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Customers Bancorp: Undervalued On Price/Book Basis

Customers Bancorp should be your Top Idea for a financial name to own heading into the balance of 2015, especially in light of recent Q4 earnings which saw the market look past a proactive net interest margin contraction of 21 bps on the full year. CUBI wanted to diversify its loan portfolio, which was hugely comprised of commercial real estate loans. The loans CUBI chose to diversify into, namely multi-family loans were lower risk and had lower interest returns which hurts NIM.

Yes, this 14 branch regional commercial bank doing business in the PA, NY, NJ, MA, and RI areas is a must own in any portfolio. CUBI is up 10% since I initiated coverage of the name in early-November but still trades at a substantial discount to peers:

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CUBI reported a blowout Q4 ex. the self-induced NIM contraction - again CUBI decided it wanted to grow… Read More …