Last Update 09 Dec 25

Fair value Increased 0.69%

CUBI: Ongoing Loan Expansion Will Drive Future Share Price Outperformance

Analysts have nudged their price target for Customers Bancorp modestly higher, lifting fair value by about $1 to roughly $85 per share as they factor in slightly faster revenue growth, resilient margins, and continued momentum in loan expansion and digital initiatives despite some recalibration of favored stock lists.

Analyst Commentary

Recent Street research reflects a generally constructive stance on Customers Bancorp, with some selective pruning from favored stock lists tempering the otherwise positive narrative. The mix of views centers on the durability of the bank's growth engine, the execution of its digital strategy, and how these factors translate into upside relative to current valuation.

Bullish Takeaways

Bullish analysts highlight that the bank's growth engine is operating at a high level, pointing to accelerating momentum from new banking team hires that should support sustained loan and deposit expansion.
The successful rollout and scaling of digital initiatives such as cubiX are viewed as key differentiators, potentially driving operating leverage and supporting higher long term earnings power.
Upward revisions to price targets, including moves into the mid 90s per share, are cited as signals of confidence that the current valuation still underappreciates the combination of balance sheet growth and improving returns.
Evidence of broad based loan growth, even in a more selective credit environment, reinforces the view that management is executing well on growth priorities without materially stretching the risk profile.

Bearish Takeaways

Bearish analysts point to the stock's removal from select current favorites lists as a sign that, while the story remains positive, near term upside may be more limited relative to other opportunities.
There is some caution that the recent run in the share price has already priced in a significant portion of the anticipated growth, which may leave less room for multiple expansion if execution merely meets expectations.
Dependence on continued strong hiring and rapid scaling of newer digital platforms introduces execution risk, which could weigh on valuation if integration or performance falls short.
As the bank leans further into loan growth, skeptics remain watchful for any deterioration in credit quality metrics that could challenge the current premium implied by higher price targets.

What's in the News

Announced full redemption of all 3,400,000 shares of higher cost Fixed to Floating Rate Non Cumulative Perpetual Preferred Stock, Series F, totaling $85 million, to streamline the capital structure and improve long term profitability (Key Developments)
Set December 15, 2025 as the redemption date for Series F preferred shares at $25 per share. Holders of record on November 30, 2025 will receive the final quarterly dividend of $0.5726314 per share separately (Key Developments)
Highlighted strong capital and liquidity positions. Management emphasized the preferred redemption as the next step, following a successful deposit franchise transformation, in enhancing shareholder value (Key Developments)
Added to the S&P Banks Select Industry Index, increasing the company’s visibility with institutional investors and potential passive fund ownership (Key Developments)

Valuation Changes

Fair Value: Risen slightly from about $84.75 to roughly $85.33 per share, reflecting modestly higher long term earnings expectations.
Discount Rate: Edged down marginally from approximately 7.27 percent to about 7.24 percent, implying a slightly lower perceived risk profile.
Revenue Growth: Increased slightly from roughly 13.74 percent to about 13.82 percent, indicating a small upgrade to forward topline assumptions.
Net Profit Margin: Ticked down very slightly from around 39.15 percent to about 39.07 percent, suggesting a largely stable but marginally softer profitability outlook.
Future P/E: Moved up modestly from about 11.42 times to roughly 11.49 times, pointing to a small increase in the valuation multiple applied to expected earnings.

Differentiation through proprietary digital banking technology and targeted talent recruitment is fueling deposit, loan, and fee income growth while enhancing revenue quality and margins.
Focus on underserved verticals, operational efficiency, and regulatory leadership is diversifying revenue streams and positioning the bank for sustainable, industry-leading earnings growth.
Heavy exposure to digital assets and limited diversification raise regulatory, earnings, and competition risks that threaten profitability, revenue growth, and long-term financial stability.

Catalysts

About Customers Bancorp

Operates as the bank holding company for Customers Bank that provides banking products and services.What are the underlying business or industry changes driving this perspective?

The rapid digitization of commercial banking and payments is driving institutional clients to seek tech-focused, 24/7 banking solutions-a shift that Customers Bancorp capitalizes on through its proprietary cubiX platform. With payments volume of $1.5 trillion in 2024 and accelerating growth, ongoing regulatory clarity around digital assets and stablecoins positions Customers as the leading provider, supporting significant potential for deposit and fee income growth.
The growing preference among younger and entrepreneurial clients for digital-first, relationship-based commercial banking creates long-term opportunities for Customers Bancorp to grow its granular deposit base and loan book through targeted recruitment of high-performing banking teams with established client relationships. This strategy is already delivering above-average, high-quality deposit growth and is set to enhance revenue and further improve net interest margins.
Expansion into high-growth verticals underserved by traditional banks-such as digital asset companies, fintechs, and healthcare finance-positions Customers Bancorp to benefit from accelerated loan growth, new customer acquisition, and diversification of revenue streams, driving double-digit loan and tangible book value growth.
Sustained investment in technology, automation, and operational efficiency (supported by AI and digitized processes) is reducing the bank's cost structure, as evidenced by top-quartile efficiency ratios and sequential improvement despite ongoing reinvestments; this is expected to continue boosting net margins and earnings.
Recent regulatory progress (GENIUS Act, stablecoin legislation) and the bank's strong compliance infrastructure are making Customers Bancorp a partner of choice for institutional clients entering digital finance, building a competitive moat and setting the stage for increased fee-based revenues, stable deposit inflows, and industry-leading earnings growth over the medium to long-term.

Customers Bancorp Earnings and Revenue Growth

Customers Bancorp Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Customers Bancorp's revenue will grow by 17.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 22.1% today to 43.5% in 3 years time.
Analysts expect earnings to reach $424.9 million (and earnings per share of $12.41) by about September 2028, up from $131.6 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 7.6x on those 2028 earnings, down from 17.3x today. This future PE is lower than the current PE for the US Banks industry at 11.9x.
Analysts expect the number of shares outstanding to grow by 0.87% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.19%, as per the Simply Wall St company report.

Customers Bancorp Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Concentration risk in digital asset and stablecoin-related deposits, with cubiX deposits now exceeding previous self-imposed caps and constituting a significant share (16–17%) of total deposits, exposes Customers Bancorp to potential earnings volatility, regulatory changes, and rapid outflows if digital asset markets dislocate-negatively impacting net interest margin, liquidity, and future earnings.
Growing reliance on fee and interest income from cubiX and digital asset platforms may be threatened by intensified competition from larger banks (e.g., JPMorgan, PNC), which could lower pricing power and compress margins, risking future revenue growth and sustainable profitability.
Heavy investment in team recruitment, technology, and compliance, while driving operating leverage targets, introduces ongoing expense burdens; should revenue growth slow or network effects plateau, the bank's efficiency ratio advantage may erode, pressuring net margins and long-term earnings growth.
Regulatory uncertainty and increased federal scrutiny of stablecoin infrastructure, payment rails, and BSA/AML standards pose heightened compliance risk for Customers Bancorp, potentially resulting in rising regulatory costs and limiting ability to scale digital asset activities-thus affecting net margin and fee income.
Limited geographic diversification and significant exposure to select high-growth verticals (e.g., digital assets, New York/Northeast CRE), while fueling near-term growth, increases vulnerability to sector-specific downturns or regulatory shocks, which could cause elevated credit losses, weakening overall revenue and tangible book value trajectory.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $77.286 for Customers Bancorp based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $90.0, and the most bearish reporting a price target of just $62.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $977.5 million, earnings will come to $424.9 million, and it would be trading on a PE ratio of 7.6x, assuming you use a discount rate of 7.2%.
Given the current share price of $67.38, the analyst price target of $77.29 is 12.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Recent Removal From Favorites Will Shape Future Digital Finance Leadership