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Investing.com - Keefe, Bruyette & Woods raised the price target on Customers Bancorp (NYSE:CUBI) stock to $76.00 from $71.00 while maintaining a Market Perform rating.
The price target increase follows Customers Bancorp’s pricing of a $150 million common equity offering at $68.50 per share, with proceeds expected to be used for paying down high-cost preferred shares and supporting continued growth. The $2.22 billion market cap bank currently trades at a P/E ratio of 16.86x.
The preferred shares targeted for redemption amount to $82 million with approximately 10% interest and are redeemable in December, according to Keefe, Bruyette & Woods.
The equity raise is expected to be modestly dilutive to earnings, with the research firm projecting a 1% reduction to 2025 estimates and a 3% reduction to 2026 estimates, assuming the 15% over-allotment is exercised.
Keefe, Bruyette & Woods noted that the transaction will simplify Customers Bancorp’s capital structure and boost its CET1 ratio to approximately 13.1% on a pro forma basis, compared to the peer average of 12.5%, providing additional flexibility to support growth momentum.
In other recent news, Customers Bancorp reported impressive second-quarter 2025 earnings, with an earnings per share (EPS) of $1.80, surpassing analyst expectations of $1.54. The company also reported revenue of $206.31 million, exceeding the forecasted $197.19 million. This robust performance included a 14 basis point increase in net interest margin, better-than-expected fee income, and reduced loan loss provisions. Following these results, Stephens raised its price target for Customers Bancorp to $62, maintaining an Equal Weight rating. Additionally, Customers Bancorp launched and priced a $150 million common stock offering at $68.50 per share. The offering includes an option for underwriters to purchase additional shares, with Morgan Stanley, Keefe, Bruyette & Woods, and Raymond James & Associates acting as joint book-running managers. These developments reflect the company’s strategic financial maneuvers and strong market performance.
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