Customers Bancorp Inc., a regional Pennsylvania lender, surged after reporting deposit inflows in the first few weeks of this month and profit for the first quarter that came in higher than analysts expected.
(Bloomberg) — Customers Bancorp Inc., a regional Pennsylvania lender, surged after reporting deposit inflows in the first few weeks of this month and profit for the first quarter that came in higher than analysts expected.
“There’s been increased stability in the banking industry in the month of April,” Customers Bank Chief Executive Officer Sam Sidhu said on an earnings call with analysts Friday. “This has led to strong momentum in our deposit base.”
The bank saw deposit inflows of several hundred millions dollars in the first few weeks of April across sectors, Sidhu said.
Deposit levels have been under scrutiny since a run on deposits last month led to the collapse of three regional banks and plunging share prices industrywide. Rising interest rates depressed the value of many regional lenders’ fixed-income investments, and the sudden surge in customer withdrawals forced many of the lenders to sell those assets at a loss.
Shares of Customers Bancorp surged as much as 19%, headed toward the biggest gain on a closing level since March 2020. The stock is still down 23% this year.
Read more: Customers Bancorp Jumps as Earnings Beat and Deposits Stabilize
First-quarter net income was $50.3 million, topping the average estimate in a Bloomberg News survey of analysts of $40.3 million. Deposits fell to $17.7 billion at the end of the first quarter, missing the $18.2 billion average estimate and below the $18.2 billion reported for the end of last year.
The bank said it also acquired several new relationships from failed banks, according to its earnings statement. For the full year, “deposits are expected to remain relatively flat, with a focus on improving our funding profile and reducing high-cost deposits,” the company said.
Customers is one of the regional lenders that rode the crypto wave in recent years, launching a real-time payments platform in 2021 that caters to crypto-trading firms, exchanges and institutional investors. It counts Coinbase Global Inc. and Circle Internet Financial Ltd. among its clients.
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