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Disclosures About Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers' financial instruments at September 30, 2021 and December 31, 2020 were as follows.

															Fair Value Measurements at September 30, 2021
(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			$	1,052,054					$	1,052,054					$	1,052,054					$	—					$	—
Debt securities, available for sale			1,861,697						1,861,697						—						1,796,080						65,617
Loans held for sale			29,957						29,957						—						29,449						508
Total loans and leases receivable, net of allowance for credit losses on loans and leases			15,354,084						15,323,107						—						2,557,624						12,765,483
FHLB, Federal Reserve Bank and other restricted stock			57,184						57,184						—						57,184						—
Derivatives			34,234						34,234						—						34,071						163
Liabilities:
Deposits			$	16,971,025					$	16,971,434					$	16,377,876					$	593,558					$	—
Other borrowings			223,151						229,582						—						229,582						—
Subordinated debt			181,603						200,080						—						200,080						—
Derivatives			34,573						34,573						—						34,573						—

															Fair Value Measurements at December 31, 2020
(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			$	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						—

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, 2021 and December 31, 2020 were as follows:

			September 30, 2021
			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:
Asset-backed securities			$	—					$	159,840					$	65,617					$	225,457
Agency-guaranteed residential mortgage-backed securities			—						9,666						—						9,666
Agency-guaranteed commercial mortgage-backed securities			—						2,194						—						2,194
Agency-guaranteed residential collateralized mortgage obligations			—						102,194						—						102,194
Agency-guaranteed commercial collateralized mortgage obligations			—						141,808						—						141,808
Commercial mortgage-backed securities			—						28,088						—						28,088
Collateralized loan obligations			—						315,502						—						315,502
Corporate notes			—						440,892						—						440,892
Private label collateralized mortgage obligations			—						587,241						—						587,241
State and political subdivision debt securities			—						8,655						—						8,655
Derivatives			—						34,071						163						34,234
Loans held for sale – fair value option			—						12,159						—						12,159
Loans receivable, mortgage warehouse – fair value option			—						2,557,624						—						2,557,624
Total assets – recurring fair value measurements			$	—					$	4,399,934					$	65,780					$	4,465,714
Liabilities
Derivatives			$	—					$	34,573					$	—					$	34,573
Measured at Fair Value on a Nonrecurring Basis:
Assets
Collateral-dependent loans			$	—					$	17,290					$	7,865					$	25,155
Total assets – nonrecurring fair value measurements			$	—					$	17,290					$	7,865					$	25,155

			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 debt securities:
Asset-backed securities			$	—					$	377,145					$	—					$	377,145
U.S. government agencies securities			—						20,034						—						20,034
Agency-guaranteed residential mortgage–backed securities			—						63,091						—						63,091
Agency-guaranteed residential collateralized mortgage obligations			—						140,841						—						140,841
Agency-guaranteed commercial collateralized mortgage obligations			—						20,926						—						20,926
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

Statement of Changes in Level 3 Assets 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 three and nine months ended September 30, 2021 and 2020 are summarized in the tables below. Additional information about residential mortgage loan commitments can be found in NOTE 14 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.

			Residential Mortgage Loan Commitments
			Three Months Ended September 30,
(amounts in thousands)			2021						2020
Balance at June 30			$	301					$	52
Issuances			163						455
Settlements			(301)						(52)
Balance at September 30			$	163					$	455

			Residential Mortgage Loan Commitments
			Nine Months Ended September 30,
(amounts in thousands)			2021						2020
Balance at December 31			$	200					$	79
Issuances			660						722
Settlements			(697)						(346)
Balance at September 30			$	163					$	455

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, 2021 and December 31, 2020 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

(amounts in thousands)

Fair Value Estimate

Valuation Technique

Unobservable Input

Range  (Weighted Average) (4)

September 30, 2021

Asset-backed securities

$

65,617

Discounted cash flow

Discount rate Annualized loss rate Constant prepayment rate

4% - 6% (5%) 2% - 6% (4%) 12% - 25% (17%)

Collateral-dependent loans – real estate

6,616

Collateral appraisal (1)

Liquidation expenses (2)

5% - 9% (7%)

Collateral-dependent loans – commercial and industrial

741

Collateral appraisal (1) Business asset valuation (3)

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

8% - 26% (12%) 20% - 20% (20%)

Residential mortgage loan commitments

163

Adjusted market bid

Pull-through rate

75% - 94% (83%)

(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

(amounts 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 and 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.

(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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