Customers Bancorp (CUBI) Q2 2024 earnings summary

Executive summary

• Q2 2024 GAAP EPS was $1.66 and core EPS $1.49, both exceeding consensus, with net income available to common shareholders up 23% year-over-year to $54.3 million.

• Achieved 11% annualized loan growth, led by corporate and specialized verticals, outpacing industry trends.

• Net interest margin expanded to 3.29%, up 19 basis points quarter-over-quarter, with three consecutive quarters of reduced interest expense.

• Tangible book value per share surpassed $50, growing 20% year-over-year and 15% CAGR over five years.

• Capital and liquidity ratios exceeded targets, with CET1 at 12.8% and TCE/TA at 7.7%, and immediately available liquidity covering 193% of uninsured deposits.

Financial highlights

• Net income was $54.3 million; core net income was $48.6 million for Q2 2024.

• Net interest income grew to $167.7 million, up $7.3 million from Q1 2024 and 1.4% year-over-year.

• Non-interest income nearly doubled to $31.0 million, driven by an $11.0 million unrealized gain on equity method investments.

• Non-interest expense rose to $103.5 million, mainly due to higher salaries, FDIC assessments, and new banking teams.

• Net charge-offs for Q2 2024 were $18.7 million, or 0.56% annualized.

Outlook and guidance

• Management maintains a 10%-15% full-year loan growth outlook, supported by a strong pipeline and new banking teams.

• Net interest margin expected to continue improving through year-end 2024.

• New banking teams expected to be break-even by end of Q1 2025.

• Targeting a mid-40s efficiency ratio over the medium term; effective tax rate guidance at 23%-25%.

• Focus on growing non-interest bearing and low-cost deposits, maintaining strong liquidity and capital.