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Disclosures About Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers' financial instruments at March 31, 2022 and December 31, 2021 were as follows.

															Fair Value Measurements at March 31, 2022
(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			$	274,600					$	274,600					$	274,600					$	—					$	—
Debt securities, available for sale			4,144,029						4,144,029						—						4,022,176						121,853
Loans held for sale			3,003						3,003						—						2,496						507
Total loans and leases receivable, net of allowance for credit losses on loans and leases			13,924,668						13,571,137						—						1,755,758						11,815,379
FHLB, Federal Reserve Bank and other restricted stock			46,040						46,040						—						46,040						—
Derivatives			21,954						21,954						—						21,805						149
Liabilities:
Deposits			$	16,415,560					$	16,343,932					$	15,969,368					$	374,564					$	—
Federal funds purchased			700,000						700,000						700,000						—						—
Other borrowings			223,230						219,130						—						219,130						—
Subordinated debt			181,742						196,482						—						196,482						—
Derivatives			18,370						18,370						—						18,370						—

															Fair Value Measurements at December 31, 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			$	518,032					$	518,032					$	518,032					$	—					$	—
Debt securities, available for sale			3,791,575						3,791,575						—						3,648,690						142,885
Loans held for sale			16,254						16,254						—						15,747						507
Total loans and leases receivable, net of allowance for credit losses on loans and leases			14,414,827						14,207,811						—						2,284,325						11,923,486
FHLB, Federal Reserve Bank and other restricted stock			64,584						64,584						—						64,584						—
Derivatives			27,295						27,295						—						27,116						179
Liabilities:
Deposits			$	16,777,924					$	16,777,236					$	16,270,586					$	506,650					$	—
Federal funds purchased			75,000						75,000						75,000						—						—
FHLB advances			700,000						700,000						—						700,000						—
Other borrowings			223,086						226,585						—						226,585						—
Subordinated debt			181,673						204,782						—						204,782						—
Derivatives			26,544						26,544						—						26,544						—

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, 2022 and December 31, 2021 were as follows:

			March 31, 2022
			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			$	—					$	221,766					$	121,853					$	343,619
Agency-guaranteed residential mortgage-backed securities			—						8,269						—						8,269
Agency-guaranteed commercial mortgage-backed securities			—						2,045						—						2,045
Agency-guaranteed residential collateralized mortgage obligations			—						603,403						—						603,403
Agency-guaranteed commercial collateralized mortgage obligations			—						162,599						—						162,599
Collateralized loan obligations			—						1,004,362						—						1,004,362
Commercial mortgage-backed securities			—						147,625						—						147,625
Corporate notes			—						593,750						—						593,750
Private label collateralized mortgage obligations			—						1,270,407						—						1,270,407
State and political subdivision debt securities			—						7,950						—						7,950
Derivatives			—						21,805						149						21,954
Loans held for sale – fair value option			—						2,496						—						2,496
Loans receivable, mortgage warehouse – fair value option			—						1,755,758						—						1,755,758
Total assets – recurring fair value measurements			$	—					$	5,802,235					$	122,002					$	5,924,237
Liabilities
Derivatives			$	—					$	18,370					$	—					$	18,370
Measured at Fair Value on a Nonrecurring Basis:
Assets
Collateral-dependent loans			$	—					$	—					$	2,485					$	2,485
Total assets – nonrecurring fair value measurements			$	—					$	—					$	2,485					$	2,485

			December 31, 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			$	—					$	154,540					$	142,885					$	297,425
Agency-guaranteed residential mortgage–backed securities			—						9,553						—						9,553
Agency-guaranteed commercial mortgage–backed securities			—						2,152						—						2,152
Agency-guaranteed residential collateralized mortgage obligations			—						196,930						—						196,930
Agency-guaranteed commercial collateralized mortgage obligations			—						238,844						—						238,844
Collateralized loan obligations			—						1,066,802						—						1,066,802
Commercial mortgage-backed securities			—						148,927						—						148,927
Corporate notes			—						580,046						—						580,046
Private label collateralized mortgage obligations			—						1,242,465						—						1,242,465
State and political subdivision debt securities			—						8,431						—						8,431
Derivatives			—						27,116						179						27,295
Loans held for sale – fair value option			—						15,747						—						15,747
Loans receivable, mortgage warehouse – fair value option			—						2,284,325						—						2,284,325
Total assets – recurring fair value measurements			$	—					$	5,975,878					$	143,064					$	6,118,942
Liabilities
Derivatives			$	—					$	26,544					$	—					$	26,544
Measured at Fair Value on a Nonrecurring Basis:
Assets
Collateral-dependent loans			$	—					$	—					$	5,121					$	5,121
Total assets – nonrecurring fair value measurements			$	—					$	—					$	5,121					$	5,121

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 months ended March 31, 2022 and 2021 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 March 31,
(amounts in thousands)			2022						2021
Balance at January 1,			$	179					$	200
Issuances			149						196
Settlements			(179)						(200)
Balance at March 31,			$	149					$	196

The changes in asset-backed securities (Level 3 assets) measured at fair value on a recurring basis for the three months ended March 31, 2022 are summarized in the tables below.

			Asset-backed securities
(amounts in thousands)			Three Months Ended March 31, 2022
Balance at January 1,			$	142,885
Principal payments			(16,349)
Credit losses			(728)
Change in fair value recognized in OCI			(3,955)
Balance at March 31,			$	121,853

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, 2022 and December 31, 2021 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)

March 31, 2022

Asset-backed securities

$

121,853

Discounted cash flow

Discount rate Annualized loss rate Constant prepayment rate

4% - 6% (4%) 7% - 8% (8%) 16% - 30% (19%)

Collateral-dependent loans – real estate

1,809

Collateral appraisal (1)

Liquidation expenses (2)

5% - 5% (5%)

Collateral-dependent loans – commercial and industrial

676

Collateral appraisal (1) Business asset valuation (3)

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

8% - 26% (13%) 25% - 27% (26%)

Residential mortgage loan commitments

149

Adjusted market bid

Pull-through rate

69% - 88% (82%)

Quantitative Information about Level 3 Fair Value Measurements

(amounts in thousands)

Fair Value Estimate

Valuation Technique

Unobservable Input

Range  (Weighted Average) (4)

December 31, 2021

Asset-backed securities

$

142,885

Discounted cash flow

Discount rate Annualized loss rate Constant prepayment rate

4% - 5% (5%) 4% - 4% (4%) 17% - 33% (19%)

Collateral-dependent loans – real estate

4,170

Collateral appraisal (1)

Liquidation expenses (2)

8% - 8% (8%)

Collateral-dependent loans – commercial and industrial

951

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

179

Adjusted market bid

Pull-through rate

76% - 89% (85%)

(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.

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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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