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Sep 30, 2024
Customers Bancorp Q3 2024 Earnings Report
Reported net income available to common shareholders of $42.9 million, or $1.31 per diluted share.
Key Takeaways
Customers Bancorp reported Q3 2024 net income available to common shareholders of $42.9 million, or $1.31 per diluted share. Total loans and leases held for investment grew by $520.8 million, and total deposits increased by $391.3 million. The CET 1 ratio was 12.5%, and the TCE / TA ratio was 7.7%.
Q3 2024 net income available to common shareholders was $42.9 million, or $1.31 per diluted share; ROAA was 0.88% and ROCE was 10.44%.
Q3 2024 core earnings were $43.8 million, or $1.34 per diluted share; Core ROAA was 0.89% and Core ROCE was 10.66%.
Total loans and leases held for investment grew by $520.8 million in Q3 2024 from Q2 2024 or 16% annualized.
Q3 2024 deposit inflows from commercial customers of $1.1 billion funded the paydown of $0.7 billion of higher-cost commercial and consumer deposits. Total deposits increased by $391.3 million in Q3 2024 from Q2 2024.
Customers Bancorp
Customers Bancorp
Forward Guidance
Customers Bancorp expects net interest margin in Q4 2024 to be roughly flattish with Q3 2024. They are adjusting guidance on effective tax rate to 18% - 20% primarily as a result of higher estimated investment tax credits in 2024. They remain committed to maintaining CET 1 ratio and TCE / TA ratio targets of 11.5% and 7.5%, respectively in 2024.
Positive Outlook
- Deposit pipelines are expected to continue to improve the quality and mix of deposits, reducing higher cost business unit deposits with lower cost deposits where we have a holistic and primary relationship.
- The addition of the new banking teams is accelerating and enhancing these efforts which were already well underway.
- Attractive opportunities to execute franchise-enhancing loan growth and our pipeline continues to be strong.
- Confident in ability to deliver 10% - 15% loan growth for the full year.
- Investments made in recruiting the new commercial banking teams will produce significant benefits by increasing our net interest income and net interest margin as well as improving the overall quality of our deposit franchise.
Challenges Ahead
- Interest earning asset repositioning and the hedging we executed impacts our short term margin and will be a headwind in 2024.
- Efficiency ratio will be elevated in the near term as we make these investments in our future.
- Professional services expense of approximately $3.0 million as we made investments to enhance our risk management infrastructure.
- Expect to spend an additional $3.0-$5.0 million in each of the next two quarters as we seek to build a best-in-class risk management function which we believe can be a competitive advantage for the bank in the future.
- The management of non-interest expenses remains a priority.