Customers Bancorp (CUBI) Q4 2025: $2 Trillion QBICS Payments Volume Signals Network Effect Moat
Customers Bancorp’s Q4 capped a transformative year, with QBICS, its proprietary payments network, processing over $2 trillion in volume—surpassing industry giants and deepening its network advantage. Deposit growth and diversified loan expansion were fueled by new commercial teams and a disciplined focus on relationship-based banking. With robust guidance for 2026 and expanding AI-led productivity, CUBI is positioning for scalable, high-margin growth while reinforcing its defensible payments and deposit franchise.
Summary
- QBICS Payments Network Outpaces Industry: $2 trillion in annual volume cements CUBI’s leadership in commercial payments infrastructure.
- Deposit Franchise Quality Improves: Relationship-driven, granular deposit growth outpaces peers and underpins funding stability.
- AI and Talent Drive Operational Leverage: Company-wide AI adoption and targeted team recruitment set up for durable margin expansion in 2026.
Performance Analysis
CUBI delivered a year of high-quality growth, marked by a 10% increase in deposits and 15% loan growth, with new commercial banking teams contributing $1.6 billion in deposits—evidence of the effectiveness of its talent acquisition and relationship banking model. Non-interest-bearing deposits grew robustly, enhancing funding mix and reducing reliance on higher-cost sources. Net interest income rose 22% year over year, supported by both higher loan balances and a continued decline in deposit costs, as the bank’s deposit beta converged to peer median levels.
Efficiency gains were material, with the efficiency ratio dropping over six percentage points and non-interest expense to average assets at 1.88%, placing CUBI in the top quartile of peers. Fee income remained diversified, with different business lines stepping up across quarters, and management signaled further monetization potential as product sets mature. Credit quality stayed strong, with non-performing assets at just 29 basis points of total assets and low net charge-offs, reinforcing the resilience of CUBI’s loan book.
- Payments Volume Surges: QBICS processed $2 trillion in 2025, a 30% YoY increase, now leading all US commercial payments networks.
- Deposit Mix Transformation: Relationship-based, granular deposits drive funding cost convergence and stability.
- Operating Leverage Strengthens: Expense discipline and operational excellence initiatives support positive operating leverage even as investments continue.
Capital ratios improved despite balance sheet growth, with tangible book value per share up 14% and a successful $100 million sub-debt issuance further strengthening the capital base. CUBI’s multi-year compounding of earnings and book value remains an industry standout.
Executive Commentary
"Our mission will remain unchanged, and that is to deliver long-term value for shareholders and our communities by putting clients first and continuing to innovate and build strong risk management and execute with excellence. We believe our best years are still ahead of us."
Jay Sidhu, Executive Chairman
"We had over $2 trillion of payments volume during the year, which was a 30% increase over last year's impressive 1.5 trillion. That level of payments activity now puts us as the number one commercial payments network in the US ahead of household names like Amex and Visa based on latest publicly available data."
Sam Sidhu, CEO
Strategic Positioning
1. QBICS Payments Platform as a Network Moat
QBICS, CUBI’s proprietary payments platform, is now the largest commercial payments network in the US by volume, eclipsing established incumbents. Its network effect—where value increases as more clients and counterparties join—creates a formidable barrier to entry. The platform supports traditional rails (wire, ACH) and advanced rails (RTP, FedNow), enabling clients to transact seamlessly and deepening customer stickiness.
2. Deposit Franchise Transformation
CUBI’s deposit gathering is anchored in relationship banking, not rate chasing. New commercial teams have delivered highly granular, low-cost deposits, with over 40% of new balances non-interest bearing. This shift supports margin resilience and funding stability, especially as digital asset-related balances are conservatively excluded from growth assumptions, leaving potential upside if market activity increases.
3. AI-Driven Productivity and Talent Acquisition
Company-wide AI enablement is producing measurable productivity gains, with nearly 20% reported improvement and over half of employees using enterprise AI tools. Targeted AI use cases in onboarding, credit, risk, and workflow orchestration are expected to scale further. Ongoing recruitment of top-performing banking teams is set to fuel both deposit and loan growth, with recent hires expected to ramp contributions through 2026.
4. Diversified Loan Growth and Asset Quality
Loan growth remains broad-based across commercial real estate, healthcare, and mortgage finance, with no outsized exposure to any single vertical. Credit metrics remain superior to peers, and management is confident in both the pipeline and underwriting discipline, positioning for continued asset growth without sacrificing credit standards.
5. Operational Excellence and Capital Strength
Operational excellence initiatives are targeting $20 million in run-rate proceeds, to be reinvested in growth areas while maintaining top-quartile efficiency. The capital base was further fortified with sub-debt issuance and rising tangible equity, supporting both organic expansion and risk management.
Key Considerations
CUBI’s Q4 and full-year results demonstrate a business model built on scalable infrastructure, disciplined growth, and emerging technology leverage. The interplay between QBICS network effects, granular deposit gathering, and AI-enabled efficiency positions the bank for margin expansion and strategic flexibility.
Key Considerations:
- QBICS Network Effects Accelerate: Payments platform scale and client onboarding deepen competitive moat and cross-sell potential.
- Deposit Beta and Cost Convergence: Funding costs now near peer median, enhancing margin durability as rate environment evolves.
- AI Deployment Goes Beyond Hype: Measurable productivity gains and department-level use cases are moving from pilot to enterprise scale.
- Recruitment Flywheel in Motion: New commercial teams drive near-term deposit growth and long-term franchise value.
- Fee Income Diversification: Multiple business lines provide fee income stability, with maturing product sets poised for further monetization.
Risks
Key risks include potential regulatory shifts impacting digital asset-related balances, execution risk in scaling new verticals on QBICS, and competitive encroachment from larger banks investing in payments and AI. Credit quality, while strong, is not immune to macroeconomic shocks, and management must continue to balance growth with risk discipline. Expense growth tied to team recruitment and technology investment must be matched by revenue realization to preserve operating leverage.
Forward Outlook
For Q1 2026, Customers Bancorp guided to:
- Loan growth of 8% to 12%, led by commercial team pipelines and diversified verticals.
- Deposit growth net of remixing also targeted at 8% to 12%.
For full-year 2026, management provided guidance for:
- Net interest income of $800 to $830 million, up 7% to 11%.
- Non-interest expenses of $440 to $460 million (2% to 6% growth), supporting positive operating leverage.
- Common equity tier one capital ratio of 11.5% to 12.5%.
- Effective tax rate of 23% to 25%.
Management highlighted:
- Strong loan and deposit pipelines from recently onboarded and recruiting teams.
- Potential upside from QBICS payments expansion and further AI-driven operational gains.
Takeaways
Customers Bancorp is leveraging its QBICS payments network and relationship-driven deposit model to outpace industry growth and margin trends, while AI adoption and team recruitment set up for continued operating leverage.
- QBICS Platform as a Growth Engine: Network effects and new vertical onboarding are increasing deposit stickiness and franchise value, with $2 trillion in volume as a proof point.
- Deposit and Loan Growth Outperform Peers: Granular, low-cost deposits and diversified loan origination underpin sustainable earnings expansion.
- 2026 Watchpoints: Monitor QBICS monetization, AI-driven efficiency realization, and the impact of new commercial teams on both core and non-interest-bearing deposit growth.
Conclusion
Customers Bancorp’s Q4 results reflect a business firing on multiple cylinders—payments innovation, disciplined deposit gathering, and operational leverage. The bank’s strategic investments in technology, talent, and risk infrastructure are translating into industry-leading growth and a defensible competitive position as 2026 begins.
Industry Read-Through
CUBI’s $2 trillion QBICS volume and network effect highlight a structural shift in commercial payments, with digital-first, API-enabled platforms outpacing legacy rails. Relationship-driven, granular deposit gathering is becoming a critical differentiator as funding costs converge across the sector. AI adoption is moving from experimentation to enterprise impact, with measurable productivity gains and workflow automation. Banks lacking scalable payments infrastructure or lagging in technology integration risk margin compression and competitive erosion. The bar for operational excellence and innovation in regional banking has been raised.