Customers Bancorp Reports 29.3% Decrease in Net Income for 2024

Customers Bancorp, Inc. (CUBI) reported net income available to common shareholders of $166.4 million for the year ended December 31, 2024, a 29.3% decrease from $235.4 million in 2023. This decline stemmed primarily from a $33 million decrease in net interest income, attributed to lower interest income in specialized lending and other commercial and industrial loans, coupled with higher interest expense on deposits. The decrease in interest income was partially offset by lower interest expense from reduced borrowing balances. Non-interest income also fell by $10.1 million, primarily due to increased losses on the sale of investment securities and loans. Conversely, non-interest expense increased by $64.4 million, largely driven by higher salaries and employee benefits, FDIC assessments, and other expenses.

The company's total assets reached $22.3 billion at the end of 2024, a 4.7% increase from 2023. This growth was mainly fueled by a $1.2 billion increase in loans and leases receivable and a $423.2 million increase in mortgage finance loans, partially offset by decreases in investment securities. Total liabilities rose by 4% to $20.5 billion, primarily due to a 5.2% increase in total deposits. Shareholders' equity increased by 12.1% to $1.8 billion, reflecting net income and changes in other comprehensive income. The allowance for credit losses (ACL) on loans and leases increased to $136.8 million (1.04% of total loans and leases), primarily due to increased commercial and industrial loan balances.

During 2024, Customers Bancorp onboarded ten experienced commercial and business banking teams in New York, California, and Nevada to boost deposit growth. The company also launched a new in-house B2B instant payments platform, cubiX, replacing its previous blockchain-based platform, CBIT. The company transitioned its consumer installment lending strategy from a held-for-investment to a held-for-sale model to reduce credit risk, resulting in the sale of $202.5 million in installment loans during the year. In 2023, Customers acquired a venture banking loan portfolio from the FDIC and recruited the originating team.

Customers Bancorp's regulatory capital ratios met all applicable requirements at the end of 2024. The company's liquidity position remained strong, with $9.1 billion in immediately available liquidity, covering approximately 124% of uninsured deposits. The company's loan-to-deposit ratio was 78% at year-end. The company noted several risk factors, including those related to credit risk, interest rate sensitivity, macroeconomic conditions, and the regulatory environment. These risks are detailed in the filing's "Risk Factors" section.

The company's outlook is subject to various uncertainties, including macroeconomic conditions, geopolitical events, and potential changes in regulations. The company's future performance will depend on its ability to manage these risks and execute its growth strategy, including organic loan growth and opportunistic acquisitions. The company does not expect to pay cash dividends on its common stock in the near future.