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 23.4% year-over-year to $54.3 million.

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

• Net interest margin expanded by 19 basis points sequentially to 3.29%, with three consecutive quarters of reduced interest expense.

• Tangible book value per share surpassed $50, growing 20% year-over-year and reaching $50.70.

• Strong capital and liquidity positions, with CET1 at 12.8%, TCE/TA at 7.7%, and liquidity covering 193% of uninsured deposits.

Financial highlights

• Q2 GAAP EPS: $1.66 on $54.3M net income; Core EPS: $1.49 on $48.6M net income.

• Net interest income was $167.7M, up $7.3M from Q1 2024; net interest margin rose to 3.29%.

• ROAA at 1.11% (core: 1.00%); ROCE at 13.9% (core: 12.4%).

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

• Non-performing assets were $47.4M (0.23% of assets), with reserves covering 280% of non-performing loans.

Outlook and guidance

• Loan growth outlook for 2024 remains at 10%-15%, 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.

• Efficiency ratio targeted to return to mid-40s 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.