Customers Bancorp's third-quarter earnings increased by 184% from a year earlier after the Wyomissing, Pa., company grew its balance sheet.
The $2.6 billion-asset company's earnings rose 2% from a quarter earlier, to $6.6 million, it announced late Thursday.
Net interest income rose 60% from the second quarter and more than doubled from a year earlier, to $22.6 million. The company attributed the growth to increased lending and "revenue related to the cash flow re-estimation process" for loans it bought in failed-bank transactions with the Federal Deposit Insurance Corp. The estimations came from the company converting to a "more sophisticated and precise loan valuation system," it said in a press release.
Net loans increased 17% from the second quarter and more than doubled from a year earlier, to $2.3 billion. The growth included $112 million of mortgage loans held for sale, $90 million of multifamily loans, $78 million in consumer loans and $61 million of commercial loans.
The loan-loss provision jumped tenfold from a year earlier, to $10.1 million, with about half of the increase stemming from the re-estimation process. Another $1.3 million was related to loan growth.
Noninterest income tripled from a year earlier, to $9.8 million. The growth was attributed to the company's warehouse-lending efforts, income from its failed-bank purchases and the re-estimation process.
Finally, noninterest expenses rose 33% from a year earlier, to $12 million, as the company grew its employee base and technology.
Despite explosive year-over-year growth, the company led by Jay Sidhu, former Sovereign Bancorp chief executive, is set to get bigger because of two pending acquisitions. Its purchase of the $1 billion-asset Acacia Federal Savings Bank is scheduled to close this quarter. Its deal for the $247 million-asset CMS Bancorp is expected to close in the second quarter. The company also raised $100 million of equity in the third quarter to fund organic growth and acquisitions.
