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Investment Securities (Tables)

9 Months Ended

Sep. 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 September 30, 2022 and December 31, 2021 are summarized as follows:

			September 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			$	200,171					$	(253)					$	—					$	(6,657)					$	193,261
Agency-guaranteed residential collateralized mortgage obligations			152,008						—						—						(13,786)						138,222
Collateralized loan obligations			855,959						—						10						(28,156)						827,813
Commercial mortgage-backed securities			138,972						—						—						(4,129)						134,843
Corporate notes			587,987						—						23						(55,355)						532,655
Private label collateralized mortgage obligations			1,141,340						—						—						(56,655)						1,084,685
State and political subdivision debt securities (2)			8,523						—												(1,172)						7,351
Available for sale debt securities			$	3,084,960					$	(253)					$	33					$	(165,910)					2,918,830
Equity securities (3)																											24,864
Total investment securities, at fair value																											$	2,943,694

			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 $15.0 million and $11.0 million at September 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 September 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 September 30, 2022 are summarized as follows:

			September 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:
Asset-backed securities			$	400,001					$	—					$	400,001					$	—					$	—					$	400,001
Agency-guaranteed residential mortgage-backed securities			7,781						—						7,781												(702)						7,079
Agency-guaranteed commercial mortgage-backed securities			1,947						—						1,947						—						(96)						1,851
Agency-guaranteed residential collateralized mortgage obligations			209,519						—						209,519						—						(16,681)						192,838
Agency-guaranteed commercial collateralized mortgage obligations			152,794						—						152,794						—						(6,189)						146,605
Private label collateralized mortgage obligations			114,252						—						114,252						—						(7,889)						106,363
Total held to maturity debt securities			$	886,294					$	—					$	886,294					$	—					$	(31,557)					$	854,737

(1)Accrued interest on HTM debt securities totaled $0.8 million at September 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 nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
(amounts in thousands)			2022						2021						2022						2021
Gross realized gains			$	—					$	6,063					$	2,563					$	31,441
Gross realized losses			(2,135)						—						(8,790)						—
Net realized gains (losses) on sale of available for sale debt securities			$	(2,135)					$	6,063					$	(6,227)					$	31,441

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:

			September 30, 2022
(amounts in thousands)			Amortized Cost						Fair Value
Due in one year or less			$	—					$	—
Due after one year through five years			463,431						421,935
Due after five years through ten years			133,079						118,071
Asset-backed securities			200,171						193,261
Collateralized loan obligations			855,959						827,813
Commercial mortgage-backed securities			138,972						134,843
Agency-guaranteed residential collateralized mortgage obligations			152,008						138,222
Private label collateralized mortgage obligations			1,141,340						1,084,685
Total available for sale debt securities			$	3,084,960					$	2,918,830

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:

			September 30, 2022
(amounts in thousands)			Amortized Cost						Fair Value
Asset-backed securities			$	400,001					$	400,001
Agency-guaranteed residential mortgage-backed securities			7,781						7,079
Agency-guaranteed commercial mortgage-backed securities			1,947						1,851
Agency-guaranteed residential collateralized mortgage obligations			209,519						192,838
Agency-guaranteed commercial collateralized mortgage obligations			152,794						146,605
Private label collateralized mortgage obligations			114,252						106,363
Total held to maturity debt securities			$	886,294					$	854,737

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 September 30, 2022 and December 31, 2021 were as follows:

			September 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			$	186,085					$	(5,811)					$	11,154					$	(846)					$	197,239					$	(6,657)
Agency-guaranteed residential collateralized mortgage obligations			138,222						(13,786)						—						—						138,222						(13,786)
Collateralized loan obligations			787,365						(27,078)						35,670						(1,078)						823,035						(28,156)
Commercial mortgage-backed securities			130,010						(4,027)						4,847						(102)						134,857						(4,129)
Corporate notes			454,386						(49,635)						55,850						(5,720)						510,236						(55,355)
Private label collateralized mortgage obligations			720,076						(45,150)						129,973						(11,505)						850,049						(56,655)
State and political subdivision debt securities			—						—						7,351						(1,172)						7,351						(1,172)
Total			$	2,416,144					$	(145,487)					$	244,845					$	(20,423)					$	2,660,989					$	(165,910)

			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 September 30, 2022
Balance at July 1			$	411
Decrease in allowance for credit losses on previously impaired securities			(158)
Balance at September 30			$	253

			Asset-backed securities
(amounts in thousands)			Nine Months Ended September 30, 2022
Balance at January 1			$	—
Credit losses on securities for which credit losses were not previously recorded			253
Balance at September 30			$	253

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:

			September 30, 2022
(amounts in thousands)			AAA						AA						A																														BBB												Not Rated						Total
Held to maturity debt securities:
Asset-backed securities			$	—					$	—					$	—																													$	—											$	400,001					$	400,001
Agency-guaranteed residential mortgage-backed securities			—						—						—																														—												7,781						7,781
Agency-guaranteed commercial mortgage-backed securities			—						—						—																														—												1,947						1,947
Agency-guaranteed residential collateralized mortgage obligations			—						—						—																														—												209,519						209,519
Agency-guaranteed commercial collateralized mortgage obligations			—						—						—																														—												152,794						152,794
Private label collateralized mortgage obligations			63,767						7,077						34,189																														9,219												—						114,252
Total held to maturity debt securities			$	63,767					$	7,077					$	34,189																													$	9,219											$	772,042					$	886,294

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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

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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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