Customers Bancorp Deposits Reach $22.6 Billion After 10.6% Annual Growth
Key Facts
Customers Bancorp reported third-quarter results on October 22, revealing that deposits reached a period-end record of $22.6 billion as of September 30. Deposits increased $831 million, or 3.8%, from the second quarter and rose $2.2 billion, or 10.6%, year over year. Funding growth accompanied an increase in loans, while net income available to common shareholders was $78.4 million, or $2.25 per diluted share. Return on average assets was 1.16%, and return on average common equity was 14.0%. The bank held its results webcast on October 23 at 9 a.m. Eastern time.
Noninterest-bearing deposits totaled $7.2 billion at quarter-end, a period-end record representing 31.9% of total deposits. The balance increased $295 million from the second quarter, lifting its share of the funding base to nearly one-third of deposits. The average cost of deposits fell to 2.50% in the third quarter, the same level as in the second quarter. Year over year, the cost declined 27 basis points from 2.77% in the third quarter of 2025. The figures show lower funding costs than a year earlier alongside deposit growth.
On the asset side, commercial and industrial loans and leases led lending growth, rising $592 million, or 6.8%, during the quarter to $9.3 billion. Non-owner-occupied commercial real estate loans also increased $179 million, or 9.5%, to $2.1 billion. The gains reflect expansion in two commercial lending categories during the period. Chief Executive Sam Sidhu said the bank added about 618 net commercial accounts, an increase of 2% in one quarter. Teams that joined in 2025 alone contributed 317 net accounts during the quarter, he added, describing the growth as "measured."
The expansion was accompanied by a slight decline in the nonperforming loan ratio from the end of June, though it remained above its level a year earlier. Nonperforming loans were 0.29% of total loans and leases on September 30, compared with 0.31% on June 30 and 0.17% on September 30, 2025. The allowance for credit losses on loans and leases was $172 million at the end of September. These asset-quality indicators form part of the lending growth picture, with the ratio improving quarter over quarter but rising year over year. They remain part of monitoring the effect of increased commercial funding on the bank's portfolio.
Chief Financial Officer Mark McCollom said higher cash balances, due to differences in the timing of deposit gathering and loan growth funding, affected net interest margin. He estimated the September margin at about 3.25% and expressed confidence in "further expansion in the fourth quarter of 2026." Management linked the pace of deposit growth and loan funding to the margin trajectory in the coming months. For the year, the bank updated its guidance to loan growth of 12% or more and deposit growth of 9% or more. It also set a 2026 net interest income range of $805 million to $810 million.
In the market, CUBI shares closed at $84.54 on October 23, according to EL7 data. The investor relations page showed a daily change of $5.81, or 7.38%, in data dated the same day. The company had announced results the previous day, ahead of its results webcast on October 23. Management's indicators for the next quarter focus on continued loan and deposit growth and margin expansion, while the annual guidance includes the specified net interest income range. The estimated September margin of about 3.25% remains the basis for management's expectation of further expansion in the fourth quarter.