Good morning and welcome to the Fourth Quarter 2016 Financial Results Earnings Call for Customers Bancorp. Today’s call is being recorded. At this time, I’d like to turn the conference over to Joe Noyons. Please go ahead.

Thank you Dana, and good morning everyone. Customers Bancorp 2016 full year and fourth quarter earnings release was issued earlier this morning, as posted on the company’s website at www.customersbank.com. Representing the company on the call today are Jay Sidhu, Chairman and Chief Executive Officer; Bob Wahlman, Chief Financial Officer; Dick Ehst, Chief Operating Officer, and Luvleen Sidhu, Co-Founder and Chief Strategy Officer of BankMobile. Before we begin, we would like to remind you that some of the statements we make today may be considered forward-looking. These forward-looking statements are subject to a number of risks and uncertainties that cause actual performance or results to differ materially, including the risks that the results are different than currently anticipated. Please note that these forward-looking statements speak only as of the date of this presentation and undertake no obligation to update these forward-looking statements in light of new information or future events, except to the extent required by applicable securities laws. Please refer to the SEC filings, including our report on Form 10-K and also the 10-Q for a more detailed description of the risk factors that may affect our results. Copies may be obtained from the SEC by visiting the Investor Relations section of our website. At this time, it is my pleasure to introduce Customers Bancorp Chief Executive Officer, Jay Sidhu. Jay, the floor is yours.

Okay, thank you so much, Joe. Good morning ladies and gentlemen. Thanks so much for taking the time to join us for the 2016 year-end financial results. I’m pleased to share with you that net income to common shareholders for the full year 2016 was $2.31 a share, and that’s $69.2 billion. We took some steps to really--there were some unusual items. BankMobile has been classified by us as held for sale or as discontinued operations, because within the next 60 days we hope to announce a divestiture of BankMobile. At the same time, about three and a half years ago we had gotten into a partnership with Religare Enterprises in India, that was more of a correspondent banking type thing to help us benefit our customers. Religare’s business strategy, they could not execute it, so we decided to exit that strategy at all [indiscernible], and hence there was an OTTI charge so that it gives us the flexibility to exit the Religare investment and move on. If you take out some of those and the normal employee benefit share-based accounting results for the year 2016, our earnings per share were $2.46; for the fourth quarter, our earnings per share were $0.64. As you could see from our financial results, we slowed our growth rate in the second half of the year to build a stronger balance sheet [indiscernible] capital base and a much stronger risk management infrastructure, and also we positioned BankMobile into a successful company that can be divested so that both customers as well as BankMobile can grow and thrive without the Durbin amendment restrictions. So during the year, we built upon and we added to our core business franchise. We added teams in all our various markets. The teams covered commercial loans and deposits in Pennsylvania, New York and New England, and that’s how we were able to achieve strong loan and deposit growth. The deposit growth continued throughout the year, although our loan growth was concentrated more in the first half of the year. So we’ve strengthened our balance sheet by growing deposits by nearly 21% while growing loans by nearly 14%. So with that introduction, I’d like to hand it over to Bob Wahlman, our Chief Financial Officer, and after Bob, Luvleen will comment on BankMobile, and then Dick and I will be completing the entire presentation and opening it up for questions and answers from anybody. Bob?

Well thank you, Jay. As Jay noted in his comments, Customers accomplished many great things in 2016 that enhanced shareholder value. We see the benefit of those accomplishments in both the Q4 2016 and full-year 2016 numbers, but because of certain decisions that were made during Q4 2016 that set the stage moving forward into 2017, we have to look a little bit deeper to see around a couple of things. I believe the best way to see through all the noise in the financial statements and in the earnings release to the substance of what was accomplished in 2016 and Q4 is to walk through a little bit on the three key decisions that are driving the numbers and presentation changes, and then I’ll drill down into the core numbers. First, as described more completely on Page 9 of the earnings release, Customers has decided that it will exit or reduce the 2013 investment that Customers made in Religare Enterprises Limited common equity. That investment has been mark-to-market, but that mark-to-market was previously captured in the equity section of the balance sheet as part of OCI, or other comprehensive income. The decision to exit or reduce means that the loss that has been incurred to date that was captured in OCI on both the value of the security and the foreign exchange currency rate of $7.3 million flows through the income statement during this period, the fourth quarter of 2016 or full year 2016. As Customers does not have any potential investments at the holding company that would generate offsetting capital gains, Customers is not able to realize any tax benefit related to this loss that would moderate the financial statement effect of the change. We are considering some strategies regarding how the current investment may be resolved that…

Thank you, Bob. I would like to spend a few minutes providing you with an update on BankMobile technologies. In this six months following the close of our transaction with Higher One, we were able to open approximately 600,000 new checking accounts. Additionally, we signed 16 new contracts with colleges and universities, representing approximately 130,000 additional students who will be offered our BankMobile Vibe product. We continue to focus on marketing strategies to increase brand awareness of our student account, including a nationwide campus ambassador program, branding 200 on-campus ATMs with BankMobile branding, on-campus print advertising as well as social media advertising, to name a few to help us to continue to grow customer acquisition. Additionally, we have made product enhancements, including offering our customers a Life Success package whereby we provide the resources and tools to help them build skills, get jobs and save money. We want to be more than just a financial services provider to our student customers. We truly want to provide them with the resources to really succeed in life. As you all know, we are focused on creating customers for life and retaining students post-graduation, which is different from the old Higher One model. We have seen a lot of positive data to support that we will be successful in doing so, with over 80% of our newest customers saying that they are very likely to somewhat likely to keep their BankMobile accounts after graduation. Additionally, we have seen our net promoter score, which is an industry-wide way to measure customer satisfaction increase from about 28 to over 50 in a very short period of time. In comparison, most of the large banks we are familiar with have negative net promoter scores to single-digit positive scores. Again, this underscores that we are truly changing…

Thanks Luvleen. As you can see, there’s lots happening at BankMobile, and we really wish at Customers Bancorp that we could keep this within our portfolio because, as Bob Wahlman had shared with you on our analyst day, within the next two to three years, we do expect this company to make about $30 million after taxes, which is just from their execution, and execution strategies in a tough regulatory environment sometimes does get hampered by certain regulatory rules, and that’s essentially what caused a little bit of a setback in the fourth quarter for BankMobile. But BankMobile remains very, very interesting, exciting. Luvleen was nice to say it’s probably the most successful digital bank in the United States. I can tell you in our opinion, I’ve been invited to speak, and Luvleen and I have been invited to speak throughout the world. It’s probably one of the most successful digital banks in the world, and where we continually learn. We have been invited to be a part of a group of digital bankers throughout the world, and we are exchanging our thoughts and ideas, and this is going to be a very exciting opportunity. Unfortunately, we have to divest it because Customers Bank’s principal business is business banking, and business banking’s opportunities are huge for us and hence in the next 12 to 24 months, we do expect to cross the $10 billion mark and we do want to see BankMobile continue to thrive. So let me give you an update on where we stand with the divestiture. Within the next 60 days, we are very hopeful that we will be able to announce to the street our divestiture, details of our divestiture. We are in final negotiations with a partner right now, and though no assurances can be…

[Operator instructions] We’ll take our first question.

Hi, this is Bob at FBR. My first question, I know you guys are working on the plan to divest Religare. Any sense of what the timeline looks like? Will that be completed in the next quarter, is it sometime this year? Just trying to get a sense.

We are hopeful, Bob, it’s going to be completed this quarter, but obviously we cannot guarantee you on that. But our objective is to exit this completely as soon as practically possible.

Okay, great. Shifting gears, I know you all talk about the $4.3 million of interest income that right now is in continuing operations, but you guys sort of think about allocating that to BankMobile. Is it fair, then, to think that when BankMobile is divested, we should be taking that out of the Customers Bank run rate? Is there some additional expenses that will be at Customers to sort of cover that funding?

Yes Bob, in regards to that funding, as I noted in my comments, the numbers that I gave from continuing operations would presume that we’re able to replace that funding at a like cost. We have different strategies in place to develop our deposits, but I would expect--but the BankMobile deposits are largely non-interest bearing, so I would expect that a significant portion of those would be replaced by interest-bearing deposits, so you would see some--some of that, we would have some increase in costs related to that.

Got it. Okay. Then could you maybe comment on what you’re seeing in terms of deposit pricing in your markets? I know New York Community mentioned they had seen some uptick since the Fed moved rates, and just curious how deposit pricing looks.

Yes Bob, I’ll take that. The interesting this is that we’ve been, as you know in looking at our cost of deposits, because we don’t have any branches, our average branch size is 450--approximately $450 million today, so we have not been exposed to as much pressure as those folks who have been operating their banks at very, very low interest expense. So we also--since we have no desire, at least in the first six months of this year, to grow our balance sheet in a very rapid fashion, so we are not--we are really simply replacing our borrowings and our other sources of funding with core deposits, so we have not seen and experienced as much upward pressure on deposit cost as you’ve normally maybe seen in other banks. Yes, some of that, especially the institutional money market deposits, yes, we passed on about 50% of the rate increase onto those customers, but in the consumer business and in the business banking sector, we really have not had a need to pay up at all to retain those deposits and continue to see growth in deposits.

Okay, great. Maybe sort of shifting from deposits to loans, if you could talk about what you’ve seen in terms of loan demand post-election and post-high rates. I guess primarily I’m interested in the New York multi-family business, but maybe also how you’re thinking about the outlook for the mortgage warehouse business.

Bob, let me start with the mortgage warehouse first. Mortgage warehouse business, you should expect in the first quarter to be down about 20%. That’s consistent with what we had shared with the street was our expectation for the first quarter on average. The refi activity has really slowed down and it’s a pretty dramatic slowdown, in fact more than what we had expected, so we are replacing those earning assets with some investment portfolio as well as multi-family growth, so you ought to see us having about a $300 million to $400 million growth in multi-family portfolio in the first quarter. We wanted to share that with you that we are very confident on the quality of that portfolio. The pricing that we are seeing is somewhere in the 3.75% to 4% range in that business, and we continue to see that the weakness in multi-family is evident in the high rent, luxury segment. There is no question about it - we have noticed that there is a 3% to up to a 10% reduction in prices sometimes in that size. We are operating in that low to moderate income multi-family residence, and another 45% approximately of all our properties are completely rent-controlled properties. The vacancy rates over there are, like I shared with you, less than 3%, and so we see a continued opportunity for us to continue to build that portfolio. As we have done in the past, we will continue to build that. We expect in the second half of the year, starting with late second quarter, mortgage warehouse business to come back to the levels that you saw in the third and the fourth quarter, and we are managing our balance sheet as such because we expect to close on our BankMobile divestiture sometime in the third quarter, so we will probably in that divestiture move not just to deposits but also some of our loans to the buyer of BankMobile. That will open up an opportunity on our balance sheet for our core business and still perhaps keep us below $10 billion, unless we see a huge size and have a much stronger balance sheet as we end 2017, so that in 2018 it will become very clear that Customers Bancorp has the capacity, ability and will deliver $3 or more in earnings per share, and hence we see a huge opportunity for continued shareholder value creation in 2017 and ’18.

Okay, great. Maybe last question and I’ll hop off. I know you all mentioned BankMobile is going to start offering credit cards later this year. Is the idea there to target the same customer base, so it would be sort of a thin credit file millennial existing customer base, or are you looking to do cards on a broader base?

Luvleen, you want to take that on?

Sure. So what we’ve identified from our student base right now is that having access to credit is a top pain point for them, so it’s actually for our thin credit file students that we’re currently banking, and once they graduate, we want to be their credit provider so we’re really going to be focusing on that market for credit cards when we roll out.

Okay, so existing customers or past customers, that’s really who the focus would be.

For now, that’s our priority.

Okay. Very good, thank you for taking the questions.

Thanks Bob.

We’ll take our next question. Please go ahead, caller.

This is Bill Dezellem with Tieton Capital. A couple of questions. First of all, would you please discuss the Religare divestiture and the impact that that will have on your capital ratios?

We’ve already given the capital ratios after the divestiture of Religare, so it’s not expected to have anything more of any materiality at all. It’s all behind us, and so it’s there in the financial statements that you’re looking at.

Yes, I think, Bill, if you’re referring to the existing investment, it’s just an investment at this point in time, so to the extent that we receive cash for it, it has not effect on capital. It would free up cash at the holding company that if we wanted to push down cash into the bank, it would provide some boost to the bank, but nothing happens at the holding company or consolidated capital from [indiscernible] divestiture.

That’s helpful, so the key is that change to cash does not impact the capital ratios, but of course it is cash that one can then move.

Correct.

The Higher One partner accounts, can you talk about that issue that you had? Sorry for not understanding that very well.

Okay, I’ll take that--oh, go ahead, Luvleen. Sorry.

Sure. Please feel free to add. We were asked by the regulators to close the accounts that were at their partner bank, which is about 1 million of the former Higher One accounts were with WEX. So we were able to retain about 300,000-some of those accounts, so about a third of the deposits as well, but unfortunately it was something that was forced upon us and, in the short period of time that we had, we were able to convey sort of the benefits of maintaining the account, and that’s why we were able to positively retain about 300,000-some of those accounts.

What were the issues, or what was the issue that the regulators were not happy with about how those accounts had been opened in the past?

Yes, let me take that one. Higher One had two partners banks: one was Customers Bank and one was WEX Bank. WEX Bank, FDIC had classified those deposits at WEX Bank as brokered deposits, which meant that Higher One had the ability to put them at any bank that they wanted to put them on prior to the closing of this deal. So during the closing, Higher One put those deposits to Customers Bank. The regulator said, oh well, we changed our mind, they are no longer brokered, they are now owned by WEX Bank, out of the blue, contrary to FDIC’s ruling on those for WEX Bank. WEX Bank is an industrial loan company. They couldn’t even have consumer checking accounts, so this was a disagreement or a dispute, I guess, between--or a difference of opinion between Federal Reserve’s classification and FDIC’s classification. So to deal with the dispute, the FDIC went along with the Federal Reserve and basically asked WEX Bank to get out of this business, and asked us, who were servicing those deposits for them, to send checks back to those consumers, because WEX didn’t have an ability to maintain those deposits by themselves. So in the fourth quarter, even though we tried our best to convince the regulators that you are hurting the under-bank, you are hurting the student, that is so contrary to public policy, but the lawyers at the Federal Reserve stuck to just law and said no, you’ve got to let them choose if they want to open a new account with BankMobile, but those who choose not to open a new account with BankMobile by November 1 or so, send them a check. So hundreds of thousands of students are sitting around with lost checks. I hate to say it, as a member of a regulated entity, but this was an absolute inappropriate decision by the regulators. But it is what it is, and that’s why we had to do what we had to do. So we lost deposits, we lost some revenues, and we spent well over a million dollars trying to communicate with these customers to let them become aware of it, and then students don’t open mail. Students don’t open even email! So it was very difficult to communicate with them, and that’s why these checks are lost and the Federal Reserve has resulted in many students losing millions of dollars of money. Kudos to them!

Thanks for the extra clarity. I really do appreciate it.

We’ll take our next question. Please go ahead caller. Caller, please check your mute button, we’re unable to hear you.

Hi, David Roche [ph] from [indiscernible]. The $3 to earnings, if we think about the run rate you guys had this quarter of $0.76, does the extra cost of the deposits, replacing the BankMobile deposits, really make that much of a difference in the earnings, that $3 shouldn’t be fairly easily to be obtained?

I think you’ve got to consider that in our $0.76, yes, there will be a negative impact from BankMobile, plus in the $0.76 there was a benefit from the adoption of our stock-based compensation charges, or income from that. So that’s why we are confident that we should be able to achieve the $3 per share or more in 2018, but it’s not going to be just a piece of cake. So we are very fixated on having higher return on assets, stronger balance sheet, higher capital ratios without any equity raises, and get our divestiture done, maintain our credit quality, maintain an interest rate risk profile that’s very neutral, add to our franchise, keep on recruiting teams, add to our expenses where necessary. So we are very fixated on doing all that and still delivering $3, and if you apply the industry multiple of 15 times earnings, we would love to see a $45 stock price but that is entirely dependent upon the street. We are just fixated on executing our strategy.

Thank you.

We’ll take our next question. Please go ahead, caller.

Good morning, it’s Matt Shouldice [ph] from [indiscernible].

Hi Matt.

A couple of quick questions. So if in the next 60 days you were to announce a transaction for BankMobile, when would you actually anticipate that closes?

Matt, like I said earlier, we anticipate the closing to take place in the third quarter, because it will need--the acquirer will need regulatory approval for the acquisition of the deposits, and we [indiscernible]. It’s the normal four months, five months, you know.

All right, just double checking. There was a lot said in the opening remarks, so if I missed anything, I apologize. As far as the accounting statement for the 2016-9, the share-based compensation, obviously there was a big impact in 4Q16. Is this really going to continue to be an ongoing issue where your taxes are going to benefit anytime you have a block of options vest deep in the money, or is this a--or is there a cumulative effect here that has to do with the adoption of the accounting standard?

I’ll let Bob talk about the numbers, but let me just share with you a little bit about our compensation philosophy, which will indicate to you that yes, you should expect this sort of a thing on an ongoing basis, although the amount can fluctuate somewhat. Our compensation philosophy is that it’s all performance-based compensation, and so we have performance-based stock plans so that for the top executives, you can elect to defer up to 50% of your bonus, and if you defer it for a five-year period, it’s invested in Customers Bancorp stock and we will double it, so it becomes a very performance-based, long-term incentive plan for you, and that has a five-year cliff vesting. So you would end up paying taxes, you could end up losing your bonus if the shareholder value is not created, but you could end up building a lot of wealth if your shareholder value is created. As you know, in the last five years we’ve had 2.5 times the KBW index in terms of the performance for our shareholders at Customers Bancorp versus the KBW index, so this will continue but the amount will change on a year-to-year basis. Bob, you want to add anything else to that?

Yes, I’d like to just give him some insight as to where they can find what the potential effect may be, if they want to work that into the models, and that is in the proxies that we have, the proxies obviously that we issue each year, you have included in there all the restricted shares that have been issued, and you also have in there the restricted share price when it was issued, so it’s going to be the difference between that restricted share price and the price when it vests that will be coming through. So we do have shares that will be vesting during the first quarter of 2017, so you will see some benefit coming there. By the way, it becomes effective for everybody that didn’t early opt. It becomes effective first quarter of 2017. In addition to that, options are also covered too, but options are a little bit more tricky to predict because it’s not--there’s not a--it doesn’t happen when it’s vested. Options, you’ll have an effect come through when they are exercised. We haven’t had people exercising any options at this point in time, but we do have a significant number of options out there, so when they are exercised, you’ll see a benefit also come through the income statement.

Okay, thank you. This one may also be really more for Bob, but obviously with the press release, you’ve got 4Q, 3Q with discontinued ops and the accounting behind that, and we’ve got the year-end and the 2015. But will we get 1Q and 2Q broken out in the same detail at some point?

I’m sorry - 1Q and 2Q of 2016?

Yes sir.

Oh, broken out by discontinued operations and continuing operations?

Right, yes.

The first quarter Q of 2017 will have the first quarter of the prior year included in there on a comparative basis, and the second quarter Q will have the second quarter on a comparative basis.

Okay, but you don’t intend to put that out early in any format, 8-K or 10-K?

Not planning to at this point in time. If it seems like it makes sense, that’s something we can take a look at.

Okay, thank you for your time.

We’ll take our next question. Please go ahead caller.

Yes, Steve Emerson, Emerson Investment Group. Is the selected buyer, apparently you’re in final stroke negotiations of Mobile, over $500 million in size?

Steve, we cannot comment on M&A activities, please. I hope you understand that.

I fully understand, but I understand on a road show, you did give color that one of the options was a very small bank where management might overlap your bank in the future. What I’m curious about, is this going to be a cash transaction, or is this going to be more complicated than that, other than 20% retained?

No Steve, we expect it to be a cash transaction principally, though like I said, we will try out best to maintain an equity position to some level in BankMobile because we see this as a good investment. But we cannot really comment on that at all beyond that.

Okay, thank you very much.

We’ll take our next question. Please go ahead, caller.

Good morning, Frank Schiraldi from Sandler.

Hi Frank.

Just a couple of questions. Just on the WEX accounts, so am I thinking about it right? First, you noted that you’ve been able to, I guess, reacquire basically a third of those. Are you in process in terms of trying to reacquire a portion of the other two-thirds, or at this point is it less likely and you’re basically just going to have to rebuild through semester by semester?

I think it’s rebuilding semester by semester. I believe Luvleen said it will take us about a year to recover all that. But no, we are not in the business of soliciting other bank customers, and the regulatory authorities would not let you do that, even though we have their records, since we were the servicer. We will just follow the appropriate regulations. They were WEX customers and they will remain WEX customers, and with lost checks.

Okay, but there’s no impact to, for example, relationships with those colleges, so that’s how you’ll be able to rebuild it?

No, no impact at all. In fact, we have expanded--as Luvleen said, we have expanded our college base, and we also are in negotiations with many white label partners to expand similar outside of the college base.

So it sounds like - and I’m asking, because it sounds like you were confident, Jay, that in terms of the previous slide you guys put out, you’re still anticipating that BankMobile standalone would be able to earn around that $30 million in 2018, 2019. Is that still viable?

I think it’s more like 2019, and about $15 million to $20 million, in that range after taxes in 2018.

Got you, okay. Then just a question on loan growth. I think I might have missed the details, but in terms of the mortgage warehouse balances, Jay, did you suggest you’re anticipating that might return to more normalized levels, and did you give that as last year at the end of the year? I just want to make sure I get that.

I said that we expect sometime in second quarter to third quarter, levels to be closer to where they were in the fourth quarter of 2016, but we expect them to be lower than fourth quarter of 2016 in the first couple of months of 2017.

Got you, okay. So you expect to get back to where you are at the end of the year in the second or third quarter?

Right.

Then just on C&I growth, is this--as we look out over the next, call it 12 months, is this a reasonable expectation of growth in that item, which I guess includes the owner-occupied CRE?

Yes. I think, Frank, we are expecting $400 million or so growth in that portfolio in 2017, would be a good number.

Okay, great. Then just finally, a BankMobile sale, would that be a taxable event that you’d be able to recapture the Religare loss through taxes?

No. It’s complicated, but no, that will not be--we will not be able to use that to recapture losses on Religare.

Yes, that will be ordinary income, sort of ordinary corporate income, so hopefully our president and the congress will reduce the taxes by the time we have to book the gain on a BankMobile divestiture. But the loss on Religare is a capital loss, Frank, and that’s why that can be offset against capital gains in the future, and that’s why I made a comment that if you take a--end up taking somewhat of an equity position as a result of the divestiture price or the acquirer paying us in some of their stock, we might take that and use that hopefully if there are gains to offset against the losses on Religare.

Right, okay. Sorry, just finally Bob, I think you might have mentioned it - I apologize, but in the assets held for sale, I guess that’s Religare and BankMobile essentially. What is the BankMobile portion held at?

In the assets held for sale line that we have on there, that is all BankMobile. The Religare is included in the investment line and has been consistently classified as held for sale since it was acquired.

Okay, so the $79 million, that is just BankMobile, that’s the value on the balance sheet of BankMobile?

That’s correct.

Great, thank you.

We’ll take our next question. Please go ahead, caller.

Hey guys, this is Kyle Peterson from FBR. Thanks for taking the follow-up for Bob. Just wanted to get a quick question on what a good tax rate to use is going forward. You guys have the early adoption of ASU 2016-9, so just wanted to see--I know that can be a little noisy quarter to quarter, but just wanted to see if you guys could give any color on what you expect.

Yes, the effective tax rate that we’ve been operating on consistently through 2016, I think is where we are still looking forward to 2017. That was 38%, or slightly under 38%.

All right, I guess just in quarters with heavier [indiscernible], you’ll get a little bit of a benefit from that, then? Is that fair?

Yes, I think that--that’s exclusive of the benefit, so no benefit--that’s the effective tax rate, and obviously that would be offset by the benefit that would be coming through under the new accounting standard.

Okay, great. That’s all from me. Thanks.

We’ll take our next question. Please go ahead, caller.

Hey, good morning guys. This is Mike Pareto from KBW.

Hi Mike.

I got on a little late, so I apologize if you guys covered this, but Jay, I did hear some remarks about the crossing $10 billion, and I just wanted to make sure I was kind of taking it away accurately. So it sounds like, is the plan with some of the assets that could potentially be divested when you close on the BankMobile sale later in the year, that you likely will be under $10 billion for the duration of 2017?

What I said was it’s possible that that could happen, and so we are not committing to cross the $10 billion mark in 2017. But we are not committing to it, so our objective is right now to stick to our discipline on credit quality, interest rate risk, get the BankMobile divestiture done, operate with very strong capital levels, increase our capital levels further, not have any equity offerings, be focused on delivering $3 a share or more in 2018, focus on building shareholder value, and if we end up crossing the $10 billion mark in 2017, so be it. If we end up doing it in 2018--but all I said was that in between 2017 and ’18, during that time period, we do expect to cross the $10 billion mark.

Okay and timing-wise, if you guys were to cross in 2018, you guys wouldn’t actually be subject to DFAST and stuff like that until the summer of 2019, correct?

That is correct.

Okay. Bob, maybe a question on the margin. I appreciate all the color - obviously there’s a couple moving parts with the BankMobile divestiture, but is it fair to assume that in the third or fourth quarter that some of the--I guess depending on what your interest rate backdrop assumptions are, but assuming that maybe there’s another hike in the Fed funds midyear, that some of the benefit from that could kind of come away with the loss of the non-interest bearing deposits from the BankMobile sale, and kind of negate each other?

There’s two moving pieces there, and I’m not sure how they balance out in the equation, Mike. I understand what you’re saying, and yes, some benefit that we would receive could be offset by some of the costs that we would incur to replace the deposits. How it would balance out--I mean, as noted previously, we have a number of strategies that we would like to execute during the course of the year, some of them which would be able to attract low-cost deposits, and just how it all plays out, how that mix plays out is unknown. And you just threw another factor in there, which is the interest rate increase and the fact that that would tend to widen our spreads out somewhat, could offset some of that cost too. But I can’t answer your question, Mike, in regards to how that would all work together at this point.

Yes, I’m just kind of curious of the timing of it. I appreciate it, thanks Bob. Then just one last one from me. Now that you guys are re-classing the BankMobile in held for sale and discontinued ops, I mean, it obviously gives a little bit of a cleaner picture of what the legacy Customers community bank fee and expense items are. I’m just curious if now as we look at it here today, if you guys could maybe just rehash--I know you’ve mentioned it before, but rehash what the potential expense build and fee income impact, just on the Customers Bank side would be from crossing $10 billion.

I think what Bob had stated earlier was that we do not expect a significant impact on us, but it’s still going to be somewhere in the $1 million to $2 million range. That is what--last time I was in a meeting with the [indiscernible] our advisors to help us do the DFAST analysis had indicated to us that it’s not going to be anything significant, but it still--we’ll end up with somewhat higher FDIC insurance premiums and a few more positions for the DFAST to modeling and those kind of things. But we have actually--have a very robust risk management system and infrastructure in place so that we are not expecting what you normally would expect the build-up at other institutions. But we still have to do some modeling and those kind of things. So Bob, do you think of anything else?

Jay, I think you said it very well. The only thing I would add is that there will be some higher--you know, additional hires, some quants that we’ll probably need to bring on over time, but we don’t expect that to be a significant amount in addition to the implementation costs and the run rate costs, Jay, that you’ve fairly described already.

So $1 million to $2 million annual expenses at this point is kind of a fair guess of the addition from crossing?

After implementation. There will be other implementation costs, but that should be the run rate, up to $2 million run rate, after implementation increase to the run rate.

Okay, thanks guys. Appreciate it.

At this time, I’ll turn the call back to our speakers for any additional or closing remarks.

Well, thank you very much, ladies and gentlemen, for joining us today. If there are any other questions, please call Bob Wahlman or myself. Thanks, have a good day.