Loans held for sale – fair value option —  1,836  162,055  163,891 
Loans receivable, mortgage finance – fair value option —  1,321,128  —  1,321,128 
Total assets – recurring fair value measurements $ —  $ 3,310,389  $ 175,331  $ 3,485,720 
Liabilities
Derivatives $ —  $ 22,570  $ —  $ 22,570 
Measured at Fair Value on a Nonrecurring Basis:
Assets
Collateral-dependent loans $ —  $ —  $ 18,048  $ 18,048 
Total assets – nonrecurring fair value measurements $ —  $ —  $ 18,048  $ 18,048 
The changes in asset-backed securities (Level 3 assets) measured at fair value on a recurring basis for the three months ended March 31, 2025 and 2024 are summarized in the table below.
Asset-backed securities
(amounts in thousands) Three Months Ended March 31,
2025 2024
Balance at January 1 $ 13,236  $ 34,949 
Purchases 157,827  — 
Principal payments and premium amortization (3,077) (7,114)
Increase in allowance for credit losses (66) — 
Decrease in allowance for credit losses 75  33 
Change in fair value recognized in OCI 480  395 
Balance at March 31 $ 168,475  $ 28,263 
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The changes in other installment loans (Level 3 assets) classified as held for sale and held for investment, and measured at fair value on a recurring basis, based on an election made to account for the loans at fair value for the three months ended March 31, 2025 and 2024 are summarized in the table below.
Other Installment Loans
(amounts in thousands) Three Months Ended March 31,
2025 2024
Balance at January 1 $ 162,055  $ 188,062 
Originations
 194,333  235,431 
Sales
 (175,564) (158,215)
Principal payments
 (42,600) (46,263)
Change in fair value recognized in earnings
 —  — 
Balance at March 31 $ 138,224  $ 219,015 
There were no transfers between levels during the three months ended March 31, 2025 and 2024.
The following tables summarize financial assets and financial liabilities measured at fair value as of March 31, 2025 and December 31, 2024 on a recurring and nonrecurring basis for which Customers utilized Level 3 inputs to measure fair value. The unobservable Level 3 inputs noted below contain a level of uncertainty that may differ from what is realized in an immediate settlement of the assets. Therefore, Customers may realize a value higher or lower than the current estimated fair value of the assets.
Quantitative Information about Level 3 Fair Value Measurements
(dollars in thousands) Fair Value
Estimate		 Valuation Technique Unobservable Input Range 
(Weighted Average)
March 31, 2025        
Asset-backed securities $ 168,475  Discounted cash flow Discount rate


Annualized loss rate


Constant prepayment rate
9% - 9%
(9%)

8% - 13%
(9%)

17% - 19%
(19%)

Quantitative Information about Level 3 Fair Value Measurements
(dollars in thousands) Fair Value
Estimate		 Valuation Technique Unobservable Input Range 
(Weighted Average)
December 31, 2024        
Asset-backed securities $ 13,236  Discounted cash flow Discount rate


Annualized loss rate


Constant prepayment rate
9% - 10%
(10%)

5% - 10%
(7%)

19% - 20%
(19%)
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NOTE 16 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Risk Management Objectives of Using Derivatives
Customers is exposed to certain risks arising from both its business operations and economic conditions. Customers manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources, and durations of its assets and liabilities. Specifically, Customers enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. Customers’ derivative financial instruments are used to manage differences in the amount, timing, and duration of Customers’ known or expected cash receipts and its known or expected cash payments principally related to certain borrowings and deposits. Customers also has interest-rate derivatives resulting from an accommodation provided to certain qualifying customers, and therefore, they are not used to manage Customers’ interest-rate risk in assets or liabilities. Customers manages a matched book with respect to its derivative instruments used in this customer service in order to minimize its net risk exposure resulting from such transactions.
Fair Value Hedges of Benchmark Interest-Rate Risk
Customers is exposed to changes in the fair value of certain of its fixed rate AFS debt securities, deposits and FHLB advances due to changes in the benchmark interest rate. Customers uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate such as the Fed Funds Effective Swap Rate. Interest rate swaps designated as fair value hedges of certain fixed rate AFS debt securities involve the payment of fixed-rate amounts to a counterparty in exchange for Customers receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Interest rate swaps designated as fair value hedges of certain deposits and FHLB advances involve the payment of variable-rate amounts to a counterparty in exchange for Customers receiving fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in net interest income.
At March 31, 2025, Customers had 46 outstanding interest rate derivatives with notional amounts totaling $2.6 billion that were designated as fair value hedges of certain deposits and FHLB advances. During the three months ended March 31, 2025, Customers entered into three interest rate derivatives with notional amounts totaling $320.2 million that were designated as fair value hedges of certain deposits. At December 31, 2024, Customers had 46 outstanding interest rate derivatives with notional amounts totaling $2.4 billion that were designated as fair value hedges of certain deposits and FHLB advances.
As of March 31, 2025 and December 31, 2024, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges.
Amortized Cost Cumulative Amount of Fair Value Hedging Adjustment to Hedged Items
(amounts in thousands) March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024
AFS debt securities $ —  $ 10,000  $ —  $ — 
Deposits $ 1,815,082  $ 1,794,923  $ 13,511  $ (6,042)
FHLB advances 1,200,000  1,200,000  3,456  (1,648)
Derivatives Not Designated as Hedging Instruments
Customers executes interest rate swaps (typically the loan customers will swap a floating-rate loan for a fixed-rate loan) and interest rate caps with commercial banking customers to facilitate their respective risk management strategies. The customer interest rate swaps and interest rate caps are simultaneously offset by interest rate swaps and interest rate caps that Customers executes with a third party in order to minimize interest-rate risk exposure resulting from such transactions. As the interest rate swaps and interest rate caps associated with this program do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and caps and the offsetting third-party market swaps and caps are recognized directly in earnings. At March 31, 2025, Customers had 126 interest rate swaps with an aggregate notional amount of $1.2 billion and two interest rate caps with an aggregated notional amount of $149.5 million related to this program. At December 31, 2024, Customers had 128 interest rate swaps with an aggregate notional amount of $1.2 billion and two interest rate caps with an aggregate notional amount of $150.0 million related to this program.
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Fair Value of Derivative Instruments on the Balance Sheet
The following tables present the fair value of Customers’ derivative financial instruments as well as their presentation on the consolidated balance sheets as of March 31, 2025 and December 31, 2024.
  March 31, 2025
  Derivative Assets Derivative Liabilities
(amounts in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives not designated as hedging instruments:
Interest rate swaps and caps (1)
 Other assets $ 14,047  Other liabilities $ 20,114 
December 31, 2024
Derivative Assets Derivative Liabilities
(amounts in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives not designated as hedging instruments:
Interest rate swaps and caps (1)
 Other assets $ 15,223  Other liabilities $ 22,567 
(1)    Customers’ centrally cleared derivatives are legally settled through variation margin payments and these payments are reflected as a reduction of the related derivative asset or liability, including accrued interest, on the consolidated balance sheet.
Effect of Derivative Instruments on Net Income
The following table presents amounts included in the consolidated statements of income related to derivatives designated as fair value hedges and derivatives not designated as hedges for the three months ended March 31, 2025 and 2024.
Amount of Income (Loss) Recognized in Earnings
Three Months Ended March 31,
(amounts in thousands) Income Statement Location 2025 2024
Derivatives designated as fair value hedges:
Recognized on interest rate swaps Net interest income $ (1,968) $ 8,173 
Recognized on hedged AFS debt securities Net interest income —  (177)
Recognized on hedged deposits Net interest income 1,173  — 
Recognized on hedged FHLB advances Net interest income 894  (7,996)
Total $ 99  $ — 
Derivatives not designated as hedging instruments:
Interest rate swaps and caps Other non-interest income $ 779  $ 672 
Credit-risk-related Contingent Features
By entering into derivative contracts, Customers is exposed to credit risk. The credit risk associated with derivatives executed with customers is the same as that involved in extending the related loans and is subject to the same standard credit policies. To mitigate the credit-risk exposure to major derivative dealer counterparties, Customers only enters into agreements with those counterparties that maintain credit ratings of high quality or with central clearing parties.
Agreements with major derivative dealer counterparties contain provisions whereby default on any of Customers’ indebtedness would be considered a default on its derivative obligations. Customers also has entered into agreements that contain provisions under which the counterparty could require Customers to settle its obligations if Customers fails to maintain its status as a well/adequately capitalized institution. As of March 31, 2025, the fair value of derivatives in a net asset position related to these agreements was $6.9 million. In addition, Customers, which has collateral posting thresholds with certain of these counterparties, had received $9.5 million of cash as collateral at March 31, 2025. Customers records cash posted or received as collateral with these counterparties, except with a central clearing entity, as a reduction or an increase in the outstanding balance of cash and cash equivalents and an increase in the balance of other assets or other liabilities.
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Disclosures about Offsetting Assets and Liabilities
The following tables present derivative instruments that are subject to enforceable master netting arrangements. Customers’ interest rate swaps and interest rate caps with institutional counterparties are subject to master netting arrangements and are included in the tables below. Interest rate swaps and interest rate caps with commercial banking customers are not subject to master netting arrangements and are excluded from the tables below. Customers has not made a policy election to offset its derivative positions.
  Gross Amounts Recognized on the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Net Amount
(amounts in thousands) Financial Instruments Cash Collateral Received/Posted
March 31, 2025
Interest rate derivative assets with institutional counterparties $ 10,586  $ (3,722) $ (6,864) $ — 
Interest rate derivative liabilities with institutional counterparties $ 3,722  $ (3,722) $ —  $ — 
  Gross Amounts Recognized on the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet Net Amount
(amounts in thousands) Financial Instruments Cash Collateral Received/Posted
December 31, 2024
Interest rate derivative assets with institutional counterparties $ 14,782  $ (577) $ (14,205) $ — 
Interest rate derivative liabilities with institutional counterparties $ 577  $ (577) $ —  $ — 
NOTE 17 — LOSS CONTINGENCIES
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the consolidated financial statements that are not currently accrued for. However, in light of the uncertainties inherent in these matters, it is possible that the ultimate resolution may have a material adverse effect on Customers’ results of operations for a particular period, and future changes in circumstances or additional information could result in accruals or resolution in excess of established accruals, which could adversely affect Customers’ results of operations, potentially materially.
Chun Yao Chang Matter
On December 2, 2024, a federal securities class action complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania, captioned Chang v. Customers Bancorp, Inc. et al., Case No. 2:24-cv-06416-JS, by Chun Yao Chang against Customers Bancorp, Jay Sidhu, its Chief Executive Officer and Executive Chairman of the Company’s Board of Directors, and Carla Leibold, its former Chief Financial Officer. The action alleges that Customers Bancorp and the individual defendants made materially false and/or misleading statements and/or omissions during the class period of March 1, 2024 through August 8, 2024, and that such statements violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The action also alleges that the individual defendants are liable pursuant to Section 20(a) of the Exchange Act as controlling persons of Customers Bancorp. The suit seeks to recover damages caused by the alleged violations of federal securities laws, along with the plaintiffs’ costs incurred in the lawsuit, including their reasonable attorneys’ and experts’ witness fees and other costs. On January 31, 2025, Chun Yao Chang filed the only application for appointment as lead plaintiff with The Rosen Law Firm, P.A. as counsel. Customers Bancorp intends to defend itself against this action.
NOTE 18 — BUSINESS SEGMENTS
Customers has one reportable segment. Customers derives its revenues from customers by providing loans and deposit products in the United States, and manages the business on a consolidated basis. Customers’ accounting policies of the reportable segment are the same as those described in NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION to the audited consolidated financial statements in the 2024 Form 10-K.
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Customers’ CODM is the Executive Committee (the “Executive Committee”) that includes the Chief Executive Officer, President, Chief Financial Officer, Chief Banking Officer, Chief Risk Officer and Chief Credit Officer. The Executive Committee assesses performance of Customers on a consolidated basis, and decides how to allocate resources based on net income that is also reported as net income available to common shareholders on the consolidated statement of income.
The Executive Committee uses net income, which is the measure of segment profit and loss, to evaluate income generated from segment assets (return on assets) and other measures, such as net interest margin, tax equivalent, return on average assets, return on common equity and tangible common equity per common share, in deciding how to reinvest profits, such as originating loans and leases, investing in investment securities, or to repurchase shares in Customers’ common stock.
Net income available to common shareholders is used to monitor budget versus actual results. The Executive Committee also uses net income available to common shareholders and other measures in comparing to Customers’ peer banks. The comparison of Customers’ net income available to common shareholders and other measures to its peer banks, along with the comparison of budgeted versus actual results are used in assessing Customers’ performance and in establishing management compensation.
The following table presents Customers’ reported segment revenues, profit or loss and significant segment expenses for the three months ended March 31, 2025 and 2024:
Segment profit or loss
Three Months Ended March 31,
  2025 2024
Total interest income $ 314,909  $ 331,777 
Total interest expense 147,463  171,392 
Net interest income 167,446  160,385 
Provision for credit losses
 28,297  17,070 
Net interest income after provision for credit losses 139,149  143,315 
Total non-interest income (loss) (1)
 (24,490) 21,231 
Non-interest expense:
Salaries and employee benefits 42,674  36,025 
Technology, communication and bank operations 11,312  21,904 
Commercial lease depreciation 8,463  7,970 
Professional services 11,857  6,353 
Loan servicing 4,630  4,031 
Occupancy (2)
 3,412  2,347 
FDIC assessments, non-income taxes and regulatory fees 11,750  13,469 
Advertising and promotion 528  682 
Other (3)
 8,145  6,388 
Total non-interest expense 102,771  99,169 
Income before income tax expense 11,888  65,377 
Income tax expense (1,024) 15,651 
Segment net income
 12,912  49,726 
Preferred stock dividends 3,389  3,800 
Segment net income available to common shareholders
 $ 9,523  $ 45,926 
Reconciliation of profit or loss
Adjustments and reconciling items
 —  — 
Consolidated net income available to common shareholders
 $ 9,523  $ 45,926 
Basic earnings per common share $ 0.30  $ 1.46 
Diluted earnings per common share 0.29  1.40 
(1)    Includes Customers’ equity in the net income of investees accounted for under the equity method consisting primarily of investments in the SBA’s small business investment companies, and income from investments in affordable housing projects.
(2)    Includes depreciation expense for furniture, fixture and equipment and amortization of leasehold improvements of $0.7 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively.
(3)    Other expenses include fees paid to a fintech company related to consumer installment loans originated and held for sale, provision for credit losses on unfunded lending-related commitments, loan workout and non-capitalizable origination costs, provision for operating losses, insurance expenses, charitable contributions and other miscellaneous expenses.
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Substantially all revenues generated and long-lived assets held by Customers are derived from customers that reside in the United States. Customers did not earn revenues from a single external customer that represents ten percent or more of consolidated total revenues.
The measure of segment assets is reported as total assets on the consolidated balance sheet. The following table presents Customers’ reported segment assets as of March 31, 2025 and December 31, 2024:
Segment assets
(amounts in thousands)
 March 31, 2025 December 31, 2024
Total assets $ 22,423,044  $ 22,308,241 
Adjustments and reconciling items
 —  — 
Consolidated total assets
 $ 22,423,044  $ 22,308,241 
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This report and all attachments hereto, as well as other written or oral communications made from time to time by us, may contain forward-looking information within the meaning of the safe harbor provisions of the U.S. 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: a continuation of the recent turmoil in the banking industry, responsive measures taken by us and regulatory authorities to mitigate and manage related risks, regulatory actions taken that address related issues and the costs and obligations associated therewith, such as the FDIC special assessments; the potential for negative consequences resulting from regulatory violations, investigations and examinations, including potential supervisory actions, the assessment of fines and penalties, the imposition of sanctions, the need to undertake remedial actions and possible damage to our reputation; effects of competition on deposit rates and growth, loan rates and growth and net interest margin; failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks; public health crises and pandemics and their effects on the economic and business environments in which we operate; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and military conflicts, including the war between Russia and Ukraine and ongoing conflict in the Middle East, which could impact the economic conditions in the United States; 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 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; the effects of changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs on its trading partners; 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 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, 2024, 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.
Management’s discussion and analysis represents an overview of the financial condition and results of operations, and highlights the significant changes in the financial condition and results of operations, as presented in the accompanying consolidated financial statements for Customers Bancorp, Inc. (the “Bancorp” or “Customers Bancorp”), a financial holding company, and its wholly owned subsidiaries, including Customers Bank (the “Bank”), collectively referred to as “Customers” herein. This information is intended to facilitate your understanding and assessment of significant changes and trends related to Customers’ financial condition and results of operations as of and for the three months ended March 31, 2025. All quarterly information in this Management’s Discussion and Analysis is unaudited. You should read this section in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Customers’ 2024 Form 10-K.
Overview
Like most financial institutions, Customers derives the majority of its income from interest it receives on its interest-earning assets, such as loans, leases and investments. Customers’ primary source of funds for making these loans, leases and investments are its deposits and borrowings, on which it pays interest. Consequently, one of the key measures of Customers’ success is the amount of its net interest income, or the difference between the interest income on its interest-earning assets and the interest expense on its interest-bearing liabilities, such as deposits and borrowings. Another key measure is the difference between the interest income generated by interest earning assets and the interest expense on interest-bearing liabilities, relative to the amount of average interest earning assets, which is referred to as net interest margin.
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There is credit risk inherent in loans and leases requiring Customers to maintain an ACL to absorb credit losses on existing loans and leases that may become uncollectible. Customers maintains this allowance by charging a provision for credit losses on loan and leases against its operating earnings. Customers has included a detailed discussion of this process in “NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION” to Customers’ audited consolidated financial statements in its 2024 Form 10-K, as well as several tables describing its ACL in “NOTE 7 – LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES” to Customers’ unaudited consolidated financial statements.
Impact of Macroeconomic and Banking Industry Uncertainties and Military Conflicts
Inflation remains slightly elevated in 2025. The Federal Reserve raised interest rates significantly throughout 2022 and into 2023 in attempts to bring the inflation to its long run target rate of two percent. The Federal Reserve has stated that inflation is moving sustainably toward two percent, and that the risks to achieving its employment and inflation goals are roughly in balance. In light of the progress on inflation and the balance of risks, the Federal Reserve began lowering the federal funds rate in late 2024. Most recently, the Federal Reserve has maintained the federal funds rate, and stated that they would assess incoming data, the evolving outlook and the balance of risks in further lowering the federal funds rate. Significant uncertainties exist as to the extent and timing of future rate cuts and their effects on the economic conditions.
Significant uncertainties as to future economic conditions continue to exist, including risks of higher inflation and sustained higher interest rate environment, changes in U.S. trade policies including the imposition of tariffs and retaliatory tariffs on its trading partners, elevated liquidity risk to the U.S. banking system and the exposure to the U.S. commercial real estate market, particularly to the regional banks, disruptions to global supply chain and labor markets and higher oil and commodity prices exacerbated by the military conflicts between Russia and Ukraine and in the Middle East. Customers has maintained higher levels of liquidity, reserves for credit losses on loans and leases and off-balance sheet credit exposures and strong capital ratios, and shifted the mix of its loan portfolio towards low credit risk commercial loans with floating or adjustable interest rates during the period of high interest rates. As the interest rates begin to decline, Customers has been reducing the Bank’s asset sensitivity through derivative hedging and investment securities portfolio rebalancing. Customers remains focused on growing its non-interest bearing and lower-cost interest-bearing deposits. Customers’ exposure to higher risk commercial real estate such as the office sector is minimal, representing approximately 1% of the loan portfolio as of March 31, 2025. The Bank’s debt securities available for sale and held to maturity are available to be pledged as collateral to the FRB and FHLB for additional liquidity. The Bank had approximately $5.2 billion in immediate available liquidity from the FRB and FHLB and cash on hand of $3.4 billion as of March 31, 2025. The Bank’s estimated FDIC insured deposits represented approximately 61% of our deposits (inclusive of accrued interest) as of March 31, 2025. When including collateralized and affiliate deposits as FDIC insured, this number increased to 70% of our deposits as of March 31, 2025. Customers continues to monitor closely the impact of uncertainties affecting the macroeconomic conditions, the U.S. banking system, particularly regional banks, the military conflicts between Russia and Ukraine and in the Middle East, as well as any effects that may result from the federal government’s responses including future rate and regulatory actions; however, the extent to which inflation, interest rates and other macroeconomic and industry factors, the geopolitical conflicts and developments in the U.S. banking system will impact Customers’ operations and financial results during the remainder of 2025 is highly uncertain.
New Accounting Pronouncements
For information about the impact that recently adopted or issued accounting guidance will have on us, refer to “NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION” to Customers’ unaudited consolidated financial statements.
Critical Accounting Policies and Estimates
Customers has adopted various accounting policies that govern the application of U.S. GAAP and that are consistent with general practices within the banking industry in the preparation of its consolidated financial statements. Customers’ significant accounting policies are described in “NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION” in Customers’ audited consolidated financial statements included in its 2024 Form 10-K. Certain accounting policies involve significant judgments and assumptions by Customers that have a material impact on the carrying value of certain assets. Customers considers these accounting policies to be critical accounting policies. The judgments and assumptions used are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions management makes, actual results could differ from these judgments and estimates, which could have a material impact on the carrying values of Customers’ assets.
The critical accounting policy that is both important to the portrayal of Customers’ financial condition and results of operations and requires complex, subjective judgments is the ACL. This critical accounting policy and material estimate, along with the related disclosures, are reviewed by Customers’ Audit Committee of the Board of Directors.
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Allowance for Credit Losses
Customers’ ACL at March 31, 2025 represents Customers’ current estimate of the lifetime credit losses expected from its loan and lease portfolio and its unfunded lending-related commitments that are not unconditionally cancellable. Management estimates the ACL by projecting a lifetime loss rate conditional on a forecast of economic parameters and other qualitative adjustments, for the loans’ and leases’ expected remaining term.
Customers uses external sources in the creation of its forecasts, including current economic conditions and forecasts for macroeconomic variables over its reasonable and supportable forecast period (e.g., GDP growth rate, unemployment rate, BBB spread, commercial real estate and home price index). After the reasonable and supportable forecast period, which ranges from two to five years, the models revert the forecasted macroeconomic variables to their historical long-term trends, without specific predictions for the economy, over the expected life of the pool, while also incorporating prepayment assumptions into its lifetime loss rates. Internal factors that impact the quarterly allowance estimate include the level of outstanding balances, portfolio performance and assigned risk ratings. Significant loan/borrower attributes utilized in the models include property type, initial loan to value, assigned risk ratings, delinquency status, origination date, maturity date, initial FICO scores, and borrower industry and state.
The ACL may be affected materially by a variety of qualitative factors that Customers considers to reflect its current judgment of various events and risks that are not measured in our statistical procedures, including uncertainty related to the economic forecasts used in the modelled credit loss estimates, nature and volume of the loan and lease portfolio, credit underwriting policy exceptions, peer comparison, industry data, and model and data limitations. The qualitative allowance for economic forecast risk is further informed by multiple alternative scenarios, as deemed applicable, to arrive at a scenario or a composite of scenarios supporting the period-end ACL balance. The evaluation process is inherently imprecise and subjective as it requires significant management judgment based on underlying factors that are susceptible to changes, sometimes materially and rapidly. Customers recognizes that this approach may not be suitable in certain economic environments such that additional analysis may be performed at management’s discretion. Due in part to its subjectivity, the qualitative evaluation may be materially impacted during periods of economic uncertainty and late breaking events that could lead to a revision of reserves to reflect management’s best estimate of expected credit losses.
The ACL is established in accordance with our ACL policy. The ACL Committee, which includes the President, Chief Financial Officer, Chief Accounting Officer, Chief Banking Officer, and Chief Credit Officer, among others, reviews the adequacy of the ACL each quarter, together with Customers’ risk management team. The ACL policy, significant judgments and the related disclosures are reviewed by Customers’ Audit Committee of the Board of Directors.
The net increase in our estimated ACL as of March 31, 2025 as compared to December 31, 2024 resulted primarily from slight deterioration in macroeconomic forecasts and higher loan balances held for investment. The provision for credit losses on loans and leases was $21.4 million for the three months ended March 31, 2025, for an ending ACL balance of $147.2 million ($141.1 million for loans and leases and $6.1 million for unfunded lending-related commitments) as of March 31, 2025.
To determine the ACL as of March 31, 2025, Customers utilized Moody’s March 2025 Baseline forecast to generate its modelled expected losses and considered Moody’s other alternative economic forecast scenarios to qualitatively adjust the modelled ACL by loan portfolio in order to reflect management’s reasonable expectations of current and future economic conditions. The Baseline forecast at March 2025 assumed slight deterioration in macroeconomic forecasts from the fourth quarter 2024 forecasts of macroeconomic conditions used by Customers; the Federal Reserve Board lowering interest rates twice in 2025 and gradually reducing the policy rate to its neutral level by late 2026, as uncertainty of economic policies weighs on near-term growth including inflationary pressures from the new administration’s tariff increases, immigrant deportations, federal government payroll and funding cuts, and corporate and individual tax cuts; failures of several banks in the first half of 2023 are not symptomatic of a serious broader problem in the financial system and policymakers’ aggressive response will ensure that the failures do not weaken the financial system or undermine economic growth; a cessation of the military conflict between Russia and Ukraine looks increasingly likely but the impact on energy, agriculture and other commodity markets will be modest; the war in Israel not spreading to other parts of the Middle East and mitigating any disruption to global energy markets and global shipping; the CPI rising 3.1% in 2025 and 2.8% in 2026; and the unemployment rate rising to 4.1% in 2025 and 4.3% in 2026. Customers continues to monitor the impact of the U.S. banking system weaknesses, the military conflicts between Russia and Ukraine and in the Middle East, inflation, and monetary and fiscal policy measures on the U.S. economy and, if pace of the expected recovery is worse than expected, further meaningful provisions for credit losses could be required.
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As of December 31, 2024, the ACL ending balance was $141.7 million ($136.8 million for loans and leases and $4.9 million for unfunded lending-related commitments). To determine the ACL as of December 31, 2024, Customers utilized the Moody’s December 2024 Baseline forecast to generate its modelled expected losses and considered Moody’s other alternative economic forecast scenarios to qualitatively adjust the modelled ACL by loan portfolio in order to reflect management’s reasonable expectations of current and future economic conditions. The Baseline forecast at December 31, 2024 assumed slight improvements in macroeconomic forecasts compared to the macroeconomic forecasts used by Customers in 2023; the Federal Reserve Board lowering interest rates twice in 2025 and gradually reducing the policy rate to its neutral level by late 2026, as slower progress in reducing inflation and additional inflationary pressures from the new administration’s fiscal, tariff and immigration plans suggest a slower pace of normalization than previously expected; failures of several regional banks in the first half of 2023 and recent issues around other banks are not symptomatic of a broader problem in the U.S. financial system and policymakers’ aggressive response will ensure that the failures do not weaken the financial system or further undermine economic growth; the military conflict between Russia and Ukraine continuing for the foreseeable future but its impact on energy, agriculture and other commodity markets and the global economy has largely faded; the war in Israel not spreading to other parts of the Middle East and disrupting global energy markets and global shipping; the CPI rising 2.3% in 2025 and 2.8% in 2026; and the unemployment rate rising to 4.1% in 2025 and 2026.
One of the most significant judgments influencing the ACL is the macroeconomic forecasts from Moody’s. Changes in the economic forecasts could significantly affect the estimated credit losses which could potentially lead to materially different allowance levels from one reporting period to the next. Given the dynamic relationship between macroeconomic variables within Customers’ modelling framework, it is difficult to estimate the impact of a change in any one individual variable on the ACL. However, to illustrate a hypothetical sensitivity analysis, management calculated a quantitative allowance using a 100% weighting applied to an adverse scenario. This scenario includes assumptions around the impact of the new administration’s tariffs and deportations on the economy being significantly worse than expected causing inflation to accelerate; elevated interest rates weakening credit-sensitive spending more than anticipated, and rising inflation causing the Federal Reserve Board to raise the fed fund rate; military conflict between Russia and Ukraine persisting longer than expected; the ceasefire in Israel collapsing; the combination of tariffs, rising inflation, deportations, political tensions, elevated interest rates and reduced credit availability causing the economy to fall into recession in the second quarter of 2025; and unemployment beginning to increase significantly in the second quarter of 2025 and peaking in the second quarter of 2026. Under this scenario, as an example, the unemployment rate is estimated at 6.2% and 8.2% in 2025 and 2026, respectively. These numbers represent a 2.1% and 3.9% higher unemployment estimate than the Baseline scenario projection of 4.1% and 4.3% for the same time periods, respectively. To demonstrate the sensitivity to key economic parameters, management calculated the difference between a 100% Baseline weighting and a 100% adverse scenario weighting for modelled results. This would result in an incremental quantitative impact to the ACL of approximately $80 million at March 31, 2025. This resulting difference is not intended to represent an expected increase in ACL levels since (i) Customers may use a weighted approach applied to multiple economic scenarios for its ACL process, (ii) the highly uncertain economic environment, (iii) the difficulty in predicting inter-relationships between macroeconomic variables used in various economic scenarios, and (iv) the sensitivity analysis does not account for any qualitative adjustments incorporated by Customers as part of its overall ACL framework.
There is no certainty that Customers’ ACL will be appropriate over time to cover losses in our portfolio as economic and market conditions may ultimately differ from our reasonable and supportable forecast. Additionally, events adversely affecting specific customers, industries, or Customers’ markets, such as geopolitical instability, risks of rising inflation including a near-term recession, or worsening of the U.S. banking system could severely impact our current expectations. If the credit quality of Customers’ customer base materially deteriorates or the risk profile of a market, industry, or group of customers changes materially, Customers’ net income and capital could be materially adversely affected which, in turn could have a material adverse effect on Customers’ financial condition and results of operations. The extent to which the geopolitical instability, risks of rising inflation and worsening of the U.S. banking system have and will continue to negatively impact Customers’ businesses, financial condition, liquidity and results will depend on future developments, which are highly uncertain and cannot be forecasted with precision at this time.
For more information, refer to “NOTE 7 – LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES” to Customers’ unaudited consolidated financial statements.
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Results of Operations
The following table sets forth the condensed statements of income for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(dollars in thousands) 2025 2024 Change % Change
Net interest income $ 167,446  $ 160,385  $ 7,061  4.4  %
Provision for credit losses
 28,297  17,070  11,227  65.8  %
Total non-interest income (loss)
 (24,490) 21,231  (45,721) (215.4) %
Total non-interest expense 102,771  99,169  3,602  3.6  %
Income before income tax expense (benefit)
 11,888  65,377  (53,489) (81.8) %
Income tax expense (benefit)
 (1,024) 15,651  (16,675) (106.5) %
Net income 12,912  49,726  (36,814) (74.0) %
Preferred stock dividends 3,389  3,800  (411) (10.8) %
Net income available to common shareholders $ 9,523  $ 45,926  $ (36,403) (79.3) %
Customers reported net income available to common shareholders of $9.5 million for the three months ended March 31, 2025, compared to net income available to common shareholders of $45.9 million for the three months ended March 31, 2024. Factors contributing to the change in net income available to common shareholders for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 were as follows:
Net interest income
Net interest income increased $7.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to lower interest expense on deposits, partially offset by a decrease in interest income from interest-bearing deposits and investment securities. Average interest-earning assets increased by $776.2 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase in interest-earning assets was primarily driven by an increase in specialized lending. NIM increased by 3 basis points to 3.13% for the three months ended March 31, 2025 from 3.10% for the three months ended March 31, 2024. The NIM increase was primarily attributable to a favorable shift in deposit mix and lower market interest rates on deposits, which drove a 53 basis point decrease in the cost of interest-bearing liabilities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Customers’ total cost of funds, including non-interest bearing deposits was 2.96% and 3.55% for the three months ended March 31, 2025 and 2024, respectively.
Provision for credit losses
The $11.2 million increase in the provision for credit losses included $5.5 million increase in provision for credit losses on loans and leases for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, which primarily reflects a slight deterioration in macroeconomic forecasts and an increase in loan balances held for investment. The ACL on off-balance sheet credit exposures is presented within accrued interest payable and other liabilities in the consolidated balance sheet and the related provision is presented as part of other non-interest expense on the consolidated statement of income. The ACL on loans and leases held for investment represented 1.04% of total loans and leases receivable at March 31, 2025, compared to 1.12% of total loans and leases receivable at March 31, 2024. Net charge-offs for the three months ended March 31, 2025 were $17.1 million, or 48 basis points of average loans and leases on an annualized basis, compared to net charge-offs of $18.0 million, or 55 basis points on an annualized basis, for the three months ended March 31, 2024. The decrease in net charge-offs for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to lower charge-offs for consumer installment loans, partially offset by higher charge-offs for multifamily loans.
The provision for credit losses for the three months ended March 31, 2025 and 2024 also included a provision for credit losses of $6.9 million and $1.1 million, respectively, on certain debt securities available for sale. Refer to “NOTE 5 – INVESTMENT SECURITIES” to Customers’ unaudited consolidated financial statements for additional information.
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Non-interest income (loss)
The $45.7 million decrease in non-interest income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from $51.3 million of impairment loss on investment securities that the Bank decided to sell as of March 31, 2025, in order to further improve structural liquidity, enhance credit profile, reduce asset sensitivity and benefit margin, partially offset by increases of $2.0 million in loan fees, $1.4 million in bank-owned life insurance income, $1.3 million in other non-interest income and $1.0 million in commercial lease income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Non-interest expense
The $3.6 million increase in non-interest expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from increases of $6.6 million in salaries and employee benefits, $5.5 million in professional services, $1.8 million in other non-interest expense and $1.1 million in occupancy. These increases were offset in part by decreases of $10.6 million in technology, communication and bank operations and $1.7 million in FDIC assessments, non-income taxes and regulatory fees for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
Included in the $1.7 million decrease in FDIC assessments, non-income taxes and regulatory fees for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was $4.2 million in FDIC premiums related to periods prior to 2024 that were recorded in the three months ended March 31, 2024.
Included in the $10.6 million decrease in technology, communication and bank operations for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was $7.1 million of deposit servicing fees related to periods prior to 2024 that were recorded in the three months ended March 31, 2024.
Income tax expense (benefit)
Customers’ effective tax rate was (8.6)% for the three months ended March 31, 2025 compared to 23.9% for the three months ended March 31, 2024. The decrease in the effective tax rate primarily resulted from lower pre-tax income and an increase in discrete tax benefits from share-based compensation for 2025.
Preferred stock dividends
Preferred stock dividends were $3.4 million and $3.8 million for the three months ended March 31, 2025 and 2024, respectively. There were no changes to the amount of preferred stock outstanding during the three months ended March 31, 2025 and 2024. Refer to “NOTE 11 – SHAREHOLDERS’ EQUITY” to Customers’ unaudited consolidated financial statements for additional information.
NET INTEREST INCOME
Net interest income (the difference between the interest earned on loans and leases, investments and interest-earning deposits with banks, and interest paid on deposits, borrowed funds and subordinated debt) is the primary source of Customers’ earnings. The following table summarizes Customers’ net interest income, related interest spread, net interest margin and the dollar amount of changes in interest income and interest expense for the major categories of interest-earning assets and interest-bearing liabilities for the three months ended March 31, 2025 and 2024. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to (i) changes attributable to volume (i.e., changes in average balances multiplied by the prior-period average rate) and (ii) changes attributable to rate (i.e., changes in average rate multiplied by prior-period average balances). For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.

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Three Months Ended March 31, Three Months Ended March 31,
2025 2024 2025 vs. 2024
(dollars in thousands) Average
Balance		 Interest
Income or
Expense		 Average
Yield or
Cost (%)		 Average
Balance		 Interest
Income or
Expense		 Average
Yield or
Cost (%)		 Due to rate Due to volume Total
Assets
Interest-earning deposits $ 3,857,617  $ 42,914  4.51  % $ 3,865,028  $ 52,817  5.50  % $ (9,798) $ (105) $ (9,903)
Investment securities (1)
 3,100,429  34,339  4.49  % 3,771,097  46,802  4.99  % (4,491) (7,972) (12,463)
Loans and leases:
Commercial and industrial:
Specialized lending loans and leases (2)
 6,474,034  120,951  7.58  % 5,268,345  115,590  8.82  % (17,916) 23,277  5,361 
Other commercial and industrial loans (2)
 1,542,846  23,933  6.29  % 1,654,665  26,714  6.49  % (871) (1,910) (2,781)
Mortgage finance loans 1,252,602  14,752  4.78  % 1,033,177  12,830  4.99  % (575) 2,497  1,922 
Multifamily loans 2,273,893  23,664  4.22  % 2,121,650  21,255  4.03  % 955  1,454  2,409 
Non-owner occupied commercial real estate loans 1,550,372  21,564  5.64  % 1,348,468  20,179  6.02  % (1,366) 2,751  1,385 
Residential mortgages 530,613  6,228  4.76  % 522,528  5,708  4.39  % 439  81  520 
Installment loans 938,193  24,677  10.67  % 1,179,721  27,771  9.47  % 3,130  (6,224) (3,094)
Total loans and leases (3)
 14,562,553  235,769  6.57  % 13,128,554  230,047  7.05  % (16,946) 22,668  5,722 
Other interest-earning assets 127,793  1,887  5.99  % 107,525  2,111  7.90  % (569) 345  (224)
Total interest-earning assets 21,648,392  314,909  5.89  % 20,872,204  331,777  6.39  % (28,014) 11,146  (16,868)
Non-interest-earning assets 666,571  463,025 
Total assets $ 22,314,963  $ 21,335,229 
Liabilities
Interest checking accounts $ 5,358,206  49,903  3.78  % $ 5,538,846  61,531  4.47  % (9,600) (2,028) (11,628)
Money market deposit accounts 3,882,855  37,767  3.94  % 3,233,103  36,811  4.58  % (5,627) 6,583  956 
Other savings accounts 1,151,439  10,691  3.77  % 1,753,118  21,399  4.91  % (4,321) (6,387) (10,708)
Certificates of deposit 2,749,720  32,947  4.86  % 2,750,788  33,984  4.97  % (1,019) (18) (1,037)
Total interest-bearing deposits (4)
 13,142,220  131,308  4.05  % 13,275,855  153,725  4.66  % (20,816) (1,601) (22,417)
Borrowings 1,346,941  16,155  4.86  % 1,506,707  17,667  4.72  % 482  (1,994) (1,512)
Total interest-bearing liabilities 14,489,161  147,463  4.13  % 14,782,562  171,392  4.66  % (20,374) (3,555) (23,929)
Non-interest-bearing deposits (4)
 5,710,644  4,620,986 
Total deposits and borrowings 20,199,805  2.96  % 19,403,548  3.55  %
Other non-interest-bearing liabilities 246,455  264,677 
Total liabilities 20,446,260  19,668,225 
Shareholders’ equity 1,868,703  1,667,004 
Total liabilities and shareholders’ equity $ 22,314,963  $ 21,335,229 
Net interest income 167,446  160,385  $ (7,640) $ 14,701  $ 7,061 
Tax-equivalent adjustment 363  394 
Net interest earnings $ 167,809  $ 160,779 
Interest spread 2.93  % 2.84  %
Net interest margin 3.13  % 3.09  %
Net interest margin tax equivalent (5)
 3.13  % 3.10  %
(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 2.82% and 3.45% for the three months ended March 31, 2025 and 2024, respectively.
(5)Tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended March 31, 2025 and 2024, presented to approximate interest income as a taxable asset.
Net interest income increased $7.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to lower interest expense on deposits, partially offset by a decrease in interest income from interest-bearing deposits and investment securities. Average interest-earning assets increased by $776.2 million, primarily related to an increase in specialized lending.
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The NIM increased by 3 basis points to 3.13% for the three months ended March 31, 2025 from 3.10% for the three months ended March 31, 2024 resulting primarily from a favorable shift in deposit mix and lower market interest rates on deposits, which drove a 53 basis point decrease in the cost of interest-bearing liabilities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Customers’ total cost of funds, including non-interest bearing deposits was 2.96% and 3.55% for the three months ended March 31, 2025 and 2024, respectively.
PROVISION FOR CREDIT LOSSES
The provision for credit losses is a charge to earnings to maintain the ACL at a level consistent with management’s assessment of expected lifetime losses in the loan and lease portfolio at the balance sheet date. Customers recorded a provision for credit losses on loans and leases during the three months ended March 31, 2025, which resulted primarily from slight deterioration in macroeconomic forecasts and an increase in loan balances held for investment. Customers recorded a provision for credit losses of $21.4 million for loans and leases and $1.2 million for lending-related commitments, respectively, for the three months ended March 31, 2025. Customers recorded a provision for credit losses of $16.0 million for loans and leases and $0.4 million for lending-related commitments, respectively, for the three months ended March 31, 2024. Net charge-offs for the three months ended March 31, 2025 were $17.1 million, or 48 basis points of average loans and leases on an annualized basis, compared to net charge-offs of $18.0 million, or 55 basis points of average loans and leases on an annualized basis, for the three months ended March 31, 2024. The decrease in net charge-offs for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to lower charge-offs for consumer installment loans, partially offset by higher charge-offs for multifamily loans.
For more information about the provision and ACL and our loss experience on loans and leases, refer to “Credit Risk” and “Asset Quality” herein.
The provision for credit losses for the three months ended March 31, 2025 and 2024 also included a provision for credit losses of $6.9 million and $1.1 million, respectively, on certain debt securities available for sale. Refer to “NOTE 5 – INVESTMENT SECURITIES” to Customers’ unaudited consolidated financial statements for additional information.
NON-INTEREST INCOME (LOSS)
The table below presents the components of non-interest income (loss) for the three months ended March 31, 2025 and 2024.
  Three Months Ended March 31,
(dollars in thousands) 2025 2024 Change % Change
Commercial lease income $ 10,668  $ 9,683  $ 985  10.2  %
Loan fees 7,235  5,280  1,955  37.0  %
Bank-owned life insurance 4,660  3,261  1,399  42.9  %
Mortgage finance transactional fees 933  946  (13) (1.4) %
Net gain (loss) on sale of loans and leases 2  10  (8) (80.0) %
Net gain (loss) on sale of investment securities —  (30) 30  (100.0) %
Impairment loss on investment securities (51,319) —  (51,319) NM
Other 3,331  2,081  1,250  60.1  %
Total non-interest income (loss)
 $ (24,490) $ 21,231  $ (45,721) (215.4) %
Commercial lease income
Commercial lease income represents income earned on commercial operating leases originated by Customers’ commercial equipment financing group in which Customers is the lessor. The $1.0 million increase in commercial lease income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from the growth of Customers’ equipment finance business.
Loan fees
The $2.0 million increase in loan fees for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from increases in fees earned on unused lines of credit and servicing fees on consumer installment loans.
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Bank-owned life insurance
Bank-owned life insurance income represents income earned on life insurance policies owned by Customers including an increase in cash surrender value of the policies and any benefits paid by insurance carriers under the policies. The $1.4 million increase in bank-owned life insurance income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from increases in death benefits received from insurance carriers and cash surrender value of the policies.
Impairment loss on investment securities
The $51.3 million increase in impairment loss on investment securities for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from impairment loss recorded on certain AFS debt securities that the Bank decided to sell as of March 31, 2025, in order to further improve structural liquidity, reduce asset sensitivity and benefit margin. The Bank began to sell these securities in Q2 2025. The actual amounts to be realized from the sales may differ from the fair values of these AFS debt securities at March 31, 2025.
Other non-interest income
The $1.3 million increase in other non-interest income for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from an increase in deposit account fees, partially offset by a decrease in SERP income.
NON-INTEREST EXPENSE
The table below presents the components of non-interest expense for the three months ended March 31, 2025 and 2024.
  Three Months Ended March 31,
(dollars in thousands) 2025 2024 Change % Change
Salaries and employee benefits $ 42,674  $ 36,025  $ 6,649  18.5  %
Technology, communication and bank operations 11,312  21,904  (10,592) (48.4) %
Commercial lease depreciation 8,463  7,970  493  6.2  %
Professional services 11,857  6,353  5,504  86.6  %
Loan servicing 4,630  4,031  599  14.9  %
Occupancy 3,412  2,347  1,065  45.4  %
FDIC assessments, non-income taxes and regulatory fees 11,750  13,469  (1,719) (12.8) %
Advertising and promotion 528  682  (154) (22.6) %
Other 8,145  6,388  1,757  27.5  %
Total non-interest expense $ 102,771  $ 99,169  $ 3,602  3.6  %
Salaries and employee benefits
The $6.6 million increase in salaries and employee benefits for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from an increase in average full-time equivalent team members, including the addition of new banking teams in April 2024, and annual merit increases.
Technology, communication and bank operations
The $10.6 million decrease in technology, communication and bank operations expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from decreases in deposit servicing-related expenses resulting from lower servicing fees and $1.9 million in fees for software as a service.
Customers incurred expenses of $2.1 million and $10.7 million to BM Technologies under the deposit servicing agreement included within the technology, communication and bank operations expense during the three months ended March 31, 2025 and 2024, respectively. The deposit servicing fees of $10.7 million incurred to BM Technologies for the three months ended March 31, 2024 included $7.1 million for periods prior to 2024. On April 1, 2025, Customers transferred approximately $166.7 million of deposits serviced by BM Technologies under a white label relationship to a new sponsor bank.
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Professional services
The $5.5 million increase in professional services for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from increases in consulting fees including to enhance the Bank’s risk management infrastructure.
Occupancy
The $1.1 million increase in occupancy for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from higher lease expense and depreciation and amortization associated with the Bank’s expansion.
FDIC assessments, non-income taxes and regulatory fees
The $1.7 million decrease in FDIC assessments, non-income taxes and regulatory fees for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from a decrease in FDIC assessments. The FDIC assessments for the three months ended March 31, 2024 included $4.2 million for periods prior to 2024.
Other non-interest expense
The $1.8 million increase in other non-interest expense for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from increases in provision for credit losses on unfunded lending-related commitments and charitable contributions.
INCOME TAXES
The table below presents income tax expense (benefit) and the effective tax rate for the three months ended March 31, 2025 and 2024.
Three Months Ended March 31,
(dollars in thousands) 2025 2024 Change % Change
Income before income tax expense (benefit) $ 11,888  $ 65,377  $ (53,489) (81.8) %
Income tax expense (benefit) (1,024) 15,651  (16,675) (106.5) %
Effective tax rate (8.6) % 23.9  %
The $16.7 million decrease in income tax expense for the three months ended March 31, 2025, when compared to the same period in the prior year, primarily resulted from lower pre-tax income and an increase in discrete tax benefits from share-based compensation for 2025. The decrease in the effective tax rate for the three months ended March 31, 2025, when compared to the same period in the prior year, primarily resulted from lower pre-tax income and an increase in discrete tax benefits from share-based compensation for 2025.
PREFERRED STOCK DIVIDENDS
Preferred stock dividends were $3.4 million and $3.8 million for the three months ended March 31, 2025 and 2024, respectively. There were no changes to the amount of preferred stock outstanding during the three months ended March 31, 2025 and 2024. Refer to “NOTE 11 – SHAREHOLDERS’ EQUITY” to Customers’ unaudited consolidated financial statements for additional information.
Financial Condition
General
Customers’ total assets were $22.4 billion at March 31, 2025. This represented an increase of $114.8 million from total assets of $22.3 billion at December 31, 2024. The increase in total assets was primarily driven by increases of $428.2 million in loans and leases receivable, $138.2 million in loans receivable, installment, at fair value, $45.3 million in loans receivable, mortgage finance, at fair value and $37.9 million in investment securities, at fair value, partially offset by decreases of $357.2 million in cash and cash equivalents, $167.3 million in loans held for sale and $53.8 million in investment securities held to maturity.
Total liabilities were $20.6 billion at March 31, 2025. This represented an increase of $86.9 million from $20.5 billion at December 31, 2024. The increase in total liabilities primarily resulted from an increase of $86.5 million in total deposits.
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The following table sets forth certain key condensed balance sheet data as of March 31, 2025 and December 31, 2024:
(dollars in thousands) March 31,
2025		 December 31,
2024		 Change % Change
Cash and cash equivalents $ 3,428,690  $ 3,785,931  $ (357,241) (9.4) %
Investment securities, at fair value 2,057,555  2,019,694  37,861  1.9  %
Investment securities held to maturity 938,161  991,937  (53,776) (5.4) %
Loans held for sale 37,529  204,794  (167,265) (81.7) %
Loans and leases receivable 13,555,820  13,127,634  428,186  3.3  %
Loans receivable, mortgage finance, at fair value 1,366,460  1,321,128  45,332  3.4  %
Loans receivable, installment, at fair value 138,159  —  138,159  NM
Allowance for credit losses on loans and leases (141,076) (136,775) (4,301) 3.1  %
Bank-owned life insurance 298,551  297,641  910  0.3  %
Other assets 530,355  481,395  48,960  10.2  %
Total assets 22,423,044  22,308,241  114,803  0.5  %
Total deposits 18,932,925  18,846,461  86,464  0.5  %
FHLB advances 1,133,456  1,128,352  5,104  0.5  %
Other borrowings 99,103  99,068  35  0.0  %
Subordinated debt 182,579  182,509  70  0.0  %
Accrued interest payable and other liabilities 210,421  215,168  (4,747) (2.2) %
Total liabilities 20,558,484  20,471,558  86,926  0.4  %
Total shareholders’ equity 1,864,560  1,836,683  27,877  1.5  %
Total liabilities and shareholders’ equity $ 22,423,044  $ 22,308,241  $ 114,803  0.5  %
Cash and Cash Equivalents
Cash and cash equivalents include cash and due from banks and interest-earning deposits. Cash and due from banks consists mainly of vault cash and cash items in the process of collection. Cash and due from banks were $62.1 million and $56.8 million at March 31, 2025 and December 31, 2024, respectively. Cash and cash due from banks balances vary from day to day, primarily due to variations in customers’ deposit activities with the Bank.
Interest-earning deposits consist of cash deposited at other banks, primarily the FRB. Interest-earning deposits were $3.4 billion and $3.7 billion at March 31, 2025 and December 31, 2024, respectively. The balance of interest-earning deposits varies from day to day, depending on several factors, such as fluctuations in customers’ deposits with Customers, payment of checks drawn on customers’ accounts and strategic investment decisions made to optimize Customers’ net interest income, while effectively managing interest-rate risk and liquidity. The decrease in interest-earning deposits since December 31, 2024 primarily resulted from deploying excess cash into loans.
Investment securities at fair value
The investment securities portfolio is an important source of interest income and liquidity. It consists primarily of mortgage-backed securities and collateralized mortgage obligations guaranteed by agencies of the United States government, asset-backed securities, collateralized loan obligations, commercial mortgage-backed securities, private label collateralized mortgage obligations, corporate notes and certain equity securities. In addition to generating revenue, the investment portfolio is maintained to manage interest-rate risk, provide liquidity, serve as collateral for other borrowings, and diversify the credit risk of interest-earning assets. The portfolio is structured to optimize net interest income given the changes in the economic environment, liquidity position and balance sheet mix.
At March 31, 2025, investment securities at fair value totaled $2.1 billion compared to $2.0 billion at December 31, 2024. The increase primarily resulted from purchases of $156.7 million of the investment securities, partially offset by the maturities, calls and principal repayments totaling $99.5 million and a decrease in the fair value of AFS debt securities, or an increase in unrealized losses of $13.2 million primarily due to changes in market interest rates and credit spreads for the three months ended March 31, 2025.
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For financial reporting purposes, AFS debt securities are reported at fair value. Unrealized gains and losses on AFS debt securities that the Bank does not intend to sell, other than credit losses, are included in other comprehensive income (loss) and reported as a separate component of shareholders’ equity, net of the related tax effect. Changes in the fair value of equity securities with a readily determinable fair value and securities reported at fair value based on a fair value option election are recorded in non-interest income in the period in which they occur. Customers recorded a provision for credit losses of $6.9 million and $1.1 million on certain debt securities available for sale for the three months ended March 31, 2025 and 2024, respectively. Refer to “NOTE 5 – INVESTMENT SECURITIES” and “NOTE 15 – DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS” to Customers’ unaudited consolidated financial statements for additional information.
The following table sets forth information about the maturities and weighted-average yield of the AFS debt securities portfolio. The weighted-average yield is computed based on a constant effective interest rate over the contractual life of each security adjusted for prepayment estimates, and considers the contractual coupon, amortization of premiums and accretion of discounts. Yields exclude the impact of related hedging derivatives.
March 31, 2025
Within one year After one but within five years After five but within ten years After ten years No
specific
maturity		 Total
Asset-backed securities —  % —  % —  % —  % 8.09  % 8.09  %
Agency-guaranteed residential mortgage-backed securities —  —  —  —  5.50  5.50 
Agency-guaranteed residential collateralized mortgage obligations —  —  —  —  3.96  3.96 
Agency-guaranteed commercial collateralized mortgage obligations —  —  —  —  4.19  4.19 
Collateralized loan obligations —  —  —  —  6.07  6.07 
Commercial mortgage-backed securities —  —  —  —  5.61  5.61 
Corporate notes 8.52  6.66  6.27  6.75  —  6.68 
Private label collateralized mortgage obligations —  —  —  —  4.67  4.67 
Weighted-average yield 8.52  % 6.66  % 6.27  % 6.75  % 3.69  % 5.63  %
Customers recognized $51.3 million of impairment loss on certain AFS debt securities that the Bank intends to sell within non-interest income (loss) for the three months ended March 31, 2025, in order to further improve structural liquidity, reduce asset sensitivity and benefit margin. Customers decided to sell $534 million in fair value of collateralized loan obligations, corporate notes and private label collateralized mortgage obligations and commercial mortgage-backed securities as of March 31, 2025. Excluding these securities that the Bank decided to sell, the weighted-average yield of the AFS debt securities portfolio was 5.50% at March 31, 2025.
The agency-guaranteed mortgage-backed securities and collateralized mortgage obligations in the AFS portfolio were issued by Ginnie Mae and Freddie Mac, and contain guarantees for the collection of principal and interest on the underlying mortgages.
Investment securities held to maturity
At March 31, 2025, investment securities held to maturity totaled $938.2 million compared to $991.9 million at December 31, 2024. The decrease primarily resulted from the maturities, calls and principal repayments totaling $69.1 million, partially offset by purchases of $14.0 million of the investment securities for the three months ended March 31, 2025.
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The following table sets forth information about the maturities and weighted-average yield of the investment securities held to maturity. The weighted-average yield is computed based on a constant effective interest rate over the contractual life of each security adjusted for prepayment estimates, and considers the contractual coupon, amortization of premiums, accretion of discounts and amortization of unrealized losses upon transfer from investment securities available for sale to held to maturity, along with the unrealized loss in accumulated other comprehensive income.
March 31, 2025
Within one year After one but within five years After five but within ten years No
specific
maturity		 Total
Asset-backed securities —  % —  % —  % 5.43  % 5.43  %
Agency-guaranteed residential mortgage-backed securities —  —  —  1.79  1.79 
Agency-guaranteed commercial mortgage-backed securities —  —  —  1.77  1.77 
Agency-guaranteed residential collateralized mortgage obligations —  —  —  1.89  1.89 
Agency-guaranteed commercial collateralized mortgage obligations —  —  —  2.31  2.31 
Private label collateralized mortgage obligations —  —  —  4.49  4.49 
Weighted-average yield —  % —  % —  % 3.95  % 3.95  %
The agency-guaranteed mortgage-backed securities and collateralized mortgage obligations in the HTM portfolio were issued by Fannie Mae, Freddie Mac and Ginnie Mae, and contain guarantees for the collection of principal and interest on the underlying mortgages.
Investment securities classified as HTM are those debt securities that Customers has both the intent and ability to hold to maturity regardless of changes in market conditions, liquidity needs, or changes in general economic conditions. For financial reporting purposes, these securities are reported at cost, adjusted for the amortization of premiums and accretion of discounts, computed by a method which approximates the interest method over the terms of the securities. Refer to “NOTE 5 – INVESTMENT SECURITIES” and “NOTE 15 – DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS” to Customers’ unaudited consolidated financial statements for additional information.
LOANS AND LEASES
Existing lending relationships are primarily with small and middle market businesses and individual consumers primarily in Berks County and Southeastern Pennsylvania (Bucks, Chester and Philadelphia Counties); New York (Westchester and Suffolk Counties, and Manhattan); Hamilton, New Jersey; Boston, Massachusetts; Providence, Rhode Island; Portsmouth, New Hampshire; California (Southern California and the Bay Area); Nevada (Las Vegas and Reno); and nationally for certain loan and deposit products. The portfolio of specialized lending loans and leases and mortgage finance loans is nationwide. The loan portfolio consists primarily of loans to support mortgage companies’ funding needs, multifamily, commercial real estate and commercial and industrial loans. Customers continues to focus on small and middle market business loans to grow its commercial lending efforts, particularly its commercial and industrial loan and lease portfolio and its specialized lending business. Customers also focuses its lending efforts on local-market mortgage and home equity lending and the origination and purchase of unsecured consumer loans (installment loans), including personal, student loan refinancing, home improvement and medical loans through arrangements with fintech companies and other market place lenders nationwide.
Commercial Lending
Customers’ commercial lending is broadly divided into the following groups: small and middle market business banking, specialized banking, multifamily and commercial real estate lending, mortgage finance, and SBA lending. This grouping is designed to allow for greater resource deployment, higher standards of risk management, strong asset quality, lower interest-rate risk and higher productivity levels.
As of March 31, 2025, Customers had $13.7 billion in commercial loans outstanding, totaling approximately 90.5% of its total loan and lease portfolio, which includes loans held for sale, loans receivable, mortgage finance, at fair value, and loans receivable, installment, at fair value, compared to commercial loans outstanding of $13.2 billion, comprising approximately 90.1% of its total loan and lease portfolio at December 31, 2024.
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The commercial lending group focuses primarily on companies with annual revenues ranging from $1 million to $100 million, which typically have credit requirements between $0.5 million and $10 million. The small and middle market business banking platform originates loans, including SBA loans, through the branch network sales force and a team of dedicated relationship managers. The support administration of this platform is centralized, including technology, risk management, product management, marketing, performance tracking and overall strategy. Credit and sales training has been established for Customers’ sales force, ensuring that it has small business experts in place providing appropriate financial solutions to the small business owners in its communities. The division approach focuses on industries that offer high asset quality and are deposit rich to drive profitability.
Customers’ specialized banking includes commercial equipment finance, healthcare lending, real estate specialty finance, fund finance, technology and venture capital banking and financial institutions group. Customers’ lender finance vertical within fund finance provides variable rate loans secured by diverse collateral pools to private debt funds. Customers’ capital call lines vertical within fund finance provides variable rate loans secured by collateral pools and limited partnership commitments from institutional investors in private equity funds and cash management services to the alternative investment industry. Customers’ technology and venture capital banking group services the venture-backed growth industry from seed-stage through late-stage.
Customers’ mortgage finance primarily provides financing to mortgage bankers for residential mortgage originations from loan closing until sale in the secondary market. The underlying residential loans are taken as collateral for Customers’ commercial loans to the mortgage companies. As of March 31, 2025 and December 31, 2024, mortgage finance loans totaled $1.4 billion and $1.3 billion, respectively, and are reported as loans receivable, mortgage finance, at fair value on the consolidated balance sheet.
Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. The commercial equipment financing group is primarily focused on serving the following industries: transportation, construction (includes crane and utility), marine, franchise, general manufacturing (includes machine tool), helicopter/fixed wing, solar, packaging, plastics and food processing. As of March 31, 2025 and December 31, 2024, Customers had $705.8 million and $675.4 million, respectively, of equipment finance loans outstanding. As of March 31, 2025 and December 31, 2024, Customers had $269.2 million and $262.7 million, respectively, of equipment finance leases outstanding. As of March 31, 2025 and December 31, 2024, Customers had $223.5 million and $214.9 million, respectively, of operating leases entered into under this program, net of accumulated depreciation of $98.8 million and $95.1 million, respectively.
Customers’ multifamily lending group is focused on retaining a portfolio of high-quality multifamily loans within Customers’ covered markets. These lending activities use conservative underwriting standards and primarily target the refinancing of loans with other banks or provide purchase money for new acquisitions by borrowers. The primary collateral for these loans is a first lien mortgage on the multifamily property, plus an assignment of all leases related to such property. Customers had multifamily loans of $2.3 billion outstanding, comprising approximately 15.4% of the total loan and lease portfolio at March 31, 2025 and December 31, 2024.
Consumer Lending
Customers provides unsecured consumer installment loans, residential mortgage and home equity loans to customers nationwide primarily through relationships with fintech companies. The installment loan portfolio consists largely of originated and purchased personal, student loan refinancing, home improvement and medical loans. None of the loans held for investment are considered sub-prime at the time of origination. Customers considers sub-prime borrowers to be those with FICO scores below 660. Customers has been selective in the consumer loans it has been purchasing. Home equity lending is offered to solidify customer relationships and grow relationship revenues in the long term. This lending is important in Customers’ efforts to grow total relationship revenues for its consumer households. As of March 31, 2025, Customers had $1.4 billion in consumer loans outstanding (including consumer loans held for investment and held for sale), or 9.5% of the total loan and lease portfolio, compared to $1.4 billion, or 9.9% of the total loan and lease portfolio, as of December 31, 2024.
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Purchases and sales of loans held for investment were as follows for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(amounts in thousands) 2025 2024
Purchases (1)
Other commercial and industrial $ 1,079 $ 7,403
Personal installment (2)
 104,941 —
Total $ 106,020 $ 7,403
Sales
Multifamily $ 8,000 $ —
Personal installment
 281 —
Total $ 8,281 $ —
(1)Amounts reported in the above table are the unpaid principal balance at time of purchase. The purchase price was 99.5% and 100.0% of the loans’ unpaid principal balance for the three months ended March 31, 2025 and 2024, respectively.
(2)Installment loan purchases for the three months ended March 31, 2025 consist of third-party originated unsecured consumer loans. None of the loans held for investment are considered sub-prime at the time of origination. Customers considers sub-prime borrowers to be those with FICO scores below 660.
Loans Held for Sale
The composition of loans held for sale as of March 31, 2025 and December 31, 2024 was as follows:
(amounts in thousands) March 31, 2025 December 31, 2024
Residential mortgage loans, at fair value $ 1,465  $ 1,836 
Personal installment loans, at lower of cost or fair value 36,000  40,903 
Other installment loans, at fair value 64  162,055 
Total loans held for sale $ 37,529  $ 204,794 
Loans held for sale are reported on the consolidated balance sheet at either fair value (due to the election of the fair value option) or at the lower of cost or fair value. An ACL is not recorded on loans that are classified as held for sale.
Refer to NOTE 7 — LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES to Customers’ unaudited consolidated financial statements for additional information on the transfer of other consumer installment loans, at fair value, from loans held for sale to held for investment during the three months ended March 31, 2025.
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Total Loans and Leases Receivable
The composition of total loans and leases receivable (excluding loans held for sale) was as follows:
(amounts in thousands) March 31, 2025 December 31, 2024
Loans and leases receivable:
Commercial:
Commercial and industrial:
Specialized lending (1)
 $ 6,070,093  $ 5,842,420 
Other commercial and industrial
 1,174,369  1,182,350 
Multifamily 2,322,123  2,252,246 
Commercial real estate owner occupied 1,139,126  1,100,944 
Commercial real estate non-owner occupied 1,438,906  1,359,130 
Construction 154,647  147,209 
Total commercial loans and leases receivable 12,299,264  11,884,299 
Consumer:
Residential real estate 496,772  496,559 
Manufactured housing 31,775  33,123 
Installment:
Personal 493,276  463,854 
Other 234,733  249,799 
Total consumer loans receivable 1,256,556  1,243,335 
Loans and leases receivable 13,555,820  13,127,634 
Loans receivable, mortgage finance, at fair value 1,366,460  1,321,128 
Loans receivable, installment, at fair value 138,159  — 
Allowance for credit losses on loans and leases (141,076) (136,775)
Total loans and leases receivable, net of allowance for credit losses on loans and leases (2)
 $ 14,919,363  $ 14,311,987 
(1)Includes direct finance and sales-type equipment leases of $269.2 million and $262.7 million at March 31, 2025 and December 31, 2024, respectively.
(2)Includes deferred (fees) costs and unamortized (discounts) premiums, net of $(22.2) million and $(20.8) million at March 31, 2025 and December 31, 2024, respectively.
Loans receivable, mortgage finance, at fair value
The mortgage finance product line primarily provides financing to mortgage companies nationwide from the time of origination of the underlying mortgage loans until the mortgage loans are sold into the secondary market. As a mortgage finance lender, Customers provides a form of financing to mortgage bankers by purchasing for resale the underlying residential mortgages on a short-term basis under a master repurchase agreement. These loans are reported as loans receivable, mortgage finance, at fair value on the consolidated balance sheets. Because these loans are reported at their fair value, they do not have an ACL and are therefore excluded from ACL-related disclosures. At March 31, 2025, all of Customers’ mortgage finance loans were current in terms of payment.
Customers is subject to the risks associated with such lending, including, but not limited to, the risks of fraud, bankruptcy and default of the mortgage banker or of the underlying residential borrower, any of which could result in credit losses. Customers’ mortgage finance lending team members monitor these mortgage originators by obtaining financial and other relevant information to reduce these risks during the lending period. Loans receivable, mortgage finance, at fair value totaled $1.4 billion and $1.3 billion at March 31, 2025 and December 31, 2024, respectively.
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Loans receivable, installment, at fair value
Customers has a lending arrangement with a fintech company, which recently was acquired by a bank, whereby Customers has been originating consumer installment loans and holding these loans prior to sale. These consumer installment loans were designated as loans held for sale and reported at fair value based on an election made to account for the loans at fair value. The lending arrangement with this fintech company expires in the second quarter of 2025. Accordingly, Customers transferred these consumer installment loans from held for sale to held for investment during the three months ended March 31, 2025, and continue to be reported at fair value based on an election made to account for the loans at fair value. Because these loans are reported at their fair value, they do not have an ACL and are therefore excluded from ACL-related disclosures. At March 31, 2025, Customers had $2.1 million of consumer installment loans, at fair value, on nonaccrual status.
Credit Risk
Customers manages credit risk by maintaining diversification in its loan and lease portfolio, establishing and enforcing prudent underwriting standards and collection efforts, and continuous and periodic loan and lease classification reviews. Management also considers the effect of credit risk on financial performance by reviewing quarterly and maintaining an adequate ACL. Credit losses are charged-off when they are identified, and provisions are added for current expected credit losses, to the ACL at least quarterly. The ACL is estimated at least quarterly.
The provision for credit losses on loans and leases was $21.4 million and $16.0 million for the three months ended March 31, 2025 and 2024, respectively. The ACL maintained for loans and leases receivable (excluding loans held for sale, loans receivable, mortgage finance, at fair value, and loans receivable, installment, at fair value) was $141.1 million, or 1.04% of loans and leases receivable at March 31, 2025, and $136.8 million or 1.04% of loans and leases receivable at December 31, 2024.
The increase in the ACL resulted primarily from slight deterioration in macroeconomic forecasts and an increase in loan balances held for investment. Net charge-offs were $17.1 million for the three months ended March 31, 2025, a decrease of $0.8 million compared to the same period in 2024. The decrease in net charge-offs was primarily due to lower charge-offs for consumer installment loans, partially offset by an increase in charge-offs for multifamily loans. Refer to the tables of changes in Customers’ ACL for annualized net-charge offs to average loans by loan type for the periods indicated.
The tables below present changes in Customers’ ACL for the periods indicated.
(amounts in thousands)
Commercial and industrial (1)
 Multifamily Commercial real estate owner occupied Commercial real estate non-owner occupied Construction Residential real estate Manufactured housing Installment Total
Three Months Ended
March 31, 2025
Ending Balance,
December 31, 2024
 $ 29,379  $ 18,511  $ 10,755  $ 17,405  $ 1,250  $ 5,968  $ 3,829  $ 49,678  $ 136,775 
Charge-offs (2)
 (4,507) (3,834) (19) —  —  —  —  (12,403) (20,763)
Recoveries (2)
 1,276  —  3  —  3  —  —  2,337  3,619 
Provision (benefit) for credit losses on loans and leases 4,436  4,113  41  653  11  195  (29) 12,025  21,445 
Ending Balance,
March 31, 2025		 $ 30,584  $ 18,790  $ 10,780  $ 18,058  $ 1,264  $ 6,163  $ 3,800  $ 51,637  $ 141,076 
Annualized Net Charge-offs to Average Loans and Leases
Three Months Ended
March 31, 2025		 (0.19) % (0.68) % (0.01) % —  % 0.01  % —  % —  % (5.07) % (0.52) %
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(amounts in thousands)
Commercial and industrial (1)
 Multifamily Commercial real estate owner occupied Commercial real estate non-owner occupied Construction Residential real estate Manufactured housing Installment Total
Three Months Ended
March 31, 2024
Ending Balance,
December 31, 2023
 $ 23,503  $ 16,343  $ 9,882  $ 16,859  $ 1,482  $ 6,586  $ 4,239  $ 56,417  $ 135,311 
Charge-offs (2)
 (5,396) (473) (22) —  —  (19) —  (16,917) (22,827)
Recoveries (2)
 1,724  —  —  —  —  1  —  3,134  4,859 
Provision (benefit) for credit losses on loans and leases 3,172  2,437  341  1,461  384  139  (79) 8,098  15,953 
Ending Balance,
March 31, 2024		 $ 23,003  $ 18,307  $ 10,201  $ 18,320  $ 1,866  $ 6,707  $ 4,160  $ 50,732  $ 133,296 
Annualized Net Charge-offs to Average Loans and Leases
Three Months Ended
March 31, 2024		 (0.24) % (0.09) % (0.01) % —  % —  % (0.01) % —  % (6.67) % (0.61) %
(1)Includes specialized lending.
(2)Charge-offs and recoveries on PCD loans that are accounted for in pools are recognized on a net basis when the pool matures.
The ACL is based on a quarterly evaluation of the loan and lease portfolio held for investment and is maintained at a level that management considers adequate to absorb expected losses as of the balance sheet date. All commercial loans, with the exception of PPP loans and mortgage finance loans, which are reported at fair value, are assigned internal credit-risk ratings, based upon an assessment of the borrower, the structure of the transaction and the available collateral and/or guarantees. All loans and leases are monitored regularly by the responsible officer, and the risk ratings are adjusted when considered appropriate. The risk assessment allows management to identify problem loans and leases timely. Management considers a variety of factors and recognizes the inherent risk of loss that always exists in the lending process. Management uses a disciplined methodology to estimate an appropriate level of ACL. Refer to Critical Accounting Policies and Estimates herein and “NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION” to Customers’ audited consolidated financial statements in its 2024 Form 10-K for further discussion on management’s methodology for estimating the ACL.
Customers’ commercial real estate, commercial and residential construction, consumer residential and owner occupied commercial and industrial loan types have real estate as collateral (collectively, “the real estate portfolio”) primarily in the form of a first lien position. Current appraisals providing current value estimates of the property are received when Customers’ credit group determines that the facts and circumstances have significantly changed since the date of the last appraisal, including that real estate values have deteriorated. A designated credit committee and loan officers review all non-accrual loans on a periodic basis. In addition, loans where the loan officers have identified a “borrower of interest” are discussed to determine if additional analysis is necessary to apply the risk-rating criteria properly. The risk ratings for the real estate loan portfolio are determined based upon the current information available, including but not limited to discussions with the borrower, updated financial information, economic conditions within the geographic area and other factors that may affect the cash flow of the loan. If a loan is individually evaluated for impairment, the collateral value or discounted cash flow analysis is generally used to determine the estimated fair value of the underlying collateral, net of estimated selling costs, and compared to the outstanding loan balance to determine the amount of reserve necessary, if any. Appraisals used in this evaluation process are typically less than two years aged. For loans where real estate is not the primary source of collateral, updated financial information is obtained, including any relevant supplemental financial data to estimate the fair value of the loan, net of estimated selling costs, and compared to the outstanding loan balance to estimate the required reserve. Customers’ exposure to the higher risk commercial real estate office sector is minimal, representing approximately 1% of the total loan and lease portfolio as of March 31, 2025.
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These impairment measurements are inherently subjective as they require material estimates, including, among others, estimates of property values in appraisals, the amounts and timing of expected future cash flows on individual loans, and general considerations for historical loss experience, economic conditions, uncertainties in estimating losses and inherent risks in the various credit portfolios, all of which require judgment and may be susceptible to significant change over time and as a result of changing economic conditions or other factors. Pursuant to ASC 326, individually assessed loans, consisting primarily of non-accrual and restructured loans, are considered in the methodology for determining the ACL. Individually assessed loans are generally evaluated based on the expected future cash flows or the fair value of the underlying collateral if principal repayment is expected to substantially come from the operation of the collateral or fair value of the collateral less estimated costs to sell if repayment of the loan is expected to be provided from the sale of such collateral. Shortfalls in the underlying collateral value for loans or leases determined to be collateral dependent are charged off immediately. Subsequent to an appraisal or other fair value estimate, management will assess whether there was a further decline in the value of the collateral based on changes in market conditions or property use that would require additional impairment to be recorded to reflect the particular situation, thereby increasing the ACL on loans and leases held for investment.
Asset Quality
Customers classifies the loan and lease receivables by product or other characteristic generally defining a shared characteristic with other loans or leases in the same group. Charge-offs from originated and acquired loans and leases held for investment are absorbed by the ACL. The schedule that follows includes both loans held for sale and loans held for investment.
Asset Quality at March 31, 2025
(dollars in thousands) Total Loans and Leases Current 30-89 Days Past Due 90 Days or More Past Due and Accruing Non-accrual/NPL (a) OREO and Repossessed Assets (b)
NPA (1) (a)+(b)
 NPL to Loan and Lease Type (%) NPA to Loans and Leases + OREO and Repossessed Assets (%)
Loan and Lease Type  
Commercial and industrial, including specialized lending
 $ 7,244,462  $ 7,214,778  $ 10,909  $ 21  $ 18,754  $ —  $ 18,754  0.26  % 0.26  %
Multifamily 2,322,123  2,315,696  6,427  —  —  —  —  —  % —  %
Commercial real estate owner occupied 1,139,126  1,131,215  118  —  7,793  —  7,793  0.68  % 0.68  %
Commercial real estate non-owner occupied 1,438,906  1,422,191  16,653  —  62  —  62  0.00  % 0.00  %
Construction 154,647  154,647  —  —  —  —  —  —  % —  %
Total commercial loans and leases receivable 12,299,264  12,238,527  34,107  21  26,609  —  26,609  0.22  % 0.22  %
Residential 496,772  480,058  8,563  —  8,151  —  8,151  1.64  % 1.64  %
Manufactured housing 31,775  29,087  704  331  1,653  —  1,653  5.20  % 5.20  %
Installment 728,009  711,468  11,882  —  4,659  —  4,659  0.64  % 0.64  %
Total consumer loans receivable 1,256,556  1,220,613  21,149  331  14,463  —  14,463  1.15  % 1.15  %
Loans and leases receivable
 13,555,820  13,459,140  55,256  352  41,072  —  41,072  0.30  % 0.30  %
Loans receivable, mortgage finance, at fair value
 1,366,460  1,366,460  —  —  —  —  —  —  % —  %
Loans Receivable, Installment, at Fair Value 138,159  133,176  2,924  —  2,059  —  2,059  1.49  % 1.49  %
Total loans held for sale 37,529  35,938  1,209  —  382  —  382  1.02  % 1.02  %
Total portfolio $ 15,097,968  $ 14,994,714  $ 59,389  $ 352  $ 43,513  $ —  $ 43,513  0.29  % 0.29  %

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Asset Quality at March 31, 2025 (continued)
(dollars in thousands) Total Loans and Leases Non-accrual / NPL ACL Reserves to Loans and Leases (%) Reserves to NPLs (%)
Loan and Lease Type
Commercial and industrial, including specialized lending
 $ 7,244,462  $ 18,754  $ 30,584  0.42  % 163.08  %
Multifamily 2,322,123  —  18,790  0.81  % —  %
Commercial real estate owner occupied 1,139,126  7,793  10,780  0.95  % 138.33  %
Commercial real estate non-owner occupied 1,438,906  62  18,058  1.25  % 29125.81  %
Construction 154,647  —  1,264  0.82  % —  %
Total commercial loans and leases receivable 12,299,264  26,609  79,476  0.65  % 298.68  %
Residential 496,772  8,151  6,163  1.24  % 75.61  %
Manufactured housing 31,775  1,653  3,800  11.96  % 229.89  %
Installment 728,009  4,659  51,637  7.09  % 1,108.33  %
Total consumer loans receivable 1,256,556  14,463  61,600  4.90  % 425.91  %
Loans and leases receivable
 13,555,820  41,072  141,076  1.04  % 343.48  %
Loans receivable, mortgage finance, at fair value
 1,366,460  —  —  —  % —  %
Loans Receivable, Installment, at Fair Value 138,159  2,059  —  —  % —  %
Total loans held for sale 37,529  382  —  —  % —  %
Total portfolio $ 15,097,968  $ 43,513  $ 141,076  0.93  % 324.22  %
(1)    Excludes non-performing investment securities, at fair value of $14.4 million with ACL of $7.8 million at March 31, 2025.
The total loan and lease portfolio was $15.1 billion at March 31, 2025 compared to $14.7 billion at December 31, 2024, and $43.5 million, or 0.29% of loans and leases, were non-performing at March 31, 2025 compared to $43.3 million, or 0.30% of loans and leases, at December 31, 2024. The total loan and lease portfolio was supported by an ACL of $141.1 million (324.22% of NPLs and 0.93% of total loans and leases) and $136.8 million (316.06% of NPLs and 0.93% of total loans and leases), at March 31, 2025 and December 31, 2024, respectively.
The tables below set forth non-accrual loans, NPAs and asset quality ratios:
(amounts in thousands) March 31, 2025 December 31, 2024
Loans 90+ days delinquent still accruing (1)
 $ 352  $ 17,084 
Non-accrual loans $ 43,513  $ 43,275 
Investment securities, at fair value 14,447  12,532 
Total non-performing assets $ 57,960  $ 55,807 
(1)Excludes PCD loans at March 31, 2025 and December 31, 2024.
March 31, 2025 December 31, 2024
Non-accrual loans to loans and leases receivable (1)
 0.30  % 0.31  %
Non-accrual loans to total loans and leases portfolio
 0.29  % 0.30  %
Non-performing assets to total assets (2)
 0.26  % 0.25  %
Non-accrual loans and loans 90+ days delinquent to total assets 0.20  % 0.27  %
Allowance for credit losses on loans and leases to:
Loans and leases receivable
 1.04  % 1.04  %
Non-accrual loans 324.22  % 316.06  %
(1)    Excludes loans held for sale, loans receivable, mortgage finance, at fair value and loans receivable, installment, at fair value.
(2)Includes non-performing investment securities, at fair value of $14.4 million with ACL of $7.8 million at March 31, 2025 and fair value of $12.5 million with ACL of $4.3 million at December 31, 2024, respectively.
The asset quality ratios related to NPAs, including non-performing investment securities, at fair value, and non-accrual loans remained low at March 31, 2025 as compared to December 31, 2024. Refer to Credit Risk above for information about the increase in ACL affecting the related asset quality ratios at March 31, 2025 as compared to December 31, 2024.
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DEPOSITS
Customers offers a variety of deposit accounts, including checking, savings, MMDA, and time deposits. Deposits are primarily obtained from Customers’ geographic service area and nationwide through our single point of contact relationship managers, our branchless digital banking products, deposit brokers, listing services and other relationships.
The components of deposits were as follows at the dates indicated:
(dollars in thousands) March 31, 2025 December 31, 2024 Change % Change
Demand, non-interest bearing $ 5,552,605  $ 5,608,288  $ (55,683) (1.0) %
Demand, interest bearing 5,137,961  5,553,698  (415,737) (7.5) %
Savings, including MMDA 5,385,312  4,976,270  409,042  8.2  %
Non-time deposits 16,075,878  16,138,256  (62,378) (0.4) %
Time deposits 2,857,047  2,708,205  148,842  5.5  %
Total deposits $ 18,932,925  $ 18,846,461  $ 86,464  0.5  %
Total deposits were $18.9 billion at March 31, 2025, an increase of $86.5 million, or 0.5%, from $18.8 billion at December 31, 2024. The increase in total deposits was primarily due to increases in savings, including MMDA of $409.0 million, or 8.2%, to $5.4 billion at March 31, 2025, from $5.0 billion at December 31, 2024 and time deposits of $148.8 million, or 5.5%, to $2.9 billion at March 31, 2025, from $2.7 billion at December 31, 2024. These increases were partially offset by decreases in interest bearing demand deposits of $415.7 million, or 7.5%, to $5.1 billion at March 31, 2025, from $5.6 billion at December 31, 2024 and non-interest bearing demand deposits of $55.7 million, or 1.0%, to $5.6 billion at March 31, 2025 from $5.6 billion at December 31, 2024.
At March 31, 2025 and December 31, 2024, the Bank had $1.5 billion in deposits, to which it had pledged $1.5 billion of available borrowing capacity through the FHLB to the depositors through a standby letter of credit arrangement, respectively.
The total amount of estimated uninsured deposits was $7.3 billion at March 31, 2025 and December 31, 2024. Time deposits greater than the FDIC limit of $250,000 totaled $764.4 million and $803.1 million at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, the scheduled maturities of uninsured time deposits were as follows:
(amounts in thousands) March 31, 2025
3 months or less $ 290,303 
Over 3 through 6 months 223,060 
Over 6 through 12 months 105,652 
Over 12 months 145,356 
Total $ 764,371 
Average deposit balances by type and the associated average rate paid are summarized below:
Three Months Ended March 31, 2025 Three Months Ended March 31, 2024
(dollars in thousands) Average
Balance		 Average
Rate Paid		 Average
Balance		 Average
Rate Paid
Demand, non-interest bearing $ 5,710,644  0.00  % $ 4,620,986  0.00  %
Demand, interest-bearing 5,358,206  3.78  % 5,538,846  4.47  %
Savings, including MMDA 5,034,294  3.90  % 4,986,221  4.70  %
Time deposits 2,749,720  4.86  % 2,750,788  4.97  %
Total $ 18,852,864  2.82  % $ 17,896,841  3.45  %
FHLB ADVANCES AND OTHER BORROWINGS
Borrowed funds from various sources are generally used to supplement deposit growth and meet other operating needs. Customers’ borrowings include short-term and long-term advances from the FHLB, FRB, federal funds purchased, senior unsecured notes and subordinated debt. Subordinated debt is also considered as Tier 2 capital for certain regulatory calculations.
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Short-term debt
Short-term debt at March 31, 2025 and December 31, 2024 was as follows:
  March 31, 2025 December 31, 2024
(dollars in thousands) Amount Rate Amount Rate
FHLB advances $ 100,000  4.49  % $ 100,000  4.61  %
Total short-term debt $ 100,000  $ 100,000 
Long-term debt
FHLB and FRB Advances
Long-term FHLB and FRB advances at March 31, 2025 and December 31, 2024 were as follows:
March 31, 2025 December 31, 2024
(dollars in thousands) Amount Rate Amount Rate
FHLB advances (1)
 $ 1,033,456 
(2)
 4.14  %
(3)
 $ 1,028,352 
(2)
 4.11  %
(3)
Total long-term FHLB and FRB advances $ 1,033,456  $ 1,028,352 
(1)    Amounts reported in the above table include fixed rate long-term advances from FHLB of $850.0 million with maturities ranging from September 2025 to March 2028, and variable rate long-term advances from FHLB of $180.0 million with maturities ranging from December 2026 to December 2028 with a returnable option that can be repaid without penalty on certain predetermined dates at Customers Bank’s option, at March 31, 2025.
(2)    Includes $3.5 million and $(1.6) million of unamortized basis adjustments from interest rate swaps designated as fair value hedges of long-term advances from FHLB at March 31, 2025 and December 31, 2024, respectively. Refer to “NOTE 16 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES” to Customers’ unaudited consolidated financial statements for additional information.
(3)    Excludes the effect of interest rate swaps designated as fair value hedges of long-term advances from FHLB.
The maximum borrowing capacity with the FHLB and FRB at March 31, 2025 and December 31, 2024 was as follows:
(dollars in thousands) March 31, 2025 December 31, 2024
Total maximum borrowing capacity with the FHLB $ 3,908,969  $ 3,562,171 
Total maximum borrowing capacity with the FRB
 3,986,593  4,357,519 
Qualifying loans and securities serving as collateral against FHLB and FRB advances
 9,835,910  9,722,736 
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Senior Notes and Subordinated Debt
Long-term senior notes and subordinated debt at March 31, 2025 and December 31, 2024 were as follows:
(dollars in thousands) Carrying Amount
Issued by Ranking March 31, 2025 December 31, 2024 Rate Issued Amount Date Issued Maturity Price
Customers Bancorp
Senior (1)
 $ 99,103  $ 99,068  2.875  % $ 100,000  August 2021 August 2031 100.000  %
Total other borrowings $ 99,103  $ 99,068 
Customers Bancorp
Subordinated (2)(3)
 $ 72,993  $ 72,947  5.375  % $ 74,750  December 2019 December 2034 100.000  %
Customers Bank
Subordinated (2)(4)
 109,586  109,562  6.125  % 110,000  June 2014 June 2029 100.000  %
Total subordinated debt $ 182,579  $ 182,509 
(1)The senior notes will bear an annual fixed rate of 2.875% until August 15, 2026. From August 15, 2026 until maturity, the notes will bear an annual interest rate equal to a benchmark rate, which is expected to be the three-month term SOFR, plus 235 basis points. Customers Bancorp has the ability to call the senior notes, in whole, or in part, at a redemption price equal to 100% of the principal balance at certain times on or after August 15, 2026.
(2)The subordinated notes qualify as Tier 2 capital for regulatory capital purposes.
(3)Customers Bancorp has the ability to call the subordinated notes, in whole, or in part, at a redemption price equal to 100% of the principal balance at certain times on or after December 30, 2029.
(4)The subordinated notes had an annual fixed rate of 6.125% until June 26, 2024. From June 26, 2024 until maturity, the notes bear an annual interest rate equal to the three-month LIBOR plus 344.3 basis points. Pursuant to the Adjustable Interest Rate (LIBOR) Act enacted by Congress on March 15, 2022, Customers substituted three-month term SOFR plus a tenor spread adjustment of 26.161 basis points for three-month LIBOR as the benchmark reference rate in order to calculate the annual interest rate after June 26, 2024. Customers Bank has the ability to call the subordinated notes, in whole, or in part, at a redemption price equal to 100% of the principal balance at certain times on or after June 26, 2024.
SHAREHOLDERS’ EQUITY
The components of shareholders' equity were as follows at the dates indicated:
(dollars in thousands) March 31, 2025 December 31, 2024 Change % Change
Preferred stock $ 137,794  $ 137,794  $ —  —  %
Common stock 35,995  35,758  237  0.7  %
Additional paid in capital 570,172  575,333  (5,161) (0.9) %
Retained earnings 1,335,534  1,326,011  9,523  0.7  %
Accumulated other comprehensive income (loss), net (67,641) (96,560) 28,919  (29.9) %
Treasury stock (147,294) (141,653) (5,641) 4.0  %
Total shareholders' equity $ 1,864,560  $ 1,836,683  $ 27,877  1.5  %
Shareholders’ equity increased $27.9 million, or 1.5%, to $1.9 billion at March 31, 2025 when compared to shareholders’ equity of $1.8 billion at December 31, 2024. The increase primarily resulted from increases of $9.5 million in retained earnings and $28.9 million in accumulated other comprehensive income (loss), net, partially offset by an increase in treasury stock of $5.6 million.
The increase in common stock and a decrease in additional paid in capital resulted primarily from the issuance of common stock under share-based compensation arrangements for the three months ended March 31, 2025.
The increase in retained earnings resulted from net income of $12.9 million, partially offset by preferred stock dividends of $3.4 million for the three months ended March 31, 2025.
The increase in accumulated other comprehensive income (loss), net primarily resulted from reclassification of $51.3 million in losses included in net income and income tax effect of $13.5 million, partially offset by an increase of $13.2 million in unrealized losses on AFS debt securities due to changes in market interest rates and credit spreads, and income tax effect of $3.5 million during the three months ended March 31, 2025.
The increase in treasury stock resulted from repurchases of 104,206 shares of its common stock for $5.6 million under the 2024 Share Repurchase Program during the three months ended March 31, 2025. On June 26, 2024, the Board of Directors of Customers Bancorp authorized a new common stock repurchase program, the 2024 Share Repurchase Program, to repurchase up to 497,509 shares of the Company’s common stock.
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LIQUIDITY AND CAPITAL RESOURCES
Liquidity for a financial institution is a measure of that institution’s ability to meet depositors’ needs for funds, to satisfy or fund loan and lease commitments and for other operating purposes. Ensuring adequate liquidity is an objective of the asset/liability management process. Customers coordinates its management of liquidity with its interest rate sensitivity and capital position, and strives to maintain a strong liquidity position that is sufficient to meet Customers’ short-term and long-term needs, commitments and contractual obligations.
Customers is involved with financial instruments and other commitments with off-balance sheet risks. Financial instruments with off-balance sheet risks are incurred in the normal course of business to meet the financing needs of the Bank’s customers. These financial instruments include commitments to extend credit, including unused portions of lines of credit, and standby letters of credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the consolidated balance sheet.
With commitments to extend credit, exposure to credit loss in the event of non-performance by the other party to the financial instrument is represented by the contractual amount of those instruments. The same credit policies are used in making commitments and conditional obligations as for on-balance sheet instruments. Because they involve credit risk similar to extending a loan and lease, these financial instruments are subject to the Bank’s credit policy and other underwriting standards.
Customers recognized a provision for credit losses on unfunded lending-related commitments of $1.2 million during the three months ended March 31, 2025, resulting in an ACL of $6.1 million as of March 31, 2025. Customers had an ACL on unfunded lending-related commitments of $4.9 million as of December 31, 2024.
Customers’ contractual obligations and other commitments representing required and potential cash outflows include operating leases, demand deposits, time deposits, short-term and long-term advances from FHLB, unsecured senior notes, subordinated debt, loan and other commitments as of March 31, 2025. Refer to “NOTE 8 – LEASES”, “NOTE 9 – DEPOSITS”, “NOTE 10 – BORROWINGS” and “NOTE 13 — FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK” to Customers’ unaudited consolidated financial statements for additional information.
At March 31, 2025, Customers had $3.4 billion of cash on hand and $3.0 billion of investment securities. Customers’ investment portfolio, including debt securities available for sale and held to maturity provides periodic cash flows through regular maturities and amortization and can be used as collateral to secure additional funding. We maintain a strong liquidity position, with $8.7 billion of liquidity immediately available consisting of cash on hand and available borrowing capacity from the FHLB and the FRB, which covered approximately 118% of uninsured deposits and approximately 155% of uninsured deposits less collateralized and affiliate deposits at March 31, 2025. Our loan to deposit ratio was 80% at March 31, 2025. Customers’ principal sources of funds are deposits, borrowings, principal and interest payments on loans and leases, other funds from operations, and proceeds from common and preferred stock issuances. Borrowing arrangements are maintained with the FHLB and the FRB to meet short-term liquidity needs. Longer-term borrowing arrangements are also maintained with the FHLB and the FRB. As of March 31, 2025, Customers’ borrowing capacity with the FHLB was $3.9 billion, of which $1.1 billion was utilized in borrowings and $1.5 billion of available capacity was utilized to collateralize deposits. As of December 31, 2024, Customers’ borrowing capacity with the FHLB was $3.6 billion, of which $1.1 billion was utilized in borrowings and $1.5 billion of available capacity was utilized to collateralize deposits. As of March 31, 2025 and December 31, 2024, Customers’ borrowing capacity with the FRB was $4.0 billion and $4.4 billion, respectively. None of this capacity was utilized as of March 31, 2025 and December 31, 2024.
The table below summarizes Customers’ cash flows for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(dollars in thousands) 2025 2024 Change % Change
Net cash provided by (used in) operating activities $ 94,121  $ (18,818) $ 112,939  (600.2) %
Net cash provided by (used in) investing activities (500,028) (163,160) (336,868) 206.5  %
Net cash provided by (used in) financing activities 48,666  36,752  11,914  32.4  %
Net increase (decrease) in cash and cash equivalents $ (357,241) $ (145,226) $ (212,015) 146.0  %
Cash flows provided by (used in) operating activities
Cash provided by operating activities of $94.1 million for the three months ended March 31, 2025 resulted from proceeds from the sales and repayments of loans held for sale of $326.4 million, net non-cash operating adjustments of $64.6 million, net income of $12.9 million and an increase in accrued interest payable and other liabilities of $0.5 million, partially offset by origination and purchases of loans held for sale of $299.8 million and an increase in accrued interest receivable and other assets of $10.5 million.
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Cash used in operating activities of $18.8 million for the three months ended March 31, 2024 resulted from origination and purchases of loans held for sale of $340.5 million, a decrease in accrued interest payable and other liabilities of $55.2 million and an increase in accrued interest receivable and other assets of $10.6 million, partially offset by proceeds from the sales and repayments of loans held for sale of $322.4 million, net income of $49.7 million and net non-cash operating adjustments of $15.4 million.
Cash flows provided by (used in) investing activities
Cash used in investing activities of $500.0 million for the three months ended March 31, 2025 primarily resulted from net increase in loans and leases, excluding mortgage finance loans of $337.4 million, purchases of investment securities available for sale of $156.7 million, purchases of loans of $106.0 million, net origination of mortgage finance loans of $41.9 million, purchases of leased asset under lessor operating leases of $16.4 million and purchases of investment securities held to maturity of $14.0 million, partially offset by proceeds from maturities, calls, and principal repayments of investment securities available for sale of $99.5 million and held to maturity of $69.1 million and proceeds from bank-owned life insurance of $5.1 million.
Cash used in investing activities of $163.2 million for the three months ended March 31, 2024 primarily resulted from purchases of investment securities available for sale of $328.9 million, net origination of mortgage finance loans of $56.5 million, purchases of loans of $7.4 million and purchases of leased asset under lessor operating leases of $4.0 million, partially offset by proceeds from maturities, calls, and principal repayments of investment securities available for sale of $113.3 million and held to maturity of $72.3 million, proceeds from sales of investment securities available for sale of $22.0 million, a net increase in loans and leases, excluding mortgage finance loans of $16.6 million and net purchases of FHLB, Federal Reserve Bank, and other restricted stock of $9.5 million.
Cash flows provided by (used in) financing activities
Cash provided by financing activities of $48.7 million for the three months ended March 31, 2025 primarily resulted from proceeds from long-term borrowed funds from the FHLB and the FRB of $100.0 million and net increase in deposits of $66.9 million, partially offset by repayments of long-term borrowed funds from the FHLB and the FRB of $100.0 million, payments of employee taxes withheld from share-based awards of $9.8 million, purchases of treasury stock of $5.6 million and dividends paid on preferred stock of $3.4 million.
Cash provided by financing activities of $36.8 million for the three months ended March 31, 2024 primarily resulted from a net increase in deposits of $41.5 million.
CAPITAL ADEQUACY
The Bank and the Bancorp are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on Customers’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank and the Bancorp must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items, as calculated under the regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
In first quarter 2020, the U.S federal banking regulatory agencies permitted banking organizations to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years. As part of its response to the impact of COVID-19, on March 31, 2020, the U.S. federal banking regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule allowed banking organizations to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. Customers elected to adopt the interim final rule, which is reflected in the regulatory capital data presented below. The cumulative CECL capital transition impact as of December 31, 2021 which amounted to $61.6 million was phased in at 25% per year beginning on January 1, 2022 through December 31, 2024. As of March 31, 2025, our regulatory capital ratios reflected the full impact of the CECL transition provisions.
Quantitative measures established by regulation to ensure capital adequacy require the Bank and the Bancorp to maintain minimum amounts and ratios (set forth in the following table) of common equity Tier 1, Tier 1, and total capital to risk-weighted assets, and Tier 1 capital to average assets (as defined in the regulations). At March 31, 2025 and December 31, 2024, the Bank and the Bancorp met all capital adequacy requirements to which they were subject.
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Generally, to comply with the regulatory definition of adequately capitalized, or well capitalized, respectively, or to comply with the Basel III capital requirements, an institution must at least maintain the common equity Tier 1, Tier 1, and total risk-based capital ratios and the Tier 1 leverage ratio in excess of the related minimum ratios set forth in the following table:
Minimum Capital Levels to be Classified as:
  Actual Adequately Capitalized Well Capitalized Basel III Compliant
(dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio
As of March 31, 2025:
Common equity Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,787,928  11.718  % $ 686,596  4.500  % N/A N/A $ 1,068,039  7.000  %
Customers Bank $ 1,890,194  12.403  % $ 685,793  4.500  % $ 990,590  6.500  % $ 1,066,789  7.000  %
Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,925,721  12.621  % $ 915,462  6.000  % N/A N/A $ 1,296,904  8.500  %
Customers Bank $ 1,890,194  12.403  % $ 914,391  6.000  % $ 1,219,188  8.000  % $ 1,295,387  8.500  %
Total capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 2,229,628  14.613  % $ 1,220,616  8.000  % N/A N/A $ 1,602,058  10.500  %
Customers Bank $ 2,121,108  13.918  % $ 1,219,188  8.000  % $ 1,523,985  10.000  % $ 1,600,184  10.500  %
Tier 1 capital (to average assets)
Customers Bancorp, Inc. $ 1,925,721  8.582  % $ 897,534  4.000  % N/A N/A $ 897,534  4.000  %
Customers Bank $ 1,890,194  8.430  % $ 896,849  4.000  % $ 1,121,061  5.000  % $ 896,849  4.000  %
As of December 31, 2024:
Common equity Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,803,601  12.087  % $ 671,841  4.500  % N/A N/A $ 1,044,526  7.000  %
Customers Bank $ 1,930,951  12.955  % $ 670,719  4.500  % $ 968,817  6.500  % $ 1,043,341  7.000  %
Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 1,941,394  13.011  % $ 895,308  6.000  % N/A N/A $ 1,268,353  8.500  %
Customers Bank $ 1,930,951  12.955  % $ 894,292  6.000  % $ 1,192,390  8.000  % $ 1,266,914  8.500  %
Total capital (to risk-weighted assets)
Customers Bancorp, Inc. $ 2,219,984  14.878  % $ 1,193,744  8.000  % N/A N/A $ 1,566,789  10.500  %
Customers Bank $ 2,136,594  14.335  % $ 1,192,390  8.000  % $ 1,490,487  10.000  % $ 1,565,012  10.500  %
Tier 1 capital (to average assets)
Customers Bancorp, Inc. $ 1,941,394  8.694  % $ 893,254  4.000  % N/A N/A $ 893,254  4.000  %
Customers Bank $ 1,930,951  8.652  % $ 892,755  4.000  % $ 1,115,944  5.000  % $ 892,755  4.000  %
The Basel III Capital Rules require that we maintain a 2.500% capital conservation buffer with respect to each of common equity Tier 1, Tier 1 and total capital to risk-weighted assets, which provides for capital levels that exceed the minimum risk-based capital adequacy requirements. A financial institution with a conservation buffer of less than the required amount is subject to limitations on capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to executive officers. As of March 31, 2025, the Bank and the Bancorp were in compliance with the Basel III requirements.
Effect of Government Monetary Policies
Our earnings are and will be affected by domestic economic conditions and the monetary and fiscal policies of the United States government and its agencies. An important function of the Federal Reserve Board is to regulate the money supply and interest rates. Among the instruments used to implement those objectives are open market operations in United States government securities and changes in reserve requirements against member bank deposits. These instruments are used in varying combinations to influence overall growth and distribution of bank loans and leases, investments, and deposits, and their use may also affect rates charged on loans and leases or paid for deposits.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Sensitivity
The largest part of Customers’ net income is net interest income, and the majority of its financial instruments are interest rate sensitive assets and liabilities with various term structures and maturities. One of the primary goals of management is to optimize net interest income while minimizing interest rate risk. Interest rate risk is derived from timing differences in the repricing of assets and liabilities, loan prepayments, deposit withdrawals and differences in lending and funding rates. Customers’ asset/liability committee actively looks to monitor and control the economic impact of changes in interest rates on the mix of interest rate sensitive assets and interest rate sensitive liabilities.
Customers uses two complementary methods to effectively measure and manage interest rate risk. The two types of simulation analysis used to determine the impact of changes in interest rates under various hypothetical interest rate scenarios are income scenario modeling and estimates of economic value (EVE). The combination of these two methods supplies a reasonably comprehensive summary of the levels of interest rate risk of Customers’ exposure to time factors and changes in interest rate environments.
Income scenario modeling is used to measure interest rate sensitivity and manage interest rate risk over a near term horizon. Income scenario considers not only the impact of changing market interest rates upon forecasted net interest income but also other factors such as yield curve relationships, the volume and mix of assets and liabilities, customer preferences and general market conditions.
Through the use of income scenario modeling, Customers has estimated the net interest income for the twelve months ending March 31, 2026 and December 31, 2025, based upon the assets, liabilities and off-balance sheet financial instruments including derivatives in existence at March 31, 2025 and December 31, 2024.
Customers has also estimated changes to that projected twelve-month net interest income based upon implied forward interest rates rising or falling immediately (“rate shocks”). For upward rate shocks modeling a rising rate environment at March 31, 2025 and December 31, 2024, Customers used a parallel and sustained shift in interest rates, in which the base market interest rate forecast was immediately increased by 100, 200, and 300 basis points. For downward rate shocks modeling a falling rate environment at March 31, 2025 and December 31, 2024, Customers used a parallel and sustained shift in interest rates, in which the base market interest rate forecast was immediately decreased by 100, 200 and 300 basis points. The following table reflects the estimated percentage change in projected twelve-month net interest income under the rate shocks versus the base projected net interest income for the twelve months ending March 31, 2026 and December 31, 2025, resulting from changes in interest rates.
Net change in net interest income
% change from base
Rate Shocks March 31, 2025 December 31, 2024
Up 3% 4.9% 8.4%
Up 2% 3.7% 5.9%
Up 1% 2.4% 3.2%
Down 1% (3.0)% (4.1)%
Down 2% (6.5)% (8.8)%
Down 3% (10.2)% (13.6)%
EVE considers a longer-term horizon and estimates the hypothetical discounted net present value of asset and liability cash flows. Discount rates are based upon market prices for comparable assets and liabilities. Upward and downward rate shocks are used to measure sensitivity of EVE in relation to a constant rate environment using implied forward interest rates. For upward rate shocks modeling a rising rate environment at March 31, 2025 and December 31, 2024, current market interest rates were shocked by a parallel and sustained shift in interest rates, in which the base market interest rate forecast was immediately increased by 100, 200, and 300 basis points. For downward rate shocks modeling a falling rate environment at March 31, 2025 and December 31, 2024, current market interest rates were shocked by a parallel and sustained shift in interest rates, in which the base market interest rate forecast was immediately decreased by 100, 200 and 300 basis points. This method of measurement primarily evaluates the longer term repricing risks and embedded options in Customers Bank’s balance sheet. The following table reflects the estimated change in EVE at March 31, 2025 and December 31, 2024, resulting from shocks to interest rates.
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% change from base
Rate Shocks March 31, 2025 December 31, 2024
Up 3% (6.3)% (5.5)%
Up 2% (2.8)% (1.3)%
Up 1% (0.3)% 0.5%
Down 1% (2.2)% (3.3)%
Down 2% (6.2)% (8.1)%
Down 3% (12.1)% (15.8)%
Management believes that the assumptions and combination of methods used in evaluating interest rate risk are reasonable. However, the interest rate sensitivity of our assets, liabilities and off-balance sheet financial instruments, as well as the estimated effect of changes in interest rates on estimated net interest income, could vary substantially if different assumptions are used or actual experience differs from the assumptions used in the model.
Item 4. Controls and Procedures
(a) Management’s Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, Customers Bancorp carried out an evaluation, under the supervision and with the participation of Customers Bancorp’s management, including Customers Bancorp’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Customers Bancorp’s disclosure controls and procedures as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Customers Bancorp’s disclosure controls and procedures were effective as of March 31, 2025.
(b) Changes in Internal Control Over Financial Reporting. During the quarter ended March 31, 2025, there have been no changes in Customers Bancorp’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, Customers Bancorp’s internal control over financial reporting.
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
For information on Customers’ legal proceedings, refer to “NOTE 17 – LOSS CONTINGENCIES” to the unaudited consolidated financial statements.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in “Risk Factors” included within the 2024 Form 10-K. There are no material changes from the risk factors included within the 2024 Form 10-K. The risks described within the 2024 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently believe to be immaterial also may materially adversely affect our business, financial condition and/or operating results. Refer to “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Cautionary Note Regarding Forward-Looking Statements.”
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
On June 26, 2024, the Board of Directors of Customers Bancorp authorized a new common stock repurchase program, the 2024 Share Repurchase Program, to repurchase up to 497,509 shares of the Company’s common stock. The term of the 2024 Share Repurchase Program will extend for one year from June 26, 2024, unless earlier terminated. Purchases of shares under the 2024 Share Repurchase Program may be executed through open market purchases, privately negotiated transactions, through the use of Rule 10b5-1 plans, or otherwise. The exact number of shares, timing for such purchases, and the price and terms at and on which such purchases are to be made will be at the discretion of the Company and will comply with all applicable regulatory limitations. The common shares repurchased during the three months ended March 31, 2025 pursuant to the 2024 Share Repurchase Program were as follows:
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares purchased as part of publicly announced plans or programs Maximum Number of Shares that may yet be purchased under the plans or programs
January 1 - January 31, 2025
 —  $ —  —  104,206 
February 1 - February 28, 2025
 104,206  53.60  104,206  — 
March 1 - March 31, 2025
 —  —  —  — 
Total 104,206  $ 53.60  104,206  — 
Dividends on Common Stock
Customers Bancorp historically has not paid any cash dividends on its shares of common stock and does not expect to do so in the foreseeable future.
Any future determination relating to our dividend policy will be made at the discretion of Customers Bancorp’s Board of Directors and will depend on a number of factors, including earnings and financial condition, liquidity and capital requirements, the general economic and regulatory climate, ability to service any equity or debt obligations senior to our common stock, including obligations to pay dividends to the holders of Customers Bancorp’s issued and outstanding shares of preferred stock and other factors deemed relevant by the Board of Directors.
In addition, as a bank holding company, Customers Bancorp is subject to general regulatory restrictions on the payment of cash dividends. Federal bank regulatory agencies have the authority to prohibit bank holding companies from engaging in unsafe or unsound practices in conducting their business, which, depending on the financial condition and liquidity of the holding company at the time, could include the payment of dividends. Further, various federal and state statutory provisions limit the amount of dividends that bank subsidiaries can pay to their parent holding company without regulatory approval. Generally, subsidiaries are prohibited from paying dividends when doing so would cause them to fall below the regulatory minimum capital levels, and limits exist on paying dividends in excess of net income for specified periods. The ability to pay dividends and the amounts that can be paid is limited to the extent the Bank’s capital ratios do not exceed the minimum required levels plus 250 basis points.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the first quarter of 2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified any “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangements,” as each term is defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibits
Exhibit No. Description
3.6
3.7
101
The following financial statements from the Customers’ Quarterly Report on Form 10-Q as of and for the quarterly period ended March 31, 2025, formatted in Inline XBRL include: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definitions Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Customers Bancorp, Inc.
May 9, 2025 By:   /s/ Jay S. Sidhu
Name:   Jay S. Sidhu
Title:   Chairman and Chief Executive Officer
(Principal Executive Officer)
May 9, 2025 By:  
/s/ Philip S. Watkins
Name:  
Philip S. Watkins
Title:   Chief Financial Officer
(Principal Financial Officer)

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EX-10.1 2 ex-101.htm EX-10.1 ex-101
CUSTOMERS BANCORP, INC. 2019 STOCK INCENTIVE PLAN NONQUALIFIED STOCK OPTION AWARD AGREEMENT This NONQUALIFIED STOCK OPTION AWARD AGREEMENT (the “Agreement”), dated as of  [Grant Date:Month DD, YYYY]  (the “Date of Grant”), is delivered by Customers Bancorp, Inc. (the “Company”) to  [Participant Name:First Name Last Name]  (the “Participant”).  RECITALS WHEREAS, the Company maintains the Customers Bancorp, Inc. 2019 Stock Incentive Plan (the “Plan”), which provides for the grant of nonqualified stock options to purchase shares of the Company’s common stock, par value $1.00 per share (“Company Stock”); WHEREAS, the Participant is employed by or is otherwise providing services to the Company and its Affiliates (together, the “Employer”); WHEREAS, pursuant to the actions of the Committee established under the Plan, the Company wishes to make a grant of a nonqualified stock option to the Participant pursuant to the terms of the Plan, subject to the additional terms and conditions set forth herein; and WHEREAS, this Agreement is made pursuant to the Plan and is subject in its entirety to all applicable provisions of the Plan and capitalized terms used herein and not otherwise defined will have the meanings set forth in the Plan. NOW, THEREFORE, the Company and the Participant, intending to be legally bound, hereby agree as follows:   1.                  Grant and Acceptance of Option.  (a)               Subject to the terms and conditions set forth in this Agreement, including, but not limited to, the restrictive covenants set forth on Exhibit A hereto (the “Restrictive Covenants”), and in the Plan, the Company hereby grants to the Participant a nonqualified stock option (the “Option”) to purchase the   [Granted:Options Granted] shares of Company Stock at an exercise price of $ [Price:Option Price]  per share of Company Stock.  The Option shall be unvested and unexercisable on the Date of Grant and shall vest and become exercisable according to Section 2 below.  The Participant hereby acknowledges and agrees to be bound by the Restrictive Covenants set forth in Exhibit A and agrees that the Company’s willingness to grant the Option and enter into this Agreement is in consideration for the Participant’s acknowledgement and agreement to be bound by the Restrictive Covenants. (b)               The Participant confirms acceptance of this Award by clicking the “Accept” (or similar wording) button on the award acceptance screen of the Participant’s UBS equity award account at UBS One Source.  If the Participant does not accept this Award by the deadline established by the Company, the Award will be forfeited in its entirety.  2.                  Exercisability of Option.  The Option shall become vested and exercisable on the fifth anniversary of the Date of Grant (the “Vesting Date”), provided that the Participant continues to be employed by, or provide service to, the Employer from the Date of Grant until the Vesting Date, except as otherwise set forth in Section 3 below. 3.                  Termination; Change in Control. 

 
(a)               Other than as set forth in Section 3(c), Section 3(d) or Section 3(e) below, if the Participant ceases to be employed by, or provide service to, the Employer for any reason before the Vesting Date, the Option shall automatically terminate and shall be forfeited as of the date of the Participant’s Termination.  No payment shall be made with respect to any unvested portion of the Option that terminates as described in this Section 3. (b)               Unless otherwise determined by the Committee, the vesting of Option will be suspended during the period of any approved leave of absence in which the Participant has a right to reinstatement. (c)               In the event the Participant dies while employed or providing service to the Employer and prior to the Vesting Date, the Option shall become 100% vested as of the date of the Participant’s death. (d)               In the event of the Participant’s Termination by reason of a Qualifying Retirement (as defined below) prior to the Vesting Date, the Option shall remain outstanding and will vest and become exercisable on the Vesting Date; provided that the Participant continues to comply with this Agreement, including the Restrictive Covenants, through the Vesting Date or such shorter period set forth in the Restrictive Covenants.  In the event that Participant breaches this Agreement, including the Restrictive Covenants, or the terms of any separation or other similar agreement entered into with the Employer, (i) any unvested portion of the Option or undelivered shares of Company Stock shall be automatically forfeited and cancelled without any further actions on the part of any party and (ii) the Committee, in its sole discretion, may require the Participant to surrender shares of Company Stock received, and to disgorge any profits (however defined by the Committee), made or realized by the Participant in connection with this Agreement or the Option granted hereunder.  The Company may require that the Participant attest periodically that the Participant is in compliance with the Restrictive Covenants using a form prescribed by the Company.  (e)               In the event of a Corporate Event prior to the Vesting Date, the terms and conditions of Section 11 of the Plan shall apply. (f)                “Qualifying Retirement” shall mean the Participant’s Termination other than by the Employer for Cause, and other than on account of death, where (i) at the time of such Termination the Participant has both completed five years of employment or service with the Employer from the most recent date of hire or engagement and attained age 60, (ii) the Participant provided notice of intent to the retire to the Employer no later than six months in advance of the date that the Participant intends to retire, and (iii) at the time of such Termination, the Participant executes and does not revoke a standard release of claims in favor of the Employer and an attestation that the Restrictive Covenants and any other restrictive covenants applicable to the Participant continue to apply to the Participant following Termination.  4.                  Term of Option. (a)               The Option shall have a term of ten years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan. (b)               The Option shall automatically terminate upon the happening of the first of the following events:  (i)                 The expiration of the 90-day period after the Participant’s Termination, if the Termination is for any reason other than Qualifying Retirement, death, or Cause. 

 
(ii)                           The expiration of the three-year period after the Participant’s Termination on account of a Qualifying Retirement. (iii)                       The expiration of the one-year period after the Participant’s Termination on account of the Participant’s death or Disability. (iv)             The date of the Participant’s Termination if such Termination is by the Employer for Cause or on account of the Participant’s breach of the Restrictive Covenants.  In addition, notwithstanding the prior provisions of this Section 3, if the Participant engages in conduct that constitutes Cause or breaches the Restrictive Covenants after the Participant’s Termination for any reason, the Option shall immediately terminate. Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant.  5.                  Exercise Procedures.  (a)               Subject to the provisions of Sections 2 and 3 above, the Participant may exercise part or all of the exercisable Option by giving the Company or its delegate written notice (or electronic notice through the Company’s stock plan administrator) of intent to exercise, specifying the number of shares of Company Stock as to which the Option is to be exercised and such other information as the Company or its delegate may require.  (b)               At such time as the Committee shall determine, the Participant shall pay the Exercise Price (i) in immediately available funds in U. S. dollars, or by certified or bank cashier’s check, (ii) by delivery of shares of Company Stock having a Fair Market Value on the date of exercise at least equal to the Exercise Price, (iii) by a broker-assisted cashless exercise in accordance with procedures approved by the Committee in accordance with procedures permitted by Regulation T of the Federal Reserve Board, whereby payment of the Exercise Price or tax withholding obligations may be satisfied, in whole or in part, with shares of Company Stock subject to the Option by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Committee) to sell shares of Company Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and, if applicable, the amount necessary to satisfy the Employer’s withholding obligations, or (iv) if permitted by the Committee, (A) by withholding shares of Company Stock subject to the exercisable Option, which have a Fair Market Value on the date of exercise equal to the Exercise Price (“net exercise”), or (B)  by such other method as the Committee may approve, to the extent permitted by applicable law.  The Committee may impose from time to time such limitations as it deems appropriate on the use of shares of Company Stock to exercise the Option. (c)               All obligations of the Company under this Agreement shall be subject to the rights of the Employer as set forth in the Plan to withhold amounts required by law to be withheld for any federal (including FICA), state, local and other taxes, with respect to the payment of the Option (“Withholding Taxes”).  The Participant shall be required to pay to the Employer, or make other arrangements satisfactory to the Employer to provide for the payment of, any Withholding Taxes.  If permitted by the Committee, the Participant may elect to, or the Company may require that the Participant, satisfy any Withholding Tax obligation of the Employer with respect to the Option by having shares of Company Stock withheld to satisfy the applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities under procedures established by the Company.  Unless the Committee determines otherwise, share withholding for taxes shall not exceed the Participant’s minimum applicable tax withholding amount. (d)               The obligation of the Company to deliver Company Stock shall also be

 
subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of shares, the shares may not be issued in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.  The issuance of shares to the Participant pursuant to this Agreement is subject to any applicable Withholding Taxes and other laws or regulations of the United States or of any state having jurisdiction thereof. (e)               Upon exercise of the Option (or portion thereof), the Option (or portion thereof) will terminate and cease to be outstanding.  6.                  Restrictions on Exercise.  Except as the Committee may otherwise permit pursuant to the Plan, only the Participant may exercise the Option during the Participant’s lifetime and, after the Participant’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Participant, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement. 7.                  Grant Subject to Plan Provisions.  This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant and exercise of the Option are subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to Withholding Taxes, (b) the registration, qualification or listing of the shares of Company Stock, (c) changes in capitalization of the Company and (d) other requirements of applicable law.  The Committee may amend the terms of this Option to the extent permitted by the Plan.  The Committee shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder. 8.                  No Employment or Other Rights.  The grant of the Option shall not confer upon the Participant any right to be retained by or in the employ or service of any Employer and shall not interfere in any way with the right of any Employer to terminate the Participant’s employment or service at any time. The right of any Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved. 9.                  No Stockholder Rights.  Neither the Participant, nor any person entitled to exercise the Participant’s rights in the event of the Participant’s death, shall have any of the rights and privileges of a stockholder with respect to the shares of Company Stock subject to the Option, until certificates for shares of Company Stock have been issued upon the exercise of the Option. 10.              Assignment and Transfers.  Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Participant, by will or by the laws of descent and distribution. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Participant, and the Option and all rights hereunder shall thereupon become null and void.  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, Subsidiaries, and

 
Affiliates.  This Agreement may be assigned by the Company without the Participant’s consent. 11.              Applicable Law.  The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof. 12.              Notice.  Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the Senior Vice President, Total Rewards, at the corporate headquarters of the Company, and any notice to the Participant shall be addressed to such Participant at the current address shown on the payroll of the Employer, or to such other address as the Participant may designate to the Employer in writing.  Any notice shall be delivered by hand, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or by the postal authority of the country in which the Participant resides or to an internationally recognized expedited mail courier. 13.              Company Policies.  The Participant agrees that the Option shall be subject to any applicable clawback or recoupment policies, share trading policies and other policies that may be implemented by the Board or imposed under applicable rule or regulation from time to time. The Option (and any pro rata portion thereof) shall not be earned until the Participant has met all the conditions of the Award, and any clawback, recoupment or forfeiture provisions of any applicable clawback, recoupment or forfeiture policy have been applied (and any provided amount, as applicable, shall be deemed an advance that remained subject to the Participant satisfying all eligibility conditions for earning the amounts deferred, accrued, or credited under the Plan). 14.              Application of Section 409A of the Code.  This Agreement is intended to be exempt from section 409A of the Code and to the extent this Agreement is subject to section 409A of the Code, it will in all respects be administered in accordance with section 409A of the Code. [Signature Page Follows]            IN WITNESS WHEREOF, the Company has caused an officer to execute this Agreement, and the Participant has executed this Agreement, effective as of the Date of Grant.                                                            CUSTOMERS BANCORP, INC.         By clicking “Accept” (or similar wording) button on the award acceptance screen of the my equity award account with UBS: •         I hereby accept the Award of the Option described in this Agreement; •         I agree to be bound by the terms of the Plan and this Agreement, including the Restrictive Covenants; •         I acknowledge delivery of the Plan and the Plan prospectus together with this Agreement, as well as the Company’s Insider Trading Policy and the Company’s

 
Clawback Policy; and •         I hereby agree that all decisions and determinations of the Committee with respect to the Option and the shares of Company Stock underlying the Option shall be final and binding.

 
  Exhibit A Restrictive Covenants 1.                  Limitations on Solicitation and Interference. (a)                             During Participant’s employment or service with the Company and/or its subsidiaries and for the 12-month period following Participant’s termination of employment or service, irrespective of who ends the employment or service relationship or why, Participant will not, without the prior written consent of the Company:                                          (i)            Either individually or on behalf of or through any third party, directly or indirectly, solicit, divert, or appropriate or attempt to solicit, divert, or appropriate, for the purpose of competing in the Field of Interest with the Company, any customers or clients of the Company that Participant worked with or had business contact with at any time within the 24 months preceding Participant’s separation from employment or service. “Field of Interest” is defined as the services and products that (1) the Company provides or had plans to provide to customers as of the end of Participant’s employment or service with the Company, and (2) Participant worked in or was involved with at any time within the 24 months preceding Participant’s separation from employment or service. Field of Interest may include, but is not limited to, the business of commercial banking, consumer banking, digital banking, specialty finance, and asset management.                                       (ii)            Either individually or on behalf of or through any third party, directly or indirectly, solicit, entice, or persuade or attempt to solicit, entice, or persuade any other Participants, board members, employees of, or consultants to the Company to leave their employment or engagement with the Company.                                     (iii)            Either individually or on behalf of or through any third party, directly or indirectly, engage in any attempt to end or reduce the Company’s relationship with any person or entity with which the Company conducts business or make any statement or engage in any conduct that ends or reduces the Company’s business relationship with any person or entity with which the Company conducts business. (b)               Participant acknowledges and agrees that the restrictions contained in this Section 1 are reasonable and necessary to protect and preserve the legitimate interests, properties, goodwill and business of the Company, including its Proprietary Information (defined below), and that the Company would not have granted the applicable restricted stock units, stock options or other equity-based award under the Plan to the Participant in the absence of such restrictions. (c)               If any provision or part of Section 1 is held to be unenforceable because of scope, duration, or geographic area, the parties agree to modify such provision, or that the court making such determination shall have the power to modify such provision, to reduce the duration or area of such provision or both, or to delete specific words (“blue-penciling”) so that, in its reduced or blue-penciled form, such provision will then be enforceable, and it is the parties’ intent that it be enforced. (d)               Participant acknowledges that due to the applicable law of the state in which Participant resides or works at the time of employment or service period, the terms or conditions of this Section 1 may be modified. These amendments are included in the Restrictive Covenants Addendum below, which forms a part of this Exhibit A, and it replaces and supersedes, where

 
applicable, the corresponding provisions of this Section 1. The Company may modify the Restrictive Covenants Addendum at any time to the extent the Company deems such modification necessary to comply with applicable law. If applicable state law prohibits any of the post- termination restrictions set forth in Section 1 above, then any such prohibited provisions shall not apply to Participant unless and until Participant works for the Company in a state that does not prohibit such provision(s). 2.                  Confidentiality Obligations. (a)                             Recognition of Company’s Rights; Nondisclosure and Prohibition Against Misappropriation.  Participant recognizes that during Participant’s employment or service with the Company, the Company will provide Participant with access to information of substantial value to the Company, including, but not limited to, Proprietary Information (defined below).  At all times during Participant’s employment or service with the Company and thereafter, Participant will hold in strictest confidence any of the Company’s Proprietary Information unless the Company expressly authorizes the disclosure in writing.  Participant further agrees that at all times during Participant’s employment or service with the Company and thereafter, Participant will not take, use, or otherwise misappropriate or use any of the Company’s Proprietary Information for any improper or unlawful purpose. (b)               Proprietary Information.  The term “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company.  By way of illustration but not limitation, “Proprietary Information” includes (i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (ii) information regarding plans for research, development, new products or services, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, vendors, and customers; and (iii) information regarding the skills and compensation of the Company’s team members, employees, consultants and/or contractors.  The Company’s failure to mark any of the Proprietary Information as confidential or proprietary will not affect its status as Proprietary Information.  “Proprietary Information” does not include information that has ceased to be confidential or proprietary by reason of any of the following:  (i) is generally available to the public and became generally available to the public other than as a result of improper disclosure by Participant or otherwise; (ii) became available to Participant on a non-confidential basis from a third party, provided that such third party is not known by Participant to be bound by a confidentiality agreement with, or other obligation of secrecy to, the Company, or another party or is otherwise prohibited from providing such information to Participant by a contractual, legal or fiduciary obligation; or (iii) Participant is required to disclose pursuant to applicable law or regulation (as to which information, Participant will provide the Company with prior notice of such requirement and, if practicable, an opportunity to obtain an appropriate protective order). (c)               Third Party Information.  Participant understands and agrees to maintain the confidentiality of confidential or proprietary information received from third parties. (d)                             No Improper Use of Information of Prior Employers and Others.  During Participant’s or service employment with the Company, Participant will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom Participant has an obligation of confidentiality, and Participant will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom Participant has an obligation of confidentiality unless consented to in writing by that former employer or person.  Participant will use in the performance of Participant’s duties only information that is generally known and used by persons with training and experience comparable to Participant’s own, which is common knowledge in the industry or

 
otherwise legally in the public domain, or which is otherwise provided or developed by the Company. (e)               Notice.   Participant is hereby advised that federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law. (f)                Nothing in this Exhibit A shall preclude Participant from communicating or testifying truthfully (i) if disclosure is required by law, statute, rule, regulation (including any subpoena or other similar form of process, including, without limitation, according to any rule, regulation or policy statement of a regulatory agency or body) or by professional standards; or (ii) in response to a request from any banking or other regulatory authority with supervisory authority over the Company (including the U.S. Federal Reserve Bank, U.S. Securities and Exchange Commission, New York Stock Exchange, or Commonwealth of Pennsylvania).  Further, nothing in this Exhibit A prohibits or limits Participant from (iii) initiating communications directly with, responding to any inquiry from, volunteering information to, or providing testimony before, the U.S. Securities &Exchange Commission (“SEC”), the U.S. Department of Justice (“DOJ”), the U.S. Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization (“SRO”), or any other governmental, law enforcement, or regulatory authority, regarding this Exhibit A and its underlying facts and circumstances, or any reporting of, investigation into, or proceeding regarding suspected violations of law, and Participant is not required to advise or seek permission from the Company before engaging in any such activity.  Participant’s ability to disclose information may be limited or prohibited by applicable law and the Company does not consent to disclosures that would violate applicable law.  Such applicable laws include, without limitation, laws and regulations restricting disclosure of confidential supervisory information or disclosures subject to the Bank Secrecy Act (31 U.S.C. §§ 5311-5330), including information that would reveal the existence or contemplated filing of a suspicious activity report. 3.                  Assignment of Inventions. Participant understands and agrees that Participant is performing work for hire for the Company and that Inventions developed or conceived by Participant during Participant’s employment or service with the Company are to be considered works made for hire and are the sole property of the Company. Participant agrees to assign, and does hereby assign, to the Company or its nominee, all right, title, and interest in and to Inventions made by Participant. Participant hereby waives any and all claims that Participant may now or hereafter have in any jurisdiction to so- called “moral rights” in connection with any such Inventions or any elements thereof. Participant will, with reasonable reimbursement for expenses, but at no other expense to the Company, at any time during or after Participant’s employment or service with the Company, sign and deliver all lawful papers and cooperate in such other lawful acts that may be reasonably necessary or desirable to protect or vest title in Inventions in the Company or its nominee, including applying for, obtaining, maintaining, and enforcing copyrights and/or patents on Inventions in all countries of the world. The Company, however, is not required to accept or perfect any such assignment or other conveyance of any interest in any patent or Inventions or require the Company to prosecute such patent or other application. This provision does not apply to Inventions for which Participant affirmatively proves that no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on Participant’s own time unless (i) the Inventions relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research or development; or (ii) the Inventions result, either directly or indirectly, from any work performed by Participant for the Company.  

 
4.                  Additional Provisions. (a)                             If Participant breaches or there is a threatened breach of any of the obligations in this Exhibit A, Participant agrees that such breach or threatened breach would cause irreparable harm to the Company, for which remedies at law will not be adequate. Participant therefore consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary, preliminary, or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that monetary damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. This equitable relief will be in addition to, not in lieu of, legal remedies, monetary damages, or other available forms of relief.   (b)               Participant agrees further that if it is determined by a court that Participant has breached the terms of this Exhibit A, the Company will be entitled to recover from Participant all costs and attorneys’ fees incurred as a result of its attempts to redress such a breach or to enforce its rights and protect its legitimate interests.

 
  Restrictive Covenants Addendum               The Agreement and Exhibit A are governed by Pennsylvania law, but if Participant primarily resides or work in another state and it is found that that state’s law applies to the restrictive covenants in Section 1 of Exhibit A, then the relevant state portion of this Restrictive Covenants Addendum replaces and supersedes, where applicable, the corresponding provisions of Section 1 of Exhibit A.   California   If Participant primarily resides or works in California and it is found that California law applies to this Agreement or any dispute arising from this Agreement, then the restrictive covenants in Section 1 shall not apply to Participant after their termination of employment or service with the Company. Any conduct relating to solicitation that involves the misappropriation of the Company’s trade secret information, such as the use, retention or distribution of the Company’s protected customer information, will remain prohibited conduct at all times, and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies the Company may have under this Agreement, trade secret law, unfair competition law, or other laws applicable in California absent this Agreement. The Company will not attempt to enforce any agreement or provision of any agreement to the extent deemed unenforceable under California Business and Professions Code Section 16600. Colorado The restrictive covenant in Section 1(a)(i) does not apply to Participant unless Participant’s annualized cash compensation from the Company exceeds $76,254 for 2025 (or the earnings threshold in effect as adjusted annually by the Colorado Division of Labor Standards and Statistics in the Department of Labor and Employment).   This Agreement contains restrictive covenants. Participant must review the restrictive covenants carefully.  Participant acknowledges that they have been provided with a separate written notice and a copy of this Agreement at least 14 days before the earlier of the

 
effective date of the Agreement or the effective date of any additional compensation or change in the terms or conditions of employment that provides consideration for the covenant not to compete. Participant acknowledges that they were provided the separate written notice in the language in which they communicate with the Company about their performance, and their signature above acknowledges receipt of this notice.   Illinois If Participant primarily resides or works in Illinois and it is found that Illinois law applies to this Agreement or any dispute arising from this Agreement, then the restrictive covenants in Section 1(a)(i) and (ii) shall not apply unless Participant’s annual compensation meets or exceeds $45,000 (with the earnings threshold increasing by $2,500 every five years from January 1, 2027, through January 1, 2037). Participant further agrees that if, at the time Participant signs the Agreement, their earnings do not meet the earnings threshold, then the restrictive covenants in Section 1(a)(i) and (ii) will automatically become enforceable against them if and when they begin earning an amount equal to or greater than the earnings threshold. If the Company terminates, furloughs, or lays Participant off as the result of business circumstances or governmental orders related to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic, then the restrictive covenants in Section 1(a)(i) and (ii) will not apply to Participant unless enforcement of the covenant includes compensation equivalent to Participant’s base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement.   Participant agrees that the restrictive covenants in Section 1 apply are supported by sufficient and adequate consideration.   Participant acknowledges that that they have been provided with this

 
Agreement at least 14 days before executing this Agreement. Participant further acknowledges that they have been advised to consult with an attorney before signing this Agreement.   Louisiana If Participant primarily resides or works in Louisiana and it is found that Louisiana law applies to this Agreement or any dispute arising from this Agreement, Participant agrees that the restrictive covenants in Section 1, as applied within the State of Louisiana, include every parish and municipality in the State, which include Acadia Parish, Allen Parish, Ascension Parish, Assumption Parish, Avoyelles Parish, Beauregard Parish, Bienville Parish, Bossier Parish, Caddo Parish, Calcasieu Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, De Soto Parish, East Baton Rouge Parish, East Carroll Parish, East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish, Iberia Parish, Iberville Parish, Jackson Parish, Jefferson Davis Parish, Jefferson Parish, La Salle Parish, Lafayette Parish, Lafourche Parish, Lincoln Parish, Livingston Parish, Madison Parish, Morehouse Parish, Natchitoches Parish, Orleans Parish, Ouachita Parish, Plaquemines Parish, Pointe Coupee Parish, Rapides Parish, Red River Parish, Richland Parish, Sabine Parish, St. Bernard Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John the Baptist Parish, St. Landry Parish, St. Martin Parish, St. Mary Parish, St. Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Union Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish, West Baton Rouge Parish, West Carroll Parish, West Feliciana Parish, and Winn Parish.    North Dakota If the Participant primarily resides or works in North Dakota and it is found that North Dakota law applies to this Agreement or any dispute arising from this Agreement, then the restrictive covenants in Section 1 shall not apply after their termination of employment or service with the Company. However, any conduct relating to the restrictive

 
covenants in Section 1 that involves the misappropriation of the Company’s trade secret information will remain prohibited conduct at all times, and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies the Company may have under this Agreement, trade secret law, unfair competition law, or other laws applicable in North Dakota absent this Agreement.   Virginia If Participant primarily resides or works in Virginia and it is found that Virginia law applies to this Agreement or any dispute arising from this Agreement, then Participant agrees that the restrictive covenants in Section 1 are reasonably limited in nature and do not prohibit employment with a competing business in a non-competitive position.   Washington The restrictive covenants in Section 1 do not restrict solicitation of former customers of the Company or the mere acceptance or transaction of business with a customer.    In addition to the other forms of protected conduct, nothing in the Agreement prohibits disclosure or discussion of conduct Participant reasonably believes to be illegal discrimination, illegal harassment, illegal retaliation, a wage-and-hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy.   Participant acknowledges that they have been provided with this Agreement and had the opportunity to review and consider the terms of this Agreement before executing this Agreement.            

 
EX-10.2 3 ex-102.htm EX-10.2 ex-102
CUSTOMERS BANCORP, INC. 2019 STOCK INCENTIVE PLAN RESTRICTED STOCK UNIT AGREEMENT This RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”), dated as of  [Grant Date:Month DD, YYYY]  (the “Date of Grant”), is delivered by Customers Bancorp, Inc. (the “Company”) to  [Participant Name:First Name Last Name]  (the “Participant”).  RECITALS WHEREAS, the Company maintains the Customers Bancorp, Inc. 2019 Stock Incentive Plan (the “Plan”), which provides for the grant of restricted stock units; WHEREAS, the Participant is employed by or is otherwise providing services to the Company and its Affiliates (together, the “Employer”); WHEREAS, pursuant to the actions of the Committee established under the Plan, the Company wishes to make a grant of restricted stock units to the Participant pursuant to the terms of the Plan, subject to the additional terms and conditions set forth herein; and WHEREAS, this Agreement is made pursuant to the Plan and is subject in its entirety to all applicable provisions of the Plan and capitalized terms used herein and not otherwise defined will have the meanings set forth in the Plan. NOW, THEREFORE, the Company and the Participant, intending to be legally bound, hereby agree as follows:   1.                  Grant and Acceptance of Stock Units.  (a)               Subject to the terms and conditions set forth in this Agreement, including, but not limited to, the restrictive covenants set forth on Exhibit A hereto (the “Restrictive Covenants”), and in the Plan, the Company hereby grants the Participant  [Granted:Shares Granted] restricted stock units (the “Stock Units”).  Each Stock Unit represents the right of the Participant to receive a share of the Company’s common stock, par value $1.00 per share (“Company Stock”) on the applicable payment date set forth in Section 5 below.  The Participant hereby acknowledges and agrees to be bound by the Restrictive Covenants set forth in Exhibit A and agrees that the Company’s willingness to grant the Stock Units and enter into this Agreement is in consideration for the Participant’s acknowledgement and agreement to be bound by the Restrictive Covenants. (b)               The Participant confirms acceptance of this Award by clicking the “Accept” (or similar wording) button on the award acceptance screen of the Participant’s UBS equity award account at UBS One Source. If the Participant does not accept this Award by the deadline established by the Company, the Award will be forfeited in its entirety. 2.                  Stock Unit Account.  Stock Units represent hypothetical shares of Company Stock, and not actual shares of stock.  The Company shall establish and maintain a Stock Unit account, as a bookkeeping account on its records, for the Participant and shall record in such account the number of Stock Units granted to the Participant.  No shares of Company Stock shall be issued to the Participant at the time the grant is made, and the Participant shall not be, and shall not have any of the rights or privileges of, a stockholder of the Company with respect to any Stock Units recorded in the Stock Unit account.  The Participant shall not have any interest in any fund or specific assets of the Company by reason of this Award or the Stock Unit account established for the Participant.

 
3.                  Vesting.  (a)               The Stock Units shall become vested according to the following schedule (each, a “Vesting Date”); provided that the Participant continues to be employed by, or provide service to, the Employer from the Date of Grant until the applicable Vesting Date, except as otherwise set forth in Section 4 below: [Vesting Table:quantity, Month DD, YYYY]   (b)               The vesting of the Stock Units shall be cumulative, but shall not exceed 100% of the Stock Units.  If the foregoing vesting schedule would produce fractional Stock Units, the number of Stock Units that vest shall be rounded down to the nearest whole Stock Unit and the fractional Stock Units will be accumulated so that the resulting whole Stock Units will be included in the number of Stock Units that become vested on the last Vesting Date. 4.                  Termination; Corporate Event.  (a)               Other than as set forth in Section 4(c), Section 4(d) or Section 4(e) below, if the Participant ceases to be employed by, or provide service to, the Employer for any reason before the last Vesting Date, any unvested Stock Units shall automatically terminate and shall be forfeited as of the date of the Participant’s Termination.  No payment shall be made with respect to any unvested Stock Units that terminate as described in this Section 4. (b)               Unless otherwise determined by the Committee, the vesting of Stock Units will be suspended during the period of any approved leave of absence in which the Participant has a right to reinstatement.  (c)               In the event the Participant dies while employed or providing service to the Employer and before the last Vesting Date, any unvested Stock Units shall become 100% vested as of the date of the Participant’s death. (d)               Except as set forth in Section 4(e) below, in the event of the Participant’s Termination by reason of a Qualifying Retirement (as defined below) prior to the last Vesting Date, any unvested Stock Units shall remain outstanding and continue to vest on the Vesting Dates specified in the schedule set forth in Section 3(a) above; provided that the Participant continues to comply with this Agreement, including the Restrictive Covenants, through each applicable Vesting Date or such shorter period set forth in the Restrictive Covenants.  In the event that the Participant breaches this Agreement, including the Restrictive Covenants, or the terms of any separation or other similar agreement entered into with the Employer, (i) any unvested Stock Units or undelivered shares of Company Stock shall be automatically forfeited and cancelled without any further actions on the part of any party and (ii) the Committee, in its sole discretion, may require the Participant to surrender shares of Company Stock received, and to disgorge any profits (however defined by the Committee), made or realized by the Participant in connection with this Agreement or the Stock Units granted hereunder.  The Company may require that the Participant attest periodically that the Participant is in compliance with the Restrictive Covenants using a form prescribed by the Company.   (e)               In the event of a Corporate Event prior to the Vesting Date, the terms and conditions of Section 11 of the Plan shall apply, subject to Sections 3(e)(i) and (ii) below. (i)                 Notwithstanding the foregoing, (x) if the Participant’s Termination on account of a Qualifying Retirement occurs prior to the date of a Corporate Event that occurs after

 
the Date of Grant, the Stock Units shall become 100% vested as of the date of the Corporate Event; and (y) if the Participant’s Termination on account of a Qualifying Retirement occurs after the date of a Corporate Event that occurs after the Date of Grant, any unvested Stock Units shall become 100% vested as of the date of such Termination.  (ii)              If upon or following a Corporate Event that occurs after the Date of Grant, the Participant employment or service is involuntarily terminated by the Employer, other than for Cause or pursuant to such other condition described in Section 11(d) of the Plan, any unvested Stock Units shall become 100% vested as of the date of such Termination. (f)                “Qualifying Retirement” shall mean the Participant’s Termination other than by the Employer for Cause, and other than on account of death, where (i) at the time of such Termination the Participant has both completed five years of employment or service with the Employer from the most recent date of hire or engagement and attained age 60, (ii) the Participant provided notice of intent to the retire to the Employer no later than six months in advance of the date that the Participant intends to retire, and (iii) at the time of such Termination, the Participant executes and does not revoke a standard release of claims in favor of the Employer and an attestation that the Restrictive Covenants and any other restrictive covenants applicable to the Participant continue to apply to the Participant following Termination.  5.                  Payment of Stock Units. (a)               If and when the Stock Units vest, the Company shall issue to the Participant one share of Company Stock for each vested Stock Unit within 60 days following the earliest of: (i)                 the applicable Vesting Date; (ii)              the date of the Participant’s Termination due to the Participant’s death; (iii)            if the Stock Units vest in accordance with Section 3(e)(i)(x) and the Corporate Event is a Qualifying Change in Control, the date of the Qualifying Change in Control; (iv)             if the Stock Units vest in accordance with Section 3(e)(i)(y) or 3(e)(ii) within two years following the Corporate Event and the Corporate Event is a Qualifying Change in Control, the date of the Participant’s Termination; and (v)               the date that the Committee exercises its discretion to vest and deliver shares of Company Stock (or other consideration) to the Participant pursuant to Section 11(b)(2) of the Plan, consistent with Code Section 409A.   (b)               All obligations of the Company under this Agreement shall be subject to the rights of the Employer as set forth in the Plan to withhold amounts required by law to be withheld for any federal (including FICA), state, local and other taxes, with respect to the payment of the Stock Units (“Withholding Taxes”). The Participant shall be required to pay to the Employer, or make other arrangements satisfactory to the Employer to provide for the payment of, any Withholding Taxes.  If permitted by the Committee, the Participant may elect to, or the Company may require that the Participant, satisfy any Withholding Tax obligation of the Employer with respect to the Stock Units by having shares of Company Stock withheld to satisfy the applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities under procedures established by the Company.  Unless the Committee determines otherwise, share withholding for taxes shall not exceed the Participant’s minimum applicable tax withholding amount.                    (c)               The obligation of the Company to deliver Company Stock shall also be subject

 
to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of shares, the shares may not be issued in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.  The issuance of shares to the Participant pursuant to this Agreement is subject to any applicable Withholding Taxes and other laws or regulations of the United States or of any state having jurisdiction thereof. (d)               Neither the Participant, nor any person entitled to receive payment in the event of the Participant’s death, shall have any of the rights and privileges of a stockholder with respect to shares of Company Stock, including voting or dividend rights, until certificates for shares have been issued upon payment of Stock Units.   (e)               “Qualifying Change in Control” means, with respect to the Company, a Change in Control that is a “change in control event” within the meaning of Treasury Regulation 1.409A-3(i)(5). 6.                  Grant Subject to Plan Provisions.  This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant and payment of the Stock Units are subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to Withholding Taxes, (b) the registration, qualification or listing of the shares of Company Stock, (c) changes in capitalization of the Company and (d) other requirements of applicable law.  The Committee may amend the terms of the Stock Units to the extent permitted by the Plan.  The Committee shall have the authority to interpret and construe the Stock Units pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder. 7.                  No Employment or Other Rights.  The grant of the Stock Units shall not confer upon the Participant any right to be retained by or in the employ or service of any Employer and shall not interfere in any way with the right of any Employer to terminate the Participant’s employment or service at any time.  The right of any Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved. 8.                  Assignment and Transfers.  Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Participant, by will or by the laws of descent and distribution.  In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of the Stock Units or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Stock Units by notice to the Participant, and the Stock Units and all rights hereunder shall thereupon become null and void.  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, Subsidiaries, and Affiliates.  This Agreement may be assigned by the Company without the Participant’s consent. 9.                  Applicable Law.  The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof.   

 
10.              Notice.  Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the Senior Vice President, Total Rewards, at the corporate headquarters of the Company, and any notice to the Participant shall be addressed to such Participant at the current address shown on the payroll of the Employer, or to such other address as the Participant may designate to the Employer in writing.  Any notice shall be delivered by hand, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or by the postal authority of the country in which the Participant resides or to an internationally recognized expedited mail courier.  11.              Company Policies.  The Participant agrees that the Stock Units shall be subject to any applicable clawback or recoupment policies, share trading policies and other policies that may be implemented by the Board or imposed under applicable rule or regulation from time to time.  No Stock Units (nor any pro rata portion thereof) shall be earned until the Participant has met all the conditions of the Stock Units, and any clawback, recoupment or forfeiture provisions of any applicable clawback, recoupment or forfeiture policy have been applied (and any provided amount, as applicable, shall be deemed an advance that remained subject to the Participant satisfying all eligibility conditions for earning the amounts deferred, accrued, or credited under the Plan). 12.              Permissive Deferral.  The Committee may permit or require the Participant to defer receipt of the payment of cash or the delivery of shares that would otherwise be due to such Participant in connection with Stock Units.  If any such deferral election is permitted or required, the Committee shall establish rules and procedures for such deferrals and may provide for interest or other earnings to be paid on such deferrals.  The rules and procedures for any such deferrals shall be consistent with applicable requirements of Section 409A of the Code and the regulations issued thereunder (“Section 409A”). 13.              Application of Section 409A of the Code.  This Award of Stock Units is intended to be exempt from or comply with the applicable requirements of Section 409A and shall be administered in accordance with Section 409A.  Notwithstanding anything in this Agreement to the contrary, if the Stock Units constitute “deferred compensation” under Section 409A and the Stock Units become vested and settled upon the Participant’s termination of employment, payment with respect to the Stock Units shall be delayed for a period of six months after the Participant’s termination of employment if the Participant is a “specified employee” as defined under Section 409A (as determined by the Committee), if required pursuant to Section 409A.  If payment is delayed, the shares of Company Stock shall be distributed within 30 days of the date that is the six-month anniversary of the Participant’s termination of employment.  If the Participant dies during the six-month delay, the shares shall be distributed in accordance with the Participant’s will or under the applicable laws of descent and distribution.  Notwithstanding any provision to the contrary herein, payments made with respect to this Award of Stock Units may only be made in a manner and upon an event permitted by Section 409A, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under Section 409A.  To the extent that any provision of this Agreement would cause a conflict with the requirements of Section 409A, or would cause the administration of the Stock Units to fail to satisfy the requirements of Section 409A, such provision shall be deemed null and void to the extent permitted by applicable law.  In no event shall the Participant, directly or indirectly, designate the calendar year of payment. If the Stock Units constitute “deferred compensation” under Section 409A and payment is subject to the execution of a release of claims in favor of the Employer and its Affiliates, and if payment with respect to the Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year. [Signature Page Follows]

 
IN WITNESS WHEREOF, the Company has caused an officer to execute this Agreement, and the Participant has executed this Agreement, effective as of the Date of Grant.                                                                        CUSTOMERS BANCORP, INC.     By clicking “Accept” (or similar wording) button on the award acceptance screen of the my equity award account with UBS: •         I hereby accept the Award of Stock Units described in this Agreement; •         I agree to be bound by the terms of the Plan and this Agreement, including the Restrictive Covenants; •         I acknowledge delivery of the Plan and the Plan prospectus together with this Agreement, as well as the Company’s Insider Trading Policy and the Company’s Clawback Policy; and •         I hereby agree that all decisions and determinations of the Committee with respect to the Stock Units shall be final and binding.

 
  Exhibit A Restrictive Covenants 1.                  Limitations on Solicitation and Interference. (a)                             During Participant’s employment or service with the Company and/or its subsidiaries and for the 12-month period following Participant’s termination of employment or service, irrespective of who ends the employment or service relationship or why, Participant will not, without the prior written consent of the Company:                                          (i)            Either individually or on behalf of or through any third party, directly or indirectly, solicit, divert, or appropriate or attempt to solicit, divert, or appropriate, for the purpose of competing in the Field of Interest with the Company, any customers or clients of the Company that Participant worked with or had business contact with at any time within the 24 months preceding Participant’s separation from employment or service. “Field of Interest” is defined as the services and products that (1) the Company provides or had plans to provide to customers as of the end of Participant’s employment or service with the Company, and (2) Participant worked in or was involved with at any time within the 24 months preceding Participant’s separation from employment or service. Field of Interest may include, but is not limited to, the business of commercial banking, consumer banking, digital banking, specialty finance, and asset management.                                       (ii)            Either individually or on behalf of or through any third party, directly or indirectly, solicit, entice, or persuade or attempt to solicit, entice, or persuade any other Participants, board members, employees of, or consultants to the Company to leave their employment or engagement with the Company.                                     (iii)            Either individually or on behalf of or through any third party, directly or indirectly, engage in any attempt to end or reduce the Company’s relationship with any person or entity with which the Company conducts business or make any statement or engage in any conduct that ends or reduces the Company’s business relationship with any person or entity with which the Company conducts business. (b)               Participant acknowledges and agrees that the restrictions contained in this Section 1 are reasonable and necessary to protect and preserve the legitimate interests, properties, goodwill and business of the Company, including its Proprietary Information (defined below), and that the Company would not have granted the applicable restricted stock units, stock options or other equity-based award under the Plan to the Participant in the absence of such restrictions. (c)               If any provision or part of Section 1 is held to be unenforceable because of scope, duration, or geographic area, the parties agree to modify such provision, or that the court making such determination shall have the power to modify such provision, to reduce the duration or area of such provision or both, or to delete specific words (“blue-penciling”) so that, in its reduced or blue-penciled form, such provision will then be enforceable, and it is the parties’ intent that it be enforced. (d)               Participant acknowledges that due to the applicable law of the state in which Participant resides or works at the time of employment or service period, the terms or conditions of this Section 1 may be modified. These amendments are included in the Restrictive Covenants Addendum below, which forms a part of this Exhibit A, and it replaces and supersedes, where

 
applicable, the corresponding provisions of this Section 1. The Company may modify the Restrictive Covenants Addendum at any time to the extent the Company deems such modification necessary to comply with applicable law. If applicable state law prohibits any of the post- termination restrictions set forth in Section 1 above, then any such prohibited provisions shall not apply to Participant unless and until Participant works for the Company in a state that does not prohibit such provision(s). 2.                  Confidentiality Obligations. (a)                             Recognition of Company’s Rights; Nondisclosure and Prohibition Against Misappropriation.  Participant recognizes that during Participant’s employment or service with the Company, the Company will provide Participant with access to information of substantial value to the Company, including, but not limited to, Proprietary Information (defined below).  At all times during Participant’s employment or service with the Company and thereafter, Participant will hold in strictest confidence any of the Company’s Proprietary Information unless the Company expressly authorizes the disclosure in writing.  Participant further agrees that at all times during Participant’s employment or service with the Company and thereafter, Participant will not take, use, or otherwise misappropriate or use any of the Company’s Proprietary Information for any improper or unlawful purpose. (b)               Proprietary Information.  The term “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company.  By way of illustration but not limitation, “Proprietary Information” includes (i) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (ii) information regarding plans for research, development, new products or services, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, vendors, and customers; and (iii) information regarding the skills and compensation of the Company’s team members, employees, consultants and/or contractors.  The Company’s failure to mark any of the Proprietary Information as confidential or proprietary will not affect its status as Proprietary Information.  “Proprietary Information” does not include information that has ceased to be confidential or proprietary by reason of any of the following:  (i) is generally available to the public and became generally available to the public other than as a result of improper disclosure by Participant or otherwise; (ii) became available to Participant on a non-confidential basis from a third party, provided that such third party is not known by Participant to be bound by a confidentiality agreement with, or other obligation of secrecy to, the Company, or another party or is otherwise prohibited from providing such information to Participant by a contractual, legal or fiduciary obligation; or (iii) Participant is required to disclose pursuant to applicable law or regulation (as to which information, Participant will provide the Company with prior notice of such requirement and, if practicable, an opportunity to obtain an appropriate protective order). (c)               Third Party Information.  Participant understands and agrees to maintain the confidentiality of confidential or proprietary information received from third parties. (d)                             No Improper Use of Information of Prior Employers and Others.  During Participant’s or service employment with the Company, Participant will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom Participant has an obligation of confidentiality, and Participant will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom Participant has an obligation of confidentiality unless consented to in writing by that former employer or person.  Participant will use in the performance of Participant’s duties only information that is generally known and used by persons with training and experience comparable to Participant’s own, which is common knowledge in the industry or

 
otherwise legally in the public domain, or which is otherwise provided or developed by the Company. (e)               Notice.   Participant is hereby advised that federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law. (f)                Nothing in this Exhibit A shall preclude Participant from communicating or testifying truthfully (i) if disclosure is required by law, statute, rule, regulation (including any subpoena or other similar form of process, including, without limitation, according to any rule, regulation or policy statement of a regulatory agency or body) or by professional standards; or (ii) in response to a request from any banking or other regulatory authority with supervisory authority over the Company (including the U.S. Federal Reserve Bank, U.S. Securities and Exchange Commission, New York Stock Exchange, or Commonwealth of Pennsylvania).  Further, nothing in this Exhibit A prohibits or limits Participant from (iii) initiating communications directly with, responding to any inquiry from, volunteering information to, or providing testimony before, the U.S. Securities &Exchange Commission (“SEC”), the U.S. Department of Justice (“DOJ”), the U.S. Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization (“SRO”), or any other governmental, law enforcement, or regulatory authority, regarding this Exhibit A and its underlying facts and circumstances, or any reporting of, investigation into, or proceeding regarding suspected violations of law, and Participant is not required to advise or seek permission from the Company before engaging in any such activity.  Participant’s ability to disclose information may be limited or prohibited by applicable law and the Company does not consent to disclosures that would violate applicable law.  Such applicable laws include, without limitation, laws and regulations restricting disclosure of confidential supervisory information or disclosures subject to the Bank Secrecy Act (31 U.S.C. §§ 5311-5330), including information that would reveal the existence or contemplated filing of a suspicious activity report. 3.                  Assignment of Inventions. Participant understands and agrees that Participant is performing work for hire for the Company and that Inventions developed or conceived by Participant during Participant’s employment or service with the Company are to be considered works made for hire and are the sole property of the Company. Participant agrees to assign, and does hereby assign, to the Company or its nominee, all right, title, and interest in and to Inventions made by Participant. Participant hereby waives any and all claims that Participant may now or hereafter have in any jurisdiction to so- called “moral rights” in connection with any such Inventions or any elements thereof. Participant will, with reasonable reimbursement for expenses, but at no other expense to the Company, at any time during or after Participant’s employment or service with the Company, sign and deliver all lawful papers and cooperate in such other lawful acts that may be reasonably necessary or desirable to protect or vest title in Inventions in the Company or its nominee, including applying for, obtaining, maintaining, and enforcing copyrights and/or patents on Inventions in all countries of the world. The Company, however, is not required to accept or perfect any such assignment or other conveyance of any interest in any patent or Inventions or require the Company to prosecute such patent or other application. This provision does not apply to Inventions for which Participant affirmatively proves that no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on Participant’s own time unless (i) the Inventions relate (A) directly to the business of the Company, or (B) to the Company’s actual or demonstrably anticipated research or development; or (ii) the Inventions result, either directly or indirectly, from any work performed by Participant for the Company.  

 
4.                  Additional Provisions. (a)                             If Participant breaches or there is a threatened breach of any of the obligations in this Exhibit A, Participant agrees that such breach or threatened breach would cause irreparable harm to the Company, for which remedies at law will not be adequate. Participant therefore consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary, preliminary, or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that monetary damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. This equitable relief will be in addition to, not in lieu of, legal remedies, monetary damages, or other available forms of relief.   (b)               Participant agrees further that if it is determined by a court that Participant has breached the terms of this Exhibit A, the Company will be entitled to recover from Participant all costs and attorneys’ fees incurred as a result of its attempts to redress such a breach or to enforce its rights and protect its legitimate interests.

 
  Restrictive Covenants Addendum               The Agreement and Exhibit A are governed by Pennsylvania law, but if Participant primarily resides or work in another state and it is found that that state’s law applies to the restrictive covenants in Section 1 of Exhibit A, then the relevant state portion of this Restrictive Covenants Addendum replaces and supersedes, where applicable, the corresponding provisions of Section 1 of Exhibit A.   California   If Participant primarily resides or works in California and it is found that California law applies to this Agreement or any dispute arising from this Agreement, then the restrictive covenants in Section 1 shall not apply to Participant after their termination of employment or service with the Company. Any conduct relating to solicitation that involves the misappropriation of the Company’s trade secret information, such as the use, retention or distribution of the Company’s protected customer information, will remain prohibited conduct at all times, and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies the Company may have under this Agreement, trade secret law, unfair competition law, or other laws applicable in California absent this Agreement. The Company will not attempt to enforce any agreement or provision of any agreement to the extent deemed unenforceable under California Business and Professions Code Section 16600. Colorado The restrictive covenant in Section 1(a)(i) does not apply to Participant unless Participant’s annualized cash compensation from the Company exceeds $76,254 for 2025 (or the earnings threshold in effect as adjusted annually by the Colorado Division of Labor Standards and Statistics in the Department of Labor and Employment).   This Agreement contains restrictive covenants. Participant must review the restrictive covenants carefully.  Participant acknowledges that they have been provided with a separate written notice and a copy of this Agreement at least 14 days before the earlier of the

 
effective date of the Agreement or the effective date of any additional compensation or change in the terms or conditions of employment that provides consideration for the covenant not to compete. Participant acknowledges that they were provided the separate written notice in the language in which they communicate with the Company about their performance, and their signature above acknowledges receipt of this notice.   Illinois If Participant primarily resides or works in Illinois and it is found that Illinois law applies to this Agreement or any dispute arising from this Agreement, then the restrictive covenants in Section 1(a)(i) and (ii) shall not apply unless Participant’s annual compensation meets or exceeds $45,000 (with the earnings threshold increasing by $2,500 every five years from January 1, 2027, through January 1, 2037). Participant further agrees that if, at the time Participant signs the Agreement, their earnings do not meet the earnings threshold, then the restrictive covenants in Section 1(a)(i) and (ii) will automatically become enforceable against them if and when they begin earning an amount equal to or greater than the earnings threshold. If the Company terminates, furloughs, or lays Participant off as the result of business circumstances or governmental orders related to the COVID-19 pandemic or under circumstances that are similar to the COVID-19 pandemic, then the restrictive covenants in Section 1(a)(i) and (ii) will not apply to Participant unless enforcement of the covenant includes compensation equivalent to Participant’s base salary at the time of termination for the period of enforcement minus compensation earned through subsequent employment during the period of enforcement.   Participant agrees that the restrictive covenants in Section 1 apply are supported by sufficient and adequate consideration.   Participant acknowledges that that they have been provided with this

 
Agreement at least 14 days before executing this Agreement. Participant further acknowledges that they have been advised to consult with an attorney before signing this Agreement.   Louisiana If Participant primarily resides or works in Louisiana and it is found that Louisiana law applies to this Agreement or any dispute arising from this Agreement, Participant agrees that the restrictive covenants in Section 1, as applied within the State of Louisiana, include every parish and municipality in the State, which include Acadia Parish, Allen Parish, Ascension Parish, Assumption Parish, Avoyelles Parish, Beauregard Parish, Bienville Parish, Bossier Parish, Caddo Parish, Calcasieu Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish, Concordia Parish, De Soto Parish, East Baton Rouge Parish, East Carroll Parish, East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish, Iberia Parish, Iberville Parish, Jackson Parish, Jefferson Davis Parish, Jefferson Parish, La Salle Parish, Lafayette Parish, Lafourche Parish, Lincoln Parish, Livingston Parish, Madison Parish, Morehouse Parish, Natchitoches Parish, Orleans Parish, Ouachita Parish, Plaquemines Parish, Pointe Coupee Parish, Rapides Parish, Red River Parish, Richland Parish, Sabine Parish, St. Bernard Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John the Baptist Parish, St. Landry Parish, St. Martin Parish, St. Mary Parish, St. Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Union Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish, West Baton Rouge Parish, West Carroll Parish, West Feliciana Parish, and Winn Parish.    North Dakota If the Participant primarily resides or works in North Dakota and it is found that North Dakota law applies to this Agreement or any dispute arising from this Agreement, then the restrictive covenants in Section 1 shall not apply after their termination of employment or service with the Company. However, any conduct relating to the restrictive

 
covenants in Section 1 that involves the misappropriation of the Company’s trade secret information will remain prohibited conduct at all times, and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies the Company may have under this Agreement, trade secret law, unfair competition law, or other laws applicable in North Dakota absent this Agreement.   Virginia If Participant primarily resides or works in Virginia and it is found that Virginia law applies to this Agreement or any dispute arising from this Agreement, then Participant agrees that the restrictive covenants in Section 1 are reasonably limited in nature and do not prohibit employment with a competing business in a non-competitive position.   Washington The restrictive covenants in Section 1 do not restrict solicitation of former customers of the Company or the mere acceptance or transaction of business with a customer.    In addition to the other forms of protected conduct, nothing in the Agreement prohibits disclosure or discussion of conduct Participant reasonably believes to be illegal discrimination, illegal harassment, illegal retaliation, a wage-and-hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy.   Participant acknowledges that they have been provided with this Agreement and had the opportunity to review and consider the terms of this Agreement before executing this Agreement.        

 
EX-31.1 4 ex-3113_31x2025.htm EX-31.1 Document

Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) / 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Jay S. Sidhu, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Customers Bancorp, Inc. for the period ended March 31, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Jay S. Sidhu
Jay S. Sidhu
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: May 9, 2025
EX-31.2 5 ex-3123_31x2025.htm EX-31.2 Document

Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) / 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Philip S. Watkins, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Customers Bancorp, Inc. for the period ended March 31, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Philip S. Watkins
Philip S. Watkins
Chief Financial Officer
(Principal Financial Officer)
Date: May 9, 2025
EX-32.1 6 ex-3213_31x2025.htm EX-32.1 Document

Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report of Customers Bancorp, Inc. (the “Corporation”) on Form 10-Q for the period ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay S. Sidhu, Chairman and Chief Executive Officer of the Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
Date: May 9, 2025 /s/ Jay S. Sidhu
Jay S. Sidhu, Chairman and Chief Executive Officer
(Principal Executive Officer)

This certificate is being made for the exclusive purpose of compliance by the Chief Executive Officer of the Corporation with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, and may not be used by any person or for any reason other than as specifically required by law.
EX-32.2 7 ex-3223_31x2025.htm EX-32.2 Document

Exhibit 32.2
Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report of Customers Bancorp, Inc. (the “Corporation”) on Form 10-Q for the period ended March 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Philip S. Watkins, Chief Financial Officer of the Corporation, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
Date: May 9, 2025 /s/ Philip S. Watkins
Philip S. Watkins, Chief Financial Officer
(Principal Financial Officer)

This certificate is being made for the exclusive purpose of compliance by the Chief Financial Officer of the Corporation with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, and may not be used by any person or for any reason other than as specifically required by law.