8-K: Customers Bancorp Reports Strong Q4, Full Year 2025 Results

Customers Bancorp reported robust financial performance for the fourth quarter and full year 2025, driven by strategic loan and deposit growth, improved profitability, and strong capital levels.

Summary

• Net income available to common shareholders for Q4 2025 was $70.1 million, or $1.98 per diluted share.
• Full Year 2025 net income available to common shareholders was $209.2 million, or $6.26 per diluted share.
• Total deposits increased by $373.7 million (1.8%) in Q4 2025 from Q3 2025, reaching $20.8 billion at December 31, 2025, and grew $1.9 billion (10.3%) year-over-year.
• Total loans increased by $479.4 million (2.9%) in Q4 2025 from Q3 2025, reaching $16.8 billion at December 31, 2025, and grew $2.1 billion (14.5%) year-over-year.
• Net interest income totaled $204.4 million in Q4 2025, an increase of $2.5 million from Q3 2025, and a record $750.5 million for Full Year 2025, up 14.7% from 2024.
• The CET 1 capital ratio was 13.0% at December 31, 2025, compared to 12.1% at December 31, 2024.
• Book value per share and tangible book value per share grew year-over-year by approximately $7.69 or 14.2%.
• Completed a $100 million subordinated debt issuance on December 22, 2025, and redeemed $85 million of Series F Preferred Stock on December 15, 2025.
• Sam Sidhu became Chief Executive Officer of Customers Bancorp, effective January 1, 2026, as part of a previously announced leadership transition.

Sentiment

Score: 8

Explanation: The company demonstrates strong financial performance, strategic execution, and a positive outlook, with several key metrics outperforming industry averages. While some Q4 metrics show slight sequential declines, the overall trend for the full year and the forward guidance are very positive, indicating robust health and strategic positioning.

Positives

• Achieved strong Q4 and Full Year 2025 net income and core earnings, with full year core earnings at $254.5 million, or $7.61 per diluted share.
• Delivered significant year-over-year growth in total deposits (10.3%) and total loans (14.5%), outpacing the industry average loan growth of 5%.
• Recorded a record net interest income of $750.5 million for Full Year 2025, marking a 14.7% increase from 2024.
• Improved CET 1 capital ratio to 13.0% and tangible common equity to tangible assets (TCE/TA) to 8.5% at year-end 2025.
• Book value per share and tangible book value per share grew robustly by 14.2% year-over-year.
• Successfully recruited 18 new banking teams since Q2 2023, adding nearly $600 million of deposits in Q4 2025 and now managing over $3.3 billion in deposits.
• Maintained strong asset quality with a non-performing asset (NPA) ratio of just 0.29% of total assets and robust reserve levels at 356% of total non-performing loans.
• The core efficiency ratio declined to 49.52% in Q4 2025, remaining below 50% for the second consecutive quarter, indicating strong operational efficiency.
• Recognized as a Top 10 Performing Bank by American Banker for five consecutive years (2021-2025), including the #1 spot in 2024 among midsize banks.
• Achieved a Net Promoter Score of 81, significantly higher than the banking industry benchmark of 41.
• Successfully completed a $100 million subordinated debt issuance and redeemed $85 million of Series F Preferred Stock, optimizing the capital structure.

Negatives

• Q4 2025 GAAP net income available to common shareholders of $70.1 million decreased sequentially from $73.7 million in Q3 2025.
• Diluted earnings per share (EPS) for Q4 2025 decreased to $1.98 from $2.20 in Q3 2025.
• Return on average assets (ROAA) decreased from 1.26% in Q3 2025 to 1.20% in Q4 2025, and Return on average common equity (ROCE) decreased from 15.57% to 13.28% quarter-over-quarter.
• Net interest margin (NIM) slightly decreased from 3.46% in Q3 2025 to 3.40% in Q4 2025.
• Non-performing loans increased to 0.26% of total loans and leases at December 31, 2025, compared to 0.17% at September 30, 2025.
• Reserves to non-performing loans (NPLs) decreased from 534.14% in Q3 2025 to 356.29% in Q4 2025.
• Total investment securities decreased by $145 million compared to Q3 2025 and by $345 million compared to a year ago.

Risks

• A continuation of the recent turmoil in the banking industry and responsive measures taken by the company and regulatory authorities.
• Potential for negative consequences resulting from regulatory violations, investigations, and examinations, including supervisory actions, fines, penalties, and damage to reputation.
• Effects of competition on deposit rates and growth, loan rates and growth, and net interest margin.
• Failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks.
• Public health crises and pandemics and their effects on the economic and business environments.
• Geopolitical conditions, including acts or threats of terrorism, and military conflicts (e.g., Russia-Ukraine, Middle East, South America), which could impact economic conditions in the United States.
• The impact that changes in the economy have on the performance of the loan and lease portfolio, the market value of investment securities, the demand for products and services, and the availability of funding sources.
• The effects of actions by the federal government, including the Board of Governors of the Federal Reserve System, that affect market interest rates and the money supply.
• Higher inflation and its impacts on operations and financial performance.
• The effects of changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs.
• The effects of any changes in accounting standards or policies.

Future Outlook

For 2026, Customers Bancorp is targeting loan growth of 8% to 12% and deposit growth of 8% to 12%. Net interest income is projected to grow to $800 million to $830 million. Non-interest expenses are expected to be between $440 million and $460 million, reflecting continued investments in people and technology while driving positive operating leverage. The company targets a CET1 ratio of 11.5% to 12.5% and expects a tax rate of 23% to 25%. Strategic priorities include sustaining above-industry-average growth, expanding team recruitment, deepening payments capabilities, and increasing AI and automation utilization, all while maintaining strong capital, liquidity, and credit quality.

Management Comments

• Jay Sidhu, Executive Chairman: "We are pleased with our fourth quarter and full year results that show the company's continued execution of its strategic priorities and underscore our success in growing franchise value."
• Jay Sidhu, Executive Chairman: "During the quarter, we continued to strategically grow our loan and deposit portfolios as we saw momentum throughout the organization."
• Jay Sidhu, Executive Chairman: "Our new teams recruited since Q2 2023 continued to shine, adding nearly $600 million of deposits in Q4 2025."
• Jay Sidhu, Executive Chairman: "We believe that our unique strategy, the investments we are making, and the exceptional talent across our organization position us strongly for continued success."
• Sam Sidhu, CEO: "Our full year net interest income reached a record level in 2025. We continue to have positive drivers to net interest income on both sides of the balance sheet."
• Sam Sidhu, CEO: "We believe we are incredibly well positioned to continue to improve market share, winning new client relationships and that we have the right strategy, the right team, and a client-centric culture to achieve our goals in 2026 and beyond."
• Mark McCollom, CFO: "Even with these costs and investments we continue to make in our future our efficiency ratio remained very strong."

Industry Context

Customers Bancorp's performance highlights a successful strategy of deposit-led growth, strategic team recruitment, and leveraging technology, including its cubiX platform and AI, to differentiate itself in the competitive banking sector. The company's focus on instant payments and AI adoption aligns with broader industry trends towards digital transformation and operational efficiency. Its consistently high Net Promoter Score (81 vs. industry average 41) suggests a strong competitive advantage in customer service and client satisfaction, positioning it favorably against peers.

Comparison to Industry Standards

• 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.
• Achieved a Net Promoter Score of 81, significantly higher than the banking industry benchmark of 41.
• Reported FY 2025 loan growth of 15%, substantially outpacing the industry average of 5%.
• Identified as the #1 Core EPS Compounder among U.S. Banks with total assets between $20 billion and $100 billion (2019-2025 CAGR).
• Ranked as a Top 5 Revenue Compounder among U.S. Banks with total assets between $20 billion and $100 billion (2019-2025 CAGR).
• Positioned as the #2 TBVPS Compounder among U.S. Banks with total assets between $20 billion and $100 billion (2019-2025 CAGR).
• Increased Core ROA by 32 basis points from 2019 to 2025 while making substantial investments for future growth.
• Achieved a nearly 50% increase in Core ROE (445 basis points) from 2019 to 2025, concurrently increasing CET1 by approximately 500 basis points.
• The average total cost of deposits has steadily converged to peer median levels, reducing the spread from over 200 basis points to under 65 basis points over the last three years.
• Non-interest expense as a percent of average assets (1.88% in Q4 2025) is among the lowest of regional bank peers, falling into the top quartile (peer median: 2.20%, top quartile: 2.05%).
• Non-performing assets (NPAs) to total assets remained low at 29 basis points, below the regional bank peer median of 35 basis points.

Management Changes

Stakeholder Impact

• Shareholders: Positive impact due to strong earnings, increased book value and tangible book value per share, and strategic growth initiatives that enhance long-term value.
• Employees: Positive impact from continued team recruitment, investments in people and technology, and a focus on enhancing organizational productivity.
• Customers: Benefit from enhanced client experiences, sophisticated product offerings, and a commitment to a 'Single Point of Contact' service model, supported by technology and AI.
• Creditors: Strong capital base, robust liquidity, and sound credit quality provide confidence in the company's financial stability.

Next Steps

• Continue to deliver above industry average loan and deposit portfolio growth in 2026.
• Build upon the successful team recruitment strategy, with newly recruited teams supporting future growth.
• Seek to deepen and broaden payments capabilities, building upon the foundation laid over the past two years.
• Target increasing utilization of AI and automation technologies to transform the organization, providing enhanced client experiences and organizational productivity.
• Maintain a strong capital base, liquidity, and credit quality.
• Host a live audio webcast and presentation slides on January 23, 2026, at 9:00 AM EST.

Key Dates

Recommendation

Customers Bancorp consistently outperforms industry averages in key growth and profitability metrics, including loan and deposit growth, core EPS, revenue, and tangible book value per share. Its strategic focus on digital payments (cubiX) and AI adoption positions it for future competitive advantage. Strong capital levels, robust asset quality, and a clear positive outlook for 2026 further support a strong buy recommendation for long-term investors. The leadership transition appears well-managed and part of a strategic plan, indicating continuity and forward-thinking management.

Keywords

Customers Bancorp, CUBI, Q4 2025 earnings, full year 2025 results, banking, financial performance, deposits, loans, net interest income, capital ratios, tangible book value, core earnings, asset quality, CEO transition, AI, digital payments, cubiX, subordinated debt, preferred stock redemption