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Disclosures about Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers’ financial instruments at December 31, 2020 and 2019 were as follows:

			Carrying Amount						Estimated Fair Value						Fair Value Measurements at December 31, 2020
(amounts in thousands)															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			$	693,354					$	693,354					$	693,354					$	—					$	—
Debt securities, available for sale			1,206,431						1,206,431						—						1,206,431						—
Equity securities			3,854						3,854						3,854						—						—
Loans held for sale			79,086						79,086						—						78,443						643
Total loans and leases receivable, net of allowance for credit losses on loans and leases			15,608,989						16,222,202						—						3,616,432						12,605,770
FHLB, Federal Reserve Bank and other restricted stock			71,368						71,368						—						71,368						—
Derivatives			54,223						54,223						—						54,023						200
Liabilities:
Deposits			$	11,309,929					$	11,312,494					$	10,657,998					$	654,496					$	—
FRB PPP Liquidity Facility			4,415,016						4,415,016						—						4,415,016						—
Federal funds purchased			250,000						250,000						250,000						—						—
FHLB advances			850,000						852,442						—						852,442						—
Other borrowings			124,037						129,120						—						129,120						—
Subordinated debt			181,394						193,119						—						193,119						—
Derivatives			98,164						98,164						—						98,164						—

			Carrying Amount						Estimated Fair Value						Fair Value Measurements at December 31, 2019
(amounts in thousands)															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			$	212,505					$	212,505					$	212,505					$	—					$	—
Debt securities, available for sale			577,198						577,198						—						577,198						—
Interest-only GNMA securities			16,272						16,272						—						—						16,272
Equity securities			2,406						2,406						2,406						—						—
Loans held for sale			486,328						486,328						—						2,130						484,198
Total loans and leases receivable, net of allowance for credit losses on loans and leases			9,508,367						9,853,037						—						2,245,758						7,607,279
FHLB, Federal Reserve Bank, and other restricted stock			84,214						84,214						—						84,214						—
Derivatives			23,608						23,608						—						23,529						79
Liabilities:
Deposits			$	8,648,936					$	8,652,340					$	6,980,402					$	1,671,938					$	—
Federal funds purchased			538,000						538,000						538,000						—						—
FHLB advances			850,000						852,162						—						852,162						—
Other borrowings			123,630						127,603						—						127,603						—
Subordinated debt			181,115						192,217						—						192,217						—
Derivatives			45,939						45,939						—						45,939						—

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring and Non-recurring Basis

For financial assets and liabilities measured at fair value on a recurring and non-recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2020 and 2019 were as follows:

			December 31, 2020
			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:
Asset-backed securities			$	—					$	377,145					$	—					$	377,145
US Government agency securities			—						20,034						—						20,034
Agency-guaranteed mortgage-backed securities			—						63,091						—						63,091
Agency-guaranteed collateralized mortgage obligations			—						161,767						—						161,767
Collateralized loan obligations			—						32,367						—						32,367
Corporate notes			—						396,744						—						396,744
Private label collateralized mortgage obligations			—						136,992						—						136,992
State and political subdivision debt securities			—						18,291						—						18,291
Equity securities			3,854						—						—						3,854
Derivatives			—						54,023						200						54,223
Loans held for sale – fair value option			—						5,509						—						5,509
Loans receivable, mortgage warehouse – fair value option			—						3,616,432						—						3,616,432
Total assets – recurring fair value measurements			$	3,854					$	4,882,395					$	200					$	4,886,449
Liabilities
Derivatives			$	—					$	98,164					$	—					$	98,164
Measured at Fair Value on a Nonrecurring Basis:
Assets
Loans held for sale			$	—					$	55,683					$	—					$	55,683
Collateral-dependent loans			—						17,251						3,867						21,118
Other real estate owned			—						—						35						35
Total assets – nonrecurring fair value measurements			$	—					$	72,934					$	3,902					$	76,836

			December 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 securities:
Agency-guaranteed residential mortgage-backed securities			$	—					$	278,321					$	—					$	278,321
Corporate notes			—						298,877						—						298,877
Interest-only GNMA securities			—						—						16,272						16,272
Equity securities			2,406						—						—						2,406
Derivatives			—						23,529						79						23,608
Loans held for sale – fair value option			—						2,130						—						2,130
Loans receivable, mortgage warehouse – fair value option			—						2,245,758						—						2,245,758
Total assets - recurring fair value measurements			$	2,406					$	2,848,615					$	16,351					$	2,867,372
Liabilities
Derivatives			$	—					$	45,939					$	—					$	45,939
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of specific reserves of $852			$	—					$	—					$	14,272					$	14,272
Other real estate owned			—						—						78						78
Total assets – nonrecurring fair value measurements			$	—					$	—					$	14,350					$	14,350

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

The changes in residential mortgage loan commitments (Level 3 assets) measured at fair value on a recurring basis for the years ended December 31, 2020 and 2019 are summarized as follows in the table below. Additional information about residential mortgage loan commitments can be found in NOTE 20 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.

						Residential Mortgage Loan Commitments
						For the Years Ended December 31,
(amounts in thousands)						2020						2019
Balance at December 31,						$	79					$	69
Issuances						922						451
Settlements						(801)						(441)
Balance at December 31,						$	200					$	79

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 December 31, 2020 and 2019 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. The interest-only GNMA securities were Level 3 assets measured at fair value on a recurring basis under a fair value option election.

Quantitative Information about Level 3 Fair Value Measurements

(dollars in thousands)

Fair Value Estimate

Valuation Technique

Unobservable Input

Range (Weighted Average) (4)

December 31, 2020

Collateral dependent loans – real estate

$

2,928

Collateral appraisal (1)

Liquidation expenses (2)

8% - 8% (8%)

Collateral dependent loans – commercial & industrial

939

Collateral appraisal (1) Business asset valuation (3)

Liquidation expenses (2) Business asset valuation adjustments (4)

7% - 8%  (8%) 60% - 60% (60%)

Other real estate owned

35

Collateral appraisal (1)

Liquidation expenses (2)

8% - 9% (9%)

Residential mortgage loan commitments

200

Adjusted market bid

Pull-through rate

78% - 78% (78%)

(1)Obtained from approved independent appraisers.  Appraisals are current and in compliance with credit policy. Customers does not generally discount appraisals. Fair value is also estimated based on sale agreements or letters of intent with third parties.

(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.

Quantitative Information about Level 3 Fair Value Measurements

(dollars in thousands)

Fair Value Estimate

Valuation Technique

Unobservable Input

Range (Weighted Average) (4)

December 31, 2019

Impaired loans – real estate

$

12,767

Collateral appraisal (1) Business asset valuation(3)

Liquidation expenses (2) Business asset valuation adjustments (4)

8% - 8% (8%) 34% - 45% (37%)

Impaired loans – commercial & industrial

1,505

Collateral appraisal (1) Business asset valuation(3)

Liquidation expenses (2) Business asset valuation adjustments (4)

8% - 8% (8%) 8% - 50% (22%)

Interest-only GNMA securities

16,272

Discounted cash flow

Constant prepayment rate

9% - 14% (12%)

Other real estate owned

78

Collateral appraisal (1)

Liquidation expenses (2)

8% - 9% (9%)

Residential mortgage loan commitments

79

Adjusted market bid

Pull-through rate

85% - 85% (85%)

(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.

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- 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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