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Disclosures About Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers' financial instruments at March 31, 2019 and December 31, 2018 were as follows.

									Fair Value Measurements at March 31, 2019
(amounts in thousands)	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)
Assets:
Cash and cash equivalents	$	117,662			$	117,662			$	117,662			$	—			$	—
Debt securities, available for sale	676,422				676,422				—				676,422				—
Equity securities	1,720				1,720				1,720				—				—
Loans held for sale	1,602				1,602				—				1,602				—
Total loans and leases receivable, net of allowance for loan and lease losses	8,700,565				8,774,518				—				1,480,195				7,294,323
FHLB, Federal Reserve Bank and other restricted stock	80,416				80,416				—				80,416				—
Derivatives	14,665				14,665				—				14,588				77
Liabilities:
Deposits	$	7,425,318			$	7,422,232			$	5,867,017			$	1,555,215			$	—
Federal funds purchased	388,000				388,000				388,000				—				—
FHLB advances	1,025,832				1,025,830				500,832				524,998				—
Other borrowings	123,963				123,591				—				123,591				—
Subordinated debt	109,002				113,988				—				113,988				—
Derivatives	23,837				23,837				—				23,837				—

									Fair Value Measurements at December 31, 2018
(amounts in thousands)	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)
Assets:
Cash and cash equivalents	$	62,135			$	62,135			$	62,135			$	—			$	—
Debt securities, available for sale	663,294				663,294				—				663,294				—
Equity securities	1,718				1,718				1,718				—				—
Loans held for sale	1,507				1,507				—				1,507				—
Total loans and leases receivable, net of allowance for loan and lease losses	8,503,522				8,481,128				—				1,405,420				7,075,708
FHLB, Federal Reserve Bank and other restricted stock	89,685				89,685				—				89,685				—
Derivatives	14,693				14,693				—				14,624				69
Liabilities:
Deposits	$	7,142,236			$	7,136,009			$	5,408,055			$	1,727,954			$	—
Federal funds purchased	187,000				187,000				187,000				—				—
FHLB advances	1,248,070				1,248,046				998,070				249,976				—
Other borrowings	123,871				121,718				—				121,718				—
Subordinated debt	108,977				110,550				—				110,550				—
Derivatives	16,286				16,286				—				16,286				—

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 March 31, 2019 and December 31, 2018 were as follows:

	March 31, 2019
	Fair Value Measurements at the End of the Reporting Period Using
(amounts in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
Measured at Fair Value on a Recurring Basis:
Assets
Available-for-sale debt securities:
Agency-guaranteed residential mortgage-backed securities	$	—			$	304,144			$	—			$	304,144
Corporate notes	—				372,278				—				372,278
Equity securities	1,720				—				—				1,720
Derivatives	—				14,588				77				14,665
Loans held for sale – fair value option	—				1,602				—				1,602
Loans receivable, mortgage warehouse – fair value option	—				1,480,195				—				1,480,195
Total assets – recurring fair value measurements	$	1,720			$	2,172,807			$	77			$	2,174,604
Liabilities
Derivatives	$	—			$	23,837			$	—			$	23,837
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of reserves of $380	$	—			$	—			$	12,668			$	12,668
Other real estate owned	—				—				781				781
Total assets – nonrecurring fair value measurements	$	—			$	—			$	13,449			$	13,449

	December 31, 2018
	Fair Value Measurements at the End of the Reporting Period Using
(amounts in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
Measured at Fair Value on a Recurring Basis:
Assets
Available-for-sale securities:
Agency-guaranteed residential mortgage–backed securities	$	—			$	305,374			$	—			$	305,374
Corporate notes	—				357,920				—				357,920
Equity securities	1,718				—				—				1,718
Derivatives	—				14,624				69				14,693
Loans held for sale – fair value option	—				1,507				—				1,507
Loans receivable, mortgage warehouse – fair value option	—				1,405,420				—				1,405,420
Total assets – recurring fair value measurements	$	1,718			$	2,084,845			$	69			$	2,086,632
Liabilities
Derivatives	$	—			$	16,286			$	—			$	16,286
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of reserves of $845	$	—			$	—			$	10,876			$	10,876
Other real estate owned	—				—				621				621
Total assets – nonrecurring fair value measurements	$	—			$	—			$	11,497			$	11,497

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 months ended March 31, 2019 and 2018 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 March 31,
(amounts in thousands)	2019				2018
Balance at December 31	$	69			$	60
Issuances	77				83
Settlements	(69		)		(60		)
Balance at March 31	$	77			$	83

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 March 31, 2019 and December 31, 2018 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
March 31, 2019	Fair Value Estimate				Valuation Technique		Unobservable Input		Range  (Weighted Average)
(amounts in thousands)
Impaired loans - real estate	$	5,270			Collateral appraisal (1)		Liquidation expenses (2)		8% - 8% (8%)
Impaired loans - commercial & industrial	7,398				Business asset valuation (3)		Business asset valuation adjustments (4)		8% - 50% (17%)
Other real estate owned	781				Collateral appraisal (1)		Liquidation expenses (2)		8% - 13% (9%)
Residential mortgage loan commitments	77				Adjusted market bid		Pull-through rate		83% - 83% (83%)

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2018	Fair Value Estimate				Valuation Technique		Unobservable Input		Range  (Weighted Average)
(amounts in thousands)
Impaired loans - real estate	$	10,260			Collateral appraisal (1)		Liquidation expenses (2)		8% - 8% (8%)
Impaired loans - commercial & industrial	616				Business asset valuation (3)		Business asset valuation adjustments (4)		8% - 50% (26%)
Other real estate owned	621				Collateral appraisal (1)		Liquidation expenses (2)		8% - 8% (8%)
Residential mortgage loan commitments	69				Adjusted market bid		Pull-through rate		90% - 90% (90%)

(1) Obtained from approved independent appraisers. Appraisals are current and in compliance with credit policy. Customers 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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