Customers Bancorp added $478.2 million of loans and leases receivable in the three months ended March 31. Cash and cash equivalents rose another $386.7 million, too. The bank was getting bigger in its lending and cash balances.
The punchline was less tidy: net income fell 8% to $69.7 million from $75.7 million in the comparable period. Diluted earnings per share fell 10.5%, from $2.20 to $1.97, with diluted shares up 5.5% to 35.3 million. More balance sheet, fewer earnings per share. Banks do enjoy making simple arithmetic feel bespoke.
The latest 10-Q gives context for the loan balances and some of the earnings machinery. Net interest income increased $23.9 million, helped by higher average loan balances and lower interest expense on deposits. The company also said net charge-offs decreased, primarily because of lower losses in commercial and industrial, multifamily, and consumer installment loans.
Management’s explanation for the bank’s larger asset base starts with those loans, but cash was a major part of the move as well:
"The increase in total assets was primarily driven by increases of $478.2 million in loans and leases receivable, $386.7 million in cash and cash equivalents, $145.7 million in loans receivable, mortgage finance, at fair value and $55.5 million in investment securities, at fair value, partially offset by a decrease of $65.6 million in investment securities held to maturity."
Customers Bancorp, 10-Q, May 8, 2026
That is a balance-sheet expansion that included a large increase in cash. Cash rose from $4.2 billion to $4.8 billion across the comparable figures, but the company cautioned that daily cash balances move with customer deposit activity. Cash is useful, but it is not the same thing as net income.
Deposits also increased. During the three months, non-interest-bearing demand deposits increased $436.0 million, savings and money-market deposits rose $217.8 million, and time deposits grew $124.3 million. Customers Bancorp described the deposit increase this way:
"The increase in total deposits was primarily due to increases in non-interest bearing demand deposits of $436.0 million, or 6.9%, to $6.7 billion at March 31, 2026 from $6.3 billion at December 31, 2025, savings, including MMDA of $217.8 million, or 3.6%, to $6.3 billion at March 31, 2026, from $6.1 billion at December 31, 2025, time deposits of $124.3 million, or 3.8%, to $3.4 billion at March 31, 2026, from $3.3 billion at December 31, 2025 and interest bearing demand deposits of $35.9 million, or 0.7%, to $5.1 billion at March 31, 2026, from $5.0 billion at December 31, 2025."
Customers Bancorp, 10-Q, May 8, 2026
The deposit mix also helped: management said the cost of interest-bearing liabilities fell 48 basis points versus the comparable period, supporting a higher net interest margin. That makes the lower net income harder to reduce to a single operating explanation. The disclosed receipts show lending activity and lower charge-offs, but they do not account for every dollar between the higher interest income and the lower bottom line.
Dilution is part of the visible arithmetic. Shares rose from 33.5 million to 35.3 million, while stock compensation increased 43.2% to $5.7 million from $4.0 million. The filing does not say that stock compensation caused the earnings decline, and it would be too neat to pretend otherwise. It does show why the per-share result deteriorated faster than net income.
At the latest close, CUBI was $82.06, down 0.9% for the day. The next quarterly report's comparison of loan balances, deposit costs, and diluted shares will clarify whether this period's central combination is repeating: stronger funding and lending activity alongside thinner per-share earnings.
More loans, cheaper deposits, fewer dollars of net income: a very bank-shaped trade-off.