Customers Bancorp (CUBI) Q3 2024 earnings summary

Executive summary

• Transitioned from a regional community bank to a specialized commercial and business bank with a national presence, leveraging technology and a customer-centric model.

• Q3 2024 net income available to common shareholders was $42.9 million, or $1.31 per diluted share, with ROAA of 0.88% and ROCE of 10.44%. Core earnings were $43.8 million, or $1.34 per diluted share.

• Achieved 16% annualized loan growth, with robust pipelines for continued expansion and significant deposit remixing, including $1.1B in commercial deposits and $536M from new teams.

• Tangible book value per share rose by $2.26 in Q3, reaching $52.96, supported by earnings and a decrease in AOCI losses.

• Asset quality remained strong with non-performing assets at 0.22% of total assets and reserves covering 281% of non-performing loans.

Financial highlights

• Core EPS of $1.34 and net income of $43.8 million for Q3 2024; diluted EPS of $1.31.

• Net interest margin (tax equivalent) was 3.06%, down from 3.29% in Q2 2024 and 3.70% in Q3 2023.

• Total assets were $21.5 billion, up 2.5% from Q2 2024; total loans and leases rose 3% to $14.1B; total deposits increased 2% to $18.1B.

• Tangible book value reached nearly $53 per share, up 18% annualized in the quarter.

• Non-interest income was $8.6 million, down $22.5 million from Q2 2024, mainly due to a $14.3 million loss on commercial clean vehicle leases offset by investment tax credits.

Outlook and guidance

• Management expects Q4 2024 net interest margin to be roughly flat with Q3 2024 and maintains a 10–15% full-year loan growth outlook.

• Expecting strong profitability trajectory in 2025, with NIM expansion and EPS growth of 30% or more as investments pay off.

• Revenues from new banking teams anticipated to exceed expenses within 12 months of onboarding.

• Operational excellence initiative targets $20M+ in annual savings for 2025.

• Non-interest expenses to remain elevated for two quarters, then normalize as investments taper.