XML 25 R13.htm IDEA: XBRL DOCUMENT
v3.20.2

Investment Securities | 9 Months Ended
--- | ---
Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | INVESTMENT SECURITIES The amortized cost and fair value of investment securities as of September 30, 2020 and December 31, 2019 are summarized in the tables below:
| September 30, 2020 (1)
(amounts in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available for sale debt securities: |  |  |  |  |  |  |
Asset-backed securities | $ | 374,151 |  |  | $ | 1,404 |  |  | $ | (174) |  |  | $ | 375,381 |
U.S. government agencies securities | 40,000 |  |  | 8 |  |  | — |  |  | 40,008 |
Agency-guaranteed residential mortgage-backed securities | 59,013 |  |  | 2,066 |  |  | — |  |  | 61,079 |
Agency-guaranteed collateralized mortgage obligations | 153,088 |  |  | 771 |  |  | (80) |  |  | 153,779 |
State and political subdivision debt securities (2) | 17,391 |  |  | 868 |  |  | — |  |  | 18,259 |
Private label collateralized mortgage obligations | 118,979 |  |  | 8 |  |  | — |  |  | 118,987 |
Corporate notes (3) | 344,344 |  |  | 19,632 |  |  | (104) |  |  | 363,872 |
Available for sale debt securities | $ | 1,106,966 |  |  | $ | 24,757 |  |  | $ | (358) |  |  | 1,131,365 |
Equity securities (5) |  |  |  |  |  |  | 2,466 |
Total investment securities, at fair value |  |  |  |  |  |  | $ | 1,133,831 |
| 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 $4.2 million at September 30, 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. These securities were sold for $15.4 million with a realized gain of $1.0 million during the three months ended September 30, 2020. During the three and nine months ended September 30, 2020, Customers recognized unrealized gains of $0.2 million and $0.1 million, respectively, on its equity securities. During the three and nine months ended September 30, 2019, Customers recognized unrealized gains of $1.3 million and $1.0 million, 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. Proceeds from the sale of available for sale debt securities were $268.6 million and $377.8 million for the three and nine months ended September 30, 2020. Realized gains from the sale of available for sale debt securities were $11.7 million and $20.0 million for the three and nine months ended September 30, 2020, respectively. Proceeds from the sale of available for sale debt securities were $97.6 million for the three and nine months ended September 30, 2019. Realized gains from the sale of available for sale debt securities were $1.0 million for the three and nine months ended September 30, 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 other assets 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:
| September 30, 2020
(amounts in thousands) | Amortized Cost |  | Fair Value
Due in one year or less | $ | 8,000 |  |  | $ | 8,000 |
Due after one year through five years | 83,209 |  |  | 84,275 |
Due after five years through ten years | 274,135 |  |  | 292,605 |
Due after ten years | 36,391 |  |  | 37,259 |
Asset-backed securities | 374,151 |  |  | 375,381 |
Agency-guaranteed residential mortgage-backed securities | 59,013 |  |  | 61,079 |
Agency-guaranteed collateralized mortgage obligations | 153,088 |  |  | 153,779 |
Private label collateralized mortgage obligations | 118,979 |  |  | 118,987 |
Total debt securities | $ | 1,106,966 |  |  | $ | 1,131,365 |
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, 2020 were as follows:
| September 30, 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: |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | $ | 107,610 |  |  | $ | (174) |  |  | $ | — |  |  | $ | — |  |  | $ | 107,610 |  |  | $ | (174) |
Agency-guaranteed residential mortgage-backed securities | 19,019 |  |  | (80) |  |  | — |  |  | — |  |  | 19,019 |  |  | (80) |
Corporate notes | 40,409 |  |  | (104) |  |  | — |  |  | — |  |  | 40,409 |  |  | (104) |
Total | $ | 167,038 |  |  | $ | (358) |  |  | $ | — |  |  | $ | — |  |  | $ | 167,038 |  |  | $ | (358) |
At September 30, 2020, there were fifteen 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 were principally due to changes in market interest rates that resulted in a negative impact on the respective securities' fair value. All amounts related to these securities are expected to be recovered when market prices recover or at maturity. Customers does not intend to sell any of the 15 securities, and it is not more likely than not that Customers will be required to sell any of the 15 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 September 30, 2020 and December 31, 2019, Customers Bank had pledged investment securities aggregating $20.1 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 September 30, 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.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration