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Tax-Free Spin-Off and Merger | 12 Months Ended
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Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Tax-Free Spin-Off and Merger | SPIN-OFF AND MERGER In third quarter 2017, Customers decided that the best strategy for its shareholders to realize the value of the BankMobile business was to divest BankMobile through a spin-off of BankMobile to Customers' shareholders to be followed by a merger with Flagship Community Bank ("Flagship"). An Amended and Restated Purchase and Assumption Agreement and Plan of Merger (the “Amended Agreement”) with Flagship to effect the spin-off and merger and Flagship’s related purchase of BankMobile deposits from Customers was executed on November 17, 2017. Per the provisions of the Amended Agreement, the spin-off will be followed by a merger of Customers' BankMobile Technologies, Inc. ("BMT") subsidiary into Flagship, with Customers' shareholders first receiving shares of BMT as a dividend in the spin-off and then receiving shares of Flagship common stock in the merger of BMT into Flagship in exchange for the shares of BMT common stock they received in the spin-off. Flagship will separately purchase BankMobile deposits directly from Customers for cash. Following completion of the spin-off and merger and other transactions contemplated in the Amended Agreement between Customers and Flagship, BMT's shareholders would receive collectively more than 50% of Flagship common stock. The common stock of the merged entities, expected to be called BankMobile, is expected to be listed on a national securities exchange after completion of the transactions. In connection with the signing of the Amended Agreement on November 17, 2017, Customers deposited $1.0 million in an escrow account with a third party to be reserved for payment to Flagship in the event the Amended Agreement is terminated for reasons described in the Amended Agreement. This $1.0 million is considered restricted cash and is presented in cash and cash equivalents in the accompanying December 31, 2017 consolidated balance sheet. The Amended Agreement provides that completion of the transactions will be subject to the receipt of all necessary regulatory approvals, certain Flagship shareholder approvals, successful raising of capital by Flagship and other customary closing conditions. Customers expects the transactions to close in mid-2018. At December 31, 2016, Customers intended to sell its BankMobile division, and the BankMobile division met the criteria to be classified as held for sale; and accordingly the assets and liabilities of BankMobile were presented as “Assets held for sale,” “Non-interest bearing deposits held for sale,” and “Other liabilities held for sale” and BankMobile’s operating results and associated cash flows were presented as “Discontinued operations.” However, generally accepted accounting principles require that assets, liabilities, operating results and cash flows associated with a business to be disposed of through a spin-off and merger transaction should not be reported as held for sale or discontinued operations until execution of the spin-off and merger. As a result, beginning in third quarter 2017, the period in which Customers decided to spin-off BankMobile rather than selling directly to a third party, BankMobile's assets, liabilities, operating results and cash flows were no longer reported as held for sale or discontinued operations but instead were reported as held and used. At September 30, 2017, Customers measured the business at the lower of its (i) carrying amount before it was classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the business been continuously classified as held and used, or (ii) fair value at the date the decision not to sell was made. BankMobile's assets, liabilities, operating results and cash flows at December 31, 2017 and 2016, and for the years ended December 31, 2017, 2016 and 2015, are reported as held and used in the accompanying consolidated financial statements. Prior reported December 31, 2016 assets held for sale, non-interest bearing deposits held for sale and other liabilities held for sale have been reclassified to conform with the current period presentation as summarized below. Amounts previously reported as discontinued operations for the years ended December 31, 2016 and 2015, have also been reclassified to conform with the current period presentation as summarized below. Customers will continue reporting the Community Business Banking and BankMobile segment results. See NOTE 24 - BUSINESS SEGMENTS. The following table summarizes the effects of the reclassification of BankMobile's assets and liabilities from held for sale to held and used on the previously reported consolidated balance sheet as of December 31, 2016:
| December 31, 2016 As Previously Reported |  | Effect of Reclassification From Held For Sale to Held and Used |  | December 31, 2016 After Reclassification
(amounts in thousands) |  |
ASSETS |  |  |  |  |
Cash and cash equivalents | $ | 244,709 |  |  | $ | 20,000 |  |  | $ | 264,709 |
Loans receivable | 6,142,390 |  |  | 12,247 |  |  | 6,154,637 |
Bank premises and equipment, net | 12,259 |  |  | 510 |  |  | 12,769 |
Goodwill and other intangibles | 3,639 |  |  | 13,982 |  |  | 17,621 |
Assets held for sale | 79,271 |  |  | (79,271 | ) |  | — |
Other assets | 70,099 |  |  | 32,532 |  |  | 102,631 |
LIABILITIES |  |  |  |  |
Demand, non-interest bearing deposits | $ | 512,664 |  |  | $ | 453,394 |  |  | $ | 966,058 |
Interest-bearing deposits | 6,334,316 |  |  | 3,401 |  |  | 6,337,717 |
Non-interest bearing deposits held for sale | 453,394 |  |  | (453,394 | ) |  | — |
Other liabilities held for sale | 31,403 |  |  | (31,403 | ) |  | — |
Accrued interest payable and other liabilities | 47,381 |  |  | 28,002 |  |  | 75,383 |
The following table summarizes the effects of the reclassification of BankMobile's operating results from discontinued operations to continuing operations for the year ended December 31, 2016:
| Year Ended December 31, 2016 As Previously Reported |  | Effect of Reclassification From Discontinued Operations |  | Year Ended December 31, 2016 After Reclassification
(amounts in thousands) |  |
Interest income | $ | 322,539 |  |  | $ | — |  |  | $ | 322,539 |
Interest expense | 73,023 |  |  | 19 |  |  | 73,042 |
Net interest income | 249,516 |  |  | (19 | ) |  | 249,497 |
Provision for loan losses | 2,345 |  |  | 696 |  |  | 3,041 |
Non-interest income | 23,165 |  |  | 33,205 |  |  | 56,370 |
Non-interest expenses | 131,217 |  |  | 47,014 |  |  | 178,231 |
Income from continuing operations before income taxes | 139,119 |  |  | (14,524 | ) |  | 124,595 |
Provision for income taxes | 51,412 |  |  | (5,519 | ) |  | 45,893 |
Net income from continuing operations | 87,707 |  |  | (9,005 | ) |  | 78,702 |
Loss from discontinued operations before income taxes | (14,524 | ) |  | 14,524 |  |  | — |
Income tax benefit from discontinued operations | (5,519 | ) |  | 5,519 |  |  | — |
Net loss from discontinued operations | (9,005 | ) |  | 9,005 |  |  | — |
Net income | 78,702 |  |  | — |  |  | 78,702 |
Preferred stock dividend | 9,515 |  |  | — |  |  | 9,515 |
Net income available to common shareholders | $ | 69,187 |  |  | $ | — |  |  | $ | 69,187 |
The following table summarizes the effects of the reclassification of BankMobile's operating results from discontinued operations to continuing operations for the year ended December 31, 2015:
| Year Ended December 31, 2015 As Previously Reported |  | Effect of Reclassification From Discontinued Operations |  | Year Ended December 31, 2015 After Reclassification
(amounts in thousands) |  |
Interest income | $ | 249,850 |  |  | $ | — |  |  | $ | 249,850 |
Interest expense | 53,551 |  |  | 9 |  |  | 53,560 |
Net interest income | 196,299 |  |  | (9 | ) |  | 196,290 |
Provision for loan losses | 20,566 |  |  | — |  |  | 20,566 |
Non-interest income | 27,572 |  |  | 145 |  |  | 27,717 |
Non-interest expenses | 107,568 |  |  | 7,378 |  |  | 114,946 |
Income from continuing operations before income taxes | 95,737 |  |  | (7,242 | ) |  | 88,495 |
Provision for income taxes | 32,664 |  |  | (2,752 | ) |  | 29,912 |
Net income from continuing operations | 63,073 |  |  | (4,490 | ) |  | 58,583 |
Loss from discontinued operations before income taxes | (7,242 | ) |  | 7,242 |  |  | — |
Income tax benefit from discontinued operations | (2,752 | ) |  | 2,752 |  |  | — |
Net loss from discontinued operations | (4,490 | ) |  | 4,490 |  |  | — |
Net income | 58,583 |  |  | — |  |  | 58,583 |
Preferred stock dividend | 2,493 |  |  | — |  |  | 2,493 |
Net income available to common shareholders | $ | 56,090 |  |  | $ | — |  |  | $ | 56,090 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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