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Investment Securities | 3 Months Ended
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Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES The amortized cost and approximate fair value of investment securities as of March 31, 2018 and December 31, 2017 are summarized in the tables below:
| March 31, 2018
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
(amounts in thousands) |  |  |  |  |  |  |
Available for Sale Debt Securities: |  |  |  |  |  |  |
Agency-guaranteed residential mortgage-backed securities | $ | 505,113 |  |  | $ | — |  |  | $ | (11,856 | ) |  | $ | 493,257 |
Agency-guaranteed commercial real estate mortgage-backed securities | 334,643 |  |  | — |  |  | (10,109 | ) |  | 324,534 |
Corporate notes | 374,611 |  |  | 947 |  |  | (15,050 | ) |  | 360,508 |
Available for Sale Debt Securities | $ | 1,214,367 |  |  | $ | 947 |  |  | $ | (37,015 | ) |  | 1,178,299 |
Equity Securities (1) |  |  |  |  |  |  | 3,362 |
Total Investment Securities, at Fair Value |  |  |  |  |  |  | $ | 1,181,661 |
(1) Includes equity securities issued by a foreign entity that are being measured at fair value with changes in fair value recognized directly in earnings effective January 1, 2018 as a result of adopting ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (see NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for additional information related to the adoption of this new standard).
| December 31, 2017
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
(amounts in thousands) |  |  |  |  |  |  |
Available for Sale: |  |  |  |  |  |  |
Agency-guaranteed residential mortgage-backed securities | $ | 186,221 |  |  | $ | 36 |  |  | $ | (2,799 | ) |  | $ | 183,458 |
Agency-guaranteed commercial real estate mortgage-backed securities | 238,809 |  |  | 432 |  |  | (769 | ) |  | 238,472 |
Corporate notes (1) | 44,959 |  |  | 1,130 |  |  | — |  |  | 46,089 |
Equity securities (2) | 2,311 |  |  | 1,041 |  |  | — |  |  | 3,352 |
Total Available for Sale Securities, at Fair Value | $ | 472,300 |  |  | $ | 2,639 |  |  | $ | (3,568 | ) |  | $ | 471,371 |
(1) | Includes subordinated debt issued by other bank holding companies.
(2) | Includes equity securities issued by a foreign entity.
There were no sales of securities during the three month periods ended March 31, 2018 and 2017.
The following table shows debt investment securities by stated maturity. Investment securities backed by mortgages have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, these debt securities are classified separately with no specific maturity date:
| March 31, 2018
| Amortized Cost |  | Fair Value
(amounts in thousands) |  |  |
Due in one year or less | $ | — |  |  | $ | — |
Due after one year through five years | — |  |  | — |
Due after five years through ten years | 119,980 |  |  | 117,332 |
Due after ten years | 254,631 |  |  | 243,176 |
Agency-guaranteed residential mortgage-backed securities | 505,113 |  |  | 493,257 |
Agency-guaranteed commercial real estate mortgage-backed securities | 334,643 |  |  | 324,534 |
Total debt securities | $ | 1,214,367 |  |  | $ | 1,178,299 |
Gross unrealized losses and fair value of Customers' available for sale debt investment securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2018 and December 31, 2017 were as follows:
| March 31, 2018
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
(amounts in thousands) |  |  |  |  |  |  |  |  |  |  |
Available for Sale Debt Securities: |  |  |  |  |  |  |  |  |  |  |
Agency-guaranteed residential mortgage-backed securities | $ | 430,735 |  |  | $ | (8,161 | ) |  | $ | 62,522 |  |  | $ | (3,695 | ) |  | $ | 493,257 |  |  | $ | (11,856 | )
Agency-guaranteed commercial real estate mortgage-backed securities | 318,635 |  |  | (9,831 | ) |  | 5,899 |  |  | (278 | ) |  | 324,534 |  |  | (10,109 | )
Corporate notes | 309,601 |  |  | (15,050 | ) |  | — |  |  | — |  |  | 309,601 |  |  | (15,050 | )
Total | $ | 1,058,971 |  |  | $ | (33,042 | ) |  | $ | 68,421 |  |  | $ | (3,973 | ) |  | $ | 1,127,392 |  |  | $ | (37,015 | )
| December 31, 2017
| Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
(amounts in thousands) |  |  |  |  |  |  |  |  |  |  |
Available for Sale Debt Securities: |  |  |  |  |  |  |  |  |  |  |
Agency-guaranteed residential mortgage-backed securities | $ | 104,861 |  |  | $ | (656 | ) |  | $ | 66,579 |  |  | $ | (2,143 | ) |  | $ | 171,440 |  |  | $ | (2,799 | )
Agency-guaranteed commercial real estate mortgage-backed securities | 115,970 |  |  | (740 | ) |  | 6,151 |  |  | (29 | ) |  | 122,121 |  |  | (769 | )
Total | $ | 220,831 |  |  | $ | (1,396 | ) |  | $ | 72,730 |  |  | $ | (2,172 | ) |  | $ | 293,561 |  |  | $ | (3,568 | )
At March 31, 2018, there were sixty-two available-for-sale debt investment securities in the less-than-twelve-month category and sixteen available-for-sale debt investment securities in the twelve-month-or-more category. The unrealized losses on the mortgage-backed securities are guaranteed by government-sponsored entities and primarily relate to changes in market interest rates. The unrealized losses on the corporate notes relate to securities with no company specific concentration. The unrealized losses were due to an upward shift in interest rates that resulted in a negative impact on the respective notes pricing. All amounts related to the mortgage-backed securities and the corporate notes are expected to be recovered when market prices recover or at maturity. Customers does not intend to sell these securities and it is not more likely than not that Customers will be required to sell the securities before recovery of the amortized cost basis. During the three month period ended March 31, 2017, Customers recorded other-than-temporary impairment losses of $1.7 million related to its equity holdings in Religare for the full amount of the decline in fair value from the cost basis established at December 31, 2016 through March 31, 2017 because Customers no longer had the intent to hold these securities until a recovery in fair value. At December 31, 2017, the fair value of the Religare equity securities was $3.4 million which resulted in an unrealized gain of $1.0 million being recognized in accumulated other comprehensive income with no adjustment for deferred taxes as Customers currently does not have a tax strategy in place capable of generating sufficient capital gains to utilize any capital losses resulting from the Religare investment. As described in NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION, the adoption of ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, on January 1, 2018 resulted in a cumulative effect adjustment to Customers' consolidated balance sheet with a $1.0 million reduction in accumulated other comprehensive income and a corresponding increase in retained earnings related to the December 31, 2017 unrealized gain on the Religare equity securities. In accordance with the new accounting guidance, changes in the fair value of the Religare equity securities from December 31, 2017 through March 31, 2018 were recorded directly in earnings, which resulted in an unrealized gain of $10 thousand being recognized in other non-interest income in the accompanying consolidated statements of income. At March 31, 2018 and December 31, 2017, Customers Bank had pledged investment securities aggregating $701.5 million and $16.9 million in fair value, respectively, as collateral against its borrowings primarily with the FHLB and an unused line of credit with another financial institution. These counterparties do not have the ability to sell or repledge these securities.

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