Customers Bancorp in Wyomissing, Pa., expects to take an earnings hit after a client unexpectedly closed.
The $10.1 billion-asset Customers disclosed in a regulatory filing Monday that it could record a $7 million to $8 million charge after an unnamed commercial mortgage warehouse client shut down in May.
While the total exposure is about $26 million, Customers said collateral, in the form of Ginnie Mae-guaranteed home equity conversion mortgage-backed securities, should soften the bottom-line hit.
Customers, which has corporate guarantees and a personal guarantee of the mortgage company’s CEO, “plans to aggressively pursue all efforts to collect this deficiency,” the filing said.
The customer had been involved with mortgage lending since 2005. It had been a Customers client since 2011.
Customers said it has no more exposure to the client and does not have any other loans in its commercial mortgage warehouse loan book that are collateralized by interest-only Ginnie Mae securities.