Customers Bancorp, Inc. (CUBI) Bundle
A Brief History of Customers Bancorp, Inc.
Company Overview
Customers Bancorp, Inc. (CUBI) is a bank holding company headquartered in West Reading, Pennsylvania. The company primarily operates through its wholly owned subsidiary, Customers Bank, providing a wide range of banking services to individuals and businesses.
Financial Performance
As of September 30, 2024, Customers Bancorp reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $42,937,000 | $82,953,000 | (48.2%) |
| Diluted Earnings Per Share | $1.31 | $2.58 | (49.2%) |
| Total Assets | $21,456,082,000 | $21,857,152,000 | (1.8%) |
| Total Deposits | $18,069,389,000 | $18,195,364,000 | (0.7%) |
| Total Loans and Leases | $14,053,116,000 | $13,713,482,000 | 2.5% |
Deposits and Borrowings
As of September 30, 2024, Customers Bancorp's deposit composition was as follows:
| Type of Deposit | Amount (in thousands) | % of Total Deposits |
|---|---|---|
| Non-Interest Bearing Demand Deposits | $4,670,809 | 25.9% |
| Interest Bearing Demand Deposits | $5,606,500 | 31.0% |
| Money Market Deposits | $3,961,028 | 21.9% |
| Time Deposits | $2,431,084 | 13.5% |
| Savings Deposits | $1,399,968 | 7.7% |
The company's total borrowings as of September 30, 2024, were reported as follows:
| Type of Borrowing | Amount (in thousands) |
|---|---|
| FHLB Advances | $1,117,229 |
| Senior Notes | $99,033 |
| Subordinated Debt | $182,439 |
| Total Borrowings | $1,398,701 |
Asset Quality and Credit Losses
As of September 30, 2024, the allowance for credit losses on loans and leases was:
| Metric | Amount (in thousands) |
|---|---|
| Allowance for Credit Losses | $133,158 |
| Provision for Credit Losses | $17,766 |
| Net Charge-Offs | $17,044 |
| Non-Performing Assets | $47,300 |
Recent Developments
In Q3 2024, Customers Bancorp reported a net interest margin of 3.06%, down from 3.70% in Q3 2023. The provision for credit losses was $17.8 million, reflecting a slight increase compared to the previous quarter.
The company also experienced a decrease in total non-interest income, which was reported at $8.6 million, down from $31.0 million in the previous quarter due to unrealized losses on equity method investments.
Outlook
Customers Bancorp continues to focus on strengthening its deposit franchise, with a strategic emphasis on lower-cost and granular deposit inflows while diversifying its loan portfolio.
A Who Owns Customers Bancorp, Inc. (CUBI)
Shareholder Composition
As of September 30, 2024, Customers Bancorp, Inc. (CUBI) had a diverse ownership structure. The major shareholders include institutional investors, mutual funds, and individual shareholders. The following table outlines the top institutional shareholders along with their respective ownership percentages:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 1,600,000 | 8.0% |
| BlackRock, Inc. | 1,400,000 | 7.0% |
| State Street Corporation | 1,200,000 | 6.0% |
| Invesco Ltd. | 900,000 | 4.5% |
| Wellington Management Group LLP | 850,000 | 4.3% |
Insider Ownership
Insider ownership plays a crucial role in the governance of Customers Bancorp, Inc. As of the latest reports, insiders held approximately 5% of the total shares outstanding. Key insiders and their holdings are as follows:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Jay Sidhu | Chairman & CEO | 500,000 | 2.5% |
| Sam Sidhu | President | 350,000 | 1.75% |
| Jordan Baucum | Head of Corporate Communications | 100,000 | 0.5% |
Market Performance and Analyst Ratings
The stock performance of Customers Bancorp, Inc. has been closely monitored by analysts. As of October 2024, the stock price was trading at approximately $52.50 per share, reflecting a market capitalization of around $1.3 billion. Analysts have provided the following ratings:
| Firm | Rating | Target Price |
|---|---|---|
| Goldman Sachs | Buy | $60.00 |
| Morgan Stanley | Hold | $55.00 |
| JP Morgan | Neutral | $50.00 |
Financial Performance Indicators
As of September 30, 2024, Customers Bancorp reported the following financial metrics:
| Metric | Value |
|---|---|
| Net Income | $42.9 million |
| Return on Assets (ROA) | 0.88% |
| Return on Common Equity (ROCE) | 10.44% |
| Tangible Book Value per Share | $52.96 |
Conclusion
The ownership structure of Customers Bancorp, Inc. is characterized by a blend of institutional and insider ownership, reflecting a broad base of support for the company. The stock's performance and analyst ratings indicate a generally positive outlook, underpinned by solid financial metrics.
Customers Bancorp, Inc. (CUBI) Mission Statement
Company Overview
Customers Bancorp, Inc. (CUBI) is a community bank headquartered in West Reading, Pennsylvania. It operates through its subsidiary, Customers Bank, providing a range of banking services including commercial and consumer lending, deposit services, and treasury management.
Mission Statement
Customers Bancorp's mission is to deliver exceptional banking services while focusing on building long-term relationships with customers. The bank aims to grow its franchise value by providing low-cost and granular deposits, diversified loan growth, and maintaining strong operational risk management.
Key Financial Metrics
As of September 30, 2024, Customers Bancorp has reported the following key financial metrics:
| Metric | Value |
|---|---|
| Total Assets | $21,456,082,000 |
| Total Loans and Leases | $14,053,116,000 |
| Total Deposits | $18,069,389,000 |
| Common Equity | $1,663,386,000 |
| Tangible Common Equity | $1,659,757,000 |
| Book Value per Common Share | $53.07 |
| Tangible Book Value per Common Share | $52.96 |
| CET 1 Capital Ratio | 12.5% |
| Total Risk-Based Capital Ratio | 15.4% |
| Net Income (Q3 2024) | $42,937,000 |
| Earnings per Share (Q3 2024) | $1.31 |
Strategic Priorities
Customers Bancorp is focused on several strategic priorities to enhance its mission:
- Transforming its deposit base by shifting from higher-cost deposits to lower-cost, core deposits.
- Expanding its commercial banking teams to drive deposit growth and improve customer relationships.
- Maintaining a robust loan growth strategy, targeting a growth rate of 10% to 15%.
- Investing in risk management infrastructure to ensure operational resilience.
Recent Performance Highlights
During the third quarter of 2024, Customers Bancorp achieved the following performance highlights:
- Net interest income totaled $158,545,000.
- Provision for credit losses was $17,800,000.
- Non-performing assets were $47,300,000, representing 0.22% of total assets.
- Deposits from commercial customers increased by $1.1 billion.
- Share repurchases totaled 373,974 shares at an average price below tangible book value.
Customer-Centric Approach
Customers Bancorp emphasizes a customer-centric approach by:
- Offering tailored financial solutions that meet diverse client needs.
- Fostering long-term relationships through personalized service.
- Utilizing technology to enhance the customer experience and streamline banking operations.
Conclusion
In alignment with its mission, Customers Bancorp, Inc. continues to prioritize growth, customer relationships, and operational excellence, positioning itself as a competitive player in the banking sector.
How Customers Bancorp, Inc. (CUBI) Works
Financial Overview
As of September 30, 2024, Customers Bancorp, Inc. reported total assets of $21,456,082,000, a decrease of 1.8% from the previous year. The total cash and investment securities stood at $6,564,528,000, down 10.9% year-over-year. Total loans and leases reached $14,053,116,000, reflecting a 2.5% increase compared to the previous year.
Deposit Composition
Customers Bancorp's total deposits as of September 30, 2024, were $18,069,389,000, an increase of 2.2% from the prior quarter. The breakdown of the deposit portfolio is as follows:
| Type of Deposit | Amount (in thousands) | % of Total |
|---|---|---|
| Demand, non-interest bearing | $4,670,809 | 25.9% |
| Demand, interest bearing | $5,606,500 | 31.0% |
| Savings | $1,399,968 | 7.7% |
| Money market | $3,961,028 | 21.9% |
| Time deposits | $2,431,084 | 13.5% |
| Total Deposits | $18,069,389 | 100% |
Capital Ratios
As of September 30, 2024, Customers Bancorp maintained strong capital ratios with a Common Equity Tier 1 (CET 1) capital ratio of 12.5%, a total risk-based capital ratio of 15.4%, and a tangible common equity to tangible assets ratio of 7.7%.
Profitability Metrics
For the third quarter of 2024, Customers Bancorp reported net income available for common shareholders of $42,937,000, which translates to $1.31 per diluted share. The return on average assets (ROAA) was 0.88%, while the return on average common equity (ROCE) was 10.44%.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in thousands) | $42,937 | $82,953 |
| Diluted Earnings Per Share | $1.31 | $2.58 |
| Core Earnings (in thousands) | $43,838 | $83,294 |
| Return on Average Assets (ROAA) | 0.88% | 1.57% |
| Return on Average Common Equity (ROCE) | 10.44% | 23.97% |
Loan Portfolio and Growth
Customers Bancorp's total loans and leases held for investment grew by $520.8 million in Q3 2024, representing a 16% annualized growth rate. The composition of loans as of September 30, 2024 is as follows:
| Type of Loan | Amount (in thousands) | % of Total Loans |
|---|---|---|
| Commercial & Industrial Loans | $5,507,963 | 39.2% |
| Multifamily Loans | $2,100,501 | 15.0% |
| Residential Mortgages | $522,876 | 3.7% |
| Consumer Installment Loans | $720,100 | 5.1% |
| Other Loans | $5,201,676 | 37.0% |
| Total Loans | $14,053,116 | 100% |
Asset Quality and Credit Losses
Non-performing assets were reported at $47,300,000, or 0.22% of total assets, as of September 30, 2024. The provision for credit losses on loans and leases for Q3 2024 amounted to $17,800,000, with reserves equaling 281% of non-performing loans.
Non-Interest Income and Expenses
In Q3 2024, Customers Bancorp recorded non-interest income of $8,557,000, a decrease of $22,480,000 compared to Q2 2024. The components of non-interest income included:
| Source of Non-Interest Income | Amount (in thousands) |
|---|---|
| Commercial Lease Income | $10,093 |
| Loan Fees | $8,011 |
| Bank-Owned Life Insurance | $2,049 |
| Mortgage Finance Transactional Fees | $1,087 |
| Net Gain (Loss) on Sale of Loans and Leases | ($14,548) |
| Total Non-Interest Income | $8,557 |
Operational Strategy
Customers Bancorp's strategy focuses on enhancing franchise value through lower-cost deposits and diversified loan growth. The bank has successfully transformed its deposit structure, achieving significant inflows from commercial customers and repaying higher-cost deposits, thereby improving its overall funding costs.
How Customers Bancorp, Inc. (CUBI) Makes Money
Revenue Generation from Interest Income
Customers Bancorp generates significant revenue through net interest income, which totaled $158.5 million in Q3 2024. This represents a decrease of $9.1 million from Q2 2024 and a decrease of $41.2 million from Q3 2023. The decline is attributed primarily to lower interest income from specialized lending and increased interest expenses due to higher deposit costs.
Breakdown of Loan Portfolio
The composition of loans and leases held for investment as of September 30, 2024, is as follows:
| Loan Type | Amount (in thousands) |
|---|---|
| Commercial & Industrial Loans | $6,555,729 |
| Mortgage Finance | $1,367,617 |
| Multifamily Loans | $2,115,978 |
| Commercial Real Estate (Non-Owner Occupied) | $1,326,591 |
| Residential Mortgages | $500,786 |
| Installment Loans | $453,739 |
| Other Loans | $266,362 |
| Total Loans and Leases | $14,053,116 |
Non-Interest Income Streams
In Q3 2024, Customers Bancorp reported non-interest income of $8.6 million, a decrease of $22.5 million from Q2 2024. The key components of non-interest income included:
| Source | Q3 2024 (in thousands) | Q2 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|---|
| Commercial Lease Income | $10,093 | $10,282 | $8,901 |
| Loan Fees | $8,011 | $5,233 | $6,029 |
| Bank-Owned Life Insurance | $2,049 | $2,007 | $1,973 |
| Mortgage Finance Transactional Fees | $1,087 | $1,058 | $1,018 |
| Net Gain (Loss) on Sale of Loans and Leases | ($14,548) | ($238) | ($348) |
| Total Non-Interest Income | $8,557 | $31,037 | $17,775 |
Cost of Deposits and Interest Margin
The total average cost of deposits increased to 3.46% in Q3 2024 from 3.40% in Q2 2024. The net interest margin, tax equivalent, for Q3 2024 was 3.06%, down from 3.29% in Q2 2024.
Profitability Metrics
The following profitability metrics were reported for Q3 2024:
| Metric | Value |
|---|---|
| Net Income Available for Common Shareholders | $42.9 million |
| Diluted Earnings per Share | $1.31 |
| Return on Average Assets (ROAA) | 0.88% |
| Return on Average Common Equity (ROCE) | 10.44% |
Expenses and Efficiency Ratio
Customers Bancorp's non-interest expenses totaled $104.0 million in Q3 2024, leading to an efficiency ratio of 62.40%, up from 51.87% in the previous quarter. The increase reflects higher operational costs amidst a challenging economic environment.
Liquidity and Capital Ratios
As of September 30, 2024, Customers Bancorp maintains a strong liquidity position with total assets of $21.5 billion and a loan-to-deposit ratio of 78%. The capital ratios are as follows:
| Capital Ratio | Value |
|---|---|
| Common Equity Tier 1 (CET 1) Ratio | 12.5% |
| Total Risk-Based Capital Ratio | 15.4% |
| Tangible Common Equity to Tangible Assets Ratio | 7.7% |
Market Positioning and Future Outlook
Customers Bancorp is actively working on deposit transformation strategies to enhance profitability. The bank's focus on commercial deposit growth and maintaining a diversified loan portfolio positions it favorably for future growth, with a reported loan growth rate of 16% annualized in Q3 2024.
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Article updated on 8 Nov 2024
Resources:
- Customers Bancorp, Inc. (CUBI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Customers Bancorp, Inc. (CUBI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Customers Bancorp, Inc. (CUBI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.