Customers Bancorp targets 8–12% loan and deposit growth for 2026 as payments and AI drive expansion

Earnings Call Insights: Customers Bancorp (CUBI) Q4 2025

MANAGEMENT VIEW

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Jay Sidhu, Founder & Executive Chairman, opened by congratulating Samvir Sidhu on his CEO appointment and highlighted the company's transformation: "what began as an approximately $175 million troubled failing bank has now grown into a $25 billion asset institution recognized for its unique single point of contact strategy, its exceptional customer service focus and a forward-thinking approach to technology." He noted core EPS of $7.61, up from $5.60 in 2024, a 16% compounded annual growth rate in core deposits over six years, and industry-leading growth in revenue, earnings, and tangible book value.

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Samvir Sidhu, President, CEO & Director, emphasized the company's Net Promoter Score increase to 81, nearly double the industry average. He outlined 2026 priorities: organic growth on both sides of the balance sheet, continued recruitment of top-performing teams, expansion of payments offerings, and leveraging AI for client experience and productivity. He stated, "2025 was any indication, top talent is excited about leveraging the unique platform here at Customers Bank." He highlighted the cubiX payments platform's $2 trillion payments volume in 2025, a 30% increase over the prior year, positioning the bank as "the #1 commercial payments network in the U.S. ahead of household names like Max and VISA."

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Mark McCollom, Executive VP & CFO, reported, "Total deposits grew almost $400 million during the quarter, ending at just under $21 billion... up about $2 billion or 10% for the year." He noted a deposit beta of 54% for the quarter and 71% on interest-bearing deposits, with core franchise delivering $150 million noninterest-bearing growth in Q4. He also highlighted loan growth of $500 million quarter-over-quarter, net interest income of $204 million (22% year-over-year growth), and a net interest margin of 3.4%.

OUTLOOK

* Mark McCollom guided for 2026: loan growth of 8% to 12%, deposit growth net of remixing of 8% to 12%, and net interest income of $800 million to $830 million (7% to 11% growth). Noninterest expenses are projected at $440 million to $460 million (2% to 6% growth), with a targeted common equity Tier 1 ratio of 11.5% to 12.5% and an effective tax rate between 23% and 25%. He stated, "we are targeting loan growth of 8% to 12%. Led by the commercial teams we've onboarded and continue to recruit, we see deposit growth net of remixing of 8% to 12%."

FINANCIAL RESULTS

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Samvir Sidhu reported core EPS of $2.06 for the quarter, core ROE of 13.8%, and ROA of about 1.2%. Full-year core EPS reached $7.61, up 36% year-over-year. Deposits grew by $2 billion (10%), with $1.6 billion from new commercial banking teams. Loans grew 15% for the year, net interest income rose 15%, and the efficiency ratio dropped by over 6 percentage points. Tangible book value per share increased over 14% to $61.77.

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Mark McCollom noted noninterest expense of $117 million for the quarter, impacted by $4.8 million in unique expenses, and an efficiency ratio of 49.5%. He also reported a tangible common equity ratio of 8.5%, up 90 basis points year-over-year, and net charge-offs declining 10% in the quarter.

Q&A

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Sun Young Lee, TD Cowen: Asked about expectations for fee income and deposit growth drivers. Samvir Sidhu responded that average quarterly noninterest income has been about $30 million and highlighted the maturing of businesses that could drive further monetization. On deposit growth, he stated that guidance is driven mainly by the core commercial bank, with potential upside from payments and cubiX.

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Stephen Moss, Raymond James: Inquired about team recruitment and transaction volumes. Samvir Sidhu explained ongoing discussions with half a dozen teams and noted that $50 billion in projected payment volume relates to existing customers, aiming to deepen relationships and drive low-cost deposits. On loan growth, Mark McCollom said, "there's no one particular segment that we're more bullish about than the rest."

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Kelly Motta, KBW: Asked if expense guidance includes new team hiring. Mark McCollom confirmed it does and expects professional services fees to decline as unique costs subside.

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Brian Wilczynski, Morgan Stanley: Queried about cubiX platform resilience amid crypto volatility. Samvir Sidhu explained that volatility increases network activity and that balances operate within a 10% threshold.

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Peter Winter, D.A. Davidson: Asked about credit quality and margin outlook. Mark McCollom stated, "our credit quality was... starting from a very, very low base," attributing nonperforming increases to a single transaction. He guided that a margin of 3.25% is a good starting point for 2026.

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Tyler Cacciatori, Stephens: Sought context on the cubiX customer base. Samvir Sidhu indicated the bank has hundreds of customers, with growth coming from both existing and new traditional finance nodes.

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Harold Goetsch, B. Riley: Asked if instant payments cannibalize traditional rails. Samvir Sidhu said most new capabilities are incremental. On AI, he described initiatives in workflow orchestration, underwriting, and risk compliance.

SENTIMENT ANALYSIS

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Analysts expressed optimism regarding growth and fee income potential but probed for details on deposit composition, expense control, and credit quality. Their tone was neutral to slightly positive, with questions focused on sustainability and drivers of growth.

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Management maintained a confident and forward-looking tone in both prepared remarks and responses, emphasizing operational strength, recruitment momentum, and technological innovation. Samvir Sidhu frequently referenced ongoing initiatives and future prospects, stating, "we are seeing a big payoff from the investments we've made in our payments infrastructure."

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Compared to the previous quarter, both analysts and management remained constructive, with analysts slightly more focused on granular drivers of deposit and loan growth and management more detailed in discussing competitive advantages and technology.

QUARTER-OVER-QUARTER COMPARISON

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Guidance for 2026 includes explicit targets for 8–12% growth in both loans and deposits, compared to upwardly revised 2025 guidance in the prior quarter.

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Strategic focus has broadened to emphasize payments leadership and AI deployment, compared to the prior quarter's emphasis on deposit transformation and team recruitment.

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Analysts' questions were similar, maintaining focus on deposit quality, cubiX growth, and expense control, but with more in-depth queries about technology and competitive positioning.

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Key metrics such as core EPS, ROE, and tangible book value per share continued their growth trends, while the efficiency ratio improved further.

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Management's confidence level remains high, with more explicit discussion of competitive moats and future investments in technology.

RISKS AND CONCERNS

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Management highlighted the importance of maintaining strong credit quality and risk management while pursuing growth. Mark McCollom noted, "our credit quality was... starting from a very, very low base."

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Analysts raised concerns about deposit remixing, exposure to digital asset volatility, and potential expense increases from team recruitment.

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Samvir Sidhu addressed regulatory order status, stating the plan is "substantially done" and the focus for 2026 is to "put this behind us."

FINAL TAKEAWAY

Customers Bancorp management emphasized the strength and durability of its core franchise, supported by robust deposit and loan growth, leading payments technology, and significant investment in AI. With clear targets for 2026, a strong pipeline of team recruitment, and a focus on operational excellence, the company remains confident in its ability to deliver sustainable shareholder value while maintaining prudent risk management and capital strength.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/cubi/earnings/transcripts]

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* Customers Bancorp, Inc. 2025 Q4 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4862248-customers-bancorp-inc-2025-q4-results-earnings-call-presentation]
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* Customers Bancorp Q4 2025 Earnings Preview [https://seekingalpha.com/news/4541070-customers-bancorp-q4-2025-earnings-preview]
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