Regional banking company Customers Bancorp (NYSE: CUBI) announced better-than-expected revenue in Q3 CY2025, with sales up 38.5% year on year to $232.1 million. Its non-GAAP profit of $2.20 per share was 14% above analysts’ consensus estimates.

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StockStory’s Take

Customers Bancorp delivered a third quarter marked by significant balance sheet expansion, outpacing market expectations for both revenue and non-GAAP profitability. Management attributed the strong results to deposit-led growth, particularly through the onboarding of new commercial banking teams and substantial contributions from the proprietary cubiX payments platform. CEO Sam Sidhu emphasized the bank’s ability to recruit top industry talent and cited a 19-basis-point net interest margin expansion as a core driver. The quarter also saw a successful equity offering that bolstered capital levels, and management highlighted continued improvements in efficiency and asset quality.

Looking forward, management expects continued momentum from granular deposit growth and the expansion of the cubiX platform, while emphasizing disciplined loan origination and investment in technology. Sam Sidhu noted the bank’s focus on broadening institutional relationships, enhancing risk and compliance capabilities, and leveraging Agentic AI systems to boost productivity. CFO Mark McCollom cautioned that some loan growth may have been pulled forward, which could moderate results in the next quarter, but the company remains optimistic about above-industry average loan growth and improved efficiency ratios for the remainder of the year.

Key Insights from Management’s Remarks

Management pointed to transformative deposit growth, technology-driven business lines, and disciplined operating execution as the main contributors to the quarter’s results and evolving outlook.

• Deposit transformation progress: The bank’s deposit base shifted significantly towards granular, noninterest-bearing balances, fueled by new commercial banking teams and the cubiX platform. These high-quality deposits now represent about 31% of total deposits, supporting both margin expansion and reduced funding costs.

• cubiX platform momentum: The proprietary payments platform, cubiX, drove $900 million in noninterest-bearing deposit growth, with management highlighting increased institutional activity and adoption. The platform also generated incremental fee income, and management sees potential for additional monetization as product breadth expands.

• Strategic team recruitment: Customers Bancorp continued aggressive hiring, onboarding four new deposit-focused teams during the quarter. Management stated that recruiting top-performing bankers is a core strategy, with new teams contributing both deposit and loan growth while maintaining low cost of funds.

• Loan growth diversification: Loan balances grew 6% quarter-over-quarter, with broad-based contributions across fund finance, commercial real estate, and venture banking. Management underscored a disciplined approach to credit and pricing, prioritizing franchise-enhancing relationships and risk management.

• Expense efficiency improvements: Noninterest expenses declined, supported by lower FDIC assessments and professional fees, while the efficiency ratio improved to 45.4%. Management noted continued investment in technology and risk infrastructure, which has led to productivity gains and helped position the bank among the most efficient in its peer group.

Drivers of Future Performance

Customers Bancorp’s outlook is underpinned by continued deposit growth, cubiX platform expansion, and disciplined expense management, though management notes some near-term moderation in loan growth.

• Sustained deposit gathering: Management expects new and existing banking teams to continue delivering $300–$400 million in quarterly deposit growth, with further upside as recently recruited teams ramp up. cubiX deposits, driven by institutional clients, are projected to provide ongoing balance sheet strength and fee opportunities.

• Loan growth normalization: While full-year loan growth guidance was raised, management cautioned that some closings were pulled forward into the third quarter, potentially leading to slower growth in upcoming quarters. The bank remains focused on above-industry average loan growth, supported by a diversified pipeline and strong credit controls.

• Investment in technology and AI: The company plans to expand the use of Agentic AI systems, aiming to drive further productivity improvements and enhance client experience. Management believes these technology investments, along with risk and compliance enhancements, will support long-term efficiency and operational resilience.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will closely monitor (1) the continued growth and stability of noninterest-bearing deposits—particularly from cubiX and new banking teams; (2) the ramp-up and productivity impact of Agentic AI systems and technology investments; and (3) the sustainability of efficiency improvements as the company invests in risk management and client experience. Developments in stablecoin adoption and regulatory clarity could also influence deposit mix and fee income.

Customers Bancorp currently trades at $70.11, up from $65.55 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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