The amortized cost, approximate fair value and allowance for credit losses of investment securities at fair value as of March 31, 2023 and December 31, 2022 are summarized as follows:


	March 31, 2023 (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	$	154,151	$	(790)	$	—	$	(5,426)	$	147,935



Agency-guaranteed residential collateralized mortgage obligations	143,717		—		—		(9,964)		133,753

Collateralized loan obligations	875,303		—		285		(21,488)		854,100
Commercial mortgage-backed securities	142,050		—		4		(5,236)		136,818
Corporate notes	642,859		(1,383)		379		(55,060)		586,795
Private label collateralized mortgage obligations	1,111,256		—		951		(71,349)		1,040,858


Available for sale debt securities	$	3,069,336	$	(2,173)	$	1,619	$	(168,523)	2,900,259

Equity securities (2)									26,710
Total investment securities, at fair value									$	2,926,969


	December 31, 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	$	169,170	$	(578)	$	—	$	(8,050)	$	160,542



Agency-guaranteed residential collateralized mortgage obligations	147,481		—		—		(13,617)		133,864

Collateralized loan obligations	896,992		—		88		(24,342)		872,738
Commercial mortgage-backed securities	142,222		—		1		(5,866)		136,357
Corporate notes	657,086		—		45		(61,878)		595,253
Private label collateralized mortgage obligations	1,125,583		—		308		(63,630)		1,062,261

Available for sale debt securities	$	3,138,534	$	(578)	$	442	$	(177,383)	2,961,015

Equity securities (2)									26,485
Total investment securities, at fair value									$	2,987,500

(2)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 March 31, 2023 and December 31, 2022. No impairments or measurement adjustments have been recorded on the equity securities without a readily determinable fair value since acquisition.

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 or HTM debt securities on the consolidated balance sheets, and represent Customers' maximum exposure to loss.

There were no sales of AFS debt securities for the three months ended March 31, 2023. Proceeds from the sale of AFS debt securities were $156.0 million for the three months ended March 31, 2022. The following table presents gross realized gains and realized losses from the sale of AFS debt securities for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
(amounts in thousands)	2023		2022
Gross realized gains	$	—	$	974
Gross realized losses	—		(2,037)
Net realized gains (losses) on sale of available for sale debt securities	$	—	$	(1,063)

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:


	March 31, 2023
(amounts in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	7,500	$	7,500
Due after one year through five years	506,934		469,143
Due after five years through ten years	128,425		110,152

Asset-backed securities	154,151		147,935
Agency-guaranteed residential collateralized mortgage obligations	143,717		133,753
Collateralized loan obligations	875,303		854,100
Commercial mortgage-backed securities	142,050		136,818



Private label collateralized mortgage obligations	1,111,256		1,040,858


Total available for sale debt securities	$	3,069,336	$	2,900,259

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 March 31, 2023 and December 31, 2022 were as follows:


	March 31, 2023
	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	$	21,902	$	(46)	$	99,525	$	(3,968)	$	121,427	$	(4,014)


Agency-guaranteed residential collateralized mortgage obligations	—		—		133,753		(9,964)		133,753		(9,964)

Collateralized loan obligations	209,389		(3,648)		582,070		(17,840)		791,459		(21,488)
Commercial mortgage-backed securities	17,742		(520)		115,676		(4,716)		133,418		(5,236)
Corporate notes	152,391		(8,607)		341,401		(42,169)		493,792		(50,776)
Private label collateralized mortgage obligations	288,509		(15,128)		563,437		(56,221)		851,946		(71,349)


Total	$	689,933	$	(27,949)	$	1,835,862	$	(134,878)	$	2,525,795	$	(162,827)


	December 31, 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	$	160,542	$	(8,050)	$	—	$	—	$	160,542	$	(8,050)


Agency-guaranteed residential collateralized mortgage obligations	133,864		(13,617)		—		—		133,864		(13,617)

Collateralized loan obligations	386,701		(13,516)		315,270		(10,826)		701,971		(24,342)
Commercial mortgage-backed securities	39,828		(1,410)		93,005		(4,456)		132,833		(5,866)
Corporate notes	386,464		(36,119)		178,955		(25,759)		565,419		(61,878)
Private label collateralized mortgage obligations	478,096		(29,364)		314,332		(34,266)		792,428		(63,630)


Total	$	1,585,495	$	(102,076)	$	901,562	$	(75,307)	$	2,487,057	$	(177,383)

At March 31, 2023, there were 50 AFS debt securities with unrealized losses in the less-than-twelve-months category and 112 AFS debt securities with unrealized losses in the twelve-months-or-more category. Except for the four asset-backed securities and six corporate notes 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 162 securities, and it is not more likely than not that Customers will be required to sell any of the 162 securities before recovery of the amortized cost basis. At December 31, 2022, there were 156 AFS debt securities in an unrealized loss position.

Customers recorded an allowance for credit losses on four asset-backed securities and six corporate notes where there was a deterioration in future estimated cash flows during the three months ended March 31, 2023 and on four asset-backed securities during the three months ended March 31, 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:


	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
(amounts in thousands)	Asset-backed securities		Corporate notes		Total		Asset-backed securities		Corporate notes		Total
Balance at January 1,	$	578	$	—	$	578	$	—	$	—	$	—
Credit losses on securities for which credit losses were not previously recorded	—		1,383		1,383		728		—		728
Credit losses on previously impaired securities	273		—		273		—		—		—
Decrease in allowance for credit losses on previously impaired securities	(61)		—		(61)		—		—		—
Balance at March 31,	$	790	$	1,383	$	2,173	$	728	$	—	$	728

At March 31, 2023, Customers Bank had pledged AFS investment securities aggregating $1.6 billion in fair value as collateral for immediate available liquidity from FRB, including the BTFP. The counterparty does not have the ability to sell or repledge these securities.


	March 31, 2023 (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	$	322,877	$	—	$	322,877	$	—	$	(3,142)	$	319,735

Agency-guaranteed residential mortgage-backed securities	7,152		—		7,152				(513)		6,639
Agency-guaranteed commercial mortgage-backed securities	1,909		—		1,909		—		(61)		1,848
Agency-guaranteed residential collateralized mortgage obligations	201,097		—		201,097		—		(13,136)		187,961
Agency-guaranteed commercial collateralized mortgage obligations	150,852		—		150,852		—		(7,239)		143,613



Private label collateralized mortgage obligations	186,407		—		186,407		—		(9,490)		176,917

Total held to maturity debt securities	$	870,294	$	—	$	870,294	$	—	$	(33,581)	$	836,713


	December 31, 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	$	361,107	$	—	$	361,107	$	—	$	(4,974)	$	356,133

Agency-guaranteed residential mortgage-backed securities	7,189		—		7,189				(563)		6,626
Agency-guaranteed commercial mortgage-backed securities	1,928		—		1,928		—		(104)		1,824
Agency-guaranteed residential collateralized mortgage obligations	204,495		—		204,495		—		(18,376)		186,119
Agency-guaranteed commercial collateralized mortgage obligations	151,711		—		151,711		—		(9,435)		142,276



Private label collateralized mortgage obligations	113,829		—		113,829		—		(12,994)		100,835

Total held to maturity debt securities	$	840,259	$	—	$	840,259	$	—	$	(46,446)	$	793,813

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:


	March 31, 2023
(amounts in thousands)	Amortized Cost		Fair Value




Asset-backed securities	$	322,877	$	319,735


Agency-guaranteed residential mortgage-backed securities	7,152		6,639
Agency-guaranteed commercial mortgage-backed securities	1,909		1,848
Agency-guaranteed residential collateralized mortgage obligations	201,097		187,961
Agency-guaranteed commercial collateralized mortgage obligations	150,852		143,613
Private label collateralized mortgage obligations	186,407		176,917
Total held to maturity debt securities	$	870,294	$	836,713

Customers recorded no allowance for credit losses on investment securities classified as held to maturity at March 31, 2023 and December 31, 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. Most of the private label collateralized mortgage obligations are highly rated and with sufficient overcollateralization, therefore have zero expected credit losses. Customers recorded no allowance for its investment in the asset-backed securities. Customers considered the seniority of its beneficial interest, which includes its overcollateralization of these asset-backed securities in the estimate of the ACL at March 31, 2023 and December 31, 2022. 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. Except for the asset-backed securities and a private label collateralized mortgage obligation, all of the HTM debt securities held by Customers were investment grade or U.S. government agency guaranteed securities that were not rated at March 31, 2023 and December 31, 2022. The asset-backed securities and a private label collateralized mortgage obligation are not rated by rating agencies. Customers monitors the credit quality of these asset-backed securities and a private label collateralized mortgage obligation by evaluating the performance of the sold consumer installment loans and other underlying loans against the overcollateralization available for these securities.


	March 31, 2023
(amounts in thousands)	AAA		AA		A		BBB		Not Rated		Total
Held to maturity debt securities:
Asset-backed securities	$	—	$	—	$	—	$	—	$	322,877	$	322,877

Agency-guaranteed residential mortgage-backed securities	—		—		—		—		7,152		7,152
Agency-guaranteed commercial mortgage-backed securities	—		—		—		—		1,909		1,909
Agency-guaranteed residential collateralized mortgage obligations	—		—		—		—		201,097		201,097
Agency-guaranteed commercial collateralized mortgage obligations	—		—		—		—		150,852		150,852



Private label collateralized mortgage obligations	62,327		7,132		34,563		9,256		73,129		186,407

Total held to maturity debt securities	$	62,327	$	7,132	$	34,563	$	9,256	$	757,016	$	870,294

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 March 31, 2023 and December 31, 2022, there were no HTM debt securities past due under the terms of their agreements or in nonaccrual status.

At March 31, 2023 and December 31, 2022, Customers Bank had pledged HTM investment securities aggregating $443.8 million and $16.7 million in fair value, respectively, as collateral primarily for immediate available liquidity from FRB, including the BTFP and unused lines of credit with another financial institution. The counterparties do not have the ability to sell or repledge these securities.