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Spin-Off and Merger | 6 Months Ended
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Jun. 30, 2018
Discontinued Operations and Disposal Groups [Abstract] |
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 the BankMobile spin-off subsidiary into Flagship, with Customers' shareholders first receiving shares of the BankMobile spin-off subsidiary as a dividend in the spin-off and then receiving shares of Flagship common stock in the merger of the BankMobile spin-off subsidiary into Flagship in exchange for shares of the BankMobile spin-off subsidiary common stock they receive in the spin-off. Separately, Flagship will assume the deposits and purchase certain associated assets of BankMobile for $10 million. Following completion of the spin-off and merger and other transactions contemplated in the Amended Agreement between Customers and Flagship, the BankMobile spin-off subsidiary 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 June 30, 2018 consolidated balance sheet. The Amended Agreement provides that completion of the transactions will be subject to the receipt of all necessary closing conditions. Although the possibility still exits that the spin-off and merger could close by September 30, 2018, at this time, no assurance can be given that the spin-off and merger will occur by or shortly after September 30, 2018. As of June 30, 2017, BankMobile met the criteria to be classified as held for sale and, accordingly, the operating results of BankMobile for the three and six month periods ended June 30, 2017, along with the associated cash flows of BankMobile for the six months ended June 30, 2017, 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/merger transaction should not be reported as held for sale or discontinued operations until execution of the spin-off/merger transaction. 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 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. Amounts previously reported as discontinued operations for the three and six month periods ended June 30, 2017 have been reclassified to conform with the current period presentation within the accompanying consolidated financial statements as summarized below. Customers will continue reporting the Community Business Banking and BankMobile segment results. See NOTE 12 - BUSINESS SEGMENTS. The following tables summarize the effect of the reclassification of BankMobile from held for sale to held and used on the previously reported consolidated statements of income for the three and six months ended June 30, 2017:
| Three Months Ended June 30, 2017
(amounts in thousands) | As Previously Reported |  | Effect of Reclassification From Held For Sale to Held and Used |  | After Reclassification
Interest income | $ | 93,852 |  |  | $ | — |  |  | $ | 93,852 |
Interest expense | 25,236 |  |  | 10 |  |  | 25,246 |
Net interest income | 68,616 |  |  | (10 | ) |  | 68,606 |
Provision for loan losses | 535 |  |  | — |  |  | 535 |
Non-interest income | 6,971 |  |  | 11,420 |  |  | 18,391 |
Non-interest expense | 30,567 |  |  | 19,846 |  |  | 50,413 |
Income from continuing operations before income taxes | 44,485 |  |  | (8,436 | ) |  | 36,049 |
Provision for income taxes | 15,533 |  |  | (3,206 | ) |  | 12,327 |
Net income from continuing operations | 28,952 |  |  | (5,230 | ) |  | 23,722 |
Loss from discontinued operations before income taxes | (8,436 | ) |  | 8,436 |  |  | — |
Income tax benefit from discontinued operations | (3,206 | ) |  | 3,206 |  |  | — |
Net loss from discontinued operations | (5,230 | ) |  | 5,230 |  |  | — |
Net income | 23,722 |  |  | — |  |  | 23,722 |
Preferred stock dividends | 3,615 |  |  | — |  |  | 3,615 |
Net income available to common shareholders | $ | 20,107 |  |  | $ | — |  |  | $ | 20,107 |
| Six Months Ended June 30, 2017
(amounts in thousands) | As Previously Reported |  | Effect of Reclassification From Held For Sale to Held and Used |  | After Reclassification
Interest income | $ | 176,946 |  |  | $ | — |  |  | $ | 176,946 |
Interest expense | 45,906 |  |  | 16 |  |  | 45,922 |
Net interest income | 131,040 |  |  | (16 | ) |  | 131,024 |
Provision for loan losses | 3,585 |  |  | — |  |  | 3,585 |
Non-interest income | 12,398 |  |  | 28,746 |  |  | 41,144 |
Non-interest expense | 60,714 |  |  | 39,064 |  |  | 99,778 |
Income from continuing operations before income taxes | 79,139 |  |  | (10,334 | ) |  | 68,805 |
Provision for income taxes | 23,263 |  |  | (3,927 | ) |  | 19,336 |
Net income from continuing operations | 55,876 |  |  | (6,407 | ) |  | 49,469 |
Loss from discontinued operations before income taxes | (10,334 | ) |  | 10,334 |  |  | — |
Income tax benefit from discontinued operations | (3,927 | ) |  | 3,927 |  |  | — |
Net loss from discontinued operations | (6,407 | ) |  | 6,407 |  |  | — |
Net income | 49,469 |  |  | — |  |  | 49,469 |
Preferred stock dividends | 7,229 |  |  | — |  |  | 7,229 |
Net income available to common shareholders | $ | 42,240 |  |  | $ | — |  |  | $ | 42,240 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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