Good morning, ladies and gentlemen. Welcome to Customers Bancorp's Q2 2023 earnings call. Joining me this morning, our President and CEO of our bank, Sam Sidhu; Customers Bancorp's CFO, Carla Leibold; Chief Credit Officer, Andy Bowman; and our bank's CFO and Head of Corporate Development, Phil Watkins. We are very pleased with our Q2 results as we executed seamlessly on our strategic priorities and delivered one of the strongest quarters to date. Despite all of the challenges banks are facing this year, we are pleased that we are not only delivering on our promises to our clients and to our investors, but finding opportunities in these challenging times. Please join me in thanking all of our team members across the bank, who continue to work tirelessly every single day on executing superbly on our short-term as well as our long-term priorities. Beginning on Slide 3. As you can see, we believe our presentation today will once again demonstrate why we believe we are truly a forward-thinking bank with strong risk management capabilities. We will cover six key topics today. I will provide you with the highlights, and my colleagues will cover them in more detail. First, in terms of quarterly performance, we are again comfortably beating street estimates on our core basis. While our industry is facing margin headwinds, we demonstrated our ability to improve net interest margin which expanded by 19 basis points to 3.15% during the quarter. Hence, our net interest income was up 10% during the quarter on a smaller loan base. We are well positioned to achieve the full year net interest margin guidance we previously provided to you. Second, we executed on several strategic transactions in the quarter to accelerate our financial and strategic priorities. The venture banking portfolio acquisition from the FDIC represented once in a cycle opportunity to recruit a phenomenal team and will serve as another avenue to continue to improve our deposit franchise. We followed through on the commitment we communicated to you last quarter to exit non-strategic relationships and to continue to de-risk the balance sheet by executing on two non-core loan sale transactions during the quarter. Sam will provide more detail on each of these transactions later on in the presentation. Third, we have a high-quality, diversified, loyal customer base and are laser-focused on continuing to improve our deposit base in 2023 and beyond. Evidence of the continued success of the efforts can be seen in the $1 billion or 29% quarter-over-quarter increase in our non-interest-bearing deposits. We reduced our average cost of deposits in the quarter by 21 basis points, despite an increase in interest rates and significant deposit pressures experienced by the entire industry. Fourth, our liquidity and capital position remain best in class. We continue to maintain immediately available liquidity of more than 200% of our uninsured deposits in recognition of the uncertain times that remain for the industry. We also significantly improved our Common Equity Tier 1 ratio by 70 basis points during the quarter and have a clear path towards the 11% plus target we stated to you last quarter. Lastly, and perhaps most important, is credit quality. This is always a key focus at Customers Bank. We were well ahead of the industry in tempering balance sheet growth, which we discussed with you on our 4Q 2022 earnings call. Recent areas of credit focus in office and retail commercial real estate are absolutely de minimis components of our loan portfolio. This was obviously intentional and will pay dividends going forward. We are pleased with what we've accomplished this quarter, but even more excited about what we can do going forward. Turning to Slide 4, let me briefly share with you again our priorities, which remain unchanged. We have and will continue to moderate growth, build a stronger balance sheet during this time period because of the uncertain environment, and to assure ourselves that we are actually capturing holistic banking relationships and continuing to build our franchise. We will continue to fortify our balance sheet and then bring our capital ratios, and then maintain those capital ratios above tier levels. As always, risk management remains at the core of the bank's DNA, and we are unchanged in our commitment to what we call our critical success factors. These are that we will never take our eye off the credit risk. We will always focus on superior interest rate risk management. We will continue to monitor liquidity daily and maintain robust liquidity under stress scenarios. We will have above average peer capital ratios, and we will always ensure our growth initiatives will generate positive operating leverage. With that, I'd like to turn it over to Sam to cover the key activity and results for the quarter in much more detail. Sam? Thank you, Jay. Good morning, everyone. I want to echo Jay's sentiment. We are so proud of our team's efforts in delivering one of our best overall quarters yet, especially under such a challenging backdrop for the industry. In the Q2 of 2023, we earned $1.39 in GAAP EPS on net income of $44 million. On a core basis, we earned $1.65 in EPS. Our core earnings were $52.2 million. Our core ROA was over 1%. Our core ROE was 15.7%. Our improvement in net interest margin to 3.15% was a function of best-in-industry improved deposit costs, supported by the repricing of our interest-earning assets, which, as you know, are largely floating rate. From a balance sheet perspective, deposits were up a net $227 million, but this does not fully reflect the significant improvement in our deposit mix and cost, which I'll discuss further in a few minutes. Loan balances were tactically reduced as we actively exited non-strategic credits in the quarter to free up balance sheet capacity for franchise-enhancing deposit-led lending opportunities. Credit quality remained benign, with NPAs declining by 2 basis points to 13 basis points of total assets, and NPLs declined by 12% to $28 million. Reserve levels remained robust at nearly 500% of NPLs, and we continue to closely monitor the portfolio for any signs of weakness, given the uncertain macroeconomic backdrop. Turning to Slide 6, I'll provide some more detail here on the venture banking FDIC transaction completed in the quarter. Firstly, let me start off by saying that we are thrilled to welcome our new team members and clients to Customers Bank. This acquisition was a perfect addition to our existing venture banking vertical. The recruited team comes with an exceptional 20-year track record in the space and is widely regarded as one of the top-performing teams in the industry. I know that the team and the clients are extremely excited to get back to working together, doing what they do best, which is driving their respective businesses forward, and we're so happy to be able to support them. Customers Bank is now immediately being recognized as a leading bank partner for venture-backed companies, serving customers from early stage all the way to IPO. Our nationwide presence and customized best-in-class technology platform will provide truly unique service and experience for those innovation and technology companies. Our acquisition of the FDIC portfolio and the parallel recruitment of the team will bring significant near and medium-term deposits to our franchise. We expect that the new portfolio will be self-funded this year, and a reminder that historically, these clients have deposit balances that are generally 2 times their loan balances. We expect that this will provide tailwinds to our already robust deposit gathering momentum. Finally, the transaction is immediately accretive to both tangible book value and earnings per share, and we expect it to be at least 5% accretive to earnings in 2024, lending to the meaningful approximately $95 million discount. Moving to Slide 7. In an effort to maintain our deposit remix goals and capital target commitment to our stakeholders and shareholders, we successfully executed on two loan sales at the end of the quarter to free up balance sheet capacity for the FDIC deal announced on June 15, late in the quarter. First, we fully exited the non-bilateral portion of our capital call fund finance credits. These did not have any meaningful deposit relationships and are with very large fund managers. Reminder, this is a one-time event. We remain highly committed to the direct capital call line lending vertical and are seeing incredible bilateral opportunities and are excited to add clients to the portfolio that bring full deposit operating account relationships. It is worth noting that we have already added about $100 million in very granular, non-interest-bearing operating accounts in the vertical over the past few months, with a big pipeline being onboarded as we speak. Additionally, we sold about $550 million of consumer installment loans at a slight premium and ahead of plan. This transaction validates our strategy to increase the velocity of assets in our digital lending business and generate fee and fee-like income with limited to no credit risk. The combination of these two transactions will provide us balance sheet capacity to grow our partnership with strategic clients, with primary banking relationships that support our funding and liquidity goals of the bank, all while continuing to meet the targeted increase in our capital levels. Moving to Slide 8. This was clearly a fantastic quarter for Customers Bank for many reasons, but we're most proud of our deposit successes. These wins are a true testament to the strength of the relationship-based banking, supported by best-in-class technology, product, and solutions that we are delivering to our customers. In an environment where many banks are struggling to attract deposits, let alone low-cost deposit gathering, Customers Bank onboarded over $900 million of net core deposits in the quarter, while increasing the level of non-interest-bearing deposit mix by another $1 billion, bringing the total to now 25% of total deposits. This already, as of today, makes up for the late 2022 negative mix shift that both we and the industry as a whole experienced. I'm extremely pleased to report that our average cost of deposits declined by 21 basis points. Our spot cost of deposits also declined by 1 basis point. These declines were despite the rate increase. Importantly, highlights our unique ability to add low cost and non-interest-bearing deposits used to remix our high cost and wholesale deposits. We have been able to achieve this in one of the most challenging and competitive deposit gathering environments in modern banking history. We remain deeply focused on the quality of our deposits, and at the end of the quarter, 77% of our deposits were either insured or collateralized. This metric keeps us in a very strong position relative to our regional bank peers. We are a beneficiary of the significant customer disruption and frustration in the industry, and we hope to look back on 2023 as a year of growing, diversifying, and transforming our deposit base with high quality, low cost, sticky and granular franchise-enhancing deposits. Moving to Slide 9. As we discussed earlier, the strength of our deposit franchise drove record net interest income in the quarter of $160 million ex PPP. I repeat, record NII, with the lowering of quarter-over-quarter interest expense being the main driver. As mentioned, our net interest margin increased significantly to 3.15%. The continued improvement in our deposit franchise and the strength of our interest-earning asset positions us to perform best in class, despite the headwinds facing the industry. With that, I'd like to turn the call over to Carla to discuss additional highlights from the quarter. Thank you, Sam. Good morning, everyone. Beginning on Slide 10, we continued our strategy of improving the overall quality of our balance sheet and loan portfolio during the Q2. Total loans held for investment declined by approximately $800 million quarter-over-quarter, with roughly $300 million of the reduction coming from our consumer installment portfolio. Another $300 million coming from our corporate and specialized banking portfolio, mainly from the syndicated capital call line of credit sale, net of the impact of the acquired venture banking portfolio from the FDIC, and the remaining $200 million coming from our community banking portfolio. These reductions were tactical to free up balance sheet capacity for more strategic relationships that come with corresponding deposits. We continue to be excited about our positioning in the fund finance business. We'll pursue new business opportunities going forward. Our focus will be on opportunities that create holistic banking relationships for us across deposits and treasury management, as well as credit facilities. Our net interest margin benefited 7 basis points from the increasing yield on our interest earning assets, reflecting the floating rate nature of our assets, including our loan portfolio, which is approximately 70% floating rate and a 13 basis point reduction in our total cost of funds. The average yield on loans in the Q2 increased to 6.83%. Our loan to deposit ratio ended the quarter at 77%, 9 percentage points lower than our regional bank peers. We've operated the bank at around 80% loan to deposit ratio over the last 5 quarters. We believe operating at these levels is prudent, especially in an environment where liquidity in the banking industry is becoming increasingly scarce. Turning to Slide 11, core non-interest expenses increased to $89 million in the Q2. The increase was primarily related to two items: The first and largest component of the increase resulted from higher insurance expenses. Second, higher incentive accruals were recorded during the quarter, tied to performance and the onboarding of our new venture banking team members. While our efficiency ratio may be slightly elevated for a quarter or two, our business model is highly efficient. This is evidenced by the level of non-interest expense to average assets relative to our regional bank peers. We were able to deliver high touch client service while managing non-interest expenses because of our limited physical branch network and tech-enabled capabilities. This is the true differentiator of the Customers Bank franchise. Moving to Slide 12. We continue to proactively monitor our interest rate risk position with all the moving pieces in this dynamic interest rate environment. Without taking undue credit risk, we continue to generate almost two times the yield on securities relative to our regional bank peers. The spot book yield on our available for sale securities and portfolio increased to 5.38%, given that nearly 50% of the portfolio is floating rate. Even more importantly, we've been able to generate that return by taking only one third of the duration risk that our regional bank peers have exposed themselves to. As a result of the strong interest rate risk management, the unrealized losses in our securities portfolio relative to our tangible common equity, is significantly lower than our regional bank peers. Turning to Slide 13. Our liquidity position remains robust and best in class, with over $11 billion in total liquidity and over $9 billion in immediately available liquidity. The net interest margin results we shared with you earlier are even more impressive when you recognize we finished the quarter with over $3 billion of cash on the balance sheet. We will continue to monitor market conditions to determine the appropriate level of balance sheet cash. That said, we continue to believe it is prudent from a risk management perspective to operate with higher levels of cash. There were modest reductions in our available committed capacity during the quarter, primarily resulting from our loan sales and the collateral value or pledging capacity associated with those loans. Immediately available liquidity as a percentage of uninsured deposits remains in excess of 220%, putting us at the very highest end relative to our regional bank peers. Moving to Slide 14. We added another $1 per share to our tangible book value in the quarter, despite continued AOCI headwinds, the acquisition and onboarding of the venture banking loan portfolio, the one-time expense associated with the early surrender of BOLI policies, and the one-time loss associated with the exit of the non-strategic, short-term syndicated capital call lines of credit. Over the last 4.5 years, we have increased our tangible book value per share by 14% on an annualized basis. That pace of tangible book value accretion is significantly more than our regional bank peers. Importantly, we remain on track to achieve a tangible book value of at least $45 by the end of this year. Despite the significant improvement in our stock price during the quarter, we continue to trade at very attractive P/E multiples, especially for a franchise that is consistently generating returns on capital of roughly 15%. Turning to Slide 15. Our estimated CET1 ratio ended the quarter at 10.3%. That was up an impressive 70 basis points compared to last quarter. We accomplished this despite the acquisition of a $631 million tech and venture loan portfolio through strong organic capital generation and the loan sales previously discussed. Our TCE ratio was 6% at the end of the Q2. This ratio was negatively impacted by approximately 80 basis points of AOCI. The more than $3 billion of balance sheet cash also negatively impacted this ratio. Excluding this increased balance sheet cash, our TCE ratio would have been around 6.8%. We remain on track to achieve the year-end CET1 target of 11%-11.5% that we disclosed last quarter, having achieved nearly 50% of that increase in a single quarter. While this can be largely accomplished through organic capital generation alone, we are continuing to evaluate a modest amount of incremental balance sheet optimization alternatives to the extent we see opportunities to exit additional non-strategic assets and relationships. Moving on to slide sixteen. Credit quality in our portfolio remains incredibly strong across all metrics. Non-performing loans fell to $28 million in the quarter. Commercial charge-offs were de minimis at just 6 basis points, and consumer and total net charge-offs remained in line with our expectations. The leading indicator of non-performing assets to total assets decreased 2 basis points to the quarter, to just 13 basis points at June thirtieth. Commercial real estate exposure continues to capture the attention of bank executives and investors. We are extremely well-positioned for the potential challenges ahead for the Commercial real estate market. CRE comprises only 15% of our loan portfolio, excluding multifamily, compared to our regional bank peers that have about 30% exposure. More specifically, our office and retail sector Commercial real estate each only account for approximately 1% of our total loan portfolio. They are both very granular portfolios with an average loan size of under $5 million. We closely monitor the minimal exposures that we do have and are pleased with their credit performance. Credits in these two sectors have an average loan-to-value of less than 60% and debt service coverage ratios of 1.5 to 1.6 times. As Jay mentioned in his opening remarks, superior credit quality has and always will be a core risk management principle that dictates how we operate the bank. We are firm believers that management must remain diligent about credit risk during the good times, which is why we are confident that we are very well positioned despite the uncertain economic environment today. Turning to Slide 17. As we touched on earlier, we further de-risked the balance sheet in the Q2 through our continued reduction in the consumer installment loans held for investment. We have reduced the balances in our held for investment consumer installment portfolio by 47% over the last year. Now accounts for just 7% of our total loan balances. The portfolio we continue to hold is very high quality and short duration. The average FICO score is 733, with no credit extended to consumers with FICO scores below 680. The duration of the portfolio is approximately 1.3 years. Going forward, we continue to see opportunity in the consumer space. We have developed differentiated origination capabilities and a robust network of partners. In our held for sale portfolio, we take very limited credit risk and currently are able to generate significant fee-like interest income, in addition to the potential fee income opportunities we have identified going forward. With that, I'd like to pass the call back to Sam to address our outlook and provide some concluding remarks. Sam? Thank you, Carla. Before we wrap our prepared remarks, I want to provide a brief update on our expectations for the full year 2023. To reiterate, our top focus areas for the year are strengthening our balance sheet, led by our improving deposit franchise, maintaining industry-leading levels of liquidity, and significantly building our capital base. We are maintaining our loan guidance, and our deposit strategy will continue to be focused on further remixing and improving the quality of our deposit base, with significant core deposit growth used to pay down high cost and wholesale deposits. It's worth mentioning that despite the $900 million+ of core deposit growth in the quarter, our pipeline remains at or above $2 billion today. We are maintaining our full year net interest margin guidance, but now have a bias towards the top end of our range. We're revising our non-interest expense guidance to reflect the higher level of expenses inclusive of the venture banking group, as Carla discussed. We're reaffirming our core EPS guidance of about $6 per share for 2023. Finally, as Carla shared with you, we're well on our way and positioned to achieve $45 or more of tangible book value by year-end. Lastly, on Slide 9, before we open it up to Q&A, I want to conclude with the takeaways from the quarter. Firstly, we materially improved the quality of our deposit base, and we bucked the industry trend by lowering our deposit cost, increasing our non-interest-bearing deposit mix, and improving the mix led to relatively low cost deposit generation in the quarter, with a $2 billion+ low-cost deposit pipeline for continued improvement. Our net interest margin, number 2, expansion was differentiated versus the rest of the industry and positions us to meet or beat our full year guidance for 2023. Number 3, we remixed the loan portfolio to emphasize strategic deposit-led relationships and provide capacity for multi-product relationship opportunities across all of our lending franchises. Fourth, we meaningfully improved our capital base by an industry-leading 70 basis points despite the acquisition, lending to our balance sheet discipline and are well on track to deliver our promise to exceed 11% CET1 by year-end. Finally, we accomplished all of this in the quarter while never deviating from our core risk management principles. Our interest rate risk and liquidity positions remain best in class, and our loan portfolio is positioned to weather whatever macroeconomic environment may be ahead. Thank you. Let's now open it up to questions. At this time, I would like to remind everyone, in order to ask a question, press Star, then the number 1 on your telephone keypad. Your first question comes from the line of Michael Perito from KBW. Your line is open. Hey, good morning, guys. Thanks for taking my questions. I wanted to start on just a couple kind of clarification. Obviously, a lot happened this quarter, right? A lot happening this year, and I wanted to maybe kind of level set, you know, how you expect the business to look in 2024 and beyond. So I have a couple questions on that line of questioning. I want to start on the loan portfolio side. You know, I guess it's... Carla, you mentioned there, there might still be some actions you take, but is, is the end-of-period mix kind of indicative of, of what you guys think going forward, about 50% C&I, maybe 5%-10% CRE, 5%-10% mortgage warehouse, the balance CRE and multifamily? Does that feel kind of like the right mix, which given where you're at now, or, or, or how should we think about that moving forward? Yeah, Mike, I think that's right. One of the things we wanted to reiterate is our loan guidance is really anchored back to the end of last year or the beginning of this year. When we're talking to a flat to declining balance sheet, really focusing on year-over-year. I think the mix that we currently have is good to think about what it looks like going forward. That's perfect. Switching to the deposit side, though, I imagine there's still, and you guys kind of alluded to this, but, but that mix still should change a bit over the next four quarters, right? I mean, you have at least $500 million, you know, targeted to come over on, on the venture side. I imagine that will be a blend of kind of low and no-cost deposits. I, I guess, just as you look ahead to on the, that side, do you guys have kind of a, a, a targetish range of, of mix on the deposit portfolio that you're hoping to be able to achieve, you know, by, by the end of next year? Yeah, so, so Mike, that's it's a great question, and I would sort of say is, you know, firstly, just as a reminder, you know, we had obviously the low-cost deposits this quarter. In the press release, we talked about the $660 million ± of, of wholesale, and brokered CDs that were paid, were paid down. You know, there's an additional, almost $2 billion, approximately, in the second half of this year. Our anticipation is, is that if the, if the core deposit pipeline continues to come in at the pace that it's coming in today, would be used to continue to pay off high cost and also, pay down those brokers. The, the remix would actually be significant, not just by the end of next year, but would, would really accelerate this year and continue at the pace that we're in. Just to kind of go back for a second to, you know, our, our growth. You know, we also had $200 billion in the Q2 of high-cost digital deposits, consumer-related deposits that declined. Our core deposit generation of actual new customer growth was approximately $1.3 billion, so over about $100 million a week on average. Having said that, there was a huge acceleration after the FDIC deal announcement in the second half of June, and that pace has continued of that approximately $100 million or so, plus or minus, of core low-cost deposit growth in July as well. Sam, if you had to try to, like, just give us a rough indication of, of the, the key verticals that drove or that drove and are driving that incremental low-cost deposit growth going forward, you know, how would you kind of break that out? You know, you had obviously dramatic DDA growth. There wasn't a ton of color in the release about where that came from. I know we could probably guess, but just would love a, like, maybe a layer deeper on that, just so we have an idea of, you know, what businesses are really driving this. Yeah, sure. Of course. Good question. It was broad-based across the organization, first and foremost, and, and the pipeline is also reasonably broad-based. There's obviously a couple of verticals in the Q2, but then importantly, I can kind of guide a little bit for the, the third quarter and beyond. In the Q2, we had $200 million of fund finance and tech and venture over the last, you know, quarter or so. We also had $200 million in end-of-period, you know, CBIT balances that were contributing. As you know, with our discipline, I think we were at 13% last quarter, about 15% ± now. With our discipline to any deposit vertical, you know, capped from a concentration perspective, you will not see any more, you know, growth from that vertical, whether it's deposits or, or non-interest bearing. Like I mentioned, it was broad-based, you know, across. If you look forward at the pipeline, you know, as you mentioned, we have $several hundred million of, you know, low-cost deposit growth in the pipeline of... you know, as you can imagine, 150, 200 accounts being opened right now, from our tech and venture group of the loan portfolio. None of those deposits came in by June 30. The loans were, the credits came on, by June 15, and it took a couple of weeks to kind of discuss with the customers, move over some of the servicing and the ACH, and to begin those account openings, and we're seeing that really in earnest right now. Fund finance is another, you know, big vertical where I think we have over 100 accounts at various stages of opening right now. What's interesting about fund finance is, as you know, these are typically non-interest bearing, in nature, and they're also small ticket on the low end, $500,000 to, you know, $1 million-$2 million. If you look forward at our, at our deposit pipeline of that $2 billion+ that I mentioned, it's granular. You know, we're talking about average account sizes in the, you know, $5 million-$10 million. In the high end, it's gonna be $20 million-$30 million. These are true, granular, sticky, you know, low-cost operating accounts. That's really good color. Thanks, Sam. Just, just a couple more quick follow-ups for me. Just, just on the, on the loan-to-deposit ratio, Carla, I think if I heard you correctly, you said operating in, like, the 80%-85% range going forward. Did I hear that right, or? Yeah, around 80%. Okay, around 80%. I think in the release of the slides, Sam, you guys mentioned that the venture piece is gonna be 2 deposits for every $1 of loans, like, normalized. It might take some time to get there. I guess, you know, just, just all to say, I mean, there's still a good amount of remixing going on, you know, micro on the balance sheet here, in terms of, like, what these businesses are gonna contribute going forward. I think just as guardrails, if we assume those, that loan mix, you know, the improving deposit mix and the 80-ish% loan-to-deposit ratio, it sounds like we should be in a flattish balance sheet near term, it sounds like we should be in the right ballpark of what you guys are expecting to happen. That's right. Okay. Then just, just lastly on the NIM guide, towards the high end of the range, that-that's a full year guide, right? If, if I recall. So that would suggest, you know, you expect the NIM to maybe be in, like, the 320, 330 range in the back half of the year. Is that, that generally fair? Yeah, the NIM guide was the full year, and the range was the 2.85%-3.05%. We think that using the Q2 margin around 3.15% is a good way to think about it in the back half of this year as well. Okay. Very good, guys. Busy quarter. Thanks, thanks for giving us all the additional detail and for taking my questions. Appreciate it. Thanks, Mike. Thanks. Your next question comes from the line of Casey Haire from Jefferies. Your line is open. Yeah, thanks. Good morning, everyone. A couple follow-up questions. Hi I guess on the NIM. We got the spot deposit costs, obviously moving in the right direction. I was wondering, given all the m-moving pieces in the quarter on the loan front, if you could give what the spot loan yield was on June 30, and, and the spot NIM, if, if you have it as well? Yeah, we don't have the, the spot NIM that we gave at the end of the quarter, focusing just on the 3.15%. The spot loan yields, you know, it's hard to say because it varies so much by the different portfolios, but I think to say on average, 7% or higher feels about right. Yeah, Casey, just to provide a little bit more color on the loan yields. You know, as you may recall, our, our specialty, you know, lending verticals, like our capital call lines, et cetera, were typically-- whereas those were sort of in that 250-350 over SOFR range. They're actually now at a minimum, 300, and actually more in the high end of the range of 325-350, and these are direct deposit-generating type relationships. You know, additionally, on the, on the tech and venture and venture banking group, you know, you're typically at a Prime plus 100, you know, which is an additional, you know, 50-100 basis points over, over those verticals as well. Gotcha. Okay. Just on the, on the the 11% CET1 target, you guys, you know, clearly sound like you're on a nice path. Just wondering, you know, do, do you need to do any more pruning of the loan book, or can you get there organically? How much of the cash position, which is very strong at 10% of the balance sheet, you know, will be utilized to get there in terms of-- I mean, you could shrink the balance sheet, obviously, and pay down borrowings? Yeah. Just a little bit of color on that. You're right, we can get there from organic generation alone, considering on a core basis, we made $2.90 so far in 2023. The back half of the year, that additional retained earnings generation could get you with to our targeted 11%-11.5% with no other balance sheet optimization strategies. Casey, if I could just go back, I just don't think we fully answered your, your NIM question, you know, as we talked about the loan portfolio. Just wanted to remind and connect some dots. You know, the, the, the consumer loan sales were at a weighted, weighted average cost of call it, you know, mid-teens. The venture banking loans, which largely, you know, filled the hole were at that 9%-ish type range. While there were very positive trends in the month of June, and continuing on, you know, into the Q2, there are also some, some headwinds, but those are desired, you know, headwinds, and they kind of, you know, neutralize each other as the, as the quarter and the year progresses. Right. Yeah, no, that's my point is, like, the consumer book obviously had a very nice rate. Then, the yield on the venture book is coming in lower. Understand from a risk perspective, all in that, that, that's what you guys were going for. Yeah, that's why I was just curious on the loan yield. Okay, what was my other-- Oh, yeah. On the expense side, yeah, taking the guide up on the FDIC assessments and the-- Can you just break out, you know, what, what's, you know, the breakdown between what is how much of that is venture banking versus the FDIC assessments? Yeah. A couple, couple of points there. First, I'd just like to reiterate it, that we were on target to deliver our previous expense guidance, if it wouldn't be for these two items. Obviously, the larger component is the increased insurance expenses, and then the second component is tied to sort of the full onboarding of the new venture banking team, as well as some increased incentives associated with or tied to performance. The larger piece would be the insurance expenses. Gotcha. the FDIC, that's my understanding is that comes late in, later, in the Q4, and it's 1 time in nature, or are you just referring to, to greater FDIC expense assessments on an ongoing basis? Yeah, Casey, we're, we're referring to, to accruals for, for larger expenses going forward and, and what you probably have seen in large commercial banks, and if you really dig in, is that this is, you know, broad-based, you know, across the industry for large commercial banks. It's just that we have such a low expense base, and we're highly efficient from a cost base perspective. It's, it's jumping out. Again, you know, going back to sort of the way that we think about efficiency, you know, we'll have sort of a one to two quarter, you know, blip in our efficiency ratio of the high 40s, and we'll go back to sort of our once the, the venture banking team and, and we sort of, you know, digest some of the capital headroom we created in this quarter, we go back to BAU. You know, we'll be back to targeting, you know, 45%, you know, plus or minus efficiency ratio in 2024 and beyond. Got it. Thanks, guys. All right. Your next question comes from a line of Frank Schiraldi from Piper Sandler. Your line is open. Good morning. Hi, Frank. Hey, just wanted, Sam, wanted to get, just follow up on the deposit question. Obviously, that was kind of the most eye-popping part of the quarter. Just the additional $2 billion in the pipeline, just want to make sure I understand, is that mostly non-interest-bearing? Is that just, you know, low cost in general? How would you characterize, you know, those balances? Sure. great question, Frank, and, and interestingly enough, it's in the similar sort of strike zone as we're operating in right now, 25%-35% non-interest-bearing, the rest of it being, you know, moderately low cost. When I say low cost at this point in time, you sort of think of that as sort of at our average cost of deposits as opposed to the marginal cost of high deposits. You know, our hope is, is that we can continue sort of in the pipeline. I think that of the, you know, the $100 million+ that I was mentioning, that we're bringing on per week right now, I'd say about $20 million ±, if not $30 million, is non-interest-bearing. That pace is continuing, and again, the, the use of proceeds is gonna be, you know, paying down the higher costs, letting some digital, high-cost digital deposits run off, and wholesale deposits, you know, in the second half of this year. We'll look to continue the, the trend of this deposit mix shift in the second half of 2023 to set up a really nice, you know, platform to jump off of in 2024. Okay. Even if the, you know, is coming on, 25% is non-interest-bearing, the stuff that's coming off is, is, you know, all interest-bearing, all higher yielding stuff or higher cost stuff. We should expect that, that non-interest-bearing, as a percentage of total, to continue to increase, I would assume, over time? ... That's the hope, Frank. Obviously, you can't fully control these things. That assumes sort of static, you know, non-interest-bearing balances, from where we are today, which we think is probably, you know, accurate, given the customer relationships and conversations. As you can imagine, for someone to hold, you know, a non-interest-bearing account, there has to be either a true 100% operating account or an incredible value-added, you know, proposition like payments, that would, you know, have you, you know, not demand to put those into an interest, interest-bearing account, or at least to move some of it into an interest-bearing account. Sure. Okay. Then you mentioned the capital call lines, the, the, the sale of the business in the quarter was sort of a one-off. There's no deposits tied to it. At this point, generally speaking, what's on the portfolio is there it's, it's, it's operating stuff where there is deposits, you know, funding those lines. Is that, you know, fair? So, you know, you, you wouldn't expect and that's why you wouldn't expect, excuse me, additional kind of one-offs on that side of the business? That, that's, that's right, Frank. The way to think about it is, is that, you know, the, the $600 million plus or minus of commitments approximately represented about $300 million in outstandings, and it was about a third of the outstandings that we had on our balance sheet. We have $520 million of outstandings in fund finance at the end of the quarter. Those are 20% as of today, self-funded, which is, you know, up significantly from no balances just a couple of quarters ago. And it's a testament to sort of that, you know, technology enablement and transaction banking that we first started talking about last summer. You know, we're continuing to add a number, though, of also, direct non-credit, non-interest-bearing deposit relationships as well, you know, to counterbalance some of the net credit relationships that we have in the vertical. Okay. Just last question, you know, sticking with that theme. Just curious, your thoughts on what's the right sort of level of brokered balances on the balance sheet for you guys, given that you've got the branch light model. You know, at this point, do you say, "Well, we've got these niches that can provide this funding that maybe, you know, we're, we're, we're ultimately not looking for, for any sort of, you know, sizable brokered on the balance sheet," or, or is that still gonna continue to be a, you know, a sizable portion, just given that the, the model you guys run? What, what are your thoughts there? Yeah, it's a good question, Frank, and thanks for the thoughtful approach to it. You know, I think that from one of the things that the entire industry learned, you know, in March, is that brokered contractual, and insured deposits can be of, you know, an incredible, you know, sort of diversified deposit strategy for any bank. Typically, you know, a traditional sort of retail banking franchise, you know, has somewhere in that, you know, 5% to, on the high end, 10%-15% of brokered or wholesale deposits. I think the right number for us, the right target for us is probably 15%-20%, given that we're branch light and a commercial grower. It's good to have that diversified contractual space. It also helps from an interest rate risk management perspective. If you also sort of split that between short term, less than 12 months, and longer term, it also allows you to have some, you know, reference portfolios on the liability side for hedging purposes. You know, I think that the, the way that we'll-- you'll sort of see that number progress is, you know, we'd like to, you know, have it 50%, you know, as early as at the end of the year or early next year. Great. Okay. Thanks for all the color, Sam. Absolutely. Your next question comes from a line of Peter Winter from D.A. Davidson. Your line is open. Thanks. Good morning. Hey, I wanted to ask, with the acquisition of the venture banking loan portfolio, and then you've got the recent bank failures that were also in this business, can you just talk about your competitive positioning and how this deal enhances your capabilities? Yeah, sure. Absolutely. Thanks, Peter, and good morning, and, and appreciate the question. You know, I think I mentioned in my prepared remarks, you know, this team allows us to have a nationwide presence end-to-end with offices and, and, you know, or presence, you know, on the, on the ground presence in Los Angeles, San Francisco, Austin, Atlanta, Denver, Raleigh, Boston, Chicago, D.C. So truly a nationwide footprint of on the ground, you know, relationship managers. It also comes, you know, fully, you know, with 5 or maybe 6 person, you know, person treasury team. It comes with about, you know, 8 or 9 folks on the credit side, and about 12 or so plus or minus relationship managers. It's truly a fully integrated, you know, very well-regarded, you know, team. I, I, I have personally spent a, a good amount of time with some of the important, you know, customers, virtually over the past couple of weeks since the onboarding occurred. You know, nothing but incredible things to say. One of the things that we have noticed is, is that, with all of the dislocation that you referenced, there are very few banks that had a running head start of an existing business that as we did. You know, we're combined, on a combined basis, over $1 billion in outstandings, about $2 billion in commitments right now in this, you know, in this vertical. With that nationwide presence, plus a truly best-in-class team, you know, really is gonna set us apart, both on the deposit gathering side as well as, you know, thinking about, continuing to, to, you know, grow from this space over the next couple of quarters in the future, in 2024 and 2025, from a credit and lending perspective as well. Got it. What, what inning do you think we are in terms of exiting these non-strategic relationships? You know, would you think that you're gonna grow the balance sheet next year? Yep. Good, good question, Peter Winter. You know, in terms of the, you know, the non-strategic exiting, the plan was, is to have these to be gradual over the course of the year. You know, we had an upside opportunity to acquire the FDIC portfolio, as well as to recruit the team. As you know, that happened very late in the quarter. You know, we thought it would be prudent to execute on a number of things, you know, late in the quarter to do what I would call sort of a clean up, catch up. You know, these, these non-bilateral syndicated capital call lines were all maturing in the next, call it, 100 days, you know, 120 days. Truly this was really an acceleration. Make sure that we had both the cash and liquidity, you know, on hand, so that we were not going, you know, one step forward, two steps forward, one step back from our deposit remix perspective. Also that we left the capital headroom and stuck to our, you know, our very important and differentiated commitment of that significant capital increase by year-end. To summarize, this was, you know, sort of a catch up, clean up quarter, and you're gonna see us, you know, have, you know, sort of a, a clean focus through the remainder of the year. We're really focused now on continuing the remix on the deposit side, having deposit growth exceed, or core deposit growth exceed, loan growth. You know, when you trade out fully at 2.5%, et cetera, this is just an opportunity for us to really focus on the core, strategically important liquidity-led, you know, credit verticals that we're in. Would that lead to, you know, that would accelerate or grow the balance sheet, that you can start growing the balance sheet next year? It's too early to, to say at this point in time, Peter. I think really our, our focus is just to kind of put a finer point on that. We have $400 million of remaining cash flows in the remainder of this year on our securities portfolio. We have $1 billion+ of loan maturities. There's plenty of opportunity for us to continue to gross originate. You know, we did gross originate, you know, in the Q2 to the tune of, you know, $500 million+, and we'll continue to do franchise enhancing. Again, liquidity-led, deposit-led, you know, lending. We, as an industry, will, you know, reevaluate as the year progresses. At this point in time, we have no, no plans, to, to increase the balance sheet from where we are, because there's enough opportunities on the deposit remix side, as well as on the loan remix side, like going back to deposit, opportunities. Got it. Just my last question, can you just provide some color around this $5 million loss on the sale of the capital call line? I guess for me, I was surprised, just given, you know, the long history of virtually no credit losses in this type of business line. Yep, absolutely. You know, Peter, this is not a credit sale. This is an exit of, of non, bilateral, meaning syndicated. This is essentially, you know, partnered, with, with one of the failed institutions. About half a dozen credits, credits. On the small side, we're talking $5 billion-$10 billion fund size. On the high end, we're talking $100 billion plus manager. These are not relationships we could have or plan to take over from a much larger institution as those lines matured. Again, this was 100% money good. It would have been nice to be on the other side of this transaction, but it was important for us, you know, given the strategic importance of the FDIC transaction and the onboarding, to make sure that we had, you know, both the, you know, capital and, and liquidity headroom, and we were not deviating from our commitments that we made to you earlier this year. Got it. it. Great. Thanks. Congrats on a very nice quarter. Thanks, Peter. Your next question comes from the line of Matthew Breese from Stephens. Your line is open. Hey, good morning. Morning, Matt. I wanted to go back to the increase in FDIC expense, up, up meaningfully quarter-over-quarter. As measured over deposits, it's now at 22 basis points annualized versus 6 last quarter. I've seen a lot of the banks with a quarter-over-quarter increase, but this one stands out in terms of degree. I'm curious why the more robust change? Was there something from a regulatory standpoint or matters requiring attention, or was it broker deposit related? Can you address these items and what the drivers were behind the increase? Yeah, Matt. You know, what we are... You know, we reaffirmed the, you know, the, the run rate guidance off this, for this, jumping-off point. You know, to be clear, the, the increase of the ±$6 million in FDIC insurance also included a catch-up of $1.5 million-$2 million for the Q1. That will be replaced more or less by a full run rate of the venture banking team, which is why we sort of referenced sort of this as a jumping-off point. It's not fully apples to apples the way you described it. Again, this is, this is consistent. Those levels are absolutely consistent with large commercial banks, that, that we have, evaluated and looked at. Again, this is, as I think Carla mentioned, we expect this to be a short to medium term. You know, meaning this is not a multi-year increase, and we expect that there'll be some sort of stabilization, especially after the assessments are, are revised and there's opportunity to have more, you know, ongoing two-way dialogue. The increase in FDIC insurance is tied to the VC loans and team you brought in? It's not tied to any one thing. If you go back to the, you know, the overall industry, the levels that we are talking about for large commercial banks, as well as those, to your point, that have transacted with the FDIC, this is a consistent increase in the quarter. Okay. maybe shifting to the mix shift we've seen year to date on the deposit side, particularly in non-interest bearing. How much of the change was done from existing customers or existing depositors versus new? It's a good question. I'm going to speak directionally because I don't have exact numbers, but I'd say call it $400 million ±, is, you know, from existing... Maybe a little less, actually. You know, maybe $200 million, $250 million ±, is from existing customers, with higher balances. You know, the rest is coming from, you know, the verticals I earlier described. Okay. The, the two ones I would, I would appreciate more color on is, one, where do CBIT deposits, balance-wise, stand today? Are those in non-interest bearing at this point, and, and where were they at year-end? That's right. They, That's right. We, the CBIT balances, at year-end, I believe, were around $2.2 billion. They were a similar balance, you know, $2.3 billion, maybe, you know, last quarter. Average balances were $2.35 billion for the quarter. You know, we were at our, or below our target of 15%, as we, as we will continue to be. Right. Are, are those in non-interest bearing at this point? Correct. Yes, they're all, all non-interest bearing. Okay. Were those non-interest bearing at, at year-end? They were non-interest bearing at non-interest bearing at Q1 end. Got it. Okay. There was a big mix shift from the Q1. They were moved from interest-bearing into non-interest bearing earlier this year? Correct, in the Q1. Yeah, Matt, essentially what we did is that these are operating accounts for us. Mm-hmm. We've been very much focused on having operating account relationships with every one of our customers. That is a strategic decision we made, and we exited, digital businesses as well as other businesses where we only get interest-bearing relationships and nothing else. All our digital asset relationships right now are non-interest bearing, and they're operating accounts tied to our payment systems. Understood. Okay. The other, you know, chunky deposit base, per se, are, are the, the BankMobile, BMTX deposits. What, what are balances there stand at today, and where are those sitting in terms of, you know, are they non-interest bearing or, or interest bearing at this point? Yeah, I could give a little- I believe that we... Yeah, go ahead, Martha. No, I was just going to add that they are sitting in the interest-bearing deposits, and they're not a meaningful part of our deposit balance at this point in time. It's like low single digits, you know, Matt, so we've, you know, diversified away from that relationship. Low single digi-- in terms of% of overall deposits? Of, of overall deposits, that's right. Okay. They're supposed to wind down by late 2024. Is that accurate? Half of the relationship, so then the half that would be remaining would be even less material as, as a percentage of our overall deposit base. Got it. Okay. Maybe just switching to the, the installment book, can you remind us how much has been, how much of the securities portfolio at this point ties back to the installment book? Because I, I think I, I remember 2 securitizations, but I, I couldn't remember if there was a third one. Yeah, in our HTM book, we have roughly a little over half of that book is for the securities purchased out of the consumer installment securitizations. Okay. I think in the past, there's been some protections as you go through this. Sure. Could you remind us of the past protections, and then were there any with the most recent securitization? It's consistent, consistent, Matt. This is a truly a completely protected senior position, not so dissimilar to any other ABS that's sort of in that, you know, double triple A range. Got it. Okay. Last one for me. The VC team, should we assume those were from, you know, one of the more recent failed institutions? That's right. From Signature Bank. From Signature. Okay. This is the old- Yep ... you know, Square 1 PacWest team. Perfect. Okay. That's, that was my, that was my thought. Could you remind us of historically what the loss content is for VC lending? My understanding is it comes with a lot of deposits, but tends to have a little bit of a higher loss content. What's the historical loss rate? Yeah. The, the, the 20-year track record of this team is 1% or less, and when you actually add in some of the, the, the warrant income, et cetera, it's actually 0 on a net basis. Got it. Perfect. Okay, along those lines, should we expect, or what are expectations around provisioning for the remainder of the year? Yeah, so for the provision, again, it's hard to predict, but I would say between that $18 million-$22 million range for the back half of this year feels right. Got it. Okay. That's all I had. I appreciate you taking my questions. Thank you. Thanks, Matt. We only have a little time left, so we'll take our one final question from Bill Dezellem from Tieton Capital Markets. Your line is open. Thank you. A couple of questions. First of all, relative to the VC portfolio addition, would you walk us through the background of how we got there and how you all and, you know, were the ones ultimately that the FDIC chose? Secondarily, are there other opportunities that the dislocation that's taken place this year in the industry, creating other opportunities? You know, whether VC or otherwise, it's broader than than just that. Just the other opportunities that you may or may not see out there. Sure. Absolutely, Bill. I'm, I'm happy-- Good morning. Happy to take that question. Firstly, on the, the venture banking, you know, side, you know, we saw this, this portfolio and this team, and we had prior relationships with this team, frankly, from a recruitment perspective, for an extended period of time. We had monitored and seen that it, it, had not gone with the whole bank transaction. You know, there was sort of a, a several week, you know, type, you know, FDIC-related due diligence process and, you know, with a closing on June 15. It was a very, very accelerated, you know, process, really focused on, on credit from the loan portfolio side and, and strategic, from a recruitment side. The real focus for us was making sure that, you know, we had a team, that had the right cultural fit, that was aligned with taking our, you know, approximately $500 million, you know, portfolio of business and taking it to the nationwide, you know, goals that we would have normally had over a 3-5 year period, but doing it in an accelerated basis. The, the discount provided, you know, extra, you know, cushion from the perspective of the accelerated, you know, credit diligence, which we've now obviously, you know, fully completed and feel incredibly comfortable with. Also provided a little bit of headroom from the perspective of, what if you couldn't recruit the team? Which the team has now been fully onboarded, so that's less of a consideration, you know, and, and look to, you know, roll off some portion of that, of that portfolio, which is not our, our plan at this point in time. I think that, you know, we feel very, you know, fortunate that there was an opportunity to, to, to bring in that team. As, as I mentioned earlier, you know, after the announcement, we saw, you know, outside of venture banking, significant deposit momentum and, and, and customer interest and growth. None of those deposits that are related to this portfolio actually came in, as a reminder, as of June thirtieth, so they're coming in, you know, in the, in the third quarter. I think that's sort of the, the, the way to think about the venture banking process. You also asked a, a second question about, you know, where else are we seeing opportunities? I think that being a service-oriented, technology-focused, best-in-class technology-focused, you know, niche banking-focused, you know, commercial bank, there's been a tremendous amount of dislocation, whether it's tech and venture, whether it's fund finance, whether it's, you know, private banking, whether it's equipment finance, across the board in many of our niche verticals. We're seeing, you know, great opportunities both to lean in and remix, you know, customers, to a lot more sort of franchise enhancing and in a much more less competitive environment. You know, we're also seeing opportunities to recruit. You know, we've added, you know, 6-12, you know, new team members in some of those verticals. We've added sort of a venture capital focus in our fund finance team from some of the dislocated institutions. We continue to, you know, be at any given time, you know, at a minimum, mini meeting, you know, at a maximum, discussing onboarding, you know, with a number of teams, you know, who are figuring out what does their business as usual, you know, mean for them in their, you know, current or new institution that they're at. Great. Thank you, and congratulations on, on that purchase, sir. Thanks, Bill. This brings us to the end of our question and answer session. Mr. Sam Sidhu, I turn the call back over to you for some final closing remarks. Thanks so much, everyone. Really appreciate your focus and interest in, in Customers Bancorp. You know, as Jay and I mentioned earlier, we are, you know, very proud of our team's efforts. We very much appreciate our, our customers' support. And, as, as we said, this on a relative basis, we feel this is one of our strongest quarters ever to date, and we think it's an incredible foundation to build off of. Thank you so much, everyone. Have a great morning. This concludes today's conference call. Thank you for your participation. You may now disconnect.