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On Thursday, Keefe, Bruyette & Woods maintained a Market Perform rating on Customers Bancorp (NYSE:CUBI) with a steady price target of $67.00. Following recent meetings with Customers Bancorp’s President/CEO Sam Sidhu and EVP/CFO Phil Watkins, the firm’s analysts expressed a growing optimism about the bank’s prospects. The discussions highlighted the company’s core deposit pipeline, loan growth, and digital asset deposits as key areas of focus.
The analysts noted Customers Bancorp’s performance in the market, especially after the election, where the shares saw a 9% increase compared to the KRX’s 4% decline. Despite the positive momentum, they observed that Customers Bancorp’s shares are still trading at a 30-35% discount compared to its peers. Currently trading at a P/E ratio of 9.87x and price-to-book of 0.95x, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value. The stock’s beta of 1.75 indicates higher volatility compared to the broader market.
The meetings with the bank’s executives seem to have reinforced the analysts’ view that Customers Bancorp has several mechanisms at its disposal to support profitable growth. The bank’s balance sheet, with its various levers, was a central topic of conversation, suggesting strategies are in place to sustain the company’s growth trajectory. InvestingPro data reveals the company has maintained profitability over the last twelve months, with a diluted EPS of $5.09. Discover more insights and 6 additional ProTips about CUBI with an InvestingPro subscription, including detailed analysis in our comprehensive Pro Research Report.
Customers Bancorp, which operates as the bank holding company for Customers Bank, provides financial products and services to small businesses, not-for-profits, and consumers. The emphasis on digital asset deposits aligns with the broader industry’s pivot towards incorporating digital technology in traditional banking services.
In summary, Keefe, Bruyette & Woods’ stance on Customers Bancorp remains unchanged, with a Market Perform rating and a price target that reflects a conservative outlook on the bank’s growth relative to its group. The analysts’ increased confidence in the bank’s growth story, post their executive meetings, suggests a watchful eye on the company’s future financial performance.
In other recent news, Customers Bancorp Inc . reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $1.36, compared to the forecasted $1.19. Despite this positive performance, the company’s revenue fell short of expectations, coming in at $167.43 million against a forecast of $184.34 million. The company achieved a 6% quarter-over-quarter growth in net interest income and a 5 basis point increase in net interest margin to 3.11%. Customers Bancorp’s core return on equity (ROE) was reported at 11.4%, with a core return on assets (ROA) of 92 basis points. The company has also transitioned to in-house technology platforms, which helped reduce expenses. Looking forward, Customers Bancorp aims for a loan portfolio growth of 7-10% in 2025, with net interest income expected to grow by a similar margin. Additionally, the company plans to improve its efficiency ratio to the low-mid 50s and enhance its ROE to the mid-teens, along with an ROA above 1%.
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