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Will Customer Bancorp’s Unexpected Surge Last?

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Written by Timothy Sykes
Reviewed by Bryce Tuohey Fact-checked by Matt Monaco

A surge in Customers Bancorp Inc’s stock by 13.9 percent on Friday follows compelling industry predictions and positive market indicators, as recent bullish sentiments surrounding improved earnings forecasts and strategic moves within the financial sector seem to bolster investor confidence.

Summary of Recent Developments

  • The report of Customers Bancorp’s Q4 results, with a core EPS of $1.36, has far surpassed the general consensus of $1.20 it raised hopes for stellar growth in the future, with the company’s effort towards deposit transformation taking center stage.

Candlestick Chart

Live Update At 17:21:10 EST: On Friday, January 24, 2025 Customers Bancorp Inc stock [NYSE: CUBI] is trending up by 13.9%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Customers Bancorp forecasted a significant dip in FY25, with promising growth figures in both deposit and loan portfolios, alongside expectations for a net interest income rise, which shows potential for sustained growth.

  • A comparison study highlights banks with tremendous EPS accretion percentages due to a deregulatory-friendly climate fueling accelerated growth and improved capital returns, giving especially favorable prospects for banks like Customers Bancorp.

  • The report of class action lawsuits, delving into anti-money laundering lapses, might offset some of the exuberance about the earnings report by sowing seeds of uncertainty.

  • Lastly, despite a decline in Q4 earnings compared to the previous year, Customers Bancorp still managed to outperform analysts’ predictions, coming as a real surprise to the market.

Overview of Customers Bancorp’s Recent Earnings

As millionaire penny stock trader and teacher Tim Sykes says, “It’s not about how much money you make; it’s about how much money you keep.” This principle holds especially true in the realm of trading, where the focus should be on sustainable profit rather than just initial financial gains. Traders often emphasize acquiring knowledge and strategies that protect their earnings over time, ensuring that their wealth continues to grow regardless of market conditions.

Customers Bancorp’s earnings report can be seen as a mixed bag. On one hand, the impressive core EPS of $1.36 shines bright. Yet, some shadows linger with an observed dip in earnings compared to last year. Their strategic shift towards leveraging franchise value worked wonders in an aggressive market. A few years back, investing in CUBI might not have felt as promising. But, as reported on Jan 23, the highs in net revenue, fundflow growth, and an NPS of 73 hints at a trust-heavy and satisfied clientele base within the market.

The stock’s recent closing price of $57.35 is quite a leap from $53.53 recorded on Jan 24. This spike traces back to the burgeoning optimism over their solid numbers and predicted growth trajectory in deposits and loans.

Yet, if you’re an investor, recent class-action allegations might keep you pacing. Such daunting claims around AML practices can quickly shape market sentiments, even setting a downturn. Balancing this is the report projecting a future where interest income rises, albeit modestly. It seems the financial environment remains favorable for those willing to weather some uncertainty.

Financially Fit or Just Lucky?

With a glance over the key ratios, one gleans insights into Customers Bancorp’s endurance. Valued at a PE of 8.17, they linger in comfort. However, a close eye on earnings and debt together might suggest patience. The debt-equity of 0.84 provides some solace, alongside a modest profit margin of 27.27.

Capital constraints aside, intuitive management has implied long-lasting resilience. Yet, that’s not the whole picture.

Financial reports show the journey of substantial cash flow with net investments in properties and loans peeking out before a backdrop of refunds, repurchases, and stock-based compensations. These, layered against supportive earnings of $46,743,000, domestic operations remain strong. Long-term insights vouch for some growth. Yet, prudent minds stay latched to the growing whispers of potential looming threats.

Stock Price Movement: Analyzing Impacts of Key Articles

Earnings Beat Raises Eyebrows

Customers Bancorp delighted markets with a robust earnings beat, surpassing expectations on Jan 23. With a surge in core EPS, the company’s calculated bets on franchise value-building strategies have had shareholders leaping with joy. But, all that’s gold doesn’t glitter, as rising costs and new investments raise pertinent questions among skeptics.

Deposits and Loans: A Pond Full of Fish?

Their F25 growth projection throws promises of riches untold, embedding whispering hopes of continued upward trends. Deposits aim for a 5-9% rise, while the loan portfolio may leap by 7-10%. This news sent shares climbing, but risks like economic downturns and poor credit quality remain haunting footnotes that wise investors might heed.

More Breaking News

Legal Woes Cast a Shadow

Legal clouds have gathered, bringing rain upon jubilant news. Allegations moot inadequate anti-money laundering practices, while fresh lawsuits may well unsettle the stock’s newfound courage. As litigation ensues, even the bravest investors might reevaluate their positions.

Deregulatory Fervor: An Opportunity

The deregulatory fervor brewing amidst political shifts sprouts hope for some. With lessened capital requirements and eased merger conditions, expected EPS accretions present a green pasture. Customers Bancorp undeniably stands among the banks mentioned in this crossfire of speculative success.

Where Lies the Horizon for Customers Bancorp?

Fast-moving financial waters embolden the bravest of sailors. For Customers Bancorp, recent earnings delight matched only by legal umbras dampening spirits beckons a cautious or intrepid trader alike. Demand in deposits and loans tells one story—an elevated PE hints another. As millionaire penny stock trader and teacher Tim Sykes, says, “Small gains add up over time; focus on building wealth gradually, not chasing jackpots.”

In your portfolio consideration, these narratives remain key: is it a cautious optimism commanding vigilance or daring hopes for unexpected gains? In balance lies an answer where fortune both favors and tests the bold.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”