WEST READING, PA — Customers Bancorp, Inc. (NYSE: CUBI) has announced its financial results for the second quarter of 2024, showcasing robust performance and strategic growth.
The company reported a net income of $54.3 million, or $1.66 per diluted share. Return on average assets (ROAA) stood at 1.11%, while return on common equity (ROCE) was 13.85%. Core earnings amounted to $48.6 million, or $1.49 per diluted share, with a core ROAA of 1.00% and a core ROCE of 12.39%.
The Common Equity Tier 1 (CET1) ratio increased to 12.8% from 12.6% at the end of March, surpassing the target of approximately 11.5%. The tangible common equity to tangible assets (TCE/TA) ratio rose to 7.7%, above the 7.5% target.
Total loans and leases grew by $375.8 million, up 11% on an annualized basis. The net interest margin (NIM) improved to 3.29% from 3.10% in the first quarter, driven by higher loan balances and lower deposit costs.
Deposit inflows from commercial customers reached $0.6 billion, which, along with excess cash, allowed the bank to pay down $0.5 billion in higher-cost consumer deposits and $0.3 billion in maturing wholesale CDs. Total deposits decreased by $283.3 million, reflecting a positive mix shift. Insured deposits made up 76% of the total, with available liquidity covering uninsured deposits by approximately 193%.
Total borrowings declined by $176.6 million, or 11.8%. Non-performing assets were $47.4 million, or 0.23% of total assets, up from 0.17% in March. The allowance for credit losses on loans and leases was 280% of non-performing loans, down from 374%.
The provision for credit losses on loans and leases rose to $17.9 million from $16.0 million in the first quarter. The coverage of credit loss reserves for loans and leases held for investment decreased slightly to 1.08%.
Book value per share and tangible book value per share both increased by approximately $1.52, or 3.1%, driven by strong earnings and a decrease in accumulated other comprehensive income (AOCI) losses. Tangible book value per share was $50.70 as of June 30, 2024.
Customers Bancorp also adopted a one-year common stock repurchase program to buy back up to 497,509 shares.
CEO Jay Sidhu expressed satisfaction with the results, stating, “Customers Bancorp delivered another strong performance in the second quarter of 2024. Actions taken over the last six quarters have enabled us to exceed our CET1 and TCE/TA ratio targets. We are now positioned for strategic, relationship-based loan and deposit growth.”
He also highlighted the bank’s success in increasing net interest margin and maintaining strong capital levels. “Our net interest margin expanded by 19 basis points to 3.29%. Capital levels continued to build, evidenced by a 40 basis point increase in our TCE/TA ratio. Our new banking teams have opened more than 1,000 new deposit accounts for over 700 customers in the quarter.”
Sidhu emphasized the bank’s strong liquidity position and prudent balance sheet management. “At June 30, 2024, we had $3.0 billion in cash on hand, leading to prudent balance sheet and liquidity management. Asset quality remains strong, with an NPA ratio of just 0.23% of total assets.”
In conclusion, Sidhu expressed optimism for the future. “We are excited and optimistic about the opportunities we had in the first half of 2024, which have been enhanced by the addition of the new banking teams.”
Customers Bancorp’s strategic initiatives and strong financial performance position it well for continued success in 2024.
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