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Investment Securities (Tables) | 9 Months Ended
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Sep. 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 September 30, 2023 and December 31, 2022 are summarized as follows:
| September 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 | $ | 111,915 |  |  | $ | (1,755) |  |  | $ | 4 |  |  | $ | (5,448) |  |  | $ | 104,716 |
Agency-guaranteed residential collateralized mortgage obligations | 133,425 |  |  | — |  |  | — |  |  | (14,956) |  |  | 118,469 |
Collateralized loan obligations | 826,764 |  |  | — |  |  | 817 |  |  | (11,725) |  |  | 815,856 |
Commercial mortgage-backed securities | 136,111 |  |  | — |  |  | — |  |  | (4,923) |  |  | 131,188 |
Corporate notes | 638,230 |  |  | (2,094) |  |  | 86 |  |  | (57,325) |  |  | 578,897 |
Private label collateralized mortgage obligations | 1,064,789 |  |  | — |  |  | 687 |  |  | (67,874) |  |  | 997,602 |
Available for sale debt securities | $ | 2,911,234 |  |  | $ | (3,849) |  |  | $ | 1,594 |  |  | $ | (162,251) |  |  | 2,746,728 |
Equity securities (2) |  |  |  |  |  |  |  |  | 26,479 |
Total investment securities, at fair value |  |  |  |  |  |  |  |  | $ | 2,773,207 |
| 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 $19.7 million and $16.7 million at September 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 September 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 September 30, 2023 and December 31, 2022 are summarized as follows:
| September 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 | $ | 645,362 |  |  | $ | — |  |  | $ | 645,362 |  |  | $ | — |  |  | $ | (5,174) |  |  | $ | 640,188 |
Agency-guaranteed residential mortgage-backed securities | 7,077 |  |  | — |  |  | 7,077 |  |  | — |  |  | (1,027) |  |  | 6,050 |
Agency-guaranteed commercial mortgage-backed securities | 1,870 |  |  | — |  |  | 1,870 |  |  | — |  |  | (139) |  |  | 1,731 |
Agency-guaranteed residential collateralized mortgage obligations | 191,469 |  |  | — |  |  | 191,469 |  |  | — |  |  | (23,331) |  |  | 168,138 |
Agency-guaranteed commercial collateralized mortgage obligations | 147,414 |  |  | — |  |  | 147,414 |  |  | — |  |  | (15,848) |  |  | 131,566 |
Private label collateralized mortgage obligations | 185,178 |  |  | — |  |  | 185,178 |  |  | — |  |  | (17,275) |  |  | 167,903 |
Total held to maturity debt securities | $ | 1,178,370 |  |  | $ | — |  |  | $ | 1,178,370 |  |  | $ | — |  |  | $ | (62,794) |  |  | $ | 1,115,576 |
| 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 $2.7 million and $1.0 million at September 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 nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(amounts in thousands) | 2023 |  | 2022 |  | 2023 |  | 2022
Gross realized gains | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,563 |
Gross realized losses | (429) |  |  | (2,135) |  |  | (429) |  |  | (8,790) |
Net realized gains (losses) on sale of available for sale debt securities | $ | (429) |  |  | $ | (2,135) |  |  | $ | (429) |  |  | $ | (6,227) |
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, 2023
(amounts in thousands) | Amortized Cost |  | Fair Value
Due in one year or less | $ | 7,500 |  |  | $ | 7,444 |
Due after one year through five years | 532,269 |  |  | 488,929 |
Due after five years through ten years | 98,461 |  |  | 82,524 |
Asset-backed securities | 111,915 |  |  | 104,716 |
Agency-guaranteed residential collateralized mortgage obligations | 133,425 |  |  | 118,469 |
Collateralized loan obligations | 826,764 |  |  | 815,856 |
Commercial mortgage-backed securities | 136,111 |  |  | 131,188 |
Private label collateralized mortgage obligations | 1,064,789 |  |  | 997,602 |
Total available for sale debt securities | $ | 2,911,234 |  |  | $ | 2,746,728 |
The following table presents HTM debt securities by stated maturity, including debt securities backed by mortgages and other assets with expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, are classified separately with no specific maturity date:
| September 30, 2023
(amounts in thousands) | Amortized Cost |  | Fair Value
Asset-backed securities | $ | 645,362 |  |  | $ | 640,188 |
Agency-guaranteed residential mortgage-backed securities | 7,077 |  |  | 6,050 |
Agency-guaranteed commercial mortgage-backed securities | 1,870 |  |  | 1,731 |
Agency-guaranteed residential collateralized mortgage obligations | 191,469 |  |  | 168,138 |
Agency-guaranteed commercial collateralized mortgage obligations | 147,414 |  |  | 131,566 |
Private label collateralized mortgage obligations | 185,178 |  |  | 167,903 |
Total held to maturity debt securities | $ | 1,178,370 |  |  | $ | 1,115,576 |
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, 2023 and December 31, 2022 were as follows:
| September 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 | $ | — |  |  | $ | — |  |  | $ | 42,932 |  |  | $ | (2,547) |  |  | $ | 42,932 |  |  | $ | (2,547) |
Agency-guaranteed residential collateralized mortgage obligations | — |  |  | — |  |  | 133,425 |  |  | (14,956) |  |  | 133,425 |  |  | (14,956) |
Collateralized loan obligations | 46,333 |  |  | (1,472) |  |  | 614,978 |  |  | (10,253) |  |  | 661,311 |  |  | (11,725) |
Commercial mortgage-backed securities | — |  |  | — |  |  | 134,866 |  |  | (4,923) |  |  | 134,866 |  |  | (4,923) |
Corporate notes | 84,827 |  |  | (3,106) |  |  | 469,187 |  |  | (45,202) |  |  | 554,014 |  |  | (48,308) |
Private label collateralized mortgage obligations | 154,078 |  |  | (10,605) |  |  | 674,943 |  |  | (57,269) |  |  | 829,021 |  |  | (67,874) |
Total | $ | 285,238 |  |  | $ | (15,183) |  |  | $ | 2,070,331 |  |  | $ | (135,150) |  |  | $ | 2,355,569 |  |  | $ | (150,333) |
| 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 September 30, |  |  |  |  |  |  |
| 2023 |  | 2022 |  |  |  |  |
(amounts in thousands) | Asset-backed securities |  | Corporate notes |  | Total |  | Asset-backed securities |  | Corporate notes |  | Total |  |  |  |  |  |  |
Balance at July 1 | $ | 1,563 |  |  | $ | 1,876 |  |  | $ | 3,439 |  |  | $ | 411 |  |  | $ | — |  |  | $ | 411 |  |  |  |  |  |  |  |
Credit losses on securities for which credit losses were not previously recorded | — |  |  | 564 |  |  | 564 |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  |  |
Credit losses on previously impaired securities | 442 |  |  | 69 |  |  | 511 |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  |  |
Decrease in allowance for credit losses on previously impaired securities | (250) |  |  | (24) |  |  | (274) |  |  | (158) |  |  | — |  |  | (158) |  |  |  |  |  |  |  |
Reduction due to sales | — |  |  | (391) |  |  | (391) |  |  | — |  |  | — |  |  | — |  |  |  |  |  |  |  |
Balance at September 30 | $ | 1,755 |  |  | $ | 2,094 |  |  | $ | 3,849 |  |  | $ | 253 |  |  | $ | — |  |  | $ | 253 |  |  |  |  |  |  |  |
| Nine Months Ended September 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 | — |  |  | 2,485 |  |  | 2,485 |  |  | 253 |  |  | — |  |  | 253 |  |  |  |  |
Credit losses on previously impaired securities | 1,488 |  |  | — |  |  | 1,488 |  |  | — |  |  | — |  |  | — |  |  |  |  |
Decrease in allowance for credit losses on previously impaired securities | (311) |  |  | — |  |  | (311) |  |  | — |  |  | — |  |  | — |  |  |  |  |
Reduction due to sales | — |  |  | (391) |  |  | (391) |  |  | — |  |  | — |  |  | — |  |  |  |  |
Balance at September 30 | $ | 1,755 |  |  | $ | 2,094 |  |  | $ | 3,849 |  |  | $ | 253 |  |  | $ | — |  |  | $ | 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, 2023
(amounts in thousands) | AAA |  | AA |  | A |  |  |  |  |  |  |  |  |  |  |  |  |  | Not Rated |  | Total
Held to maturity debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed securities | $ | — |  |  | $ | — |  |  | $ | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 645,362 |  |  | $ | 645,362 |
Agency-guaranteed residential mortgage-backed securities | — |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 7,077 |  |  | 7,077 |
Agency-guaranteed commercial mortgage-backed securities | — |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,870 |  |  | 1,870 |
Agency-guaranteed residential collateralized mortgage obligations | — |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 191,469 |  |  | 191,469 |
Agency-guaranteed commercial collateralized mortgage obligations | — |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 147,414 |  |  | 147,414 |
Private label collateralized mortgage obligations | 67,528 |  |  | 18,234 |  |  | 25,920 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 73,496 |  |  | 185,178 |
Total held to maturity debt securities | $ | 67,528 |  |  | $ | 18,234 |  |  | $ | 25,920 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1,066,688 |  |  | $ | 1,178,370 |

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