Customers Bank slows growth, raises $56M in high-yield share sale (Update)

UPDATE: Joe Gladue, research director at Merion Capital, says he's cutting his profit estimates at Customers Bank -- for 2 reasons: 1) "higher-than-expected expense growth in 1Q16," 2) boss Jay S. Sidhu's repeated "intention to take steps to slow asset growth for the next 12-18 months in order to delay reaching the $10 billion in assets threshold" that would subject Customers to strict federal capital rules under the 2010-era bank reform laws.

Merion cut its 2016 EPS estimate from $2.46 to $2.37, a few cents shy of Sidhu's $2.40-$2.50 estimate. But Frank Schiraldi, bank analyst at Sandler O'Neill + Partners in New York, says Customers could raise "several dollars a share" in a "spin-off" of its Bankmobile unit, which he  says isn't reflected in the bank's recent share price.

EARLIER: Customers Bancorp Inc., Wyomissing, says it has priced 2 million shares of new preferred shares (Series E) at $25 a share, close to Customers' recent common-stock share value and its average value over the past year. Bankers at UBS and Morgan Stanley, who led the sale, may buy another 300,000 shares over the next month.

The Series E shares are to pay pay a 6.45 percent annual dividend until 2021, and an adjustable-rate dividend 5.14 percent plus the three-month London Interbank Offered Rate) from then on, "perpetually."

Customers will raise up to $55.7 million from the sale, and use it for "working capital and the funding of organic growth," and other "general corporate purposes." The shares will list on the New York Stock Exchange under the symbol CUBIPrE, starting in May, if the exchange approves.

Customers Bancorp manages $9 billion in loans and other assets. It has branches in southeast Pennsylvania, New Jersey, the New York area and southern New England, plus online and "Bank Mobile" smartphone-based services, and "Concierge Banking," which send bankers to rich customers' homes and offices.