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Disclosures About Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers' financial instruments at September 30, 2018 and December 31, 2017 were as follows.

									Fair Value Measurements at September 30, 2018
	Carrying Amount				Estimated Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
(amounts in thousands)
Assets:
Cash and cash equivalents	$	666,034			$	666,034			$	666,034			$	—			$	—
Debt securities, available for sale	667,032				667,032				—				667,032				—
Equity securities	1,819				1,819				1,819				—				—
Loans held for sale	1,383				1,383				—				1,383				—
Total loans receivable, net of allowance for loan losses	8,715,536				8,646,346				—				1,516,327				7,130,019
FHLB, Federal Reserve Bank and other restricted stock	74,206				74,206				—				74,206				—
Derivatives	22,613				22,613				—				22,491				122
Liabilities:
Deposits	$	8,513,714			$	8,506,804			$	6,120,233			$	2,386,571			$	—
FHLB advances	835,000				834,968				—				834,968				—
Other borrowings	123,779				124,724				—				124,724				—
Subordinated debt	108,953				114,400				—				114,400				—
Derivatives	15,684				15,684				—				15,684				—

									Fair Value Measurements at December 31, 2017
	Carrying Amount				Estimated Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
(amounts in thousands) (as restated)
Assets:
Cash and cash equivalents	$	146,323			$	146,323			$	146,323			$	—			$	—
Investment securities, available for sale	471,371				471,371				3,352				468,019				—
Loans held for sale (as restated)	146,077				146,251				—				1,886				144,365
Total loans receivable, net of allowance for loan losses (as restated)	8,523,651				8,470,171				—				1,793,408				6,676,763
FHLB, Federal Reserve Bank and other restricted stock	105,918				105,918				—				105,918				—
Derivatives	9,752				9,752				—				9,692				60
Liabilities:
Deposits	$	6,800,142			$	6,796,095			$	4,894,449			$	1,901,646			$	—
Federal funds purchased	155,000				155,000				155,000				—				—
FHLB advances	1,611,860				1,611,603				881,860				729,743				—
Other borrowings	186,497				193,557				65,072				128,485				—
Subordinated debt	108,880				115,775				—				115,775				—
Derivatives	10,074				10,074				—				10,074				—

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

For financial assets and liabilities measured at fair value on a recurring and nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2018 and December 31, 2017 were as follows:

	September 30, 2018
	Fair Value Measurements at the End of the Reporting Period Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
(amounts in thousands)
Measured at Fair Value on a Recurring Basis:
Assets
Available-for-sale debt securities:
Agency-guaranteed residential mortgage-backed securities	$	—			$	305,418			$	—			$	305,418
Corporate notes	—				361,614				—				361,614
Equity securities	1,819				—				—				1,819
Derivatives	—				22,491				122				22,613
Loans held for sale – fair value option	—				1,383				—				1,383
Loans receivable, mortgage warehouse - fair value option	—				1,516,327				—				1,516,327
Total assets - recurring fair value measurements	$	1,819			$	2,207,233			$	122			$	2,209,174
Liabilities
Derivatives	$	—			$	15,684			$	—			$	15,684
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of reserves of $1,771	$	—			$	—			$	7,295			$	7,295
Other real estate owned	—				—				1,078				1,078
Total assets - nonrecurring fair value measurements	$	—			$	—			$	8,373			$	8,373

	December 31, 2017
	Fair Value Measurements at the End of the Reporting Period Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
(amounts in thousands) (as restated)
Measured at Fair Value on a Recurring Basis:
Assets
Available-for-sale securities:
Agency-guaranteed residential mortgage-backed securities	$	—			$	183,458			$	—			$	183,458
Agency-guaranteed commercial real estate mortgage-backed securities	—				238,472				—				238,472
Corporate notes	—				46,089				—				46,089
Equity securities	3,352				—				—				3,352
Derivatives	—				9,692				60				9,752
Loans held for sale – fair value option (as restated)	—				1,886				144,365				146,251
Loans receivable, mortgage warehouse - fair value option (as restated)	—				1,793,408				—				1,793,408
Total assets - recurring fair value measurements	$	3,352			$	2,273,005			$	144,425			$	2,420,782
Liabilities
Derivatives	$	—			$	10,074			$	—			$	10,074
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of reserves of $1,451	$	—			$	—			$	13,902			$	13,902
Other real estate owned	—				—				1,449				1,449
Total assets - nonrecurring fair value measurements	$	—			$	—			$	15,351			$	15,351

Statement of Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis for the three and nine months ended September 30, 2018 and 2017 are summarized in the tables below. Additional information about residential mortgage loan commitments can be found in NOTE 10 - DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES.

	Residential Mortgage Loan Commitments
	Three Months Ended September 30,
	2018				2017
(amounts in thousands)
Balance at June 30	$	133			$	102
Issuances	122				103
Settlements	(133		)		(102		)
Balance at September 30	$	122			$	103

	Residential Mortgage Loan Commitments
	Nine Months Ended September 30,
	2018				2017
(amounts in thousands)
Balance at December 31	$	60			$	45
Issuances	338				300
Settlements	(276		)		(242		)
Balance at September 30	$	122			$	103

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value as of September 30, 2018 and December 31, 2017 on a recurring and nonrecurring basis for which Customers utilized Level 3 inputs to measure fair value. The unobservable Level 3 inputs noted below contain a level of uncertainty that may differ from what is realized in an immediate settlement of the assets. Therefore, Customers may realize a value higher or lower than the current estimated fair value of the assets.

	Quantitative Information about Level 3 Fair Value Measurements
September 30, 2018	Fair Value Estimate				Valuation Technique		Unobservable Input		Range  (Weighted Average)
(amounts in thousands)
Impaired loans - Real Estate	$	5,211			Collateral appraisal (1)		Liquidation expenses (2)		8% - 8% (8%)
Impaired loans - C&I	2,084				Business asset valuation (3)		Business asset valuation adjustments (4)		6% - 63% (12%)
Other real estate owned	1,078				Collateral appraisal (1)		Liquidation expenses (2)		8% - 10% (8%)
Residential mortgage loan commitments	122				Adjusted market bid		Pull-through rate		90% - 90% (90%)

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2017	Fair Value Estimate				Valuation Technique		Unobservable Input		Range  (Weighted Average)
(amounts in thousands)
Impaired loans	$	13,902			Collateral appraisal (1)		Liquidation expenses (2)		8% - 8% (8%)
Other real estate owned	1,449				Collateral appraisal (1)		Liquidation expenses (2)		8% - 8% (8%)
Residential mortgage loan commitments	60				Adjusted market bid		Pull-through rate		90% - 90% (90%)

(1) Obtained from approved independent appraisers. Appraisals are current and in compliance with credit policy. The Bank does not generally discount appraisals.

(2) Appraisals are adjusted by management for liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percentage of the appraisal.

(3) Business asset valuation obtained from independent party.

(4) Business asset valuations may be adjusted by management for qualitative factors including economic conditions and the condition of the business assets. The range and weighted average of the business asset adjustments are presented as a percent of the business asset valuation.

X

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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