Customers Bancorp Reports Results for Third Quarter 2025

Customers Bancorp, Inc. (NYSE:CUBI):

Third Quarter 2025 Highlights

• Q3 2025 net income available to common shareholders was $73.7 million, or $2.20 per diluted share; ROAA was 1.26% and ROCE was 15.57%.
• Q3 2025 core earnings*¹ were $73.5 million, or $2.20 per diluted share; Core ROAA* was 1.25% and Core ROCE* was 15.52%.
• Q3 2025 net interest margin, tax equivalent ("NIM") was 3.46%, compared to Q2 2025 NIM of 3.27%, an increase of 19 basis points, primarily due to higher interest income from loan and leases and higher average non-interest bearing deposit balances.
• CET 1 ratio of 13.0%² at September 30, 2025, compared to 12.1% at June 30, 2025 primarily driven by the successful common equity raise.
• Q3 2025 book value per share and tangible book value per share* both grew by approximately $3.48, or 6.2% over Q2 2025, or 24.8% annualized, with a tangible book value per share* of $59.72 at September 30, 2025.

CEO Commentary

"We are pleased with our third quarter results that show the company's continued execution of its strategic priorities and underscore our success in growing franchise value," said Customers Bancorp Chairman and CEO Jay Sidhu.

"During the quarter, we successfully raised $163 million of common equity (net of issuance costs) which further strengthened our already solid capital position and gives us flexibility to potentially redeem the remaining tranche of preferred stock in our capital structure in the fourth quarter of 2025. The success of this offering reflects a clear vote of confidence in our strategy, our team, and the disciplined execution of our business model. We appreciate the trust our new shareholders have placed in us, and we are fully committed to execute to continue to deliver top tier returns.

Our Q3 2025 GAAP earnings were $73.7 million, or $2.20 per diluted share, and core earnings* were $73.5 million, or $2.20 per diluted share. Asset quality remains strong with our NPA ratio at just 0.25% of total assets and reserve levels are robust at 534% of total non-performing loans at the end of Q3 2025. Our TCE / TA ratio* increased by 50 basis points to 8.4% while our balance sheet grew by 7.6%. We believe that our unique strategy, the investments we have continued to make, and the exceptional talent across our organization position us strongly for continued success," Jay Sidhu continued.

Key Balance Sheet Trends

Loans and Leases Held for Investment

Loans and leases held for investment were $16.3 billion at September 30, 2025, up $893 million, or 5.8%, from June 30, 2025. Specialized lending increased by $629 million, or 9.7% quarter-over-quarter, to $7.1 billion. Multifamily loans increased by $109 million, or 4.9% to $2.4 billion. Consumer installment loans increased by $89 million, or 11.1% to $891 million. Non-owner occupied commercial real estate loans increased by $85 million, or 5.7% to $1.6 billion. Construction loans increased by $25 million, or 25.0% to $123 million and other commercial & industrial loans increased by $18 million, or 1.8% to $1.1 billion. These increases were partially offset by decreases in mortgage finance loans of $49 million, or 3.0% to $1.6 billion, and owner-occupied commercial real estate loans of $6 million, or 0.6% to $1.1 billion.

Loans and leases held for investment of $16.3 billion at September 30, 2025 were up $2.5 billion, or 18.1%, year-over-year. Specialized lending increased by $1.6 billion, or 29.5%, year-over-year. Non-owner occupied commercial real estate loans increased by $256 million, or 19.3%. Multifamily loans increased by $241 million, or 11.4%. Mortgage finance loans increased by $209 million, or 15.3%. Consumer installment loans increased $171 million, or 23.8%, inclusive of the transfer from loans held for sale in Q1 2025. Owner-occupied commercial real estate loans increased by $77 million, or 7.8%. These increases were partially offset by decreases in construction loans of $51 million, or 29.4%, and other commercial and industrial loans of $31 million, or 2.9%.

Investment Securities

At September 30, 2025, total investment securities were $2.8 billion, an increase of $82 million compared to June 30, 2025 and a decrease of $664 million compared to a year ago.

At September 30, 2025, the AFS debt securities portfolio had a spot yield of 5.81%, an effective duration of approximately 2.1 years, and approximately 29% are variable rate. Additionally, 67% of the AFS securities portfolio was AAA rated at September 30, 2025.

At September 30, 2025, the HTM debt securities portfolio represented only 3.3% of total assets, had a spot yield of 3.68% and an effective duration of approximately 3.7 years. Additionally, at September 30, 2025, approximately 58% of the HTM securities were AAA rated and $0.3 billion were credit enhanced asset backed securities with no current expectation of credit losses.

Deposits

Total deposits increased $1.4 billion to $20.4 billion at September 30, 2025 as compared to the prior quarter. The total average cost of deposits decreased by 8 basis points to 2.77% in Q3 2025 from 2.85% in the prior quarter. Total estimated uninsured deposits were $6.8 billion¹, or 33% of total deposits (inclusive of accrued interest) at September 30, 2025 with immediately available liquidity covering approximately 146% of these deposits.

Total deposits increased $2.3 billion, or 13%, to $20.4 billion at September 30, 2025 as compared to a year ago. The total average cost of deposits decreased by 69 basis points to 2.77% in Q3 2025 from 3.46% in the prior year.

Borrowings

Total borrowings increased slightly to $1.5 billion at September 30, 2025 as compared to the prior quarter. Total borrowings increased $79 million, or 6%, to $1.5 billion at September 30, 2025 as compared to a year ago. This increase primarily resulted from net draws of $85 million in FHLB advances.

Capital

Customers Bancorp's common equity increased $263 million to $2.0 billion, and tangible common equity* increased $263 million to $2.0 billion, at September 30, 2025 compared to the prior quarter, respectively, primarily from earnings of $74 million and the issuance of 2,518,248 shares at $68.50 (before issuance costs) on September 5, 2025. Customers Bancorp's common equity increased $380 million to $2.0 billion, and tangible common equity* increased $380 million to $2.0 billion, at September 30, 2025 compared to a year ago, respectively, primarily from earnings of $162 million, the issuance of 2,518,248 shares and a decrease in AOCI of $55 million (net of taxes) mostly from decreased unrealized losses on investment securities, offset in part by $7 million of common share repurchases. Book value per common share increased to $59.83 from $56.36 and $53.07, and tangible book value per common share* increased to $59.72 from $56.24 and $52.96, at September 30, 2025, June 30, 2025 and September 30, 2024, respectively.

Credit Quality

The provision for credit losses in Q3 2025 was $27 million, compared to $21 million in Q2 2025 and $17 million in Q3 2024.

Net charge-offs were $15 million in Q3 2025, compared to $13 million in Q2 2025, and $17 million in Q3 2024.

The allowance for credit losses on loans and leases was $152 million at September 30, 2025, compared to $147 million at June 30, 2025 and $133 million at September 30, 2024.

Non-performing loans at September 30, 2025 decreased to 0.17% of total loans and leases, compared to 0.18% at June 30, 2025 and 0.34% at September 30, 2024.

Key Profitability Trends

Net Interest Income

Net interest income totaled $201.9 million in Q3 2025, an increase of $25.2 million from Q2 2025. This increase was driven by an increase in interest income of $33.5 million primarily due to higher average loan balances, higher average interesting earning deposits, and higher discount accretion.

"Net interest margin continued to expand in the quarter as we realized the benefits of deposit led loan growth, growth in non-interest bearing and lower-cost deposits, and well managed funding costs," stated Customers Bancorp President Sam Sidhu. "We continue to have positive drivers to net interest income on both sides of the balance sheet. We have a strong loan pipeline and our primarily deposit focused commercial banking team recruitment strategy continued to gain momentum with an additional 4 teams joining in the third quarter. This represents 7 new teams in 2025 and our recruitment pipeline remains strong," stated Sam Sidhu.

Net interest income totaled $201.9 million in Q3 2025, an increase of $43.4 million from Q3 2024. This increase was primarily due to lower interest expense from a favorable shift in deposit mix and lower market interest rates, and higher interest income primarily due to higher average loan balances, higher average interesting earning deposits, and higher discount accretion.

Non-Interest Income

Reported non-interest income totaled $30.2 million for Q3 2025, an increase of $0.6 million compared to $29.6 million for Q2 2025. The increase was primarily due to an increase in loan fees primarily resulting from the settlement of certain stock warrants and a decrease in net loss on sale of investment securities, partially offset by a decrease in other non-interest income of $4.3 million primarily from a decrease of $1.5 million in gain on sale of leased assets and $1.8 million of fees in Q2 2025 associated with the sunsetting of a loan origination program with a fintech company, which was acquired by a bank.

Non-interest income totaled $30.2 million for Q3 2025, an increase of $21.6 million compared to Q3 2024. The increase was primarily due to $14.3 million of loss on leases of commercial clean vehicles that were accounted for as sales-type leases and included within net gain (loss) on sale of loans and leases in Q3 2024 and increases in loan fees of $3.4 million primarily resulting from the settlement of certain stock warrants and deposit account fees of $1.8 million. The commercial clean vehicle leases generated the same amount of investment tax credits that were included as a benefit to income tax expense in Q3 2024.

Non-Interest Expense

Non-interest expenses totaled $105.2 million in Q3 2025, a decrease of $1.4 million compared to Q2 2025. The decrease was primarily attributable to decreases of $3.4 million in FDIC assessments and $1.6 million in professional fees, partially offset by an increase of $2.9 million in salaries and employee benefits primarily due to higher headcount and incentives.

"As previously communicated, we continued to reinvest a portion of the benefit of our operational excellence initiatives to further strengthen our human capital, risk management and technology infrastructure to support the next phase of growth. Even with these investments our efficiency ratio declined for the fourth consecutive quarter as we drove positive operating leverage," stated Sam Sidhu.

Non-interest expenses totaled $105.2 million in Q3 2025, an increase of $1.2 million compared to Q3 2024. The increase was primarily attributable to increases of $3.2 million in professional fees including the investment in our risk management infrastructure, $1.7 million in commercial lease depreciation, $1.4 million in occupancy and $1.0 million in salaries and employee benefits associated with the Bank's growth. These increases were partially offset by decreases of $3.2 million in technology, communication and bank operations primarily due to lower deposit servicing fees, provision for credit losses on unfunded lending commitments and fees paid to a fintech company related to a consumer installment loan origination program.

Taxes

Income tax expense increased by $6.6 million to a provision of $24.6 million in Q3 2025 from $18.0 million in Q2 2025 primarily due to higher pre-tax income, and increased by $25.3 million from a benefit of $0.7 million in Q3 2024 primarily due to higher pre-tax income and lower estimated income tax credits for 2025. The effective tax rate was 24.5% for Q3 2025.

Outlook

"We were very pleased with our third quarter results and remain focused on executing in those areas which differentiate us from our peers. We believe that truly exceptional service, sophisticated product offerings, recruitment of top talent, and a single-point-of-contact service model will deliver sustainable long-term growth. Importantly, our cubiX platform is proving to be a mission-critical real-time payments solution for our commercial clients and our team recruitment strategy is continuing to gain momentum, which we feel will continue to differentiate our company and drive long-term franchise value. We believe we are incredibly well positioned to continue to take market share winning new client relationships and that we have the right strategy, the right team, and a client-centric culture to achieve our goals in 2025 and beyond," concluded Sam Sidhu.

Webcast

The live audio webcast, presentation slides, and earnings press release will be made available at https://www.customersbank.com and at the Customers Bancorp 3rd Quarter Earnings Webcast.

You may submit questions in advance of the live webcast by emailing our Head of Corporate Communications, Jordan Baucum at [email protected].

The webcast will be archived for viewing on the Customers Bank Investor Relations page and available beginning approximately two hours after the conclusion of the live event.

Institutional Background

Customers Bancorp, Inc. (NYSE:CUBI) is one of the nation's top-performing banking companies with over $24 billion in assets making it one of the 80 largest bank holding companies in the U.S. Customers Bank's commercial and consumer clients benefit from a full suite of technology-enabled tailored product experiences delivered by best-in-class customer service distinguished by a Single Point of Contact approach. In addition to traditional lines such as C&I lending, commercial real estate lending and multifamily lending, Customers Bank also provides a number of national corporate banking services to specialized lending clients. Major accolades include:

• Named a Top 10 Performing Bank by American Banker for five consecutive years (2021-2025), including the #1 spot in 2024 among midsize banks ($10B to $50B in assets)

• No. 72 out of the 100 largest publicly traded banks in 2025 Forbes Best Banks list

• 2024 Inc. Magazine Best in Business List in Financial Services Category

• Net Promoter Score of 73 compared to industry average of 41

A member of the Federal Reserve System with deposits insured by the Federal Deposit Insurance Corporation, Customers Bank is an equal opportunity lender. Learn more: www.customersbank.com.

"Safe Harbor" Statement

In addition to historical information, this press release may contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Customers Bancorp, Inc.'s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words "may," "could," "should," "pro forma," "looking forward," "would," "believe," "expect," "anticipate," "estimate," "intend," "plan," "project," or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Customers Bancorp, Inc.'s control). Numerous competitive, economic, regulatory, legal and technological events and factors, among others, could cause Customers Bancorp, Inc.'s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements, including: a continuation of the recent turmoil in the banking industry, responsive measures taken by us and regulatory authorities to mitigate and manage related risks, regulatory actions taken that address related issues and the costs and obligations associated therewith, such as the FDIC special assessments; the potential for negative consequences resulting from regulatory violations, investigations and examinations, including potential supervisory actions, the assessment of fines and penalties, the imposition of sanctions, the need to undertake remedial actions and possible damage to our reputation; effects of competition on deposit rates and growth, loan rates and growth and net interest margin; failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks; public health crises and pandemics and their effects on the economic and business environments in which we operate; geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and military conflicts, including the war between Russia and Ukraine and ongoing conflict in the Middle East, which could impact economic conditions in the United States; the impact that changes in the economy have on the performance of our loan and lease portfolio, the market value of our investment securities, the demand for our products and services and the availability of sources of funding; the effects of actions by the federal government, including the Board of Governors of the Federal Reserve System and other government agencies, that affect market interest rates and the money supply; actions that we and our customers take in response to these developments and the effects such actions have on our operations, products, services and customer relationships; higher inflation and its impacts; the effects of changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs on its trading partners; and the effects of any changes in accounting standards or policies. Customers Bancorp, Inc. cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management's current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Customers Bancorp, Inc.'s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K for the year ended December 31, 2024, subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K, including any amendments thereto, that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Customers Bancorp, Inc. does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Customers Bancorp, Inc. or by or on behalf of Customers Bank, except as may be required under applicable law.