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Investing.com -- Customers Bancorp, Inc. (NYSE:CUBI) shares jumped 4.2% after the company reported second quarter earnings that significantly exceeded analyst expectations, driven by strong loan growth and an expanding net interest margin.
The Pennsylvania-based bank reported adjusted earnings of $1.80 per share, handily beating the analyst consensus of $1.53. Revenue reached $206.31 million, surpassing estimates of $197.19 million. The company’s net interest margin expanded to 3.27% in the second quarter, up 14 basis points from 3.13% in the first quarter, primarily due to higher interest income from loan growth.
Total (EPA:TTEF) loans and leases held for investment grew by $319 million or 2.1% from the previous quarter to $15.4 billion, with specialized lending increasing by $385 million or 6%. Year-over-year, the loan portfolio expanded by 13.1%.
"We are pleased to share our second quarter results that highlight the company’s continued execution of its strategic priorities and underscore our success in growing franchise value," said Customers Bancorp Chairman and CEO Jay Sidhu.
The bank maintained strong asset quality with non-performing assets at just 0.27% of total assets. The allowance for credit losses covered 518% of non-performing loans, up significantly from 324% in the previous quarter.
Based on strong first-half performance, Customers Bancorp updated its 2025 targets, now expecting loan portfolio growth of 8% to 11% and net interest income growth of 7% to 10%.
Total deposits increased slightly by $43.1 million to $19 billion compared to the previous quarter. The company’s CET1 capital ratio improved to 12.0% from 11.7% in the first quarter, while tangible book value per share grew by $1.50 or 2.7% to $56.24.
Provision for credit losses decreased to $20.8 million in the second quarter compared to $28.3 million in the first quarter, reflecting the bank’s confidence in its loan portfolio despite slight deterioration in macroeconomic forecasts.
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