Customers Bancorp, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic initiatives compared to the previous fiscal period.

For the three months ended September 30, 2024, total interest income decreased to $332.1 million from $376.3 million in the same period of 2023, reflecting a decline in net interest income from $199.8 million to $158.5 million. This decline was attributed to lower interest income on commercial and industrial loans and higher interest expenses on deposits. The net interest margin (NIM) also fell to 3.06%, down from 3.70% in the prior year. For the nine months, total interest income was $997.9 million, down from $1.021 billion, with net interest income decreasing from $514.9 million to $486.6 million.

In terms of profitability, net income for the third quarter was $46.7 million, a significant drop from $86.8 million in Q3 2023, while net income for the nine months decreased to $154.6 million from $188.1 million. The net income available to common shareholders also fell sharply, from $82.9 million in Q3 2023 to $42.9 million in Q3 2024. The effective tax rate for the third quarter was notably lower at (1.58%) compared to 21.29% in the previous year, primarily due to increased estimated income tax credits.

Total non-interest income for the third quarter decreased to $8.6 million from $17.8 million, while for the nine months, it increased to $60.8 million from $51.9 million, driven by higher loan fees and commercial lease income. However, the company reported a net loss on the sale of loans and leases, particularly a $14.3 million loss on leases of commercial clean vehicles.

On the balance sheet, total loans and leases receivable increased to $13.6 billion as of September 30, 2024, up from $12.7 billion at the end of 2023. Total deposits rose slightly to $18.1 billion, with demand deposits increasing significantly. The company’s total assets reached $21.5 billion, reflecting a modest increase from $21.3 billion at year-end 2023.

Strategically, Customers Bancorp initiated a share repurchase program in June 2024, allowing for the repurchase of up to 497,509 shares. The company also reported a decrease in its allowance for credit losses (ACL) to $133.2 million, down from $135.3 million, attributed to improvements in macroeconomic forecasts and a reduction in consumer installment loan balances.

Overall, Customers Bancorp's financial performance in the third quarter of 2024 reflects challenges in net interest income and profitability, alongside strategic adjustments in its loan portfolio and capital management.