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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost and Approximate Fair Value of Investment Securities and Held to Maturity Securities

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

(1)Accrued interest on AFS debt securities totaled $13.0 million and $11.0 million at June 30, 2022 and December 31, 2021, respectively, and is included in accrued interest receivable on the consolidated balance sheet.

(2)Includes both taxable and non-taxable municipal securities.

(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.

The amortized cost, approximate fair value and allowance for credit losses of investment securities held to maturity as of June 30, 2022 are summarized as follows:

			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

(1)Accrued interest on HTM debt securities totaled $0.7 million at June 30, 2022, and is included in accrued interest receivable on the consolidated balance sheet.

Gain (Loss) on Securities

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

Summary of Available-for-Sale and Held to Maturity Debt Securities by Stated Maturity

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

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

Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value

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)

Debt Securities, Available-for-sale, Allowance for Credit Loss

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

			Asset-backed securities
(amounts in thousands)			Six Months Ended June 30, 2022
Balance at January 1			$	—
Credit losses on securities for which credit losses were not previously recorded			411
Balance at June 30			$	411

Debt Securities, Held-to-Maturity, Credit Quality Indicator

The following table presents the amortized cost of HTM debt securities based on their lowest credit rating available:

			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

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- Definition

Tabular disclosure of allowance for credit loss on investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 30
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=124269663&loc=SL82922900-210455

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+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=121590138&loc=SL82922954-210456

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Tabular disclosure of credit quality indicator for investment in debt security measured at amortized cost (held-to-maturity).

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-Publisher FASB
-Name Accounting Standards Codification
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