Customers Bancorp Q2 2025 Earnings Report

Customers Bancorp EPS Results

• Actual EPS: $1.80
• Consensus EPS: $1.50
• Beat/Miss: Beat by +$0.30
• One Year Ago EPS: $1.49

Customers Bancorp Revenue Results

• Actual Revenue: $206.31 million
• Expected Revenue: $170.81 million
• Beat/Miss: Beat by +$35.50 million
• YoY Revenue Growth: +3.80%

Customers Bancorp Announcement Details

• Quarter: Q2 2025
• Date: 7/24/2025
• Time: After Market Closes
• Conference Call Date: Friday, July 25, 2025
• Conference Call Time: 9:00AM ET

Customers Bancorp (NYSE:CUBI). operates as the bank holding company for Customers Bank that provides financial products and services to individual consumers, and small and middle market businesses. The company provides deposit banking products, which includes commercial and consumer checking, non-interest-bearing and interest-bearing demand, MMDA, savings, and time deposit accounts. Its lending business offers commercial and industrial, commercial real estate, and multifamily and residential mortgage loans; SBA lending and financing; specialty lending includes fund finance, real estate specialty finance, technology and venture, and healthcare and financial institutions group; commercial loans to mortgage companies, and commercial equipment financing; and fund finance, such as variable rate loans secured by collateral pools to private debt funds; and cash management services. In addition, the company provides digital banking including Banking-as-a-Service to fintech companies, payments and treasury services to businesses, and consumer loans through fintech companies and the TassatPay, a blockchain-based instant B2B payments platform which offers instant payments including over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals. Further, it offers mobile phone and internet banking, wire transfers, electronic bill payment, lock box, remote deposit capture, courier, merchant processing, cash vault, controlled disbursements, positive pay, and cash management services, such as account reconciliation, collections, and sweep accounts. The company was incorporated in 2010 and is headquartered in West Reading, Pennsylvania.

Customers Bancorp Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong Q2 results with core EPS of $1.80 beating consensus, net interest margin up 14 bps, and efficiency ratio improving to 51.6%.
• Positive Sentiment: $300 million in new commercial banking deposits and 8% annualized loan growth amid a $350 million reduction in brokered funding, enhancing deposit quality.
• Positive Sentiment: Cubix payments platform processed $1.5 trillion in 2024 (third behind Amex/Visa), and is set to benefit from stablecoin legislation and network growth.
• Positive Sentiment: Raised full-year guidance to 8–11% loan growth (from 7–10%) and 7–10% NII growth (from 3–7%), with a bias toward the low end of the efficiency ratio range.
• Neutral Sentiment: Leadership transition announced: Jay Sidhu to become Executive Chairman in 2026, Sam Sidhu named CEO, and Mark McCollum joining as CFO.

Presentation

[Operator]

Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Hello and thank you for standing by.

[Operator]

My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Customers Bancorp Inc. Second Quarter twenty twenty five Earnings Webcast and Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

I would now like to turn the conference over to David Patti with Customers Bank. Please go ahead.

[David Patti, Special Assistant - Executive Chair at Customers Bank]

Thank you, Regina, and good morning, everyone. Thank you for joining us for the Customer Bancorp earnings webcast for q two of twenty twenty five. The presentation deck you will see during today's webcast has been posted on the investors webpage of the bank's website at customersbank.com. You can scroll to q two twenty five results and click download presentation. You can also download a PDF of the full press release at this spot.

[David Patti, Special Assistant - Executive Chair at Customers Bank]

Our investor presentation includes important details that we will walk through on this morning's webcast. I encourage you to download and use the document. Before we begin, we would like to remind you that some of the statements we make today may be considered forward looking. These forward looking statements are subject to a number of risks and uncertainties that may cause actual performance results to differ materially from what is currently anticipated. Please note that these forward looking statements speak only as of the date of this presentation, and we undertake no obligation to update these forward looking statements in light of new information or future events except to the extent required by applicable securities laws.

[David Patti, Special Assistant - Executive Chair at Customers Bank]

Please refer to our SEC filings, including our Form 10 k and 10 Q, for a more detailed description of the risk factors that may affect our results. Copies may be obtained from the SEC or by visiting the investor relations section of our website. Now at this time, it's my pleasure to introduce Customers Bancorp chair, Jay Sidhu. Jay?

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

Thank you, Dave, and good morning, ladies and gentlemen. Welcome to Customers Bancorp's second quarter twenty twenty five earnings call. I'm joined this morning by our President and Chief Executive Officer of the bank, Sam Sidhu and Customers Bancorp CFO, Phil Watkins and Customers Bancorp CFO, Mark McCollum. First, I'm thrilled to welcome Mark on the call. Mark and I were partners at Southern Bancorp and I'm thrilled he is now on the customers team.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

And you know Mark joined us in early June and will complete the transition to CFO of Customers Bancorp in the coming weeks. We are very excited about the continued depth of leadership we are building as our franchise grows. I also wish to thank Phil Watkins for his exceptional performance as Chief Financial Officer of Customers Bancorp over the past few quarters. He will continue to be a part of our top team. We are pleased to report another strong quarter reporting results that materially exceed the consensus REIT estimates.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

Before we dive into the results from the quarter, I'd like to take a few minutes to reflect on some of the incredible accomplishments of this organization. As many of you know, we founded Customers Bank in 2019 and then a year later Customers Bancorp, all with an objective of creating a company with a bold idea to build a client centric tech forward high performing business bank that could compete and win in the fast evolving industry. Since then, we've grown from a small troubled $200,000,000 asset bank in 02/2009, which had become a $3,200,000,000 asset bank by 2012 and today is a $22,000,000,000 commercial bank with national reach, high performing and I'm incredibly proud of our team and what we've accomplished together. As you can see from Slide three, over the past fifteen years, we've built a differentiated model anchored in disciplined growth, innovation and exceptional client service. And over the last five years since Sam Sidhu joined the executive team, our transformation has meaningfully continued to accelerate.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

Under his leadership, Customers Bank team has expanded into high growth verticals, launched cutting edge payment platforms like Cubix and delivered industry leading growth in tangible book value, revenue and earnings per share. And as expected, this has resulted in incredible value for our shareholders as our stock price has increased nearly 500% over the last five years. Perhaps most importantly, we've attracted and developed what I believe is the best management team I've had a privilege to work with and I was the CEO of a $90,000,000,000 asset company and served on the board of a multinational top five bank in the world. I am excited this morning to share that effective 01/01/2026, I will be transitioning to the role of Executive Chairman of Customers Bancorp and Sam will assume the role of Chief Executive Officers of Customers Bancorp. Sam is a visionary leader with deep conviction in our strategy and culture and we have every confidence in his ability to take this institution to even higher levels.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

Six years ago, the Board of Directors of Customers Bancorp and Customers Bank embarked on its responsibilities for choosing a successor for our incredible COO at that time Dick East, who had expressed his desire to retire. One of the best decisions in my opinion that Dick and the Board made at that time was to select and convince one of their fellow directors, Sam Sidhu to join the bank as Chief Operating Officer in 2020. A year later upon Dick's retirement, Sam was named the CEO of the bank. And we have been thrilled with Sam's leadership style and we couldn't be more excited to have a thoughtful, strategic and dynamic leader like Sam to be the CEO of Customers Bancorp Inc. And lead us into the future.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

We are all convinced that our best years are ahead of us. I remain the largest individual shareholder of the company. And for the past several years, I've even taken my short term annual bonus completely in customers Bancorp stock. Even our Board receives majority of their compensation in company stock. Our interests are totally aligned with the interests of our long term shareholders.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

Our mission remains unchanged to strive to deliver above average long term value for shareholders and our communities by putting clients first and executing in a superb manner. The Board and I look forward to continuing to work closely and support and guide Sam and our exceptional management team as they take on tomorrow. Please join me in congratulating Sam. And with that, I'll turn the call over to Sam on Slide four.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Good morning, Jay. I want to begin by expressing my deep gratitude to you and our Board of Directors for their trust and confidence in appointing me as CEO of Customers Bancorp. It is truly an honor to step into this role and to build on the incredible foundation that Jay and his team have established since the bank's founding in 02/2009. What makes this moment especially meaningful is this opportunity to lead alongside such an extraordinary team. Across the organization, from our commercial bankers to the team members in our operations, technology, risk, finance, and many other areas, I see a shared drive to innovate, serve with purpose, and never settle for average.

[Sam Sidhu, VC, President & CEO at Customers Bank]

That entrepreneurial winning culture is what defines customers, and it's what gives me tremendous confidence in our future. While we're proud of the progress we've made, as you heard from Jay, and the momentum that we're carrying, we know the opportunity ahead is even larger. We have the right foundation, a clear road map, and an incredibly talented team. And we're gonna stay relentlessly focused on deepening client relationships, executing with discipline, and delivering durable value for all of our stakeholders. We are unwavering in our belief that long term success will be defined in three things, a client first approach, consistent financial performance, and best in class risk and operating framework.

[Sam Sidhu, VC, President & CEO at Customers Bank]

These are the principles that will make us built to last, and they will continue to guide us in everything we do as we move forward. These pillars are reinforced by our culture, one that's been entrepreneurial, client centric, and performance driven. That's why we've been able to consistently attract and retain top talent. The proof is in the results and in the trust that we've earned from our clients, our team, and our shareholders. From a financial perspective, Customers Bank has been the number one financial performer in EPS and in book value growth over the last five years, and that's translated into long term returns for our shareholders.

[Sam Sidhu, VC, President & CEO at Customers Bank]

We have also been, as you heard from Jay, the number one performing US bank stock over a five year period. Moving to slide five. Q two was another very strong quarter across the board. Here's a quick look at the highlights. We had nearly 300,000,000 in deposit growth from our new commercial banking teams in what is typically a slow quarter.

[Sam Sidhu, VC, President & CEO at Customers Bank]

We also delivered annualized loan growth of 8% with diversified contributions across the franchise. Our net interest margin expanded by 14 basis points quarter over quarter. Our efficiency ratio improved again even as we continued to invest, and we continued to grow tangible book value crossing $56 per share. We accomplished all of this while maintaining strong credit quality and liquidity metrics. Advancing to slide six, you'll see our GAAP financials.

[Sam Sidhu, VC, President & CEO at Customers Bank]

And then moving to slide seven, I'll run through the core financials for the quarter. Our beat relative to expectations on both a GAAP and core basis was driven by broad, strong results. We delivered core EPS of $1.8 with core ROE and ROA of thirteen point three and one point one, respectively. This reflects broad based strength across the business. And more importantly, our credit metrics remain strong, which Phil will cover in more detail later.

[Sam Sidhu, VC, President & CEO at Customers Bank]

As you recall, on our third quarter twenty twenty four earnings call, I stated that we could achieve 30% core EPS growth in one year if we executed on our strategic priorities. I'm incredibly proud to say that we've exceeded that with about 35% of core EPS growth from those levels one quarter early. Now let's turn to deposits in the next slide, where we continue to execute on our deposit transformation with a meaningful shift towards franchise enhancing high quality deposits. Total deposits were steady at 19,000,000,000 but it's under the hood but it's what's under the hood that matters. Our new banking teams onboarded since June 2023 contributed nearly $300,000,000 in high quality deposits this quarter.

[Sam Sidhu, VC, President & CEO at Customers Bank]

These teams now manage $2,400,000,000 in relationship based granular funding. That's about 13% of our total deposits in less than two years, which is absolutely phenomenal. And to reinforce the granularity of this growth, commercial account openings remain strong, up 14% this quarter and over 60% since the end of twenty twenty two. The planned reduction in deposits serviced by BMTX had an approximately three basis point impact on total average cost of deposits and approximately a six basis point impact on total interest bearing deposit costs in the quarter. Adjusting for this impact, interest bearing deposit costs would have declined by five basis points in the quarter.

[Sam Sidhu, VC, President & CEO at Customers Bank]

This shows the continued power of our deposit remix efforts. We reduced our broker deposits again by $350,000,000 this quarter and have now reduced these balance by balances by about a billion dollars over the last year. Continuing to reduce these balances remains a top priority for us. Noninterest bearing deposits remain strong at about 29% of total deposits. At the heart of our deposit franchise transformation is one of the power is one of our most powerful advantages, our ability to consistently recruit top tier banking talent and giving them the resources and platform to excel and produce quickly.

[Sam Sidhu, VC, President & CEO at Customers Bank]

When we talk about team recruitment, we're not just talking about adding headcount. We're talking about strategically growing the franchise by onboarding experienced professionals with deep market knowledge, existing client relationships, and a proven track record of performance. I mentioned our commercial banking teams we onboarded over the last couple of years. And while these teams continue to have a lot of runway ahead, we are also focused on teams that will spearhead the next phase of customers' banks' growth. Year to date, we've onboarded three new teams to the bank and continue to recruit high performing deposit focused teams.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Two additional teams will be starting soon this quarter, and we are in advanced negotiation with a few more. Our brand reputation as a high performance tech forward institution with an entrepreneurial culture is attracting more and more top tier bankers, those looking to leave behind bureaucratic legacy institutions for a platform where they can serve clients more effectively. Team recruitment is not a tactic for Customers Bank. It is core to our strategy. It's how we win relationships.

[Sam Sidhu, VC, President & CEO at Customers Bank]

It's how we expand our franchise with purpose, and it's one of the clearest ways we continue to create long term value for our shareholders. Now turning to slide nine. I'd like to illuminate Kubix, our proprietary in house developed payments platform. Kubix is purpose built for our institutional clients who are looking for a tech forward, service oriented, and reliable banking partner. Cubix has become a mission critical payments platform for our commercial clients.

[Sam Sidhu, VC, President & CEO at Customers Bank]

It's delivering value to our customers in three ways, twenty four seven three sixty five instant payment capabilities, continuous product enhancements based on client feedback, and a growing network effect with thousands of unique pairs trading pairs. Kubix is not just a tech platform. It's a relationship deepener and a competitive edge. Today, it is primarily used by the digital asset industry as an on off ramp for institutional players looking to trade and settle on our network via APIs twenty four seven, providing a direct connection to all major exchanges, stablecoin providers, market makers, and institutional investors. To try and help put this in context, just how critical and utilized this network is, in 2024, we processed about 1 and a half trillion dollars in payments volume.

[Sam Sidhu, VC, President & CEO at Customers Bank]

If you ranked us against household name payments networks, this would put us at number three, only behind Amex and Visa commercial. This very much aligns with our philosophy of being a top three to five player in franchise businesses we participate in and being able to achieve industry leading performance. This summer, we have seen the beginning of regulatory clarity institutional safeguards that the industry has long been awaiting. Institutional adoption began significantly increasing with ETF approvals last year. And with stablecoin legislation now coming out of Washington, we, as a leading stablecoin infrastructure and digital asset payments provider, believe we will be the bank that benefits the most from this postgenius landscape.

[Sam Sidhu, VC, President & CEO at Customers Bank]

We are building a resilient, compliance focused, and scalable platform that is aligned with the long term evolution of digital finance, one that positions Customers Bank as a partner of choice for the future of the industry. Cubic's has been a hidden gem in our franchise and, we believe, frankly, has been a misunderstood and therefore mispriced asset. Let's turn to loan growth on slide 10. We delivered roughly $320,000,000 of net held for investment loan growth this quarter, translating to a strong 8% annualized pace. Importantly, the growth was diversified, strategic, and relationship driven.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Here's what's driving that performance. Our corporate and specialized verticals continue to outperform. Mortgage finance was a nice contributor driven by our long standing leadership in the space. Fund finance had a strong quarter, and health care lending is gaining solid momentum. Our equipment finance group continues to deliver consistent growth with strong yield and structure and credit.

[Sam Sidhu, VC, President & CEO at Customers Bank]

And our commercial banking teams, while primarily deposit focused, have been also producing high quality granular loan volume with strong relationship economics. And we're doing all this while maintaining pricing and credit discipline. The depth and breadth of our platform means we're not overly reliant on any one geography, industry, or client segment. That gives us the flexibility to go where where the opportunity lies and where the right credit exists. Looking ahead, our loan pipelines remain strong across multiple verticals.

[Sam Sidhu, VC, President & CEO at Customers Bank]

We believe we're well positioned to acquire high quality clients and relationships often from much larger institutions. With that, I'll turn the call over to Phil on slide 11.

[Philip Watkins, CFO at Customers Bancorp]

Thanks, Sam, and good morning, everyone. I'll start on margin where our disciplined execution continues to deliver meaningful results. In q two, our net interest margin expanded by 14 basis points to three twenty seven, marking the third consecutive quarter of NIM improvement, And our net interest income increased by about 6% to $176,700,000 in the quarter. On the asset side of the balance sheet, we saw positive impacts from an increase in average loan balances of more than $500,000,000 in the quarter. This growth, along with slightly higher loan yields and the impacts from the balance sheet optimization efforts we undertook, collectively drove interest income higher.

[Philip Watkins, CFO at Customers Bancorp]

And on the liability side, our interest expense was well managed. Thanks to our robust deposit and loan pipelines, we're well positioned to continue expanding net interest income. One item to note was that late in the quarter, we bought out a participant at a discount in an existing portfolio of loans that will positively impact interest income and margin through the remainder of 2025. The purchase closed in mid June, so there wasn't a significant benefit in q two, but we expect this to increase to about $10,000,000 in each of the next two quarters. In short, we believe we've built a business that has positive drivers for NII and NIM on both sides of the balance sheet.

[Philip Watkins, CFO at Customers Bancorp]

Moving on to slide 12, we'll cover noninterest expenses. In q two, noninterest expenses were a $106,600,000. As we previously communicated, these increased as we reinvested a portion of the operational excellence proceeds back into the franchise. Even with this investment, our core efficiency ratio improved for the third consecutive quarter to 51.6% as we drove positive operating leverage in the business. Our core efficiency ratio is well below the industry average even with the investments we've made, and our noninterest expense to average asset ratio of 1.91% is top quartile of peers.

[Philip Watkins, CFO at Customers Bancorp]

On slide 13, we'll talk about tangible book value, which we believe is one of the clearest markers of long term shareholder value creation in bank stocks. At the end of q two, tangible book value per share reached $56.24 and continues our multiyear trend of double digit annual growth. To put that in perspective, since q four of twenty nineteen, we've more than doubled tangible book value per share, a 15% compound annual growth rate, significantly outperforming peers and positioning us at the top of the industry. And it's worth underscoring. We've achieved this level of compounding through a period marked by a global pandemic, historical historic rate volatility, and a regional banking crisis.

[Philip Watkins, CFO at Customers Bancorp]

We accomplished this as a result of our differentiated business model and by being strategically nimble in order to best capitalize on market opportunities. Now let's move to slide 12 to discuss capital. Our capital ratios remain strong and provide us with substantial flexibility for organic growth opportunities. As previously announced, we fully redeemed our Series E preferred stock in the quarter, utilizing a portion of our organically generated capital. Our TCE ratio increased by about 20 basis points in the quarter even with some growth in the size of our balance sheet.

[Philip Watkins, CFO at Customers Bancorp]

And at 12%, we remain in excess of our CET one target even while utilizing some risk based capital for loan growth in the quarter. On slide 15, we continue to be pleased overall with our credit performance. Nonperforming assets remained low at 27 basis points of total assets. Our commercial and consumer portfolios are both performing well. You can see this as total net charge offs improved, down about 25% quarter over quarter.

[Philip Watkins, CFO at Customers Bancorp]

Additionally, special mention and substandard loans were down 7% in the quarter. While we continue to closely monitor any emerging risks, we feel the portfolio is well positioned. And with that, I'll pass the call back over to Sam before we open up the line for q and a.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Thanks for that, Phil. As we look ahead to the rest of 2025, though there is some continued market uncertainty, we're excited about our positioning and confident in our ability to navigate the current environment. We're positively updating a few of our guidance items this quarter as an outcome of the strong results we've achieved in the first half of the year. On full year loan growth, we're raising the range to 8% to 11% from 7% to 10%. We now project net interest income to grow between 7% to 10%, up from 3% to 7% previously.

[Sam Sidhu, VC, President & CEO at Customers Bank]

This increase reflects a strong performance on both sides of the balance sheet in driving increased revenue and the benefits Phil discussed earlier. And lastly, as a result of the stronger revenue growth and well managed expenses, we now have a bias towards the low end of the efficiency ratio range. I'd also like to echo Jay's sentiment and thank Phil for his leadership. As Customers Bancorp's CFO, we're excited for him to be spearheading strategic initiatives to support the company's long term growth. In closing, we're building on a strong foundation, one defined by disciplined execution, strategic growth, and a relentless focus on our clients.

[Sam Sidhu, VC, President & CEO at Customers Bank]

With the right talent, technology, and operating model in place, we're confident in our ability to sustain this momentum, and we remain committed to delivering long term value for our clients, communities, and shareholders. With that, I'd like I'd like to open up the line for questions, please.

[Operator]

We will now begin the question and answer session. Our first question will come from the line of Peter Winter with D. A. Davidson. Please go ahead.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

Good morning. Congratulations, Sam, on the promotion and Jay with your future plans to start off. But if I could just first question, just Bill, you mentioned the increase of about $10,000,000 next two quarters. Can you just go over that one more time in your prepared remarks?

[Philip Watkins, CFO at Customers Bancorp]

Yeah. Hey. Hey. Good morning, Peter. I hope you're doing well.

[Philip Watkins, CFO at Customers Bancorp]

Yeah. It's you know, really, it was a small portfolio of loans that we originated with the partner. We had opportunity to purchase out the interest at a discount and did. And so the results of that will flow through net interest income over the next couple quarters.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

And it's it's 10,000,000 benefit each quarter?

[Philip Watkins, CFO at Customers Bancorp]

Yeah.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

We Or over the next 10,000,000 over the next two quarters?

[Philip Watkins, CFO at Customers Bancorp]

We expect it to be around 10,000,000 each of the next two quarters.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

Got it. Thank you. And then Sam, if I could just ask, just with this passage of the Genius Act, how maybe are you thinking about crypto related deposits going forward? And just it seems like it's gonna be incredibly competitive, with stablecoins. I mean, we've seen JPMorgan step into this.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

PNC announced a joint partnership, as well. So I'm just curious if you could talk about this.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yeah. Sure. Sure, Peter. Thank you so much for your comments earlier. So, you know, the net takeaway is this is incredibly exciting, you know, for, you know, for Customers Bank.

[Sam Sidhu, VC, President & CEO at Customers Bank]

And, you know, what I would say about the recent legislation from Washington is that, first and foremost, it really just reinforces what we at Customers Bank have believed for a long time, which is that digital assets are are here to are here to stay. You know? And I think that we have really established ourselves as the leaders in digital asset banking. And in this position, we will we have and will continue to benefit from regulatory clarity. You heard me talk about the ETFs early last year.

[Sam Sidhu, VC, President & CEO at Customers Bank]

You know, you had a, you know, a bump with the election, you know, last November. You have Genius now from a stablecoin perspective, and then there's further market structure legislation that is penciled out, you know, for later this year. Each one of these milestones has resulted in, you know, increased activity, increased, you know, deposits, increased fee income, you know, at customers' banks. So, you know, to get a little bit more specific on your question about stablecoins, you know, what I would say is is that, you know, this legislation almost certainly benefits a number of our existing customers as you could appreciate. They they will likely benefit from more AUM today and in the future.

[Sam Sidhu, VC, President & CEO at Customers Bank]

It also is gonna mean that there's gonna be, you know, new new institutional issuers, you know, starting with nonbanks. As you can appreciate, if you continue to pull this thread, all major institutional issuers that launch a stablecoin are likely gonna need to be a customer of Customers Bank. You know, we are the leading stablecoin infrastructure and payments provider, you know, in the country. You know? And a little bit more on on Kubix.

[Sam Sidhu, VC, President & CEO at Customers Bank]

I don't know if we've shared this before, but, you know, we only have about 10% or so of our deposits that come from stablecoin issuers today out of our, you know, overall Cubic's deposits. So we could very well see that increase over time. You know? And, you know, getting back to your question about big banks, you know, at the end of the day, if you're a large bank, this is something that you you, you know, you have to to be involved in. If you have a large network of customers that need to move money, whether if there's pull from your customers today, you will need to, you know you know, have this as a means of of payment.

[Sam Sidhu, VC, President & CEO at Customers Bank]

But at the end of the day, large banks make money when there's friction and inefficient flow in the banking system, you know, whether that's FX, payments, capital markets. And a stablecoin, if it truly proves out to be more efficient, cheaper, faster, you're really cannibalizing your existing revenue. So there's a lot of pros and cons and a lot to be determined. I think there's gonna be a, you know, a long runway over the medium to long term, but the most important thing is that is that this is gonna be a huge benefit for customers bank in the near to medium and to long term. The pie is gonna increase in regardless of of increased competition.

[Sam Sidhu, VC, President & CEO at Customers Bank]

You know, we have the strongest payments network. We we laid out we laid out some of those stats there to kinda put that in perspective. You know, we are continuing to trend and grow that business. You know, July, as I mentioned, you know, was was will actually be our most active month to date on the platform.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

Got it. That's helpful. And then just one last quick question. Just the professional fees increased $2,000,000 this quarter, quarter to quarter. Could you just talk about that and maybe the outlook?

[Philip Watkins, CFO at Customers Bancorp]

Yeah. Hey. Hey, Peter. Good morning again. Yeah.

[Philip Watkins, CFO at Customers Bancorp]

You know, I'd I'd say generally, if you look back, they were actually pretty consistent with where they were sorta two quarters ago. So, you know, q one was probably a bit lower. We actually saw some, you know, some increases kinda broadly across the, you know, across the platform. But from the risk management sort of investment side, they were they were largely consistent quarter over quarter.

[Sam Sidhu, VC, President & CEO at Customers Bank]

And I would just add, Peter, if you're asking about sort of regulatory expenses, I'd say that we, you know, are largely on track with what we prior, you know, prior guided towards and expect those really that portion, which is not contributing to the growth this quarter, but that portion, you know, to, you know, to drop off significantly, if if not completely in the next ninety days.

[Peter Winter, MD & Senior Research Analyst at D.A. Davidson]

Got it. Thanks, Sam. Thanks, Phil.

[Operator]

Our next question comes from the line of Kelly Motta with KBW. Please go ahead.

[Kelly Motta, Managing Director at Keefe, Bruyette & Woods (KBW)]

Hi, good morning. Thanks for the question. I would like to continue on with the topic of Cubic. Notably, I think investors are interested as to how big of a contributor this could be to your business. I know, you had previously capped these deposits at 15% of total, which has been lifted a bit.

[Kelly Motta, Managing Director at Keefe, Bruyette & Woods (KBW)]

Can you, one, provide how what the size of the Cubic's deposits were this quarter? And two, just from a high level, as you think about the potential opportunity as well as risk management thinking through concentrations, is there a way to think about how your this business could grow with the industry? Just any any high level thoughts there.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yep. Good morning, Kelly. Happy to happy to take that. So first of all, I think you asked about, you know, where we were at the end of the quarter. From a spot basis perspective, we were at 3,200,000,000.0, which is roughly in line with where we were last quarter.

[Sam Sidhu, VC, President & CEO at Customers Bank]

It's actually about a $100,000,000 dollars lower. What I would say is is that a spot basis is not really the best indicator, you know, of of thinking about where that is. That puts it probably at 16 or 17% as of as of 06/30, which is above the prior cap that you you know, that that we had talked about. But, really, when we had that cap, we were not initially in February 23, we were not holding these all in cash, which is what we're doing today. So as as we discussed earlier this year, that that cap has been removed.

[Sam Sidhu, VC, President & CEO at Customers Bank]

I referenced July activity a little bit earlier to kinda put that in perspective. If as of the twenty fifth of of July, we've had the the most active month, you know, on on Cubix to date. So with so, you know, almost a week to go, you know, in the month. Our deposit balances are up about 20%, you know, in in the month of July to kinda put that perspective. Increased activity leads to increased deposits, and increased deposits leads to to lot higher interest income as well as, you know, increased activity, which leads to to fee income.

[Sam Sidhu, VC, President & CEO at Customers Bank]

So over time, we expect that, you know, these deposit balances will could potentially, you know, increase as we get more institutional flow. I think one of the things that's not fully understood and appreciated is we have about 20% of our flow today, which was not the case two years ago, comes from traditional finance players who are active in in in the digital asset trading and settlement space. And we expect that percentage to increase over time. And as that percentage increases over time, we may see increased you know, slightly increased balances as we continue to grow. But, again, our goal is not to grow the deposits first.

[Sam Sidhu, VC, President & CEO at Customers Bank]

It's actually to grow the strength of the net network. It's the additional products and services, payment rails that we offer to our customers. With that, we will likely continue to have sort of our, you know you know, modest, you know, deposit growth as activity increases. So hopefully, that answers your question, but happy to answer any follow ups.

[Kelly Motta, Managing Director at Keefe, Bruyette & Woods (KBW)]

That that's really helpful. I guess, as a follow-up here, as as you've mentioned several times now, you you hold these deposits in cash. I think some larger players are considering lending against such related deposits. Given the softening regulatory tone in the industry, is this something that's coming up with discussions on the board and any change in terms of how how you're viewing it potentially longer term with regards to how you hold these deposits?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Sure. So the the short answer is we're we're not, you know, looking to change, you know, the way that we approach and and and hold on these deposits. I think the the, you know, longer answer is over time, as you can probably appreciate over a multiyear period, we'll continue to get more, you know, more internal, you know, data on how these, you know, deposits operate and fluctuate. We'll continue to have longer term relationships with our customers and can work on structure. And and, you know, just have a sense of sort of a minimum amount of payments float.

[Sam Sidhu, VC, President & CEO at Customers Bank]

So the the answer over the medium term is is that we will likely, you know, consider, you know but this will be customer driven, and it'll be business driven. And sitting where we are today, it it is entirely appropriate to hold these in cash, especially where where rates are.

[Kelly Motta, Managing Director at Keefe, Bruyette & Woods (KBW)]

Got it. May maybe last question for me, and then I'll step step back into the queue is, you know, this slide nine where you, draw out the the payment volume is is super powerful. I know this is, you know, a huge benefit of of this platform is is the payments related fee income potentially generated. Can you elaborate how how much that contributed to 2Q? And any commentary about the potential for further monetization of payment fees longer term?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yep. So late last year, we, you know, we instituted sort of traditional, you know, wire fees and platform fees to to some of our customers. That has resulted in about an $8,000,000 run rate of fees. It was about similar in the second quarter, so nothing, you know, necessarily, you know, material in the second quarter. But going forward, we could see that increase over time.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Again, our objective is not to to continue to, you know, materially drive fees. Our our majority of our income today is coming from interest income over time. We'll likely see that shift from a mix perspective, especially as there's a potentially, you know, changing rate environment over the medium term. So, you know, one of the things that's that is important about that overall volume is it really just shows the incredible strength of the network. And, know, you while it was 1 and a half trillion last year, you know, we're at about a trillion year to date.

[Sam Sidhu, VC, President & CEO at Customers Bank]

So it kind of puts it in perspective that this is growing, activity is growing, and the strength of the network is only growing, and our and our lead and our moat is increasing.

[Kelly Motta, Managing Director at Keefe, Bruyette & Woods (KBW)]

Got it. Thank you for so much for all the color. I'll step back.

[Operator]

Our next question comes from the line of Harold Getsch with Riley Securities. Please go ahead.

[Hal Goetsch, Managing Director at B Riley Financial]

Hey. Thank you. Congratulations for all the changes and and the leadership there. I hope you, all succeed and are happy with where things are heading. Congratulations.

[Hal Goetsch, Managing Director at B Riley Financial]

And my question is still on the, you know, Cubic's end. You know, the payment flows across the rails are just enormous. The monetization is you know, it it it's quite low. I mean, I guess, is this really a vehicle outside of even digital assets just to increase banking relationships and and the size of connections to many commercial accounts? Because it seems like, you know, I appreciate your comment on, you know, how banks big banks make money.

[Hal Goetsch, Managing Director at B Riley Financial]

They make it through friction, and this seems to be very low almost a low cost producer, or a low cost option. And and and and and and because of that, you know, volume is coming your way. Could you just kinda comment on on your strategy with your current pricing and and and the related volume gains you're getting?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yeah. Good morning, Hal. Happy happy to take that. So, you know, as we, you know, think about the, you know, the the the Kubix, you know, platform, it's it's helpful to kinda just remind folks what it is. It's really just, you know, software that sits on top of our, you know, existing, you know, core and and payments infrastructure at the bank.

[Sam Sidhu, VC, President & CEO at Customers Bank]

It allows our customers, commercial customers, who are more institutional and and, in many cases, tech savvy, you know, to to operate. So, you know, prior to Cubix, we had something called CBit, which was a a blockchain, you know, tokenized deposit. You know, from a traditional finance perspective, I will admit that was a lot tougher of a sell to get some of the, you know, traditional commercial customers, you know, to interact with that. When you're talking about the digital deposit sort of format that we're using today, $24.07, $3.65, along with a a ton of other additional, not just, you know, intra bank type transfers, but but really a full suite of products and payment rails and services and connectivity and data and information. You know, we are seeing, you know, you know, tremendous amount of use cases, you know, from commercial customers.

[Sam Sidhu, VC, President & CEO at Customers Bank]

I was just sitting in someone's office yesterday, and we have, you know, a a real estate customer who has hundreds of accounts with us that's now gonna be using this for some of their internal, you know, GL ledger type activity. And, again, this is not necessarily driving, you know, new deposits with that customer, but it is actually strengthening our relationship. It's providing an incremental service. And, you know, think of it as sort of a, you know, software as a service type solution. So we continue to see it, you know, as a as an opportunity to to to strengthen relationships, drive incremental deposits with our existing customer, but also importantly, open up, you know, more traditional finance type, you know, you know, opportunities that, you know, many of the big banks have these types of cape capabilities, but on a one off basis and a very clunky basis and an inability to do it in the, you know, incredibly streamlined format that we have.

[Hal Goetsch, Managing Director at B Riley Financial]

Thank you very much.

[Operator]

Our next question comes from the line of David Bishop with HUBDAY Group. Please go ahead.

[David Bishop, Director - Research at Hovde Group]

Yes. Good morning. Hey, a quick question, Sam. In terms of the loan mix here, you guys have been pretty successful past couple of quarters in growing commercial real estate, maybe taking some share given your capacity. Just curious your appetite to grow some of those commercial real estate segments.

[David Bishop, Director - Research at Hovde Group]

As we look at the loan mix in terms of the breakdown for segment, does that stay relatively consistent, do you think, over the next year? Or do you continue to see sort of specialty lending C and I build as a percent of loans? Yes.

[Philip Watkins, CFO at Customers Bancorp]

Hey, Dave. Good morning. It's Phil. I'll take that for you. I I think, yes, we've talked about over the last two or three quarters, we you know, somewhat opportunistically stepped into a bit of a void, especially here in our New York markets or in the Northeast markets in in commercial real estate.

[Philip Watkins, CFO at Customers Bancorp]

You know, as others pulled back in in q four and q one, we were really able to win, again, not transactional, but full relationship based opportunities where we, you know, were able to perform for clients when when others weren't. We still definitely see some opportunities there in the pipeline. You know, we've got a a nice pipeline on the commercial real estate side, but we're being very disciplined again, not sit not, you know, seeking out just transactional interest earning assets. It's gotta be full relationship driven. And so, you know, we have seen some of the participants that had stepped out for a few quarters start to step back in.

[Philip Watkins, CFO at Customers Bancorp]

So, again, we're we're not going to chase transactions there just for the sake of it, but we are still seeing, you know, some good opportunities. As we look across the rest of the franchise, you know, as Sam mentioned in his comments, that is part of that is one of the real strengths here is that, you know, we have the ability to dial up or down, especially across the various specialty lenders, but even as you just highlighted in areas like commercial real estate over the last couple of quarters. So, you know, we we will continue to do that and go where we see the best opportunities for that franchise enhancing growth. So, yeah, we we can give you the lookout of the pipeline, you know, call it, you know, ninety days out, which does have some some commercial real estate, but also some, again, continued contributions from the specialized c and I. But as we look, you know, three, four quarters out, it'll be very dependent on the opportunities, but we're incredibly well positioned for that.

[Sam Sidhu, VC, President & CEO at Customers Bank]

I would just add, you know, David, as you mentioned, you know, we have about, you know, $500,000,000 or so in the, you know, the loan backlog, you know, right now.

[David Bishop, Director - Research at Hovde Group]

Got it. Appreciate that guidance there. And then just curious in terms of the BMTE deposit to run off. Is there any more plans in the near future? Will that be a headwind or is that mostly behind you? Thanks.

[Sam Sidhu, VC, President & CEO at Customers Bank]

I think we well telegraphed that. That was a Q2 headwind and it and anything like it is behind us.

[David Bishop, Director - Research at Hovde Group]

Great. Thank you.

[Operator]

Our next question comes from the line of Steve Moss with Raymond James. Please go ahead.

[Steve Moss, Director at Raymond James Financial]

Good morning, guys. Sam, congratulations on the promotion here. Maybe just on the deposit side, with the pipeline remaining strong there, just curious if what the expectation rates will be coming down here at some point over the short to medium term. Is that entering the conversation with the deposit customers you're bringing on these days? And just kind of where is what's the blended cost of deposits today?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yep. So I think the the the good news is is that, you know, we're we're continuing to bring on, you know, new deposit customers at similar levels that we were sort of sort of high twenties, 30% noninterest bearing, you know, component blending at about that two and a half percent plus or minus, you know, type basis, which we feel, you know, pretty, you know, privileged to be doing. And then a lot of that credit goes to, you know, our our existing and as well as sort of new, you know, teams to the bank as well as future teams to the bank. You know, when you're when you're in competition and taking market share, in some cases, you have to sort of match, you know, the top dollar as rates, you know, decline. You know, a receding tide sort of, you know, brings all boats down, and I think that many of those conversations are are had and expected, you know, by customers, especially when it's not connected with, you know, migration of account.

[Steve Moss, Director at Raymond James Financial]

Okay. Appreciate that. And and just in terms of the teams you hired here, Sam, and the ones you're about to bring on, just kind of curious if you could size up the potential those deposit books.

[Sam Sidhu, VC, President & CEO at Customers Bank]

I don't want to get premature in sizing up the deposit books, but what I would say is that you know, it looks like we'll have about half a dozen or so teams, you know, this year based upon sort of where we are in in discussions with, you know, you know, five already, you know, three on onboarded to, you know, this quarter and and, you know, another one or two plus or minus even even more. You know, the the goal would be to start building for for '26 and '27. You know, one of the things that's worth mentioning about our prior teams, as a reminder, they were breakeven in the first half of this year. Call that a 100% efficiency ratio. Right?

[Sam Sidhu, VC, President & CEO at Customers Bank]

So there's a lot of opportunity for that to come down, you know, first by, you know, having, you know, the the revenues be two times expenses. Eventually, we'd like to get that to a minimum of three, and that's gonna provide us tremendous amount of operating leverage, you know, over the next twelve to twenty four months on the on the on the old teams. On new teams, we're cons you know, we're we're working on a similar twelve to eighteen month type, you know, breakeven. And, you know, safe to to say, you know, each one of our teams, you know, we would expect to be at a minimum in sort of that couple $100,000,000 or so, you know, book on the high end. They they they do get to 10.

[Steve Moss, Director at Raymond James Financial]

Okay. Appreciate that. And terms of, you know, I know you guys have gotten to NII growth, but just curious how you guys are thinking about the margin here. I realize there's a lot of moving pieces, but is it relative stability at current levels? Or could we see some more margin expansion just given your deposit base should continue to get better here?

[Philip Watkins, CFO at Customers Bancorp]

Steve, good morning. So I you know, I'd say, overall, you know, there are as you said, there are moving pieces on on both sides. I mean, we've got the positive on the loan growth side, and and we continue to have some some positive momentum, you know, opportunities on the remix side. Some of it, you know, some of it does continue to depend on the rate outlook. You know, we do continue to be modestly asset sensitive.

[Philip Watkins, CFO at Customers Bancorp]

Though, as you know, we've taken, you know, meaningful steps, you know, and method measured steps over the last year plus to to continue to to bring that closer to to neutral. So I'd say, overall, on a net basis, we we probably have a little bit of a an upward bias, but it it will be a bit dependent on that outlook. I guess the one thing I would highlight as I as I noted earlier, we you will see, you know, clearly some benefits in in q three and q four, from that, additional interest income flowing through.

[Steve Moss, Director at Raymond James Financial]

Great. Okay. Thanks for that, Phil. And then I guess just maybe I hear you guys in terms of, you know, you're be bringing on more, customers with regard to Cubic's and, you know, definitely potential for loan growth, deposit growth out of that out of the platform. You know, in terms of I I realized it's kinda difficult to see see where it could shake out, but just kinda curious as to, how you're thinking about managing those deposit balances, or are you just willing to let it ramp up and how do I think about concentration with regard to that and if if you guys have any thoughts, over the medium term?

[Sam Sidhu, VC, President & CEO at Customers Bank]

It's a it's a very valid question, Steve. And and, you know, from a liquidity risk perspective, I think we've well contained it. I think as you think about strategic risk, you also don't want a lot of concentration from any one vertical. And know, these are conversations that we're having and that we're thinking about, and and and that's why, you know, I've stated before, our our goal is not to to sit here and drive, you know, deposits. It's to increase the strength of the network.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Increasing the strength of the network increases, know, sort of activity and associated, you know, deposit balances. And we view those as the high quality, you know, value of the franchise, not spot balances with sort of a a new account funding that's not active.

[Steve Moss, Director at Raymond James Financial]

Right. Okay. Well, I appreciate all the color here today, and thank you very much.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Thanks, Steve. And what I would like to say to is I forgot to say at the beginning, congratulations on the new baby.

[Jay Sidhu, Founder, Chairman & CEO at Customers Bancorp]

Thanks, Sam.

[Operator]

Our final question comes from the line of Matthew Breese with Stephens. Please go ahead.

[Matthew Breese, Managing Director at Stephens Inc]

Hey, good morning. I had a few questions. First of all, how much more room do you have to remix securities into loans? And and how should we be thinking about kinda overall balance sheet size over the next year?

[Philip Watkins, CFO at Customers Bancorp]

Yeah. Hey. Hey, Matt. Good morning. You know, I'd say overall, we probably feel, you know, pretty good about where our securities portfolio as a percent of average assets is.

[Philip Watkins, CFO at Customers Bancorp]

Obviously, you know, we did we were able to reinvest a portion of those proceeds as we talked about from some of the sales. But, you know, at this point, it would probably be, you know, be more be more cash flow driven. And then, you know, as far as balance sheet from a balance sheet growth perspective, excuse me, as I said, you know, as we've said before, you know, we the first half of this year, we would continue to expect to be heavier on the deposit remix side. And and so as a result, you know, you wouldn't see a lot of balance sheet growth, which is which is what occurred. But then as we got into the back half of the year and certainly into '26, you know, while we still have, you know, some some opportunities on the remix side, we would expect more growth in overall in the balance sheet.

[Matthew Breese, Managing Director at Stephens Inc]

Okay. Is it safe to say that we should expect more of the, you know, the loan growth transition into total asset growth at this point? That's a fair statement.

[Philip Watkins, CFO at Customers Bancorp]

That that's right.

[Matthew Breese, Managing Director at Stephens Inc]

Okay.

[Matthew Breese, Managing Director at Stephens Inc]

And then in the presentation and in the earnings release, you noted that part of the deposit mix shift resulted in, I think, $350,000,000 less brokered deposits. For the call report last quarter, I thought you had around $6,600,000,000 brokered. Is it fair to take those two numbers and figure out the net number? Or what is your brokered deposit balances today? And is there a targeted goal there?

[Matthew Breese, Managing Director at Stephens Inc]

Where where would you like to be broker deposit total deposits?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yep. That's the simple math, you know, Matt. And so, yes, they have declined, and they declined by about a billion over the last year. I think we've been pretty, you know, vocal about, you know, some of the changes in in categorization, some of the deposits that that happened over time that but it is consistent that those changes have been made sort of more broadly across the the industry. Those those deposits are now being deemphasized and and and remixed out.

[Sam Sidhu, VC, President & CEO at Customers Bank]

So, you know, where do we want those deposits to be? You know, we are not a traditional sort of branch based, you know, bank that has a a broad base of of of, you know, branch based retail deposits. Having said that, I think we've always said we'll we'll we expect to sort of operate a little bit on the higher range of a of a traditional bank. You know, whether that's, you know, 25 or or 20, it's to be determined. We definitely want these below 30% in the near to medium term.

[Matthew Breese, Managing Director at Stephens Inc]

Thank you. Okay. And then I had a couple questions on on Kubix myself. I I guess the the first one is is just on the stable coin bill, and I was hoping you could help me better understand, you know, one of the inherent things is that all stable coins will need to be backed by US treasuries, which inherently invites global usage. And I and I think there's some strong use cases around that.

[Matthew Breese, Managing Director at Stephens Inc]

But, you know, for yourselves and others in the banking system, how do you protect yourself from a BSA, AML, know your customer standpoint? Who bears responsibility for making sure that there's, you know, good incremental actors into the system, especially if this now becomes something that, you know, extends beyond The US US borders?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yep. So, you know, I think that it's from first and foremost, I think I mentioned this earlier in the call, it is incredibly helpful to have, you know, our customers come in customers come into, you know, formal federal regulatory, you know, framework, you know, while all of our customers are regulated in some way, shape, or form, and in some cases, many, you know, shapes and form. This provides, you know, sort of a very, you know, constructive and and cohesive road map, not only on the, you know, compliance side and BSAAML, but also, you know, importantly, on sort of the liquidity management and and sort of the consumer protection as you were sort of referencing, you know, before. You know, there's about a plus or minus eighteen month implementation phase where a lot of detail, you know, will be, you know, will be coming out, you know, for a number of our, you know, customers. As I mentioned, this is about 10% plus or minus of our existing, you know, deposits today.

[Sam Sidhu, VC, President & CEO at Customers Bank]

And we're we're thrilled that there's now gonna be a a federal framework that also, you know, includes, you know, much more comprehensive BSA, AML, and and we'll look to really just partner, you know, with the with the structure that our customers are in. And and what we're looking to do at Customers Bank on the BSA, AML side is we've already invested significant sums of money, you know, to build up our our infrastructure and our technology, and we view it as a strength of the organization. And the fact that our customers are are also gonna be leveling up and entering a US federal framework is gonna, you know, even further, you know, strengthen the overall institutional flow of the of the bank, but but also really increase the moat around our business.

[Matthew Breese, Managing Director at Stephens Inc]

And you said Stablecoin is 10% of existing deposits. Is that total deposits or just the Kubix deposits?

[Sam Sidhu, VC, President & CEO at Customers Bank]

Kubix deposits.

[Steve Moss, Director at Raymond James Financial]

Okay. Okay.

[Matthew Breese, Managing Director at Stephens Inc]

And then the other thing I was curious about is just in terms of your Cubix customers. You know, could you talk a little bit about the granularity of those deposits and how many accounts, you know you know, are frequent users of Cubic's? I I just wanted to get a sense for, you know, is this is this kind of a, you know, an upside down pyramid where there's there's a small number of of really big kind of deposit holders, or is it pretty granular across the board? You know, frame for us what kind of, you know, customers are actually within your system.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Yep. So, you know, we have essentially all major exchanges, all major stablecoin providers, all major market makers, all major investors, you know, digital asset specific as well as traditional institutional investors, you know, who who operate in the digital asset space. So so, really, you know, it is a a wide swath of market share, and and, really, the folks that bank with us come to us for the payments network, you know, first and foremost, and that's really where our focus has been. So the the short answer to your question is is everyone is is looking to be active on the network, and and and that's also why they're, you know, customers of the bank. The longer answer is is that as you can appreciate, the larger the exchange, the larger the AUM of the stablecoin provider and the, you know, larger the network.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Even when someone is new to the bank, it takes time for them to build a larger network. You know, they they do build, you know, in many cases, larger activity, which which comes from, you know, larger deposit balances. And the deposit balances are, you know, diversified across those major, you know, thresholds, but you will see, you know, say, you know, a 9 figure deposit with an exchange, and you will see maybe a $5,000,000 deposit, you know, with, you know, a medium sized investor.

[Matthew Breese, Managing Director at Stephens Inc]

I'll leave it there. Thanks for taking my questions, Sam. Appreciate it.

[Operator]

And that will conclude our question and answer session. I will hand the call back over to Sam Sadhu for any closing remarks.

[Sam Sidhu, VC, President & CEO at Customers Bank]

Thanks so much, everyone, for your continued interest and support of Customers Bancorp. We really appreciate you being a part of this incredible franchise that we're building, and we look forward to speaking with you next quarter. Thank you so much, and have a great day and weekend.

[Operator]

This concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Jay Sidhu, Founder, Chairman & CEO
• Philip Watkins, CFO

Analysts

• David Patti, Special Assistant - Executive Chair at Customers Bank
• Sam Sidhu, VC, President & CEO at Customers Bank
• Peter Winter, MD & Senior Research Analyst at D.A. Davidson
• Kelly Motta, Managing Director at Keefe, Bruyette & Woods (KBW)
• Hal Goetsch, Managing Director at B Riley Financial
• David Bishop, Director - Research at Hovde Group
• Steve Moss, Director at Raymond James Financial
• Matthew Breese, Managing Director at Stephens Inc