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Investment Securities | 9 Months Ended
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Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | NVESTMENT SECURITIES The amortized cost and approximate fair value of investment securities as of September 30, 2018 and December 31, 2017 are summarized in the tables below:
| September 30, 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 | $ | 316,785 |  |  | $ | — |  |  | $ | (11,367 | ) |  | $ | 305,418 |
Corporate notes | 381,475 |  |  | 347 |  |  | (20,208 | ) |  | 361,614 |
Available-for-sale debt securities | $ | 698,260 |  |  | $ | 347 |  |  | $ | (31,575 | ) |  | 667,032 |
Equity securities (1) |  |  |  |  |  |  | 1,819 |
Total investment securities, at fair value |  |  |  |  |  |  | $ | 668,851 |
(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 2 - 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 securities: |  |  |  |  |  |  |
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.
The following table presents proceeds from the sale of investment securities and gross gains and gross losses realized on those sales for the three and nine month periods ended September 30, 2018 and 2017:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
(amounts in thousands) |  |  |  |  |  |  |
Proceeds from sale of available-for-sale securities | $ | 476,182 |  |  | $ | 554,540 |  |  | $ | 476,182 |  |  | $ | 670,522 |
Gross gains | $ | — |  |  | $ | 5,349 |  |  | $ | — |  |  | $ | 8,532 |
Gross losses | (18,659 | ) |  | — |  |  | (18,659 | ) |  | — |
Net (losses)/gains | $ | (18,659 | ) |  | $ | 5,349 |  |  | $ | (18,659 | ) |  | $ | 8,532 |
These (losses)/gains were determined using the specific identification method and were reported as (loss) gain on sale of investment securities included in non-interest income on the consolidated statements of income. The following table shows debt securities by stated maturity. Debt 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:
| September 30, 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 | 229,807 |  |  | 218,904 |
Due after ten years | 151,668 |  |  | 142,710 |
Agency-guaranteed residential mortgage-backed securities | 316,785 |  |  | 305,418 |
Total debt securities | $ | 698,260 |  |  | $ | 667,032 |
Gross unrealized losses and fair value of Customers' available-for-sale debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017 were as follows:
| September 30, 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 | $ | 305,418 |  |  | $ | (11,367 | ) |  | $ | — |  |  | $ | — |  |  | $ | 305,418 |  |  | $ | (11,367 | )
Corporate notes | 321,303 |  |  | (20,208 | ) |  | — |  |  | — |  |  | 321,303 |  |  | (20,208 | )
Total | $ | 626,721 |  |  | $ | (31,575 | ) |  | $ | — |  |  | $ | — |  |  | $ | 626,721 |  |  | $ | (31,575 | )
| 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 September 30, 2018, there were twenty-eight available-for-sale debt securities in the less-than-twelve-month category and no available-for-sale debt 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 note's fair value. 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 and nine month periods ended September 30, 2017, Customers recorded other-than-temporary impairment losses of $8.3 million and $12.9 million, respectively, related to its equity holdings in Religare Enterprises Ltd. ("Religare") for the full amount of the decline in fair value from the cost basis established at December 31, 2016 through September 30, 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 2 - 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 since adoption are recorded directly in earnings, which resulted in an unrealized loss of $1.2 million and $1.5 million being recognized in other non-interest income in the accompanying consolidated statements of income for the three and nine months ended September 30, 2018, respectively. At September 30, 2018 and December 31, 2017, Customers Bank had pledged investment securities aggregating $187.1 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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