CUBI

Customers Bancorp has been on a strong multi year run, which puts a spotlight on whether the current share price is still aligned with the earnings the bank is producing today. With fresh headlines around growth and technology gains, the key issue for you is how much earnings power is already reflected in the valuation. - Customers Bancorp has delivered a 112.6% share price gain over the past 3 years, so any reassessment of its earnings profile can have an outsized impact on future returns from here. - Recent progress on AI driven lending and onboarding systems points to potential efficiency gains that can influence profitability, capital needs and ultimately the earnings base investors are paying for. - There is a second opinion on Customers Bancorp worth weighing. See what analysts think Customers Bancorp's shares could be worth. The stock's next move may depend on whether the current price fairly reflects the earnings Customers Bancorp is generating and is expected to produce. If you want a wider field of ideas built around similar themes of earnings and technology, a focused stock screen can help surface other opportunities that meet those criteria through 39 profitable AI stocks that aren't just burning cash. A P/E lens fits Customers Bancorp because earnings are the primary driver for most bank valuations. The stock currently trades on a P/E of 9.9x, which sits below the Banks sector average of 11.6x and also trails the broader peer group on about 13.0x. Against that backdrop, the shares change hands at a lower earnings multiple than many comparable lenders. Because record Q3 2026 results and AI driven process gains have already been flagged by management, the key point is that investors are not paying a premium P/E for Customers Bancorp despite those updates. On this framework, the current P/E sits under the multiple a tailored model suggests for the business, which points to an undervalued earnings profile relative to what similar banks trade on. That gap is what the detailed valuation work is designed to help you weigh. Explore the numbers behind Customers Bancorp's P/E valuation. Simply Wall St Narratives pick up where the valuation work on Customers Bancorp leaves off. They spell out the specific growth, margin and earnings paths that would need to play out for the stock to be worth meaningfully more or less than it is today. Each one anchors its number to a clear view on where Customers Bancorp's expansion, profitability and risk profile could go next, which you can then revisit as fresh results and disclosures come through. Community views on Customers Bancorp split between AI and payments upside and concerns about margins, funding mix and credit risk. Bull case: 10% undervalued "Sustained investment in technology, automation and AI-enabled operating workflows is backed by at least 46,000 hours of work saved and more than 600 in-house agents and custom GPTs..." Discover why this Narrative puts Customers Bancorp at 10% undervalued. Bear case: 11% overvalued "Although Customers Bancorp reports strong loan and deposit balances with record levels in Q2 2026, the previously flagged weak profitability relative to revenue at an average net interest margin of about 3.3% suggests that balance sheet growth could continue to translate into subdued earnings..." Explore why this Narrative puts Customers Bancorp at 11% overvalued. You have a view on what Customers Bancorp costs today relative to its current earnings, but professional estimates for where profits might land over the next few years offer a different reference point that can sharpen your own judgment. Explore where analysts expect Customers Bancorp to be in a few years. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CUBI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Customers Bancorp walked into its Q3 2026 report with a stock that had already quietly re-rated higher over the past few months. Then the release hit, and the shares jumped another 7.45% on Friday to about US$84.60 in regular trading. The market cheered, but the real story sits in the earnings power behind that move. For a bank known for efficiency and return on equity, this quarter was all about profitability quality. Basic earnings per share reached US$2.33 on revenue of US$214.01 million, alongside a trailing net profit margin flagged at 34.7%. That combination, together with an earnings multiple around 9.9x, is what has investors reassessing the whole Customers Bancorp thesis. Love Customers Bancorp's earnings power and efficiency but want more options with similar profitability traits? Line up this quarter's figures against our 29 high quality undervalued stocks to see how it compares on quality and valuation strength. - Revenue (Q3 2026 vs. Q3 2025): US$214.01 million vs. US$205.56 million (up about 4.1%) - Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$78.383 million vs. US$73.726 million (up about 6.3%) - Basic EPS (Q3 2026 vs. Q3 2025): US$2.33 vs. US$2.28 (up about 2.2%) - Net Interest Margin, or NIM (Q3 2026 vs. Q3 2025): 3.19% vs. 3.46% (compressed by about 0.27 percentage points) Prefer sharp visual charts instead of another wall of banking numbers? See Customers Bancorp's full financial picture, including a clear view of its valuation and profitability profile, in the interactive company report for Customers Bancorp. The bullish story says Customers Bancorp can turn AI, cubiX, and new teams into a self funding efficiency and growth engine. That ambition is now measurable. "The main thing that has to go right is that Customers Bancorp continues to scale cubiX, AI automation, and Operational Excellence programs while maintaining strong credit quality and a robust deposit mix so that current efficiency and earnings trends persist over time." Q3 points in that direction. AI programs have saved about 76,000 hours and unlocked an estimated US$15m of annual capacity, helping lift revenue per employee 13% and pretax profit per employee 34% year on year. Record US$22.6b deposits with 32% noninterest bearing, lower brokered balances, and nonperforming assets at 0.29% of assets show the deposit mix and credit side of that claim are also tracking the script. One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all. The skeptical view argues that efficiency spending and cubiX deposits risk weighing on profitability instead of fixing it. "While management is rolling out extensive AI and automation programs with quantified time savings and a stated goal of a low 40s efficiency ratio run rate by 2027, the June 2026 assessment of weak profitability and the recent sector downgrade highlight the risk that rising technology and people investment outweighs the benefits." Q3 shows Customers Bancorp pushing back on that concern, but not erasing it. The efficiency ratio improved about 340 basis points quarter on quarter and pretax profit per employee rose 34% year on year. At the same time, net interest margin sits at 3.19% and only ticks higher in late quarter, so margin pressure is easing rather than clearly resolved. Customers Bancorp recently highlighted how focused efficiency work can influence an earnings narrative in a single quarter. The real opportunity is in locating stocks that could be undervalued before valuations adjust. - Company 1 - 28% below our estimate - builds grid testing and diagnostic equipment that helps utilities adapt networks to heavier electrification demand. - Company 2 - 40% below our estimate - turns government-backed device trade-ins into a dependable sourcing channel for higher margin electronics refurbishment and resale. - Company 3 - 36% below our estimate - converts record design wins in regulated hardware programs into long production runs supported by disciplined manufacturing execution. That is three of the list. See all 29 potentially undervalued companies → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CUBI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

- Interested in Customers Bancorp, Inc? Here are five stocks we like better. - Strong quarterly performance: Customers Bancorp reported third-quarter EPS of $2.25, up about 10% sequentially, with a 14% return on equity and a 1.16% return on assets. Net interest income rose 8% to more than $208 million as the net interest margin expanded to 3.19%. - Loans and deposits continued to grow: Deposits reached a record $22.6 billion and loans increased 3% sequentially to $18.5 billion. Management raised its full-year loan-growth outlook to at least 12% while emphasizing growth in fund finance, healthcare and commercial real estate. - AI and payments investments are expanding: The bank said AI-powered underwriting cut cycle times by 95% and generated more than $15 million in annualized capacity. Its cubiX payments platform grew accounts 19%, with non-digital-asset balances reaching roughly $1.4 billion, while credit quality remained stable. Customers Bancorp (NYSE:CUBI) reported third-quarter earnings per share of $2.25, up about 10% from the prior quarter, as loan and deposit growth, higher net interest income and productivity initiatives supported profitability. Chief Financial Officer Mark McCollom said the bank generated a 14% return on equity and a 1.16% return on assets during the quarter. He noted that Customers Bancorp has "virtually no goodwill" on its balance sheet because it has grown organically rather than through bank acquisitions, and said its ROE ranked in the top quintile among banks with $10 billion to $100 billion in assets. → The AI Buildout Is Only 15% Complete—Here Is Where the Next Dollar Actually Goes Total deposits reached a record $22.6 billion at quarter-end, increasing 4% sequentially and $2.2 billion year over year, McCollom said. Non-interest-bearing deposits rose by about $300 million during the quarter to a record $7.2 billion, or 32% of total deposits. Brokered deposits declined by about $370 million and represented less than 20% of total deposits at quarter-end. Loan balances increased nearly $500 million, or 3% from the prior quarter, to $18.5 billion. Loans were up 14% year over year, with growth led by fund finance, healthcare and commercial real estate, more than offsetting lower mortgage warehouse and real estate specialty finance balances. → GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? Management raised its full-year loan growth outlook to 12% or more. It expects deposits to increase at least 9% in 2026, despite intentionally reducing roughly $1 billion of higher-cost deposits during the year. During the question-and-answer session, management said customer activity and loan demand remained generally strong, although it characterized sentiment in commercial real estate as somewhat more cautious. McCollom also noted that much of the quarter's loan growth occurred during September, positioning average loan balances higher in the fourth quarter. → Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs Net interest income exceeded $208 million, rising $15 million, or 8%, from the second quarter. The net interest margin expanded 2 basis points to 3.19%, while September's run-rate margin was approximately 3.25%. McCollom said the timing of deposit growth earlier in the quarter and loan funding later in the quarter limited reported margin expansion. He said gross loan originations carried a spread of about 4% over deposit inflows during the period, and that new loan yields averaged 6.83%, compared with an overall portfolio yield of 6.33%. The company tightened its 2026 net interest income outlook to a range of $805 million to $810 million. McCollom said momentum is supported by low-cost deposit growth, diversified lending and an opportunity for fixed assets to reprice heading into 2027. Management said the deposit beta during the first 30 days following September's rate increase was about 33%, compared with around 60% during the previous rising-rate cycle. McCollom said deposits brought in by newly recruited commercial banking teams generally carry an all-in cost in the low-2% range. Chief Executive Officer Sam Sidhu said the company has expanded its use of artificial intelligence and automation in lending, deposits and payments. Its AI-powered underwriting process has reduced cycle times by 95%, according to Sidhu, while a rebuilt commercial deposit onboarding process can open complex accounts in minutes rather than days. The bank has more than 60 employees focused on AI transformation, along with forward-deployed engineers from technology partners working alongside internal teams. Sidhu said Customers Bancorp doubled its deployed AI agents, estimated cumulative time savings at 76,000 hours and identified more than $15 million of annualized capacity. Revenue per employee increased 13% year over year on an annualized basis, while pretax profit per employee rose 34%, Sidhu said. The company is targeting a low-40% run-rate efficiency ratio by the end of 2027. The bank's cubiX payments platform continued to diversify beyond digital assets. cubiX accounts increased 19% in the third quarter, with real estate and fund finance representing more than 30% of cubiX deposit balances. Management said network activity is on pace to exceed last year's $2 trillion volume. In response to analyst questions, Sidhu said non-digital-asset cubiX balances totaled roughly $1.4 billion, while digital asset deposits were approximately $3.1 billion. He said the bank had not seen material changes in customer activity due to perceived competition in digital asset payments and described cubiX deposits as predominantly non-interest-bearing. Customers Bancorp is also developing extended-hours trading capabilities, correspondent banking services and cross-border payment functionality, according to management. Non-interest expense totaled $113.4 million, down $1.5 million from the second quarter. The efficiency ratio improved by approximately 340 basis points sequentially, and non-interest expense as a percentage of average assets was 1.68%, McCollom said. The company updated its full-year non-interest expense guidance to $460 million to $465 million. Management expects expenses to increase in the fourth quarter, citing incentive compensation, technology investment and deposit-growth initiatives. Tangible book value per share rose 10% year over year to $65.66. The company estimated its common equity tier 1 ratio at 12.6% and its tangible common equity-to-tangible assets ratio at 8%. During the quarter, it repurchased nearly 500,000 shares, or about 1.5% of common shares outstanding. Credit quality remained stable, with nonperforming assets declining 8% from the prior quarter. Nonperforming assets represented 29 basis points of total assets, while net charge-offs improved to 28 basis points from 34 basis points in the second quarter. McCollom said the bank continues to monitor potential pressure from loan rate resets, which could require some borrowers to be restructured to maintain repayment capacity. Customers Bancorp, Inc is a bank holding company headquartered in Wyomissing, Pennsylvania. Through its principal subsidiary, Customers Bank, the company provides banking and financial services to businesses, entrepreneurs, professionals and consumers in the United States. Customers Bank offers commercial and industrial lending, commercial real estate financing, small business lending, mortgage warehouse financing, venture banking and other specialized credit products. Its services also include business and consumer deposit accounts, cash management, treasury services, online banking and payment solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Customers Bancorp (CUBI) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Customers Bancorp (CUBI) just delivered third quarter results that topped analyst expectations on both earnings and revenue, raised its 2026 net interest income outlook, and highlighted record deposit and loan balances supported by new AI driven efficiency gains. The earnings beat, higher 2026 net interest income guidance and ongoing share buybacks helped push Customers Bancorp's share price up 3.17% on the day to US$78.73. The 7 day share price return was 5.89% and the 1 year total shareholder return was 20.11%, pointing to momentum that has been building over a multi year period, reflected in a 3 year total shareholder return of 133.27%. Look beyond Customers Bancorp's rebound to see which other banks are displaying similar balance sheet strength and earnings momentum in our hand picked list of solid balance sheet and fundamentals (26 results) Bulls see Customers Bancorp's AI efficiency gains, raised 2026 guidance and buybacks as support for a higher valuation. Bears point to banking cycle risks. Which side do the current numbers lean toward as you weigh the stock's pricing? Customers Bancorp's most followed thesis pegs fair value at $93.45, above the $78.73 last close. This frames a valuation gap that rests on its payments engine, efficiency targets and capital strength. The rapid digitization of commercial banking and payments continues to drive institutional clients toward tech-focused, 24/7 solutions. Customers Bancorp is extending its cubiX platform from digital assets into real estate and potential capital-markets uses, which could support higher fee income and payments-driven revenue as volumes build on the existing more than $5t of cumulative activity. Sustained investment in technology, automation and AI-enabled operating workflows is backed by at least 46,000 hours of work saved and more than 600 in-house agents and custom GPTs. This is alongside explicit targets for a low 40s efficiency ratio by 2027, which could translate into lower noninterest expense and support stronger net margins if management reaches those goals. See why 3 investors see Customers Bancorp as 16% undervalued. Result: Fair Value of $93.45 (UNDERVALUED) Still, concentration in cubiX related deposits and sector wide concerns about credit quality and commercial real estate could quickly challenge that bullish Customers Bancorp narrative. Find out about the key risks to this Customers Bancorp narrative. Mixed messages in the Customers Bancorp story so far. Move quickly, review the upside and downside data points yourself, then weigh those 4 key rewards and 1 important warning sign. If you stop with Customers Bancorp, you risk missing other setups that might fit your style even better. Put a few minutes into screening and widen your opportunity set. - Target potential mispricing by focusing on financially strong companies that screens flag as attractively valued through the 29 high quality undervalued stocks. - Lock in income ideas by scanning for rock solid payers using the 6 dividend fortresses. - Prioritise resilience by filtering for companies with sturdier financial profiles through the 30 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CUBI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Achieved record deposits and loans driven by the successful integration of 12 new revenue-producing teams and the diversification of the cubiX payments platform. - Implemented AI-powered underwriting and onboarding workflows, reducing loan cycle times by 95% and commercial account opening from days to minutes. - Realized significant productivity gains with revenue per employee up 13% and pretax profit per employee up 34% year-over-year as AI capacity is redeployed into revenue production. - Diversified the cubiX platform beyond digital assets, with real estate and mortgage finance now representing over 30% of its deposit balances. - Maintained strong credit quality with nonperforming assets at 29 basis points, benefiting from a disciplined origination platform across fund finance and healthcare. - Strengthened the deposit franchise by increasing non-interest-bearing deposits to 32% of the total mix, supported by organic recruiting and payment strategy success. - Raised 2026 loan growth guidance to 12% or higher based on strong pipelines and the momentum of newly recruited teams heading into 2027. - Expects continued net interest margin expansion in Q4 2026, supported by a September run-rate NIM of 3.25% and fixed asset repricing opportunities in 2027. - Targets a low-forties efficiency ratio by the end of 2027, driven by sustainable positive operating leverage from technology transformation and AI-native workflows. - Anticipates a step-up in Q4 2026 expenses due to incentive compensation and continued investments in technology and deposit growth initiatives. - Maintains a robust hiring pipeline for 2027, focusing on high-quality revenue producers to sustain organic growth and expand fee income opportunities. - The Pennsylvania Department of Banking and Securities lifted its consent order, which management views as a recognition of strengthened risk management capabilities. - Deliberately moved out approximately $1 billion of higher-cost deposits during the year to optimize the net interest margin and deposit mix. - Repurchased nearly 500,000 shares in Q3 while maintaining a strong CET1 ratio of 12.6% and tangible book value growth of 10% year-over-year. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management explained that the Palantir partnership focuses on complex commercial deposit onboarding and data ontology to eliminate manual background processes. - The goal is to move toward an 'AI-native' bank model where end-to-end automated workflows accelerate the 12- to 18-month ramp-up period for new banking teams. - Management reported a 33% deposit beta in the first 30 days following the September rate hike, significantly lower than the 60% beta seen in previous cycles. - NIM expansion is supported by new loan origination yields of 6.83% compared to a total deposit cost of 2.50%, creating over 400 basis points of marginal spread. - Management stated there has been no material change in customer activity despite perceived competition from larger banks entering the 24/7 settlement space. - The cubiX network's value is driven by a strong network effect and a diverse client base of custodians and investors that remain active on the non-interest-bearing platform.

Image source: The Motley Fool. Friday, Oct. 23, 2026 - Executive Vice President, Head of Corporate Development and Investor Relations - Philip Watkins - Chief Executive Officer - Samvir S. Sidhu - Chief Financial Officer - Mark R. McCollom Operator: Please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Philip Watkins, Executive Vice President, Head of Corporate Development and Investor Relations. Please go ahead. Philip Watkins: Thank you, Ellen and good morning, everyone. Thank you for joining us for the Customers Bancorp's earnings webcast for the third quarter of 26. The presentation you will see during today's webcast has been posted on the Investors webpage of the bank's website at www.customersbank.com. You can also download a PDF of the full press release on the same page. I would like to remind you that today's presentation may contain forward-looking statements which are subject to uncertainty and changes in circumstances. Actual results may differ materially from management's expectations due to a variety of factors which are described in our earnings materials, and our SEC filings. We also reference non-GAAP financial measures, it is important to review our GAAP results in the presentation and the reconciliations in the appendix. At this time, it is my pleasure to introduce Customers Bancorp CEO. Samvir S. Sidhu. Samvir S. Sidhu: Thanks, Philip. Good morning, everyone, and welcome to Customers Bancorp's third quarter 26 earnings call. I am joined this morning by our chief financial officer, Mark R. McCollom. I will take you through a few key highlights from the third quarter, give you an update on our strategic priorities, and then Mark will provide additional detail on our financials. Simply put, it was a great quarter. We delivered record deposits and loans, real wins in AI, a more diversified cubiX platform, and continued success recruiting teams. On top of that, we have strong momentum to finish the year and a very positive outlook as we move to 2027. Turning to Slide 4. Our third quarter results reflect strong execution across the franchise. To give a few highlights, Deposits grew 4% in the quarter and 11% year over year to a record $22.6 billion. Noninterest-bearing deposits grew by $300 million to $7.2 billion a third consecutive quarterly record. Total loans grew 3% in the quarter and 14% year over year to a record $18.5 billion. NII increased 8% quarter over quarter, EPS was $2.25, up 10% quarter over quarter. ROE rose to 14%, up more than 70 basis points quarter over quarter. Our efficiency ratio improved approximately 340 basis points in the quarter, and tangible book value per share increased 10% year over year. that is 17 consecutive quarterly records for book value, 5 for loans, and 8 for total deposits. We delivered these results with strong credit quality and solid capital, while growing the balance sheet and returning capital through share buybacks. Slide 5 shows our priorities for 2026 which remain unchanged. I will provide an update on each again this quarter starting with AI on Slide 6. Over the past several quarters, we have shared our AI journey. We are currently in a phase of reimagining and automating end to end workflows coupled with rapid product development. We are shipping new capabilities every quarter that make banking simpler for our clients and free up our team to focus on higher value work. Everything we are doing is aimed at a better experience for our customers, and, importantly, our employees. In Q3, we advanced our top 3 top-down priorities. In lending, we scaled our AI powered loan underwriting process adding functionality and increasing utilization. The cycle time for this process is down 95%. This will allow the same team to handle significantly more loan throughput. In deposits, we piloted our rebuilt commercial deposit onboarding process in just 10 weeks. It allows us to open complex commercial accounts in minutes instead of days at other institutions. That represents an >90% reduction in cycle time. And in payments, we enabled programmable subaccounts on cubiX enhancing our product offering for existing clients as well as broadening potential Agentic payment use cases. Using AI and automation tools, we now have an ability to rapidly ship new products. Just to give you a few examples. We launched voice agents on our main customer service line and are now working on incorporating them into our customer-onboarding journey. We are expanding an AI digital twin pilot to more members across the organization, we piloted an automated savings sweep for consumers. To drive this progress, we now have over 60 people focused on AI transformation at the bank. And our engineering talent is increasing too. We have 12 and growing forward-deployed engineers from our partners working in pods alongside our in house engineers and subject matter experts. And the results are tangible. Our team doubled the number of AI agents deployed. Cumulative estimated hours saved have now grown to 76 thousand. And we have unlocked an estimated $15 million+ of annualized capacity. In the last 6 months, revenue producers grew 6% and accounted for about 60% of the new positions we filled, while total headcount drifted lower. Even with the great results in the quarter and positive momentum for the year, if I had to leave you with 1 point, it is that productivity gains are showing up in our financial performance. And are already above our investments today. Revenue per employee is up 13%, and pretax profit per employee is up 34% on an annualized basis this quarter versus last year. We ranked number 1 and number 4, respectively, among all $10 to $100 billion asset banks on these metrics. A better equipped team helps us improve customer and employee experiences. This should enable us to grow revenue meaningfully faster than expenses, and reach our goal of a low forties run rate efficiency ratio by the end of 2027. Turning to Slide 7 and cubiX. Diversification is expanding the opportunity for our payments franchise. cubiX accounts grew 19% in the third quarter, with real estate and mortgage finance driving new client growth. Those 2 verticals now represent more than 30% of cubiX deposit balances. That broader reach puts our payments capabilities in more of our clients' day to day operations and creates opportunities to deepen relationships and gather low cost operating deposits. Network activity is on pace to hit another record this year, surpassing last year's $2 trillion volume. And showcasing the value of the platform to our clients. And looking forward, we are developing extended hours trading capabilities for capital markets and correspondent banking services that support cross border flows. At the end of last year, we did not expect cubiX to be a growth vertical. With this diversification, we believe there is substantial opportunity ahead to continue to increase low cost deposits on the platform. Turning to Slide 8. Our recruitment strategy, which is a unique part of our business model continues to build a larger and more valuable deposit franchise. The teams we have recruited since 2023 now hold $4.3 billion in deposits or 19% of our total deposit base. They added roughly $415 million in the third quarter alone, and more than $1 billion so far this year. that is more than a 6-fold increase in their share of our deposits in about 3 years, all through organic recruiting. The breadth of the franchise is also expanding. We have added more than 3 thousand commercial deposits accounts so far this year, which is more than we achieved in all of 2025. that is up 13% year to date, and accounts have roughly doubled since 2022. And our 2026 recruiting class keeps growing. 15 revenue producers joined us in the third quarter. That brings year to date revenue producing hires to 50 and 12 teams represented. that is up 50% from last year. The success of these teams gives us confidence that we can sustain the space of recruiting high quality revenue producers in 2027 and beyond. With that, I will turn it over to Mark to take you through the financials in more detail. Mark R. McCollom: Thanks, Samvir, and good morning, everyone. My comments will begin on Slide 9. We are only showing you GAAP earnings this quarter, as we do not have any material adjustments to those GAAP results. I am pleased to walk you through another quarter of consistent growth in the balance sheet, earnings, and profitability. We delivered EPS of $2.25, up roughly 10% from last quarter. ROE and ROA came in at 14% and 1.16%, respectively. We note that many of you tend to quote ROTCE instead of ROE, comparing relative profitability among your peer groups. However, because we have grown organically, rather than buying other banks, our balance sheet carries virtually no goodwill. As a result, our third quarter ROE of 14% is within the top quintile of all banks between $10 and $100 billion in assets. On Slide 10, we provide details on our deposit franchise. Total deposits ended the quarter at a record $22.6 billion, up 4% in the quarter and an increase of $2.2 billion year-over-year. Our total cost of deposits remained flat despite the increase in interest rates by the Federal Reserve during the quarter. The quality of our growth was strong. And I will highlight a few stats. Noninterest bearing deposits grew by about $300 million during the quarter, ending at $7.2 billion, which as Samvir noted, is another record for the third consecutive quarter. that is 32% of total deposits which is top quartile for regional bank peers and up more than $800 million, or 13%, year over year. A direct result of team recruitment and payment strategy that Samvir just walked through. Our goal remains to have the highest percentage of noninterest bearing deposits among our peers. 1 additional metric I want to emphasize, our broker deposits came in about $370 million lower for the quarter and now make up less than 20% of our deposits. Turning to Slide 11 in loans. Total loans grew nearly $500 million or 3% in the quarter to $18.5 billion, compared to 1% linked quarter growth for the industry. On a year over year basis, loans are up 14%. Just as important as the pace of growth is the breadth. Growth was delivered, led by business units like fund finance, health care, and commercial real estate which more than offset lower mortgage warehouse and real estate specialty finance balances. As we always say, the mix of top contributors may shift from quarter to quarter, but the diversified nature of our origination platform helps us deliver strong growth while remaining disciplined on structure and pricing. Slide 12 covers net interest income and net interest margin. Net interest income exceeded $208 million, up $15 million or 8% from the second quarter driven by higher average loan and security balances and higher interest spread. As we signaled last quarter, the second quarter was expected to be the low point for our margin in 2026. Our third quarter net interest margin expanded 2 basis points to 3.19%. Our margin would have expanded further but was impacted by the timing of our deposit growth, which occurred earlier in the quarter, versus when we funded loan growth. Which occurred later in the quarter. Our run rate net interest margin in September was approximately 3.25%. Additionally, our growth in the quarter was accretive to margin as the spread between gross loan originations and deposit inflows was about 4%. When combined, these factors set us up well for further net interest margin expansion in the fourth quarter. Looking ahead, our NIM and NII momentum are supported by a few factors. Our low cost deposit pipeline led by our new teams and our new business units on cubiX, the strength of our diversified loan origination platform, and we have a fixed asset repricing opportunity heading into 2027. With positive levers on both sides of the balance sheet, we expect continued net interest income and margin expansion going forward. Moving to Slide 13 and expenses. Noninterest expense was $113.4 million in the quarter, down $1.5 million from the second quarter. The story here continues to be long term strength in our efficiency ratio. Our efficiency ratio improved by approximately 340 basis points from the second quarter. Our noninterest expense as a percent of average assets was 1.68% among the lowest of any regional bank peer. As you can see from our updated guidance, we do expect a step up in expenses in the fourth quarter due to incentive compensation as well as investment in technology initiatives and deposit growth. I would underscore that we are delivering very strong efficiency while investing in people and technology and redeploying the capacity that AI creates into revenue production. As Samvir described, We remain confident the work underway will deliver sustainable positive operating leverage. On Slide 14, tangible book value per share grew to $65.66 up 10% year over year. that is approximately 2.5x where we stood at the end of 2019, a CAGR of roughly 15%. Compared with about a 5% CAGR for regional bank peers over the same period. Without the industry wide impact of interest rates on AOCI this quarter, our tangible book value per share would have increased 13% year over year. Given the short duration of our investment portfolio, our AOCI as a percent of TCE was just 5% compared to over 8% for our regional bank peer set. Further, our held to maturity portfolio is just 2%, of total assets. Turning to Slide 15. Our capital position remains strong, and continues to provide meaningful strategic flexibility. Our estimated CET 1 ratio was 12.6%, and our tangible common equity to tangible assets ratio was 8% while we grew our tangible assets by over 3% and repurchased nearly 500 thousand shares or about 1.5% of our common stock during the quarter. Strong organic earnings position us to support continued balance sheet growth and, when appropriate, to return capital to our shareholders. On Slide 16, credit quality remains strong. Nonperforming assets were down 8% quarter over quarter. And NPAs as a percent of total assets were just 29 basis points, down 3 basis points quarter over quarter and well below the regional bank peer median of 36 basis points. Net charge offs continue to perform well, with total net charge offs improving to 28 basis points from 34 basis points last quarter with commercial charge offs of just 13 basis points. I will finish with slide 17 where we have a few updates to provide as we close out our 2026 guidance. For loans, given the performance year to date, and the strength and breadth of our platform, we are now raising our guidance and now expect loan growth to be 12% or higher for the year. For deposits, the momentum from our new teams and the new cubiX verticals continues to be strong and we expect balances to finish up 9% or more in 2026 even after deliberately moving out about $1 billion of higher-cost deposits during the year. The combination of loan and deposit growth opportunities should continue to drive solid growth in net interest income, and we are tightening our range to $805 million to $810 million for the year. On noninterest expenses, we update our range to $460 million to $465 million as we continue to invest in people and technology. And for income taxes, we now expect a range of 22% to 23% for the year. Taken as a whole, we believe this guidance sets us up for a strong finish to 2026 and a strong springboard 2027. With that, I will pass it back to Samvir for closing remarks. Before we open the line for questions. Samvir S. Sidhu: Thanks, Mark. To wrap up, we delivered exceptional results across our priorities in the third quarter. AI is moving from pilot to production, and it is already showing up in our numbers with more opportunity ahead. cubiX is on track for record activity this year and is diversifying fast with mortgage finance and real estate now representing over 30% of balances. Loans grew 14% year over year to a record. Deposits grew 11% year over year to a record. Noninterest bearing deposits grew by $300 million to a record. Our new teams added about $415 million in the quarter and over $1 billion so far this year. From the second quarter, our NII increased 8%. Our EPS increased 10%, Our ROE increased to 14%, and our efficiency ratio improved by 340 basis points. We are building momentum heading into 2027, and we remain in the early innings of what this franchise can deliver. With that, we will now open up the line for questions. Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. And to withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question for optimum sound quality. And if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Janet Lee with TD Cowen. Your line is open. Please go ahead. Janet Lee: Good morning. This is Noah on for Janet Lee. Can you just talk about what you are hearing from commercial borrowers today and how demand has evolved given the recent move in rates? And as you look at the pipeline, how are you thinking about the sustainability of the growth from here? Samvir S. Sidhu: Hi. Good morning. Noah, so first of all, I think, you know, loan demand continues to you know, remain strong at the franchise and, frankly, in the industry as a whole. You know, what we can see over the next 30, you know, to 90 days, which is you know, most tangible as Mark sort of described as we sort of have a pretty good sense of where fourth quarter is going to turn out. And in conversations more softly, with the exception of, say, in the commercial real estate industry where there is a little bit more tepid, you know, of a reaction, we generally are seeing you know, strong interest in customer activity as well as their own customers' activity. Mark R. McCollom: Yeah. And then, Noah, I would also just add you know, as I said in my prepared comments, that our average, you know, loan balances for the quarter were less than kind of where we ended for the quarter. We had you know, most of our loan growth occurred in the month of September. You know? So that also sets us up really well for fourth quarter average loan balances. Janet Lee: that is helpful. Thank you. And then 1 follow-up on expenses. I know you mentioned comp and tech expenses. Possibly contributing to some pressure in 4Q. As we think about the exit rate into 2027, can you help frame the right quarterly expense base from here as we look ahead? Mark R. McCollom: Yeah. We are gonna be giving. Noah, this is Mark again. We are gonna be giving expense guidance for 2027 as well as all other material metrics in our fourth quarter call in January. Okay. Thank you. Operator: Next question comes from the line of Anthony Elian with JPMorgan. Analyst: Your line is Good morning. This is Mike on for Anthony Elian. On NIM, you guys called out margins expected to improve further in 4Q given that the September run-rate NIM was 3.25% I guess, could you put a finer point on where you expect 4Q NIM to land and some of the puts and takes there? And then also, maybe how we should think about that trending into 2027. I know you are not giving specific guidance, but maybe just a general trend. Mark R. McCollom: Yeah. You know, we do not give specific guidance on margin, but we did, obviously, tighten our range, you know, which you can impute from that, you know, where we expect NII to be for the fourth quarter. You know? So I would do that, and then you can use your own assumptions on balance sheet to, you know, translate into a margin. But you know, 1 data point, you know, I will give you is that our loan yields during the third quarter you know, our new volume on those loan yields came in at about 6.83, which is about 50 basis points higher than our overall loan yield of 33 for the quarter. You know? So that should give you another data point and some comfort for further NIM expansion in the fourth quarter. Analyst: Great. that is helpful. And then you guys announced this partnership with Palantir. I guess, what is the extent of this partnership Is it just for account onboarding, or could it result in Palantir, sort of, you know, maybe 1 day replacing the bank's core? Samvir S. Sidhu: You know, You know, as I said-- First of all, let me sort of zoom out sort of a bit of a high level. You know, we see, you know, the bank, as you can, you know, tell, value in partnering with a broader range of companies, especially folks that are sort of the leading edge of technology AI, you know, as well as services. You know, Palantir, as you probably well know, are pioneers in the, you know, FDE or forward-deployed engineer model, as well as incredible experts on the data layer that sits on top of any LLM. So as you can imagine, in complex commercial deposit account opening, it is incredibly useful to have them, you know, involved sort of helping work with our teams side by side. You know, in AI pods with our own engineers as well as subject matter experts. So in your broader question, you know, we are not looking to sort of reinvent the world here. We are looking to do the things that drive the most value for our employees and our customers. And that is really where our focus is today, which is how do you improve the employee experience and how do you improve. How does that you know, directly and indirectly, you know, improve the customer experience? Got it. Thanks. Operator: Next question comes from the line of Steve Moss with Raymond James. Your line is open. Please go ahead. Steve Moss: Good morning. Nice quarter. Maybe starting on deposits here, continuing with that. You guys had really good deposit growth this quarter Just kind of curious a little bit about the underlying mix here. I see the disclosures around Cubix. Just kind of wondering, maybe, you know, where are Cubic's balances these days and trying to get a sense for how much of deposit growth this quarter may have been from title. Just kind of how to think about that going forward here? Samvir S. Sidhu: Sure. Broad-ranging question. I will take a stab, and then if something is missed, you know, you know, please feel free to ask a follow-up or Mark can sort of step in. You know, as it relates to cubiX, I think we are really proud, as I mentioned on the call, about the diversification. The end of last year, you know, we were being sort of pressed on how we saw the this as a potential growth vertical when it was. Went from 100% in cash to 100% in DA to 80% to now, you know, under 70%. I think that is really, you know, the testament to you know, to the team's success as well as the fact that the platform has been monetized you know, by a broad range of customers. So, you know, there was contribution from title teams. I think, you know, about $150 million so, you know, or so on a spot basis. Importantly, that team continues to perform incredibly well and we. And their pipelines also remain strong. Total sort of non DA cubic balances are about $1.4 billion. And I think you remember last quarter, I talked about a $1.5 billion, you know, goal by the end the year. Mark R. McCollom: Steve, this is Mark. I. My. You know, I would just add we had said that the new teams, you know, contributed over $400 million you know, growth during the quarter. You know, title, as Samvir mentioned, was 1 of the larger ones, but, I mean, it was broad based growth when you when you look throughout all of our teams. Steve Moss: Okay. Great. And maybe just curious also with regard to Cubic's what does, you know, the correspondent banking business look like? You guys You guys mentioned cross border transactions. Just kind of curious what is that type of customer or how to think about that market there? Samvir S. Sidhu: Yep. So, you know, I think the way to think about, you know, this. We talked a little bit about this last quarter. This is something that is we are developing internally with existing as well as new customers. Just an ability as money moves to 27, how do you expand and leverage the technology capabilities, the customers that we have, both directly, you know, on the network that are also can be in support of other customers to allow us to, you know, provide 24/7 money movement. And that is really, you know, the way I would describe how we also think about cross border. Okay. Okay. Appreciate that. Steve Moss: And then just 1 other thing here in terms of just back on the expenses here. I know you guys tend to target an efficiency ratio, you know, obviously, very good trends here over the course of the current year. I am just, you know, curious as to, like, as we look forward here, does that efficiency ratio trend from, like, call it 49 this year to maybe to the 47, 46, 47 range. In 2027. Samvir S. Sidhu: So I think as Mark said, you know, we will. Wait. Stay tuned, you know, for fourth quarter for us to be able to, you know, provide a lot more guidance. What I would sort of, you know, the trend you are describing is obviously the trend we wanna be on. Quarter to quarter matters a lot. We put out sort of a incredibly ambitious, you know, target of sort of low forties led by sort of some of our transformation efforts on the technology side. So more to come, but you are right. We are incredibly focused on efficiency ratio. We also are incredibly focused on making investments, which we have done and will continue to do. But, you know, that is sort of in support of the growth of the franchise. Alright. Great. Appreciate all the color. I will step back. Operator: Next question comes from the line of Brian Wilczynski with Morgan Stanley. Your line is open. Please go ahead. Brian Wilczynski: Hi, good morning. Thank you for taking my questions. The commercial banking teams continue to perform extremely well. I was wondering, as we think about the deposit cost outlook from here, can you give us some more color on the average cost of deposits among the commercial bank teams? And cubiX and just how you see overall deposit betas playing out as we move into a rising rate environment? Thank you. Mark R. McCollom: Sure. Yeah. A couple of things there, Brian. I will try to take a stab at that. First, we will go on the deposit betas. You know, while you know, it is still early. So far, you know, from the first 30 days since the September rate hike, our deposit beta has been about 33%. And that compares to, you know, the last time there was an upcycle in rates Our beta was around 60%. So I think that is a testament to some of the progress we have made in our deposit transformation. You know, as we have said on prior calls, you know, the overall cost of deposits that we bring in from our teams you know, generally is in kind of the low twos range all in. You know? And that has continued this quarter. And then remind me if there is anything there I did not answer. Brian Wilczynski: No. No. You hit it. Thank you. Appreciate that color. And then maybe just going back to AI, clearly a big strategic priority for the bank. Think in the past, with the commercial banking teams, you had talked about how those teams typically ramp over about a 12- to 18-month time period. I am wondering given the investments you are making in AI, particularly on the deposit onboarding process, is there an opportunity for that time line to accelerate over time? How should we think about the benefit to deposit growth from your focus on AI? Thank you. Samvir S. Sidhu: Yeah. Thanks so much for the question, Brian. So just to kinda build off of what I mentioned earlier, the sort of complex commercial deposit account opening in minutes. You know, versus days. Think of this as multiple signers, background checks being done in parallel, multiplayer between an RM and a customer. You know, we really believe this is going to be industry leading. And in. All in of a better customer experience, but importantly, as you described, you know, growing our commercial account deposit at. And supporting the growth as well as potentially helping accelerate future growth. As you can imagine, if you have manual processes in the background, you know, which we will, you know, eliminate as part of this process, that can slow down, you know, the account growth that we are talking about. And I think I mentioned in my prepared remarks we are already at the growth in all of 2025. You know, year to date, you know, so far this year. Got it. Really appreciate all the and thank you for taking my questions. Operator: Your next question comes from the line of Peter Winter with D.A. Davidson. Your line is open. Please go ahead. Peter Winter: Samvir, I wanted to touch base on the Cubic's digital asset deposits. When I think about 1 of the reasons clients came to you were, at the time, 1 of the few banks that had this 24/7 settlement. But we have seen that 1 of the largest crypto exchanges now has a direct bed payment access and a settlement deal with another bank. So and we are seeing also some of the biggest banks have also launched this 24/7 and looking to serve exchanges and markets. The question is, are you seeing any of your larger clients start to move balances to these other rails? And if these clients now have a choice, is there a risk that the deposits that are zero cost you might have to start paying interest on those deposits. Samvir S. Sidhu: Yep. Hey, Peter. Thanks for the question. So I think our position here sort of remains same, which is, you know, which we are very pleased by. There is really no, material change, you know, in our customer activity as a result of perceived, what I would describe as perceived competition. there is a large network effect and barrier to entry here of the 27 network that we built. You know, prior to. You know, over the past number of years, even prior to, you know, banking charters and Fed access being available, we have had banks and custodians and investors and many other folks have that are and continue to be incredibly active on our network. So I think the value we bring is sort of a intra bank network that has best in class technology with a broad diverse network that is that continues to grow. And is non interest bearing. Peter Winter: Got it. If I could just follow-up, the consent order was lifted. Congratulations. Does that impact your thoughts on how much digital assets you want to hold on the balance sheet? And would you start lending against those deposits and then, third, just where were the deposits? This quarter, digital deposits? Samvir S. Sidhu: Sure. Yeah. Thanks. We are. You know, on the on the on the, you know, PA department of banking and securities lifting its order, we are you know, we are we are pleased. You know? And I would also just add that, you know, the regulatory agreements including, you know, with the Federal Reserve, are essentially the same. And as I said earlier this year, we would essentially put that. Materially put that work behind us at end of last year. So it is. It is a very good big recognition. It does not change, to answer your question, the way that we know, are operating on a day to day basis, and I think that is really you know, the key of how we are approaching our current, you know, and future business. So it is just an important milestone. But what I would say is, I think now I can confidently say that risk management is now becoming a real strength for us, and that there is creating a further moat building off of your previous question as well around our payments business. Got it. Thanks, Samvir. Congrats on a great quarter. Operator: Your next question comes from the line of Matthew Breese with Stephens. Your line is open. Please go ahead. Matthew Breese: Hey. Good morning. Hey. Good morning, Matthew. Samvir S. Sidhu: Samvir, I. I am sorry. I missed it. What was the digital asset deposit I think you got a little garbled on my end. Yep. Sure. About $3.1 billion. Matthew Breese: Okay. Okay. And my follow-up there around cubiX deposits in general, all of which are in non interest bearing Are there any associated know, earnings credit rates with the Cubic's deposit base? Or waive fees, and to what extent did that play out this quarter, last quarter? I am just trying to get a sense of if there is anything flowing through expenses tied to the Cubix deposit base. Samvir S. Sidhu: Mean, they are they are predominantly, you know, 100% on interest bearing. I would just sort of clarify that you know, 70% of the title bought. You know, deposits are non interest bearing. They are the very small portion, tens of millions that there would be sort of a little bit of you know, expense associated with them. Got it. Okay. So, Paul, You know? 90 something percent of these are truly non-interest-bearing. 99 maybe. 99. Okay. Alright. Matthew Breese: And then this is my bigger picture question for you. You know, I heard a lot from investors and sell-siders and questions around agentic AI the potential, the ability for a much more kind of volatile deposit environment as, you know, things like Muse came up. I wanted your thoughts there, and I could not help but think you know, maybe the partnership with Palantir was applicable to this. A defensive play. And yeah, maybe that is a little bit of an open ended question, but you get where I am going with this. Samvir S. Sidhu: Yeah. Sure. You know, so I think that the. The short answer is Muse is a consumer app. Right? And at the end of the day, that, you know, we have limited exposure to sleepy, you know, consumer deposits. You know, as, you know, our clients are primarily sophisticated corporate customers that, you know, have treasury teams and are optimizing their liquidity. And they run their operating accounts, you know, pretty efficiently, you know, with sort of moving things, you know, into sort of interest bearing accounts if they do have those excess deposits. I also mentioned in our. My prepared remarks, we launched a pilot of an automated sweep product. Know? So while we do not have a huge consumer base, but for our consumer customers, to help them sort of earn interest, this is something that we do plan to roll out more broadly in the future. And while this type of retail deposit is not a big part of our franchise today, to your point, you know, this could be, you know, a potential product for us in the future. it is a you know, it is something that we wanna make sure that we are prepared for as consumers, you know, may waken to the benefit of Agentic money movement. What I would say is the key here is going to be using this as a tool to have a primary relationship, not just as a high cost deposit, you know, gathering tool because that is not really, you know, a customer's bank's objective here. I appreciate all that. I will leave it there. Thank you. Operator: Your next question comes from the line of Kelly Motta with KBW. Your line is open. Please go ahead. Kelly Motta: Hey. Good morning. Thanks for the question. I joined a little late, but I think at this point in the call, I do not know if anybody's asked about credit, which has been to your credit. Quite boring. In this higher rate you know, higher for longer, are you seeing anything incremental that you are watching Any changes in early changes in customer demand? Just wondering both from just an overall asset quality perspective as well as how it is impacting borrower behavior? Thanks. Mark R. McCollom: Hey, Kelly. it is Mark. Yes. Boring is always better when talking about the credit story for, you know, our company and the industry. You know, we had really strong credit performance this quarter. You know, we continue, you know, to watch the entire portfolio. You know, we will have, you know, some rate resets going into next year, you know, which has a benefit both ways. You know, it obviously picks up net interest income, but for certain borrowers that could put stress on capacity to pay. You know, and may, you know, end up having some of those borrowers restructured, you know, to create the necessary capacity for them to continue to pay, but we are we are monitoring it closely You know? But at this point, you know, it is been steady as she goes. Kelly Motta: Got it. I appreciate that. And maybe a nitpicky modeling question for you. If I look at the guide, for expenses, it is mostly unchanged, but implies a step up in Q4. I know you guys had kind of a I believe it was somewhat of a true up last Q4. I am wondering if there is any sort of year end housekeeping items that we should be mindful of when thinking about how we are thinking about the go forward run rate? Thanks. Mark R. McCollom: Sure. Yeah. And the step up, I mean, obviously, we are not giving guidance, beyond the fourth quarter. You know? But for that fourth quarter guide, I mean, it was really it was it was a combination of factors. I mean, I mean, we did have a couple things that were just a little bit lower in the third quarter that we typically see that will not continue. Will go back to their normal run rates. We are having a good year. We just had a good quarter, which was, you know, maybe the step up you are referring to last year. So then in the fourth quarter, we would expect additional incentive compensation And then, also, you know, as we have noted, you know, on the call here, we are investing in technology. So, you know, you saw a step up in some of our technology costs in the third quarter that we continue in the 4 q as well. Got it. Kelly Motta: that is helpful. And then I know you have covered your AI partnerships a bit. I may have missed some of the details. I apologize if this is repetitive, but you have this new exciting partnership with Palantir. I think the release cited, like, account opening. I am just wondering about you know, is this the first thing that they are they are working on, if there is potential. If potential kind of, like, next step priorities, 1, and then, 2, how this is different from what OpenAI has been working with you on. Thanks. Samvir S. Sidhu: Yep. Happy to take that, Kelly. And just to sort of recap a little bit of what I mentioned earlier is that, you know, we see value in partnering with you know, a number of folks. You know? Right now, Palantir working with us, as I mentioned, on sort of this deposit onboarding, and they may continue to work with us, especially in areas where there is a benefit of using their expertise and, you know, some of the services side by side with our engineers as sort of a focus on sort of the data ontology, which is something they are really are, I know, incredible experts on. You know, we are continuing to work on the top 3 top-down you know, domains. So loans where we are really leaning in heavily with OpenAI deposits. We just talked about, and also on the payment side. So those are the 3 domains we will continue to sort of you know, really. And those are really kicking up into high gear and sort of working on each of them concurrently, you know, now as well, whereas they were sort of a focus in the second quarter on the loan and third quarter on deposits. But now we are starting to sort of build a big transformation project in the fourth quarter that will sort of lead and give us momentum into 2027. Kelly Motta: Got it. that is helpful. And maybe just a quick follow-up. You know, bank. Banks have been mostly confined to us as certain set of core providers over time, do you think AI is something that could be helpful in, you know, developing and improving upon and perhaps replacing the core? Thanks. Samvir S. Sidhu: Yeah. I think you are absolutely right in terms of the benefit of some of these software tools. I think the real help is if you sort of think about the old world of data transformation and data maturation and data lineage and definitions and data keys, all of that is much easier today. There is an incredible amount of benefit to having systems of record across your organization that you can actually build on top of, you know, and also the real focus at our bank today is focusing on end to end automated workflows, whereas before you would sort of just have automated portions of workflows that sort of represented a bit of an 20. You know, if you actually wanna get to a, you know, an AI-native reach bank, which is what our focus is, you have to have sort of end to end workflows. Our focus is on the workflows. And the. And using the technology tools to be able to assist in those workflows. And not trying to sort of reinvent, you know, the software wheel. Great. Thank you so much for entertaining the question. Nice quarter off the back. Operator: Your next question comes from the line of Manuel Navas with Piper Sandler. Your line is open. Please go ahead. Manuel Navas: Hey. Good morning. Just have a question on NIM dynamics. Kind of what are you seeing on new loan yields and the marginal cost of deposits And do you see the September NIM of 3.25% as the floor in the fourth quarter? Mark R. McCollom: Hey, Manuel. it is Mark. Thanks for the questions. Yeah. So, obviously, we have multiple lines of business. And when you think about a spread you know, you really have to take that kind of business line by business line where we have somewhere it might be closer to 25 over. You know? But then we have other businesses where, you know, the index might be prime or it might be something other than SOFR. But when you equivalize that to a spread over SOFR, it could be over 400 basis points you know, over, you know, a common index. For the quarter, we had mentioned earlier you know, that our third quarter loan originations were at $6.83. You know? And our cost of deposits was $2.50. Know, I will tell you that our spot balance on deposits, which as a CFO, I do not place as much emphasis on as the average balance, but our spot balance at September 30 was $2.47. You know? So you can just take that marginal you know, asset production, you know, over our spot balance on deposits and you get over 400 basis points, you know, of, you know, on the margin expansion. You know, as far as, you know, whether that $3.25 is a floor, you know, I. What we. We are not giving specific guidance for the fourth quarter, you know, but just wanted to give you a sense of where we ended the third quarter, and you can build your own model you know, and kinda project out from there. Manuel Navas: Appreciate that. The 15 new team member hiring, is there any staff on that? Maybe you gave it earlier, but, like, do you have a thought on their prior book of business? Maybe where they are coming from broadly in terms of what type of bank they are coming from, and you did. You described on the slide what segments they are in, but which is, like, the most focused of those segments? Anything you could add on the new hires. Samvir S. Sidhu: You know, sure. I think I think that it is really broad across a number of sectors, you know, 50 plus team members. This is just like the new team members. You know, we have also hired about 60 revenue producers in total. You know, this year, across 12 teams. So there is also sort of density that we are sort of increasing in existing teams. So there is no real direct answer. What I would say is that we are hired more this year than we did last year, which I think is sort of a good indicator of where we are in our overall you know, growth cycle. I would also talked about the teams that we have hired this year. Last quarter that there was a 9 figure pipeline on both loans and deposits, which is which is great. We are pleased by that. it is the benefit of getting, you know, folks joining the bank in, you know, as early as April of this year. But what I would leave you with is we are having a flurry of conversations now for 2027 hiring. Which is the strongest hiring pipelines that we have had and counted. I think it is a testament to our own success. it is the flywheel we talk about that we have in the appendix. And, you know, our own success, our customer success, our new team member success, their alumni networks, allow us to kind of continue, you know, to hire and support the organic growth business model we have. Manuel Navas: I appreciate that. Is that kind of bigger hiring pipeline? Is that come from any 1 spot? Obviously, the referral network is working well. Is what do you think there is any other drivers there in the industry beyond your own success? Samvir S. Sidhu: Yeah. No. Same answer as before. there is there is nothing, nothing specific that I would I would point to. I think we give a pretty good snapshot of areas that are you know, new to the bank or accretive, you know, to sort of where we are, as you think about fee income. But these are predominantly sort of deposit led and revenue generating hires. Manuel Navas: And then just 1 last question broadly. Do you have can you give some thoughts for next year in terms of growth momentum, margin? You cannot get fourth quarter, it sounds like. Or OpEx trajectory? Anything thoughts on 2028 targets broadly? Mark R. McCollom: We are gonna be talking about Oh, you said 2028 targets. Definitely not. Great. Great. I am sorry. But, 2027, you know, we will be giving you all of our thoughts on guidance, you know, obviously, on the January call. Manuel Navas: Understood. Thank you very much. Thank you for the commentary. Operator: We have reached the end of the Q&A session. I will now turn the call back to Samvir S. Sidhu, CEO, for closing remarks. Samvir S. Sidhu: Thanks, Ellen. Thank you everyone for your continued investment and support of Customers Bancorp. Have a great day and a great weekend. Operator: This does conclude today's call. Thank you for attending. You may now disconnect. Before you buy stock in Customers Bancorp, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Customers Bancorp wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $361,596!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,303,935!* Now, it's worth noting Stock Advisor's total average return is 910% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of October 23, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Customers Bancorp (CUBI) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. - EPS: $2.25, up ~10% quarter-over-quarter. - Net Interest Income (NII): Exceeded $208 million, up $15 million or 8% from Q2. - Net Interest Margin (NIM): Expanded 2 basis points to 3.19%; September run rate ~3.25%. - ROE: 14%, up more than 70 basis points quarter-over-quarter. - ROA: 1.16%. - Total Deposits: Record $22.6 billion, up 4% in the quarter and 11% year-over-year. - Noninterest-Bearing Deposits: Grew $300 million to a record $7.2 billion (32% of total deposits), up 13% year-over-year. - Broker Deposits: Down ~$370 million in the quarter; now less than 20% of deposits. - Total Loans: Record $18.5 billion, up 3% in the quarter and 14% year-over-year. - Non-Interest Expense: $113.4 million, down $1.5 million from Q2; 1.68% of average assets. - Efficiency Ratio: Improved ~340 basis points from Q2. - Tangible Book Value per Share: $65.66, up 10% year-over-year (13% excluding AOCI impact). - CET1 Ratio: Estimated 12.6%; TCE to tangible assets 8%. - Share Buybacks: Nearly 500,000 shares (~1.5% of common stock) repurchased in the quarter. - Credit Quality: NPAs down 8% quarter-over-quarter; NPAs at 29 basis points of total assets; net charge-offs improved to 28 basis points from 34 basis points (commercial charge-offs 13 basis points). - cubiX Accounts: Grew 19% in Q3; real estate and mortgage finance now over 30% of cubiX deposit balances. - Recruited Teams' Deposits: ~$4.3 billion (19% of total deposit base); added ~$415 million in Q3 and over $1 billion year-to-date. - Revenue Producers: 15 hired in Q3; 50 year-to-date across 12 teams, up 50% from last year. - Productivity: Revenue per employee up 13%; pre-tax profit per employee up 34% annualized versus last year. - 2026 Guidance: Loan growth 12% or higher; deposit growth 9% or more; NII $805 million$810 million; non-interest expense $460 million$465 million; income tax rate 22%23%. - Warning! GuruFocus has detected 7 Warning Signs with CUBI. - Is CUBI fairly valued? Test your thesis with our free DCF calculator. Release Date: October 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Record deposits of $22.6 billion, up 4% in the quarter and 11% year-over-year, with noninterest-bearing deposits reaching a record $7.2 billion (32% of total deposits). - Record total loans of $18.5 billion, up 3% in the quarter and 14% year-over-year, driven by diversified business units. - Net interest income increased 8% quarter-over-quarter to over $208 million, with net interest margin expanding 2 basis points to 3.19% and expected further expansion. - EPS of $2.25, up 10% quarter-over-quarter, ROE of 14%, and efficiency ratio improved by approximately 340 basis points. - Strong credit quality with NPAs at 29 basis points of total assets and net charge-offs improving to 28 basis points. - Noninterest expense is expected to step up in the fourth quarter due to incentive compensation and technology investments, impacting near-term profitability. - Net interest margin expansion was partially offset by timing mismatch between deposit growth and loan funding, limiting quarterly NIM growth to 2 basis points. - Commercial real estate sector shows tepid demand, which could restrain growth in that loan category. - Potential stress from rate resets on certain borrowers may lead to restructurings and impact credit quality going forward. - Competition in digital asset deposits and 24/7 settlement could pressure noninterest-bearing deposit balances or require paying interest in the future. Q: Can you discuss commercial borrower demand and the sustainability of loan growth given recent rate moves? A: CEO Sam Sidhu said loan demand remains strong across the franchise and industry, with good visibility over the next 30 to 90 days, though commercial real estate is somewhat more tepid. CFO Mark McCollom added that most loan growth occurred late in the quarter (September), which sets up well for fourth quarter average loan balances. Q: Where do you expect fourth quarter NIM to land, and what are the puts and takes? A: CFO Mark McCollom declined specific margin guidance but noted the tightened NII range can be used to impute it. He highlighted that new loan volume yields came in at about 6.83% in Q3, roughly 50 basis points above the overall loan yield of 6.33%, supporting further NIM expansion. Q: What is the extent of the Palantir partnership is it just account onboarding, or could it eventually replace the bank's core? A: CEO Sam Sidhu said the bank values partnering with leading-edge technology firms. Palantir brings forward-deployed engineer expertise and data-layer capabilities that help with complex commercial deposit account opening alongside in-house engineers. He emphasized the focus is on improving employee and customer experience, not reinventing the core. Q: Can you provide color on deposit costs from the commercial banking teams and cubiX, and how deposit betas may play out in a rising rate environment? A: CFO Mark McCollom said the deposit beta has been about 33% in the first 30 days since the September rate hike, versus roughly 60% in the prior upcycle, reflecting deposit transformation progress. Costs from recruited teams remain in the low 2s range, consistent with prior quarters. Q: Given AI investments in deposit onboarding, could the 12-to-18-month ramp for commercial banking teams accelerate? A: CEO Sam Sidhu said the rebuilt commercial deposit onboarding process opening complex accounts in minutes versus days, with parallel background checks and multi-signer support should be industry-leading and support deposit growth. Eliminating manual back-office processes could help accelerate account growth; the bank has already matched all of 2025's commercial account growth year-to-date. Q: Are larger cubiX digital asset clients moving balances to competing 24/7 rails, and is there risk you'll have to pay interest on those deposits? A: CEO Sam Sidhu said there is no material change in customer activity from perceived competition, citing the large network effect and barrier to entry of the 24/7 network built over years. He described the value as a best-in-class intra-bank network with a broad, diverse, and non-interest-bearing client base. Q: Does the lifted consent order change your plans for digital asset balances or lending against those deposits, and where were digital asset deposits this quarter? A: CEO Sam Sidhu said the Pennsylvania Department of Banking and Securities lifting its order is an important milestone, but regulatory agreements, including with the Federal Reserve, are essentially the same and day-to-day operations are unchanged. He said risk management is becoming a real strength. Digital asset deposits were about $3.1 billion. Q: Are cubiX deposits fully non-interest-bearing, or are there earnings credit rates or waived fees flowing through expenses? A: CEO Sam Sidhu clarified that cubiX deposits are predominantly non-interest-bearing, with roughly 70% of title deposits non-interest-bearing and only tens of millions carrying minor associated expense approximately 99% truly non-interest-bearing. Q: With agentic AI tools like Muse emerging, how do you view potential deposit volatility, and is the Palantir partnership a defensive play? A: CEO Sam Sidhu noted Muse is a consumer app and the bank has limited exposure to sleepy consumer deposits, as clients are primarily sophisticated corporate treasury teams. The bank piloted an automated savings sweep for consumers and may expand it, but the goal is to use such tools to build primary relationships rather than as a high-cost deposit-gathering mechanism. Q: Are you seeing any incremental credit concerns given higher-for-longer rates, including rate resets next year? A: CFO Mark McCollom said credit performance was strong and the portfolio is closely monitored. Rate resets into next year benefit net interest income but could stress some borrowers' ability to pay, potentially leading to restructurings; overall conditions remain steady. Q: What is driving the fourth quarter expense step-up, and any year-end housekeeping items to note? A: CFO Mark McCollom attributed the Q4 step-up to a combination of factors: some Q3 items running below normal that will revert, additional incentive compensation given a strong year, and continued technology investment that stepped up in Q3 and continues into Q4. Q: How does the Palantir work differ from the OpenAI partnership, and what are the next priorities? A: CEO Sam Sidhu said Palantir is working on deposit onboarding, leveraging its data ontology expertise alongside in-house engineers. OpenAI remains heavily involved in the three top-down domains lending, deposits, and payments which are now running concurrently in high gear, building a major transformation project in Q4 that carries momentum into 2027. Q: What are you seeing on new loan yields and marginal deposit costs, and is the September NIM of 3.25% a floor for Q4? A: CFO Mark McCollom said spreads vary by business line, from about 2.25% to over 400 basis points over common indices. Q3 originations yielded 6.83% against a 2.50% cost of deposits, and the September 30 spot deposit cost was 2.47%, implying over 400 basis points of marginal expansion. He declined to call 3.25% a floor but noted it as the Q3 exit point. Q: Can you share details on the 15 new revenue producers hired in Q3 prior books of business and segment focus? A: CEO Sam Sidhu said hiring is broad across sectors, with about 60 revenue producers hired year-to-date across 12 teams, plus added density in existing teams. He noted a nine-figure pipeline in For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Customers Bancorp (CUBI) reported $239.44 million in revenue for the quarter ended September 2026, representing a year-over-year increase of 3.2%. EPS of $2.27 for the same period compares to $2.20 a year ago. The reported revenue represents a surprise of +1.29% over the Zacks Consensus Estimate of $236.4 million. With the consensus EPS estimate being $2.15, the EPS surprise was +5.58%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Customers Bancorp performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Efficiency Ratio: 47.2% compared to the 49% average estimate based on seven analysts. - Average Balance - Total interest-earning assets: $25.92 billion compared to the $25.38 billion average estimate based on six analysts. - Annualized net charge-offs to average loans and leases: 0.3% versus the six-analyst average estimate of 0.4%. - Net Interest Margin: 3.2% versus the six-analyst average estimate of 3.2%. - Nonaccrual / non-performing loans: $53.44 million versus the two-analyst average estimate of $56.02 million. - Tier 1 capital to average assets (leverage ratio): 9.1% versus the two-analyst average estimate of 9.1%. - Non-Performing Assets: $79.03 million versus $85.66 million estimated by two analysts on average. - Total Non-Interest Income: $31.37 million versus $32.73 million estimated by seven analysts on average. - Net Interest Income: $208.08 million compared to the $203.94 million average estimate based on six analysts. - Commercial lease income: $15.96 million versus the five-analyst average estimate of $15.55 million. - Loan fees: $6.25 million versus the five-analyst average estimate of $8.55 million. - Net interest income tax equivalent: $208.75 million compared to the $204.41 million average estimate based on four analysts. View all Key Company Metrics for Customers Bancorp here>>> Shares of Customers Bancorp have returned -0.5% over the past month versus the Zacks S&P 500 composite's no change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Customers Bancorp, Inc (CUBI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Customers Bancorp (CUBI) came out with quarterly earnings of $2.27 per share, beating the Zacks Consensus Estimate of $2.15 per share. This compares to earnings of $2.2 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.58%. A quarter ago, it was expected that this bank holding company would post earnings of $2 per share when it actually produced earnings of $2.05, delivering a surprise of +2.5%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Customers Bancorp, which belongs to the Zacks Banks - Southeast industry, posted revenues of $239.44 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 1.29%. This compares to year-ago revenues of $232.1 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Customers Bancorp shares have added about 4.4% since the beginning of the year versus the S&P 500's gain of 13.3%. While Customers Bancorp has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Customers Bancorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.27 on $244.38 million in revenues for the coming quarter and $8.43 on $933.78 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Southeast is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Origin Bancorp (OBK), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 28. This bank holding company is expected to post quarterly earnings of $1.06 per share in its upcoming report, which represents a year-over-year change of +292.6%. The consensus EPS estimate for the quarter has been revised 2.4% higher over the last 30 days to the current level. Origin Bancorp's revenues are expected to be $111.34 million, up 1.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Customers Bancorp, Inc (CUBI) : Free Stock Analysis Report Origin Bancorp, Inc. (OBK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research