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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2023

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 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

(1)Accrued interest on AFS debt securities totaled $19.6 million and $16.7 million at March 31, 2023 and December 31, 2022, respectively, and is included in accrued interest receivable on the consolidated balance sheet.

(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.

The amortized cost, approximate fair value and allowance for credit losses of investment securities held to maturity 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						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

(1)Accrued interest on HTM debt securities totaled $1.5 million and $1.0 million at March 31, 2023 and December 31, 2022, respectively, 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 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)

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:

			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

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

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 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)

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:

			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

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:

			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

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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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Tabular disclosure of fair value of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale), in unrealized loss position, without allowance for credit loss. Includes beneficial interest in securitized financial asset.

+ 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
-Publisher FASB
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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).

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
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