Customers Bancorp Inc., a regional Pennsylvania lender, reported net interest income and profit that beat analysts’ estimates and said it expects deposits to hold steady this year.
(Bloomberg) — Customers Bancorp Inc., a regional Pennsylvania lender, reported net interest income and profit that beat analysts’ estimates and said it expects deposits to hold steady this year.
Shares of the company surged 18% to $21.95 at 5:15 p.m. in late trading in New York. They stock had lost 34% this year through Thursday’s close.
NII was $149.9 million for the first quarter, beating the estimate of $136.9 million. Deposits fell to $17.7 billion at the end of the first quarter, missing the $18.2 billion average forecast of analysts surveyed by Bloomberg and below the $18.2 billion reported for the end of last year.
“Deposits are expected to remain relatively flat, with a focus on improving our funding profile and reducing high-cost deposits,” the bank said in a statement Thursday. “We believe our net interest margin has troughed with expansion opportunities throughout the remainder of 2023.”
Profit also beat expectations, with net income coming in at $50.3 million versus the average estimate of $40.3 million.
US regional banks have been in turmoil after a run on deposits led to the collapse of SVB Financial Group’s Silicon Valley Bank, Signature Bank and Silvergate Capital Corp. last month. Rising interest rates depressed the value of bonds some banks bought when rates were low, and a sudden surge in customer withdrawals forced them to sell those assets at a loss.
Customers is one of the regional lenders that rode the crypto wave in recent years, launching a real-time payments platform in 2021 that caters to crypto-trading firms, exchanges and institutional investors. It counts Coinbase Global Inc. and Circle Internet Financial Ltd. among its clients.
Led by Jay Sidhu, the company offers business and home loans in the northeastern US and also operates nationally through its corporate-specialty banking and digital-banking units, according to an investor presentation in January.
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