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Investment Securities | 3 Months Ended
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Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES The amortized cost and fair value of investment securities as of March 31, 2020 and December 31, 2019 are summarized in the tables below:
| March 31, 2020 (1) |  |  |  |  |  |
(amounts in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available for sale debt securities: |  |  |  |  |  |  |
Agency-guaranteed residential mortgage-backed securities | $ | 159,416 |  |  | $ | 13,398 |  |  | $ | — |  |  | $ | 172,814 |
Agency-guaranteed collateralized mortgage obligations | 153,952 |  |  | — |  |  | — |  |  | 153,952 |
State and political subdivision debt securities (2) | 15,157 |  |  | — |  |  | — |  |  | 15,157 |
Collateralized mortgage obligations | 5,566 |  |  | — |  |  | — |  |  | 5,566 |
Corporate notes (3) | 356,027 |  |  | 1,471 |  |  | (8,634) |  |  | 348,864 |
Available for sale debt securities | $ | 690,118 |  |  | $ | 14,869 |  |  | $ | (8,634) |  |  | 696,353 |
Interest-only GNMA securities (4) |  |  |  |  |  |  | 15,276 |
Equity securities (5) |  |  |  |  |  |  | 1,028 |
Total investment securities, at fair value |  |  |  |  |  |  | $ | 712,657 |
| December 31, 2019 |  |  |  |  |  |
(amounts in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available for sale debt securities: |  |  |  |  |  |  |
Agency-guaranteed residential mortgage-backed securities | $ | 273,252 |  |  | $ | 5,069 |  |  | $ | — |  |  | $ | 278,321 |
Corporate notes (3) | 284,639 |  |  | 14,238 |  |  | — |  |  | 298,877 |
Available for sale debt securities | $ | 557,891 |  |  | $ | 19,307 |  |  | $ | — |  |  | 577,198 |
Interest-only GNMA securities (4) |  |  |  |  |  |  | 16,272 |
Equity securities (5) |  |  |  |  |  |  | 2,406 |
Total investment securities, at fair value |  |  |  |  |  |  | $ | 595,876 |
(1)Accrued interest on AFS debt securities totaled $4.7 million at March 31, 2020 and is included in accrued interest receivable on the consolidated balance sheet. (2)Includes both taxable and non-taxable municipal securities. (3)Includes corporate securities issued by domestic bank holding companies. (4)Reported at fair value with fair value changes recorded in non-interest income based on a fair value option election. (5)Includes equity securities issued by a foreign entity. On June 28, 2019, Customers obtained ownership of certain interest-only GNMA securities that served as the primary collateral for loans made to one commercial mortgage warehouse customer through a Uniform Commercial Code private sale transaction. In connection with the acquisition of the interest-only GNMA securities, Customers recognized a pre-tax loss of $7.5 million for the three months ended June 30, 2019 for the shortfall in the fair value of the interest-only GNMA securities compared to its credit exposure to this commercial mortgage warehouse customer. Upon acquisition, Customers elected the fair value option for these interest-only GNMA securities. The fair value of these securities at March 31, 2020 was $15.3 million. During the three months ended March 31, 2020 and 2019, Customers recognized unrealized losses of $1.4 million and unrealized gains of $2 thousand, respectively, on its equity securities. These unrealized gains and losses are reported as unrealized gain (loss) on investment securities within non-interest income on the consolidated statements of income. For the three months ended March 31, 2020, realized gains from sales of available-for-sale securities were $4.0 million. Proceeds from these sales were received in April 2020. There were no sales during the three months ended March 31, 2019. These gains (losses) were determined using the specific identification method and were reported as gain (loss) on sale of investment securities within non-interest income on the consolidated statements of income. The following table shows debt securities by stated maturity. Debt securities backed by mortgages and interest-only GNMA securities 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, 2020 |  |
(amounts in thousands) | Amortized Cost |  | Fair Value
Due in one year or less | $ | 11,885 |  |  | $ | 11,885 |
Due after one year through five years | 57,611 |  |  | 57,723 |
Due after five years through ten years | 282,528 |  |  | 275,182 |
Due after ten years | 19,160 |  |  | 19,231 |
Agency-guaranteed residential mortgage-backed securities | 159,416 |  |  | 172,814 |
Agency-guaranteed collateralized mortgage obligations | 153,952 |  |  | 153,952 |
Collateralized mortgage obligations | 5,566 |  |  | 5,566 |
Interest-only classes of agency-guaranteed home equity conversion mortgage-backed securities | — |  |  | 15,276 |
Total debt securities | $ | 690,118 |  |  | $ | 711,629 |
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 March 31, 2020 were as follows:
| March 31, 2020 |  |  |  |  |  |  |  |  |  |
| Less Than 12 Months |  |  |  | 12 Months or More |  |  |  | Total |  |
(amounts in thousands) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
Available for sale debt securities: |  |  |  |  |  |  |  |  |  |  |
Corporate notes | 249,946 |  |  | 8,634 |  |  | — |  |  | — |  |  | 249,946 |  |  | 8,634 |
Total | $ | 249,946 |  |  | $ | 8,634 |  |  | $ | — |  |  | $ | — |  |  | $ | 249,946 |  |  | $ | 8,634 |
At March 31, 2020, there were 13 available for sale debt securities with unrealized losses in the less-than-twelve-month category and no available for sale debt securities with unrealized losses in the twelve-month-or-more category. The unrealized losses on the corporate notes relate to securities with no company specific concentration. The unrealized losses were principally due to changes in market interest rates that resulted in a negative impact on the respective notes' fair value. All amounts related to 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. At December 31, 2019, there were no available for sale debt securities in an unrealized loss position. At March 31, 2020 and December 31, 2019, Customers Bank had pledged investment securities aggregating $20.0 million and $20.4 million in fair value, respectively, as collateral against its borrowings primarily with an unused line of credit with another financial institution. These counterparties do not have the ability to sell or repledge these securities. At March 31, 2020 and December 31, 2019, no securities holding of any one issuer, other than the U.S. Government and its agencies, amounted to greater than 10% of shareholders' equity.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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