Customers Bancorp(CUBI)2025-01-23 21:33Net Income and Earnings - Q4 2024 net income available to common shareholders was $23.3 million, or $0.71 per diluted share, with ROAA of 0.48% and ROCE of 5.50%[2] - Q4 2024 core earnings were $44.2 million, or $1.36 per diluted share, with Core ROAA of 0.86% and Core ROCE of 10.44%[2] - 2024 net income available to common shareholders was $166.4 million, or $5.09 per diluted share, with ROAA of 0.85% and ROCE of 10.36%[4] - Net income available for common shareholders decreased by 45.8% to $23,266 thousand in Q4 2024 compared to $42,937 thousand in Q3 2024[9] - Core earnings increased by 0.8% to $44,168 thousand in Q4 2024 compared to $43,838 thousand in Q3 2024[9] - Adjusted core earnings increased by 6.7% to $44,168 thousand in Q4 2024 compared to $41,381 thousand in Q3 2024[9] - Net income available for common shareholders decreased by 60.0% to $23,266 thousand in Q4 2024 compared to $58,223 thousand in Q4 2023[12] - Core earnings decreased by 28.3% to $44,168 thousand in Q4 2024 compared to $61,633 thousand in Q4 2023[12] - Adjusted core earnings decreased by 28.3% to $44,168 thousand in Q4 2024 compared to $61,633 thousand in Q4 2023[12] - Net income available to common shareholders for Q4 2024 was $23.3 million, a significant drop from $58.2 million in Q4 2023[61] - Earnings per share (diluted) for Q4 2024 were $0.71, compared to $1.79 in Q4 2023[61] - Core earnings for Q4 2024 were $44.2 million, compared to $61.6 million in Q4 2023[61] - GAAP net income to common shareholders for Q4 2024 was $23.3 million, or $0.71 per share, compared to $58.2 million, or $1.79 per share, in Q4 2023[83] - Core earnings for Q4 2024 were $44.2 million, or $1.36 per share, compared to $61.6 million, or $1.90 per share, in Q4 2023[83] - Adjusted core earnings for Q4 2024 were $44.2 million, or $1.36 per share, compared to $61.6 million, or $1.90 per share, in Q4 2023[83] - Core net income for Q4 2024 was $47.8 million, compared to $65.5 million in Q4 2023[84] - Adjusted core net income for Q4 2024 was $47.8 million, compared to $65.5 million in Q4 2023[84] - Core earnings for Q4 2024 were $44.2 million, down from $61.6 million in Q4 2023[87] - Adjusted core earnings for 2024 were $189.3 million, compared to $248.2 million in 2023[87] - GAAP net income to common shareholders for Q4 2024 was $23.3 million, compared to $58.2 million in Q4 2023[88] Loan and Lease Growth - Total loans and leases held for investment grew by $671.1 million in Q4 2024, representing a 19% annualized growth rate[2] - Total loans and leases held for investment grew by $1.6 billion or 12.3% from December 31, 2023 to December 31, 2024[4] - Total loans and leases increased by 4.3% to $14,653,556 thousand in Q4 2024 compared to $14,053,116 thousand in Q3 2024[9] - Total loans and leases grew by $1.45 billion (11.0%) to $14.65 billion in 2024, driven by increases in commercial and multifamily loans[14] - Loans and leases held for investment increased by $671.1 million (4.9%) to $14.45 billion in Q4 2024, with specialized lending up $373.9 million (6.8%)[18] - Year-over-year, loans and leases held for investment grew by $1.6 billion (12.3%), with specialized lending increasing $835.7 million (16.7%)[19] - Loans held for sale decreased by $70.6 million to $204.8 million in Q4 2024, reflecting reduced demand in certain loan categories[20] - Total loans and leases held for investment increased to $14,448,762 in December 2024, up from $12,861,767 in December 2023[73] - Total loans and leases portfolio increased to $14,653,556 thousand as of December 31, 2024, up from $13,202,084 thousand in December 2023, reflecting growth in the loan portfolio[75] Deposit Growth - Total deposits increased by $777.1 million or 4.3% in Q4 2024, with non-interest bearing demand deposits up $937.5 million or 20.1%[2] - Non-interest bearing demand deposits increased $1.2 billion, or 26.8%, from December 31, 2023 to December 31, 2024[4] - Non-interest bearing demand deposits increased by 20.1% to $5,608,288 thousand in Q4 2024 compared to $4,670,809 thousand in Q3 2024[9] - Non-interest bearing demand deposits rose by $1.19 billion (26.8%) to $5.61 billion in 2024, reflecting strong customer deposit growth[14] - Total deposits increased by $777.1 million (4.3%) to $18.8 billion at December 31, 2024, compared to the prior quarter, driven by a 20.1% increase in non-interest bearing demand deposits[33] - Total deposits grew to $18,846,461 in December 2024, compared to $17,920,236 in December 2023[74] - Total deposits increased to $18,846,461 thousand in December 2024, compared to $17,920,236 thousand in December 2023[66] - Non-interest-bearing deposits increased to $5,608,288 in December 2024 from $4,422,494 in December 2023[74] Net Interest Margin and Income - Q4 2024 net interest margin (NIM) was 3.11%, up 5 basis points from Q3 2024, primarily due to lower deposit costs[2] - Net interest income totaled $167.8 million in Q4 2024, an increase of $9.3 million from Q3 2024[43] - Total cost of deposits declined by 39 basis points during Q4 2024[44] - Net interest income rose to $167,821 thousand in Q4 2024, compared to $158,545 thousand in Q3 2024 and $172,506 thousand in Q4 2023[67] - Net interest margin improved to 3.10% in Q4 2024, up from 3.05% in Q3 2024 but down from 3.30% in Q4 2023[67] - Tax-equivalent net interest margin was 3.11% in Q4 2024, up from 3.06% in Q3 2024 but down from 3.31% in Q4 2023[69] - Net interest income decreased to $654,404 in 2024 from $687,449 in 2023[70] - Net interest margin decreased to 3.14% in 2024 from 3.28% in 2023[70] Asset Quality and Credit Losses - Ratio of non-performing assets to total assets was 0.25% at December 31, 2024, compared to 0.22% at September 30, 2024[2] - Net charge-offs decreased to $14.6 million in Q4 2024, down from $17.0 million in Q3 2024 and $17.3 million in Q4 2023[21] - Provision for credit losses on loans and leases was $18.2 million in Q4 2024, up from $17.8 million in Q3 2024 due to macroeconomic forecast adjustments[22] - Provision for credit losses on available-for-sale securities was $3.0 million in Q4 2024, compared to a benefit of $0.7 million in Q3 2024[23] - Total provision for credit losses increased by $7.14 million to $20.53 million in Q4 2024, driven by higher commercial loan balances and macroeconomic factors[24] - Non-performing loans decreased to 0.30% of total loans and leases at December 31, 2024, compared to 0.34% at September 30, 2024, and increased from 0.21% at December 31, 2023[29] - Net charge-offs for Q4 2024 were $14.6 million, with an annualized rate of 0.41% of average total loans and leases[61] - Non-performing loans (NPLs) to total loans and leases stood at 0.30% in Q4 2024, up from 0.21% in Q4 2023[61] - Allowance for credit losses as a percentage of total loans decreased to 0.93% in December 2024 from 1.02% in December 2023, indicating improved asset quality[75] - Total net charge-offs from loans held for investment were $68,335 thousand for the twelve months ended December 31, 2024, slightly lower than $69,035 thousand in the same period in 2023[79] - Non-accrual loans and NPLs to total loans increased to 0.30% in December 2024 from 0.21% in December 2023, with reserves to total NPLs at 316.06%[77] Capital and Equity - CET 1 ratio was 12.0% at December 31, 2024, compared to 12.5% at September 30, 2024[2] - Common equity increased by 2.1% to $1,698,889 thousand in Q4 2024 compared to $1,663,386 thousand in Q3 2024[9] - Common equity increased by $35.5 million to $1.7 billion at December 31, 2024, driven by earnings of $23.3 million and decreased unrealized losses on investment securities[39] - The CET 1 capital ratio was 12.0% at December 31, 2024, compared to 12.5% at September 30, 2024, and 12.2% at December 31, 2023[37] - The total risk-based capital ratio was 14.8% at December 31, 2024, compared to 15.4% at September 30, 2024, and 15.3% at December 31, 2023[37] - Book value per common share increased to $54.20 at December 31, 2024, from $53.07 at September 30, 2024, and $47.73 at December 31, 2023[37] - CET 1 ratio at Customers Bancorp level was 12.0% at December 31, 2024[41] - Common equity Tier 1 capital to risk-weighted assets was 12.9% in Q4 2024, down from 13.77% in Q4 2023[61] - Tier 1 capital to average assets (leverage ratio) was 8.7% in Q4 2024, slightly down from 8.71% in Q4 2023[61] - Tangible common equity to tangible assets ratio for Q4 2024 was 7.6%, slightly lower than Q3 2024's 7.7%[94] - Tangible book value per common share increased to $54.08 in Q4 2024, up from $52.96 in Q3 2024[95] - Tangible common equity for Q4 2024 was $1.70 billion, up from $1.66 billion in Q3 2024[94] Non-Interest Income and Expenses - Non-interest income totaled a loss of $0.4 million for Q4 2024, a decrease of $19.1 million compared to Q4 2023[47] - Non-interest expenses totaled $110.4 million in Q4 2024, an increase of $16.6 million compared to Q4 2023[50] - Total one-time non-interest expense items recorded in 2024 were $6.1 million, or $0.19 per share[83] - Core non-interest expense for Q4 2024 was $108.57 million, a decrease from $110.38 million in GAAP non-interest expense after adjustments[93] - Adjusted core non-interest expense to average total assets for Q4 2024 was 1.95%, consistent with the core non-interest expense ratio[93] - Total one-time non-interest expense items recorded in 2024 amounted to $8.32 million, primarily due to deposit servicing fees and FDIC premiums[93] - Core non-interest expense to average total assets for the full year 2024 was 1.92%, compared to 1.62% in 2023[93] Future Outlook - Customers Bancorp expects deposit growth of 5% to 9% during 2025[53] - Customers Bancorp targets to increase the loan portfolio by about 7% to 10% in 2025[53] - Customers Bancorp expects net interest income to increase between 3% to 7% in 2025[53] - Customers Bancorp expects an effective tax rate to be between 22% to 25% in 2025[53] Other Financial Metrics - Total assets grew by 4.0% to $22,308,241 thousand in Q4 2024 compared to $21,456,082 thousand in Q3 2024[9] - Total assets increased by $991.98 million (4.7%) to $22.31 billion as of December 31, 2024, compared to $21.32 billion in 2023[14] - Total assets increased to $22,308,241 thousand in December 2024, up from $21,316,265 thousand in December 2023[66] - Average total assets for Q4 2024 were $22.2 billion, compared to $21.3 billion in Q4 2023[84] - Average total assets for 2024 were $21.4 billion, slightly higher than $21.5 billion in 2023[86] - Average total assets for Q4 2024 were $22.18 billion, showing growth from $21.23 billion in Q3 2024[93] - Tangible assets for Q4 2024 were $22.30 billion, slightly higher than Q3 2024's $21.45 billion[94] - Common shares outstanding in Q4 2024 were 31.35 million, a slight decrease from 31.34 million in Q3 2024[95]