Customers Bancorp (NYSE:CUBI) executives used the company’s fourth-quarter and full-year 2025 earnings call to highlight what they described as strong profitability, continued deposit and loan growth, and expanding payments capabilities, while also outlining initial financial targets for 2026.
Leadership transition and long-term performance
Executive Chairman Jay Sidhu opened the call by noting the company’s CEO transition to Sam Sidhu, describing the change as the result of a succession planning process that began more than five years ago. Jay Sidhu also reviewed the company’s evolution since its founding in late 2009, when it began as an approximately $175 million troubled bank and has since grown into a $25 billion asset institution.
2025 results: deposits, loans, profitability, and credit
CEO Sam Sidhu described 2025 as an “exceptional year,” citing multiple operating highlights. He said deposits grew by about $2 billion, or 10%, led by new commercial banking teams that added $1.6 billion in deposits. Loans grew 15%, and the company posted record net interest income that increased 15%. He also noted the efficiency ratio dropped by more than six percentage points and tangible book value per share increased more than 14% for the year.
On a core basis, management reported:
- Fourth-quarter core EPS: $2.06
- Fourth-quarter core ROE: 13.8%
- Fourth-quarter ROA: about 1.2%
- Full-year 2025 core EPS: $7.61, up 36% from 2024
CFO Mark McCollum said total deposits rose nearly $400 million in the fourth quarter to just under $21 billion. He said non-interest-bearing deposits increased by about $150 million in the quarter and by over $500 million in 2025, excluding large increases associated with Qubix clients. McCollum also discussed what he characterized as a continued shift toward “relationship-based, granular, high-quality deposits,” noting that teams recruited over the past two and a half years manage over $3.3 billion in deposits (excluding Qubix) across more than 8,000 commercial accounts. In the fourth quarter, those teams added $585 million in deposits, which he said were 40% non-interest-bearing.
Loans rose about $500 million, or 3%, sequentially, with growth led by commercial real estate, healthcare, and mortgage finance, while fund finance experienced net paydowns, McCollum said.
Net interest income increased 22% year-over-year in the quarter to $204 million, and net interest margin expanded 29 basis points year-over-year to 3.4%. McCollum attributed sequential net interest income growth to higher average loan and deposit balances, a lower blended cost of deposits (2.54% in Q4 versus 2.77% in the prior quarter), and higher average non-interest-bearing balances.
On expenses, McCollum said fourth-quarter reported non-interest expense was $117 million, and described several items as unique or tied to fee income and tax savings. These included $1.9 million in legal fees related to onboarding a new team and $2.2 million in insurance expense tied to tax credit purchases. He said the efficiency ratio was 49.5% in the quarter.
Credit metrics remained “stable,” according to McCollum, who said non-performing assets were 29 basis points of total assets and have been below peers for five consecutive quarters. He said net charge-offs declined 10% in the quarter, and commercial net charge-offs were 16 basis points annualized when excluding the bank’s small consumer portfolio. In response to a question, management said one transaction of approximately $10–$11 million drove much of the quarter’s increase in non-performing loans and that a restructuring or resolution was expected in the first quarter.
Payments platform expansion and Qubix activity
A major focus of the call was the bank’s payments strategy and its in-house developed Qubix platform. Sam Sidhu said Qubix enables clients to access multiple payment rails, including wire, ACH, RTP, FedNow, and the bank’s 24/7/365 intra-bank instant payments platform.
Management said the instant payments platform processed over $2 trillion in payments volume in 2025, up 30% from $1.5 trillion in 2024. Sam Sidhu said this activity supported consistent average deposit balances quarter-over-quarter of $3.9 billion. In response to analyst questions, he described Qubix-related balances as moving within a range and said the company saw higher activity and balances during periods of market volatility. He also said the Qubix customer base includes “hundreds” of customers.
Sam Sidhu said the bank recently enabled a network of existing mortgage-industry customers that could add up to $50 billion in transaction volume in 2026, and said the bank is also targeting new client networks in real estate-related activities that could drive non-interest-bearing deposit growth in coming quarters. He added that new payment rails were incremental to existing activity, rather than directly cannibalizing wire and ACH volumes.
Capital actions, operational initiatives, and 2026 guidance
McCollum said the company strengthened its capital position through a $100 million sub-debt issuance that added Tier 2 capital. He said the tangible common equity ratio reached 8.5% and increased 90 basis points year-over-year. Tangible book value per share rose to $61.77, up 3% sequentially, which he said equated to 14% annualized growth.
McCollum also discussed a renewed “operational excellence initiative,” targeting $20 million in run-rate proceeds across revenue and expense actions, with the intent to reinvest in strategic growth. He said the bank’s 2026 expense outlook includes continued investments in recruiting teams.
For 2026, management provided initial guidance including:
- Loan growth: 8%–12%
- Deposit growth (net of remixing): 8%–12%
- Net interest income: $800 million–$830 million (7%–11% growth)
- Non-interest expense: $440 million–$460 million (2%–6% growth)
- Common Equity Tier 1 ratio: 11.5%–12.5%
- Effective tax rate: 23%–25%
During the Q&A, management said it was “conservatively” not assuming a major 2026 contribution from digital asset balances in its deposit guidance, with expected deposit growth driven primarily by core commercial banking. The company also discussed fee income, saying different businesses may contribute more heavily in different quarters and pointing to an average of about $30 million in quarterly non-interest income from 2Q 2024 onward as a reasonable starting point.
On net interest margin, management suggested a 3.25%–3.27% range as a starting point and said it expected to “build from there” through 2026, also noting the bank is modestly asset-sensitive.
Sam Sidhu reiterated the bank’s 2026 priorities, including organic balance sheet growth, continued talent recruitment, expanding commercial payments leadership, and leveraging AI across the organization while maintaining capital, liquidity, and credit discipline. He said all employees have been trained on AI, and described efforts underway including workflow orchestration, automating onboarding, building AI support for underwriting and credit memo drafting, and risk and compliance automation.
About Customers Bancorp (NYSE:CUBI)
Customers Bancorp, Inc (NYSE: CUBI) is a bank holding company headquartered in Phoenixville, Pennsylvania, and the parent of Customers Bank, a federally chartered institution. The company offers a full suite of commercial and consumer banking services, combining traditional deposit and lending products with modern digital banking platforms. As a publicly traded entity, Customers Bancorp focuses on delivering tailored financial solutions to mid‐market companies, small businesses, professionals and individuals across the United States.
Through its commercial banking division, the company provides term loans, lines of credit, real estate financing, asset‐based lending and treasury management services.
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