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.



* Non-GAAP measure. Customers' reasons for the use of the non-GAAP measure and a detailed reconciliation between the non-GAAP measure and the comparable GAAP amount are included at the end of this document.
¹Excludes pre-tax gains on investment securities of $0.3 million.
²Regulatory capital ratios as of September 30, 2025 are estimates.

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.


¹ Uninsured deposits (estimate) of $8.7 billion to be reported on the Bank's call report, less deposits of $1.7 billion collateralized by standby letters of credit from the FHLB and from our affiliates of $227 million.

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 increa

Customers Bancorp Reports Results for Third Quarter 2025