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Investment Securities (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2023 and December 31, 2022 are summarized as follows:

			June 30, 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			$	135,188					$	(1,563)					$	—					$	(7,088)					$	126,537
Agency-guaranteed residential collateralized mortgage obligations			138,869						—						—						(13,561)						125,308
Collateralized loan obligations			848,861						—						396						(18,004)						831,253
Commercial mortgage-backed securities			136,941						—						—						(4,467)						132,474
Corporate notes			642,757						(1,876)						206						(61,336)						579,751
Private label collateralized mortgage obligations			1,082,913						—						1,469						(81,765)						1,002,617
Available for sale debt securities			$	2,985,529					$	(3,439)					$	2,071					$	(186,221)					2,797,940
Equity securities (2)																											26,698
Total investment securities, at fair value																											$	2,824,638

			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 $17.5 million and $16.7 million at June 30, 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 June 30, 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 June 30, 2023 and December 31, 2022 are summarized as follows:

			June 30, 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			$	719,551					$	—					$	719,551					$	—					$	(5,117)					$	714,434
Agency-guaranteed residential mortgage-backed securities			7,115						—						7,115						—						(669)						6,446
Agency-guaranteed commercial mortgage-backed securities			1,889						—						1,889						—						(103)						1,786
Agency-guaranteed residential collateralized mortgage obligations			196,206						—						196,206						—						(16,504)						179,702
Agency-guaranteed commercial collateralized mortgage obligations			148,066						—						148,066						—						(9,239)						138,827
Private label collateralized mortgage obligations			185,733						—						185,733						—						(14,680)						171,053
Total held to maturity debt securities			$	1,258,560					$	—					$	1,258,560					$	—					$	(46,312)					$	1,212,248

			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 $1.4 million and $1.0 million at June 30, 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 and six months ended June 30, 2023 and 2022:

			Three Months Ended June 30,												Six Months Ended June 30,
(amounts in thousands)			2023						2022						2023						2022
Gross realized gains			$	—					$	2,003					$	—					$	2,563
Gross realized losses			—						(5,032)						—						(6,655)
Net realized gains (losses) on sale of available for sale debt securities			$	—					$	(3,029)					$	—					$	(4,092)

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, 2023
(amounts in thousands)			Amortized Cost						Fair Value
Due in one year or less			$	7,500					$	7,425
Due after one year through five years			521,866						479,208
Due after five years through ten years			113,391						93,118
Asset-backed securities			135,188						126,537
Agency-guaranteed residential collateralized mortgage obligations			138,869						125,308
Collateralized loan obligations			848,861						831,253
Commercial mortgage-backed securities			136,941						132,474
Private label collateralized mortgage obligations			1,082,913						1,002,617
Total available for sale debt securities			$	2,985,529					$	2,797,940

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, 2023
(amounts in thousands)			Amortized Cost						Fair Value
Asset-backed securities			$	719,551					$	714,434
Agency-guaranteed residential mortgage-backed securities			7,115						6,446
Agency-guaranteed commercial mortgage-backed securities			1,889						1,786
Agency-guaranteed residential collateralized mortgage obligations			196,206						179,702
Agency-guaranteed commercial collateralized mortgage obligations			148,066						138,827
Private label collateralized mortgage obligations			185,733						171,053
Total held to maturity debt securities			$	1,258,560					$	1,212,248

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, 2023 and December 31, 2022 were as follows:

			June 30, 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			$	21,932					$	(23)					$	52,780					$	(3,409)					$	74,712					$	(3,432)
Agency-guaranteed residential collateralized mortgage obligations			—						—						125,308						(13,561)						125,308						(13,561)
Collateralized loan obligations			89,992						(2,442)						599,341						(15,562)						689,333						(18,004)
Commercial mortgage-backed securities			17,756						(506)						114,718						(3,961)						132,474						(4,467)
Corporate notes			105,912						(3,892)						424,070						(50,457)						529,982						(54,349)
Private label collateralized mortgage obligations			296,673						(22,216)						594,574						(59,549)						891,247						(81,765)
Total			$	532,265					$	(29,079)					$	1,910,791					$	(146,499)					$	2,443,056					$	(175,578)

			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 June 30,
			2023																		2022
(amounts in thousands)			Asset-backed securities						Corporate notes						Total						Asset-backed securities						Corporate notes						Total
Balance at April 1			$	790					$	1,383					$	2,173					$	728					$	—					$	728
Credit losses on securities for which credit losses were not previously recorded			—						233						233						329						—						329
Credit losses on previously impaired securities			773						260						1,033						—						—						—
Decrease in allowance for credit losses on previously impaired securities			—						—						—						(646)						—						(646)
Balance at June 30			$	1,563					$	1,876					$	3,439					$	411					$	—					$	411

			Six Months Ended June 30,
			2023																		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			—						1,876						1,876						411						—						411
Credit losses on previously impaired securities			1,046						—						1,046						—						—						—
Decrease in allowance for credit losses on previously impaired securities			(61)						—						(61)						—						—						—
Balance at June 30			$	1,563					$	1,876					$	3,439					$	411					$	—					$	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, 2023
(amounts in thousands)			AAA						AA						A																														BBB												Not Rated						Total
Held to maturity debt securities:
Asset-backed securities			$	—					$	—					$	—																													$	—											$	719,551					$	719,551
Agency-guaranteed residential mortgage-backed securities			—						—						—																														—												7,115						7,115
Agency-guaranteed commercial mortgage-backed securities			—						—						—																														—												1,889						1,889
Agency-guaranteed residential collateralized mortgage obligations			—						—						—																														—												196,206						196,206
Agency-guaranteed commercial collateralized mortgage obligations			—						—						—																														—												148,066						148,066
Private label collateralized mortgage obligations			68,435						18,133						25,848																														—												73,317						185,733
Total held to maturity debt securities			$	68,435					$	18,133					$	25,848																													$	—											$	1,146,144					$	1,258,560

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