Customers Bancorp ((CUBI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Customers Bancorp showcased a robust financial performance, marked by impressive growth in loans, deposits, and net interest margin. The sentiment during the call was overwhelmingly positive, with a strong emphasis on the company’s strategic focus on technology and innovation. Despite facing some operational challenges, such as changes in deposit costs and a reduction in brokered deposits, the overall outlook remains optimistic.
Strong Quarter Performance
Customers Bancorp reported results that significantly exceeded consensus Street estimates, with a core EPS of $1.80. The company achieved a core return on equity (ROE) of 13.3% and a return on average assets (ROAA) of 1.1%, underscoring its solid financial footing and operational efficiency.
Loan and Deposit Growth
The company experienced an annualized loan growth of 8%, driven by diversified contributions. Additionally, Customers Bancorp saw nearly $300 million in deposit growth, attributed to new commercial banking teams, highlighting its successful expansion efforts.
Net Interest Margin Expansion
Customers Bancorp’s net interest margin expanded by 14 basis points quarter-over-quarter to 3.27%, marking the third consecutive quarter of improvement. This expansion reflects the company’s effective interest rate management and strategic financial planning.
Leadership Transition
A significant leadership transition was announced, with Jay S. Sidhu transitioning to the role of Executive Chairman and Sam Sidhu assuming the role of CEO effective January 1, 2026. This change is expected to bring fresh perspectives and continued strategic direction to the company.
Recognition and Achievements
Customers Bank has been recognized as the top financial performer in EPS and book value growth over the last five years. It has also been the top-performing U.S. bank stock over the same period, reflecting its strong market position and investor confidence.
cubix Platform Success
The proprietary payments platform, cubix, processed about $1.5 trillion in payments volume in 2024, ranking it third behind Amex and Visa Commercial. The platform’s success is a testament to Customers Bancorp’s innovative approach to financial technology.
Deposit Cost Impact
The planned reduction in deposits serviced by BMTX had a minor impact on the company’s total average cost of deposits, affecting it by approximately 3 basis points. This strategic move is part of the company’s efforts to optimize its deposit portfolio.
Brokered Deposits Reduction
Customers Bancorp reduced its brokered deposits by $350 million this quarter, continuing its trend of reducing these balances by about $1 billion over the past year. This reduction is part of the company’s strategy to strengthen its balance sheet.
Forward-Looking Guidance
Looking ahead, Customers Bancorp has raised its full-year loan growth guidance to 8%-11% and net interest income growth to 7%-10%. The company continues to focus on expanding its financial metrics, with a tangible book value per share increasing to $56.24 and a steady deposit base of $19 billion. The proprietary payments platform, cubix, remains a significant contributor to its financial performance.
In summary, the earnings call for Customers Bancorp reflected a positive sentiment with strong financial results and strategic initiatives. The company’s focus on innovation, leadership transition, and strategic financial management positions it well for future growth. Investors can remain optimistic about Customers Bancorp’s trajectory as it continues to deliver impressive results.