8-K: Customers Bancorp Redeems $85M Series F Preferred Stock

Customers Bancorp, Inc. announced the full redemption of its Series F Preferred Stock, totaling $85.0 million, to optimize its capital structure and enhance profitability.

Summary

• Customers Bancorp, Inc. will redeem all 3,400,000 shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F (CUBIPrF).
• The total value of the Series F Preferred Stock being redeemed is $85.0 million.
• The redemption date is December 15, 2025, with a cash redemption price of $25 per share.
• A quarterly cash dividend of $0.5726314 per share on the Series F Preferred Stock has been declared, payable on December 15, 2025, to shareholders of record on November 30, 2025.
• The current declared dividend rate for the Series F Preferred Stock was 9.06%.
• After the redemption, no shares of Series F Preferred Stock will remain outstanding, and dividends will no longer accrue on these securities.
• The redemption is intended to enhance the efficiency of the company's funding and capital structure, optimize capitalization, and improve long-term profitability.

Sentiment

Score: 8

Explanation: The redemption of high-cost preferred stock is a strong positive signal, indicating sound financial management, robust capital, and a clear strategy to enhance profitability and shareholder value. This is a proactive move to optimize the capital structure.

Positives

• Redemption of higher-cost preferred stock (9.06% dividend rate) is expected to improve long-term profitability.
• Enhances the efficiency of the company's funding and capital structure.
• Optimizes capitalization, reflecting a strong capital position and robust liquidity levels.
• Consistent with ongoing efforts to deliver shareholder value, following a successful deposit franchise transformation.

Future Outlook

The redemption is a strategic move to enhance the efficiency of the company's funding and capital structure, optimize capitalization, and improve long-term profitability. This action, combined with a successful deposit franchise transformation, is expected to deliver shareholder value.

Management Comments

• "Our strong capital position and robust liquidity levels have positioned us to redeem this higher cost preferred stock to further optimize our capitalization and improve long-term profitability."
• "This action, on the heels of our successful deposit franchise transformation, are significant steps in our on-going commitment to deliver shareholder value."

Industry Context

This redemption reflects a broader trend among well-capitalized financial institutions to optimize their capital structures by retiring higher-cost debt or preferred equity, especially in environments where funding costs are a focus. It indicates a proactive approach to financial management, aiming to improve net interest margin and overall profitability.

Comparison to Industry Standards

• Customers Bancorp, Inc. has been named a Top 10 Performing Bank by American Banker for five consecutive years (2021-2025), including the #1 spot in 2024 among midsize banks ($10B to $50B in assets).
• Ranked No. 72 out of the 100 largest publicly traded banks in 2025 Forbes Best Banks list.
• Received the 2024 Inc. Magazine Best in Business List in Financial Services Category.
• Maintains a Net Promoter Score of 73, significantly higher than the industry average of 41, indicating strong customer satisfaction.

Stakeholder Impact

• **Preferred Shareholders (Series F):** Will receive $25 per share plus the declared quarterly dividend on December 15, 2025, for their redeemed shares.
• **Common Shareholders:** Expected to benefit from improved long-term profitability and enhanced shareholder value due to reduced financing costs and optimized capital structure.
• **Creditors:** The action signals a strong financial position and prudent capital management, which could be viewed positively.

Next Steps

• Completion of the redemption of all Series F Preferred Stock shares on December 15, 2025.
• Payment of the quarterly cash dividend on Series F Preferred Stock on December 15, 2025.

Key Dates

Recommendation

The redemption of high-cost preferred stock signals a robust financial position, strong liquidity, and a proactive management team focused on optimizing the capital structure and enhancing long-term profitability. This move reduces financing costs and is a clear indicator of financial health and strategic foresight, making the common stock more attractive to investors seeking value and efficiency.

Keywords

Customers Bancorp, CUBI, Preferred Stock Redemption, Capital Structure, Financial Optimization, Banking, Dividend, Series F Preferred Stock