WEST READING, PA — Customers Bancorp Inc. (NYSE: CUBI) reported second-quarter net income available to common shareholders of $71.6 million, or $2.05 per diluted share, as loan and deposit balances reached records and the bank expanded its use of artificial intelligence across lending, sales and compliance operations.
Return on average assets was 1.13%, while return on common equity was 13.22%. Core earnings were $71.5 million, also equal to $2.05 per diluted share.
Total loans increased 3.6% from the first quarter and 16.9% from a year earlier to $18 billion. Deposits rose 0.6% sequentially and 14.5% year over year to $21.7 billion.
Noninterest-bearing deposits increased by $174.1 million during the quarter to $6.9 billion, representing 31.8% of total deposits. The company reported approximately $375 million of noninterest-bearing deposit growth outside its digital-asset client channel.
Chief Executive Officer Sam Sidhu attributed the balance-sheet expansion to growth across multiple commercial banking businesses without loosening credit standards.
“Total loans and leases grew by 3.6% in Q2 2026 compared to Q1 2026, with contributions from multiple verticals allowing us to deliver above industry average growth rates without sacrificing on structure or credit quality,” Sidhu stated.
Commercial and industrial specialized lending increased by $253 million during the quarter to $7.7 billion. Non-owner-occupied commercial real estate loans rose by $145 million to $1.9 billion, while multifamily loans increased by $113 million to $2.6 billion.
Customers Bancorp also reported progress from artificial intelligence projects intended to shorten loan processing, improve prospecting and automate portions of regulatory screening.
A pilot program completed selected commercial loan closings in seven days, compared with a typical period of 30 to 60 days, according to the company. Customers Bancorp also reported that some business units more than doubled prospecting success rates using AI-assisted opportunity identification.
The bank piloted AI tools for know-your-customer screening and clearing false-positive alerts generated through Office of Foreign Assets Control compliance checks. The company did not provide independent performance data or disclose the number of transactions included in those pilots.
Its cubiX payments network surpassed $5 trillion in cumulative transaction volume during the quarter. The real estate payments business added $300 million in deposits and had what management described as a nine-figure quarterly pipeline through year-end.
Net interest income increased by $2 million from the first quarter and $16.7 million from a year earlier to $193.4 million. The year-over-year increase primarily reflected higher income from specialized commercial and industrial lending.
Chief Financial Officer Mark McCollom indicated that the second quarter is expected to mark the low point for the company’s net interest margin, with a recovery toward first-quarter levels projected in the third quarter and further expansion anticipated in the fourth.
Total deposit costs increased four basis points from the first quarter to 2.50%, but declined 35 basis points from a year earlier.
Borrowings rose by $428 million during the quarter to $2.3 billion, primarily because of $500 million in net advances from the Federal Home Loan Bank. Borrowings were up $853 million from a year earlier.
The company estimated uninsured deposits at $7.6 billion, or 35% of total deposits, and reported immediately available liquidity equal to approximately 146% of that amount.
Credit indicators were mixed. Nonperforming loans increased to 0.31% of total loans and leases from 0.27% in the first quarter and 0.18% a year earlier.
Nonperforming loans totaled $56 million, including approximately $12 million covered by government guarantees. Excluding the guaranteed portion, nonperforming loans represented 0.24% of total loans and leases.
The provision for credit losses was $23 million, unchanged from the first quarter and up from $21 million a year earlier. Net charge-offs increased to $15 million from $13 million in both comparison periods.
The allowance for credit losses rose to $164 million from $161 million in the first quarter and $147 million a year earlier. The company reported reserves equal to 293% of total nonperforming loans.
Noninterest expenses increased by $2.9 million from the first quarter and $8.3 million from a year earlier to $114.9 million. The increases reflected higher compensation, staffing, software, processing and business-development costs, partially offset by lower regulatory assessments and professional fees.
The efficiency ratio improved to 50.55% from 51.23% a year earlier. Customers Bancorp reported that it had achieved $30 million in annualized revenue enhancements and expense savings under its operational improvement program.
The company repurchased 92,804 shares during the quarter at an average price of $73.03. Tangible book value per share increased to $65.20 from $63.54 in the first quarter and $56.24 a year earlier.
Customers Bancorp reaffirmed its full-year 2026 guidance across all metrics. Management plans broader deployment of its seven-day commercial loan closing tool, faster onboarding of complex deposit accounts and additional business lines within its payments operation.
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