Customers Bancorp Flags Second-Quarter NIM Trough

The Tip Desk · July 24, 2026 · 3 min read

Net interest margin, tax equivalent, fell to 3.17% as the company said the quarter is expected to mark the low before a rebound to roughly first-quarter levels in the third quarter.

Customers Bancorp, Inc. (CUBI), a technology-enabled commercial bank with about $27 billion in assets, said the second quarter of 2026 is expected to be the trough in its net interest margin, with a rebound to roughly first-quarter 2026 levels in the third quarter and additional expansion in the fourth.

Tax-equivalent net interest margin compressed 5 bps to 3.17% in the second quarter from 3.22% in the first quarter, after an 18 bps compression from 3.40% in the fourth quarter of 2025. Chief Financial Officer Mark McCollom said the trajectory is driven by expected continued low-cost deposit gathering and robust loan growth.

Net interest income totaled $193.4 million, up $2.0 million from the first quarter and $16.7 million, or 9%, from the second quarter of 2025. The year-over-year increase was primarily due to higher interest income, mainly from C&I specialized lending, partially offset by higher interest expense from a shift in deposit mix and net draws of FHLB advances.

Total loans and leases reached a record $18.0 billion at June 30, 2026, up $623.8 million, or 3.6%, from the first quarter and $2.6 billion, or 16.9%, from a year earlier. C&I specialized lending rose $253 million, or 3.4%, to $7.7 billion. Non-owner occupied commercial real estate loans increased $145 million, or 8.3%, to $1.9 billion, and multifamily loans rose $113 million, or 4.5%, to $2.6 billion. Mortgage finance loans fell $101 million, or 5.5%, to $1.7 billion.

Deposit growth slowed. Total deposits increased $140.3 million, or 0.6%, to a record $21.7 billion, after an $813.9 million, or 3.9%, increase in the first quarter. Non-interest-bearing deposits rose $174.1 million to $6.9 billion, or 31.8% of total deposits. The average cost of deposits rose 4 bps to 2.50% from 2.46% in the prior quarter.

Total borrowings increased $428 million, or 22.5%, to $2.3 billion at June 30, 2026, primarily from $500 million of net FHLB advance draws, partially offset by repayment of $70 million in federal funds purchased.

Net income available to common shareholders was $71.6 million, or $2.05 a share. Core earnings were $71.5 million, or $2.05 a share. Return on average assets was 1.13%, and return on average common equity was 13.22%.

Non-interest income totaled $34.0 million, down $0.3 million from $34.3 million in the first quarter, mainly due to $1.8 million lower loan fees, including lower gains on stock warrants, and $0.9 million lower bank-owned life insurance, partly offset by $2.6 million higher other non-interest income.

Non-interest expenses were $114.9 million, up $2.9 million from the first quarter, including $4.7 million higher salaries and employee benefits, $1.0 million of severance, and $1.2 million higher technology, communication, and bank operations, partly offset by $3.6 million lower FDIC assessments, non-income taxes, and regulatory fees. The efficiency ratio was 50.55%.

The provision for credit losses was $23 million, unchanged from the first quarter. Net charge-offs were $15 million, or 0.34% annualized. Non-performing loans rose to 0.31% of total loans and leases from 0.27% at March 31, 2026, with NPLs of $56 million, including about $12 million of government-guaranteed SBA loans. Reserves to NPLs were 293%.

The company repurchased 92,804 shares at a weighted average price of $73.03 in the second quarter, versus 621,668 shares at $68.04 in the first quarter. Common equity Tier 1 capital at the bank was 13.5% at June 30, 2026, and tangible common equity to tangible assets was 8.3%. Book value per common share was $65.31.

Customers Bancorp is reaffirming its full-year 2026 guidance across all metrics.