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Shift In Customers Bancorp's Business Model Could Generate 7-8% Loan Growth, Says DA Davidson

Shift In Customers Bancorp's Business Model Could Generate 7-8% Loan Growth, Says DA Davidson
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A new business model, expanding efforts in high-growth markets and a high net worth client base could be promising catalysts for Customers Bancorp, Inc. (NYSE: CUBI), according to analysts at D.A. Davidson.

The Analyst

Russell E. T. Gunther of D.A. Davidson initiated coverage on Customers Bancorp with a Neutral rating, a $33 12-18 month price target and a $40 five-year price target. 

The Thesis

Customers Bancorp’s growth over the past six years has been driven in part by the company’s unique business model, Gunther said in a Tuesday note. (See the analyst's track record here.)

“CUBI employs a private banking service model via recruitment of talented teams targeting privately held businesses and high net worth families with a bespoke, single point of contact approach to driving an above-peer growth rate," the analyst said. 

CUBI, a "struggling $200-million institution" in 2009, now has $9.8 billion in assets, according to D.A. Davidson. 

Now, CUBI plans to focus its efforts on consumer and industrial loans, sending teams into high-growth markets in Washington D.C. and Chicago, Gunther said. 

Gunther expects this new model to generate 7-8 percent organic loan growth through 2020.

Price Action

At the time of publication, Customers Bancorp shares were up 0.54 percent at $29.83. 

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Latest Ratings for CUBI

Nov 2018B. Riley FBRDowngradesBuyNeutral
Feb 2018DA DavidsonInitiates Coverage OnNeutral
Dec 2017B. Riley FBRReinstatesBuy

View More Analyst Ratings for CUBI
View the Latest Analyst Ratings

Posted-In: banks DA Davidson financials Russell GuntherAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga


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