Customers Bancorp (CUBI) 1 Nov 24 2024 Q3 Earnings call transcript
AInvestFriday, Nov 1, 2024 7:48 pm ET
2min read
CUBI --

Customers Bancorp, a forward-thinking bank with a national presence, reported strong financial results for the third quarter of 2024, highlighting its strategic focus on customer-centric solutions and technology investments. In a recent earnings call, Customers Bancorp executives shared their optimism for the future, emphasizing the bank's unique business model, deposit growth, and loan expansion.

A Focus on Deposit and Loan Growth

Customers Bancorp's commitment to its customer-centric business model has resulted in significant deposit and loan growth. The bank reported high-quality commercial deposit growth at an annualized pace of 16%, underscoring its ability to attract and retain clients. This deposit growth strategy has enabled Customers Bancorp to replace less strategic and higher-cost deposits with higher-quality deposits, contributing to a more stable and profitable deposit base.

Similarly, the bank's loan growth has been robust, with an annualized pace of 16%, driven by a diversified loan portfolio and strategic focus on commercial lending. The bank's loan portfolio has grown to over $520 million in the third quarter, representing a 4% increase across the franchise in just one quarter.

Investing in Technology and Talent

Customers Bancorp's strategic investments in technology and talent have positioned the bank for long-term growth. The bank's focus on hiring an A+ deposit-focused team and significant investment in technology and product improvement has set the stage for improved operational efficiency and enhanced client service. These investments are expected to pay off in the coming quarters, contributing to a strong trajectory in 2025 and beyond.

Financial Highlights and Outlook

The bank's financial highlights for the third quarter reflect its strong performance, with core earnings per share of $1.34 and net income of $43.8 million. Despite facing some headwinds in the quarter, including temporary elevated noninterest expenses, Customers Bancorp remains confident in its ability to return to mid-teen ROE and ROA levels in the coming years.

Credit Quality and Liquidity

Customers Bancorp's credit quality remains a strength, with a nonperforming asset ratio of just 22 basis points and a declining trend in special mention and substandard loans. The bank's liquidity metrics remain robust, ensuring its ability to meet the needs of its clients and navigate any market uncertainties.

Looking Ahead

Customers Bancorp's strategic focus on deposit and loan growth, coupled with its investment in technology and talent, positions the bank for continued success. With a strong financial foundation and a clear vision for the future, Customers Bancorp is well-positioned to capitalize on growth opportunities and maintain its competitive edge in the financial services industry.

The bank's emphasis on customer-centric solutions and operational excellence, along with its strategic investments in technology and talent, are key drivers of its long-term growth prospects. As Customers Bancorp continues to execute its unique strategy, it is poised to make a significant impact on the financial services landscape and deliver value to its shareholders.

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