The amortized cost, approximate fair value and allowance for credit losses of investment securities as of June 30, 2022 and December 31, 2021 are summarized as follows:


	June 30, 2022 (1)
(amounts in thousands)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale debt securities:
Asset-backed securities	$	223,661	$	(411)	$	—	$	(3,529)	$	219,721



Agency-guaranteed residential collateralized mortgage obligations	156,339		—		—		(9,219)		147,120

Collateralized loan obligations	974,213		—		—		(23,645)		950,568
Commercial mortgage-backed securities	138,972		—		—		(3,188)		135,784
Corporate notes	579,324		—		376		(33,856)		545,844
Private label collateralized mortgage obligations	1,161,325		—		—		(47,988)		1,113,337
State and political subdivision debt securities (2)	8,527		—		—		(790)		7,737

Available for sale debt securities	$	3,242,361	$	(411)	$	376	$	(122,215)	3,120,111

Equity securities (3)									24,771
Total investment securities, at fair value									$	3,144,882


	December 31, 2021 (1)
(amounts in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale debt securities:
Asset-backed securities	$	297,291	$	253	$	(119)	$	297,425

Agency-guaranteed residential mortgage-backed securities	9,865		—		(312)		9,553
Agency-guaranteed commercial mortgage-backed securities	2,162		—		(10)		2,152
Agency-guaranteed residential collateralized mortgage obligations	199,091		154		(2,315)		196,930
Agency-guaranteed commercial collateralized mortgage obligations	242,668		53		(3,877)		238,844
Collateralized loan obligations	1,067,770		247		(1,215)		1,066,802
Commercial mortgage-backed securities	149,054		53		(180)		148,927
Corporate notes	575,273		6,334		(1,561)		580,046
Private label collateralized mortgage obligations	1,248,142		333		(6,010)		1,242,465
State and political subdivision debt securities (2)	8,535		—		(104)		8,431
Available for sale debt securities	$	3,799,851	$	7,427	$	(15,703)	3,791,575

Equity securities (3)							25,575
Total investment securities, at fair value							$	3,817,150

(3)Includes perpetual preferred stock issued by domestic banks and domestic bank holding companies and equity securities issued by fintech companies, without a readily determinable fair value, and CRA-qualified mutual fund shares at June 30, 2022 and December 31, 2021. No impairments or measurement adjustments have been recorded on the equity securities without a readily determinable fair value since acquisition.

In June 2021, Customers sold all of the outstanding shares in CB Green Ventures Pte Ltd. and CUBI India Ventures Pte Ltd., which held the equity securities issued by a foreign entity, for $3.8 million, and recognized $2.8 million in loss on sale of foreign subsidiaries within non-interest income on the consolidated statement of income. During the three and six months ended June 30, 2021, Customers recognized unrealized gains of $1.7 million and $2.7 million respectively, on its equity securities issued by a foreign entity that were held by CB Green Ventures Pte Ltd. and CUBI India Ventures Pte Ltd. These unrealized gains and losses were reported as unrealized gain (loss) on investment securities within non-interest income on the consolidated statements of income.

Customers' transactions with unconsolidated VIEs include sales of consumer installment loans and investments in the securities issued by the VIEs. Customers is not the primary beneficiary of the VIEs because Customers has no right to make decisions that will most significantly affect the economic performance of the VIEs. Customers' continuing involvement with the unconsolidated VIEs is not significant. Customers' continuing involvement is not considered to be significant where Customers only invests in securities issued by the VIE and was not involved in the design of the VIE or where Customers has transferred financial assets to the VIE for only cash consideration. Customers' investments in the securities issued by the VIEs are classified as AFS debt securities on the consolidated balance sheets, and represent Customers' maximum exposure to loss.

Proceeds from the sale of AFS debt securities were $399.0 million and $555.0 million for the three and six months ended June 30, 2022, respectively. Proceeds from the sale of AFS debt securities were $53.7 million and $407.6 million for the three and six months ended June 30, 2021, respectively. The following table presents gross realized gains and realized losses from the sale of AFS debt securities for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended June 30,				Six Months Ended June 30,
(amounts in thousands)	2022		2021		2022		2021
Gross realized gains	$	2,003	$	1,812	$	2,563	$	25,378
Gross realized losses	(5,032)		—		(6,655)		—
Net realized gains (losses) on sale of available for sale debt securities	$	(3,029)	$	1,812	$	(4,092)	$	25,378

The following table presents AFS debt securities by stated maturity. Debt securities backed by mortgages and other assets 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:


	June 30, 2022
(amounts in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	—	$	—
Due after one year through five years	436,185		411,856
Due after five years through ten years	151,666		141,725

Asset-backed securities	223,661		219,721
Collateralized loan obligations	974,213		950,568
Commercial mortgage-backed securities	138,972		135,784


Agency-guaranteed residential collateralized mortgage obligations	156,339		147,120

Private label collateralized mortgage obligations	1,161,325		1,113,337


Total available for sale debt securities	$	3,242,361	$	3,120,111

Gross unrealized losses and fair value of Customers' AFS debt securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2022 and December 31, 2021 were as follows:



	June 30, 2022
	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	$	132,895	$	(2,495)	$	—	$	—	$	132,895	$	(2,495)


Agency-guaranteed residential collateralized mortgage obligations	147,120		(9,219)		—		—		147,120		(9,219)

Collateralized loan obligations	920,688		(23,080)		25,064		(565)		945,752		(23,645)
Commercial mortgage-backed securities	117,536		(3,188)		—		—		117,536		(3,188)
Corporate notes	434,262		(32,270)		13,413		(1,586)		447,675		(33,856)
Private label collateralized mortgage obligations	737,880		(47,976)		4,000		(12)		741,880		(47,988)
State and political subdivision debt securities	7,737		(790)		—		—		7,737		(790)

Total	$	2,498,118	$	(119,018)	$	42,477	$	(2,163)	$	2,540,595	$	(121,181)


	December 31, 2021
	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	$	54,753	$	(119)	$	—	$	—	$	54,753	$	(119)
Agency-guaranteed residential mortgage-backed securities	9,554		(312)		—		—		9,554		(312)
Agency-guaranteed commercial mortgage-backed securities	2,152		(10)		—		—		2,152		(10)
Agency-guaranteed residential collateralized mortgage obligations	173,492		(2,315)		—		—		173,492		(2,315)
Agency-guaranteed commercial collateralized mortgage obligations	118,334		(3,877)		—		—		118,334		(3,877)
Collateralized loan obligations	715,250		(1,215)		—		—		715,250		(1,215)
Commercial mortgage-backed securities	122,597		(180)		—		—		122,597		(180)
Corporate notes	188,100		(1,561)		—		—		188,100		(1,561)
Private label collateralized mortgage obligations	632,091		(5,874)		6,818		(136)		638,909		(6,010)
State and political subdivision debt securities	8,430		(104)		—		—		8,430		(104)

Total	$	2,024,753	$	(15,567)	$	6,818	$	(136)	$	2,031,571	$	(15,703)

At June 30, 2022, there were 140 AFS debt securities with unrealized losses in the less-than-twelve-months category and seven AFS debt securities with unrealized loss in the twelve-months-or-more category. Except for the four asset-backed securities where there was a deterioration in future estimated cash flows as further discussed below, the unrealized losses were principally due to changes in market interest rates that resulted in a negative impact on the respective securities' fair value and are expected to be recovered when market prices recover or at maturity. Customers does not intend to sell any of the 147 securities, and it is not more likely than not that Customers will be required to sell any of the 147 securities before recovery of the amortized cost basis. At December 31, 2021, there were 117 AFS debt securities in an unrealized loss position.

Customers recorded an allowance for credit losses on four asset-backed securities where there was a deterioration in future estimated cash flows during the three and six months ended June 30, 2022. A discounted cash flow approach is used to determine the amount of the allowance. The cash flows expected to be collected, after considering expected prepayments, are discounted at the original effective interest rate. The amount of the allowance is limited to the difference between the amortized cost basis of the security and its estimated fair value. The following tables present the activity in the allowance for credit losses on AFS debt securities, by major security type, for the periods presented:


	Asset-backed securities
(amounts in thousands)	Three Months Ended June 30, 2022
Balance at April 1	$	728
Credit losses on securities for which credit losses were not previously recorded	329
Net increase (decrease) in allowance for credit losses on previously impaired securities	(646)
Balance at June 30	$	411

At June 30, 2022 and December 31, 2021, Customers Bank had pledged investment securities aggregating $19.3 million and $11.3 million in fair value, respectively, as collateral primarily for unused lines of credit with another financial institution. The counterparty does not have the ability to sell or repledge these securities.

In June 2022, Customers transferred $500.2 million in net carrying value of certain debt securities from available for sale to held to maturity as a part of Customers' ongoing asset liability management primarily to mitigate the impact of rising interest rates on the long duration component of the investment portfolio. At the time of transfer to held to maturity, these debt securities had unrealized losses of $50.0 million, which, along with the unrealized loss in accumulated other comprehensive income, will be amortized over the remaining terms of the securities as an adjustment to yield (interest income) using the effective interest method resulting in no impact to current period earnings.


	June 30, 2022 (1)
(amounts in thousands)	Amortized Cost		Allowance for Credit Losses		Net Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held to maturity debt securities:


Agency-guaranteed residential mortgage-backed securities	$	7,820	$	—	$	7,820	$	—	$	(181)	$	7,639
Agency-guaranteed commercial mortgage-backed securities	1,966		—		1,966		—		(5)		1,961
Agency-guaranteed residential collateralized mortgage obligations	215,996		—		215,996		—		(4,368)		211,628
Agency-guaranteed commercial collateralized mortgage obligations	154,204		—		154,204		4		(1,041)		153,167



Private label collateralized mortgage obligations	115,053		—		115,053		—		(3,813)		111,240

Total held to maturity debt securities	$	495,039	$	—	$	495,039	$	4	$	(9,408)	$	485,635

The following table presents HTM debt securities by stated maturity. Debt securities backed by mortgages and other assets 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:


	June 30, 2022
(amounts in thousands)	Amortized Cost		Fair Value







Agency-guaranteed residential mortgage-backed securities	$	7,820	$	7,639
Agency-guaranteed commercial mortgage-backed securities	1,966		1,961
Agency-guaranteed residential collateralized mortgage obligations	215,996		211,628
Agency-guaranteed commercial collateralized mortgage obligations	154,204		153,167
Private label collateralized mortgage obligations	115,053		111,240
Total held to maturity debt securities	$	495,039	$	485,635

Customers recorded no allowance for credit losses on investment securities classified as held to maturity at June 30, 2022. The U.S. government agency securities represent obligations issued by a U.S. government-sponsored enterprise or other federal government agency that are explicitly or implicitly guaranteed by the U.S. federal government and therefore, assumed to have zero credit losses. The private label collateralized mortgage obligations are highly rated with sufficient overcollateralization and therefore have zero expected credit losses. The unrealized losses on HTM debt securities with no ACL were due to changes in market interest rates that resulted in a negative impact on the respective securities' fair value and are expected to be recovered when market prices recover or at maturity.

Customers monitors the credit quality of HTM debt securities primarily through credit ratings provided by rating agencies. Investment grade debt securities are rated BBB- or higher by S&P Global Ratings, Baa3 or higher by Moody's Investors Service or equivalent ratings by other rating agencies, and are generally considered to be of low credit risk. All of the HTM debt securities held by Customers were investment grade or U.S. government agency guaranteed securities that were not rated at June 30, 2022.


	June 30, 2022
(amounts in thousands)	AAA		AA		A		BBB		Not Rated		Total
Held to maturity debt securities:


Agency-guaranteed residential mortgage-backed securities	$	—	$	—	$	—	$	—	$	7,820	$	7,820
Agency-guaranteed commercial mortgage-backed securities	—		—		—		—		1,966		1,966
Agency-guaranteed residential collateralized mortgage obligations	—		—		—		—		215,996		215,996
Agency-guaranteed commercial collateralized mortgage obligations	—		—		—		—		154,204		154,204



Private label collateralized mortgage obligations	65,092		7,022		33,779		9,160		—		115,053

Total held to maturity debt securities	$	65,092	$	7,022	$	33,779	$	9,160	$	379,986	$	495,039

Customers has elected to not estimate an ACL on accrued interest receivable on HTM debt securities, as it already has a policy in place to reverse or write-off accrued interest, through interest income, for debt securities in nonaccrual status in a timely manner. At June 30, 2022, there were no HTM debt securities past due under the terms of their agreements or in nonaccrual status.