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Leases | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
Leases | LEASES Lessee Customers has operating leases for its branches, certain limited purpose offices (“LPOs”), and administrative offices, with remaining lease terms ranging between one month and nine years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the Consumer Price Index (“CPI”). Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease. As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments. The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands) | Classification |  | December 31, 2023 |  | December 31, 2022 |  |
ASSETS |  |  |  |  |  |  |
Operating lease ROU assets | Other assets |  | $ | 15,644 |  |  | $ | 16,133 |  |  |
LIABILITIES |  |  |  |  |  |  |
Operating lease liabilities | Other liabilities |  | $ | 18,048 |  |  | $ | 19,046 |  |  |
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
|  |  | For the Years Ended December 31,
(amounts in thousands) | Classification |  | 2023 |  | 2022 |  | 2021
Operating lease cost (1) | Occupancy expenses |  | $ | 5,050 |  |  | $ | 4,758 |  |  | $ | 4,545 |
(1) There were no variable lease costs for the years ended December 31, 2023, 2022 and 2021, and sublease income for operating leases was immaterial. Maturities of non-cancelable operating lease liabilities were as follows at December 31, 2023:
(amounts in thousands) | December 31, 2023 |
2024 | $ | 4,786 |  |
2025 | 3,745 |  |
2026 | 2,977 |  |
2027 | 2,469 |  |
2028 | 2,090 |  |
Thereafter | 3,535 |  |
Total minimum payments | 19,602 |  |
Less: interest | 1,554 |  |
Present value of lease liabilities | $ | 18,048 |  |
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to operating lease liabilities was $5.4 million, $5.0 million and $4.9 million for the years ended December 31, 2023, 2022 and 2021, respectively, and reported as cash flows used in operating activities in the statement of cash flows. The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at December 31, 2023 and 2022:
| December 31, 2023 |  | December 31, 2022 |  |
Weighted average remaining lease term (years) |  |  |  |  |
Operating leases | 5.6 years |  | 5.1 years |  |
Weighted average discount rate |  |  |  |  |
Operating leases | 3.28 | % |  | 2.85 | % |  |
Equipment Lessor Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. The commercial equipment financing group is primarily focused on serving the following industries: transportation, construction (includes crane and utility), marine, franchise, general manufacturing (includes machine tool), helicopter/fixed wing, solar, packaging, plastics and food processing. Lease terms typically range from 24 months to 120 months. The commercial equipment financing group offers the following lease products: Loans, Capital Lease, Purchase Upon Termination (“PUT”), Terminal Rental Adjustment Clause ("TRAC”), Split-TRAC, and Fair Market Value (“FMV”). Direct finance equipment leases are included in commercial and industrial loans and leases receivable. The estimated residual values for direct finance and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only Customers’ Split-TRAC leases have residual risk and the unguaranteed portions are typically nominal. Expected credit losses on direct financing leases and the related estimated residual values are included in the ACL on loans and leases. Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment. The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at December 31, 2023 and 2022:
(amounts in thousands) | Classification |  | December 31, 2023 |  | December 31, 2022 |  |
ASSETS |  |  |  |  |  |  |
Direct financing leases |  |  |  |  |  |  |
Lease receivables | Loans and leases receivable |  | $ | 190,559 |  |  | $ | 140,182 |  |  |
Guaranteed residual assets | Loans and leases receivable |  | 15,783 |  |  | 12,370 |  |  |
Unguaranteed residual assets | Loans and leases receivable |  | 10,010 |  |  | 7,555 |  |  |
Deferred initial direct costs | Loans and leases receivable |  | 1,213 |  |  | 667 |  |  |
Unearned income | Loans and leases receivable |  | (11,891) |  |  | (3,404) |  |  |
Net investment in direct financing leases |  |  | $ | 205,674 |  |  | $ | 157,370 |  |  |
Operating leases |  |  |  |  |  |  |
Investment in operating leases | Other assets |  | $ | 282,208 |  |  | $ | 248,454 |  |  |
Accumulated depreciation | Other assets |  | (77,672) |  |  | (52,585) |  |  |
Deferred initial direct costs | Other assets |  | 1,192 |  |  | 1,461 |  |  |
Net investment in operating leases |  |  | 205,728 |  |  | 197,330 |  |  |
Total lease assets |  |  | $ | 411,402 |  |  | $ | 354,700 |  |  |
Maturities of operating and direct financing lease receivables were as follows at December 31, 2023:
(amounts in thousands) | Operating leases |  | Direct financing leases |
2024 | $ | 41,842 |  |  | $ | 50,761 |  |
2025 | 38,176 |  |  | 41,822 |  |
2026 | 43,852 |  |  | 34,055 |  |
2027 | 32,782 |  |  | 29,059 |  |
2028 | 52,716 |  |  | 21,401 |  |
Thereafter | 24,701 |  |  | 16,100 |  |
Total lease payments | $ | 234,069 |  |  | 193,198 |  |
Less: interest |  |  | 2,639 |  |
Present value of lease receivables |  |  | $ | 190,559 |  |
Leases | LEASES Lessee Customers has operating leases for its branches, certain limited purpose offices (“LPOs”), and administrative offices, with remaining lease terms ranging between one month and nine years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the Consumer Price Index (“CPI”). Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease. As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments. The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands) | Classification |  | December 31, 2023 |  | December 31, 2022 |  |
ASSETS |  |  |  |  |  |  |
Operating lease ROU assets | Other assets |  | $ | 15,644 |  |  | $ | 16,133 |  |  |
LIABILITIES |  |  |  |  |  |  |
Operating lease liabilities | Other liabilities |  | $ | 18,048 |  |  | $ | 19,046 |  |  |
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
|  |  | For the Years Ended December 31,
(amounts in thousands) | Classification |  | 2023 |  | 2022 |  | 2021
Operating lease cost (1) | Occupancy expenses |  | $ | 5,050 |  |  | $ | 4,758 |  |  | $ | 4,545 |
(1) There were no variable lease costs for the years ended December 31, 2023, 2022 and 2021, and sublease income for operating leases was immaterial. Maturities of non-cancelable operating lease liabilities were as follows at December 31, 2023:
(amounts in thousands) | December 31, 2023 |
2024 | $ | 4,786 |  |
2025 | 3,745 |  |
2026 | 2,977 |  |
2027 | 2,469 |  |
2028 | 2,090 |  |
Thereafter | 3,535 |  |
Total minimum payments | 19,602 |  |
Less: interest | 1,554 |  |
Present value of lease liabilities | $ | 18,048 |  |
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to operating lease liabilities was $5.4 million, $5.0 million and $4.9 million for the years ended December 31, 2023, 2022 and 2021, respectively, and reported as cash flows used in operating activities in the statement of cash flows. The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at December 31, 2023 and 2022:
| December 31, 2023 |  | December 31, 2022 |  |
Weighted average remaining lease term (years) |  |  |  |  |
Operating leases | 5.6 years |  | 5.1 years |  |
Weighted average discount rate |  |  |  |  |
Operating leases | 3.28 | % |  | 2.85 | % |  |
Equipment Lessor Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. The commercial equipment financing group is primarily focused on serving the following industries: transportation, construction (includes crane and utility), marine, franchise, general manufacturing (includes machine tool), helicopter/fixed wing, solar, packaging, plastics and food processing. Lease terms typically range from 24 months to 120 months. The commercial equipment financing group offers the following lease products: Loans, Capital Lease, Purchase Upon Termination (“PUT”), Terminal Rental Adjustment Clause ("TRAC”), Split-TRAC, and Fair Market Value (“FMV”). Direct finance equipment leases are included in commercial and industrial loans and leases receivable. The estimated residual values for direct finance and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only Customers’ Split-TRAC leases have residual risk and the unguaranteed portions are typically nominal. Expected credit losses on direct financing leases and the related estimated residual values are included in the ACL on loans and leases. Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment. The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at December 31, 2023 and 2022:
(amounts in thousands) | Classification |  | December 31, 2023 |  | December 31, 2022 |  |
ASSETS |  |  |  |  |  |  |
Direct financing leases |  |  |  |  |  |  |
Lease receivables | Loans and leases receivable |  | $ | 190,559 |  |  | $ | 140,182 |  |  |
Guaranteed residual assets | Loans and leases receivable |  | 15,783 |  |  | 12,370 |  |  |
Unguaranteed residual assets | Loans and leases receivable |  | 10,010 |  |  | 7,555 |  |  |
Deferred initial direct costs | Loans and leases receivable |  | 1,213 |  |  | 667 |  |  |
Unearned income | Loans and leases receivable |  | (11,891) |  |  | (3,404) |  |  |
Net investment in direct financing leases |  |  | $ | 205,674 |  |  | $ | 157,370 |  |  |
Operating leases |  |  |  |  |  |  |
Investment in operating leases | Other assets |  | $ | 282,208 |  |  | $ | 248,454 |  |  |
Accumulated depreciation | Other assets |  | (77,672) |  |  | (52,585) |  |  |
Deferred initial direct costs | Other assets |  | 1,192 |  |  | 1,461 |  |  |
Net investment in operating leases |  |  | 205,728 |  |  | 197,330 |  |  |
Total lease assets |  |  | $ | 411,402 |  |  | $ | 354,700 |  |  |
Maturities of operating and direct financing lease receivables were as follows at December 31, 2023:
(amounts in thousands) | Operating leases |  | Direct financing leases |
2024 | $ | 41,842 |  |  | $ | 50,761 |  |
2025 | 38,176 |  |  | 41,822 |  |
2026 | 43,852 |  |  | 34,055 |  |
2027 | 32,782 |  |  | 29,059 |  |
2028 | 52,716 |  |  | 21,401 |  |
Thereafter | 24,701 |  |  | 16,100 |  |
Total lease payments | $ | 234,069 |  |  | 193,198 |  |
Less: interest |  |  | 2,639 |  |
Present value of lease receivables |  |  | $ | 190,559 |  |
Leases | LEASES Lessee Customers has operating leases for its branches, certain limited purpose offices (“LPOs”), and administrative offices, with remaining lease terms ranging between one month and nine years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the Consumer Price Index (“CPI”). Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease. As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments. The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands) | Classification |  | December 31, 2023 |  | December 31, 2022 |  |
ASSETS |  |  |  |  |  |  |
Operating lease ROU assets | Other assets |  | $ | 15,644 |  |  | $ | 16,133 |  |  |
LIABILITIES |  |  |  |  |  |  |
Operating lease liabilities | Other liabilities |  | $ | 18,048 |  |  | $ | 19,046 |  |  |
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
|  |  | For the Years Ended December 31,
(amounts in thousands) | Classification |  | 2023 |  | 2022 |  | 2021
Operating lease cost (1) | Occupancy expenses |  | $ | 5,050 |  |  | $ | 4,758 |  |  | $ | 4,545 |
(1) There were no variable lease costs for the years ended December 31, 2023, 2022 and 2021, and sublease income for operating leases was immaterial. Maturities of non-cancelable operating lease liabilities were as follows at December 31, 2023:
(amounts in thousands) | December 31, 2023 |
2024 | $ | 4,786 |  |
2025 | 3,745 |  |
2026 | 2,977 |  |
2027 | 2,469 |  |
2028 | 2,090 |  |
Thereafter | 3,535 |  |
Total minimum payments | 19,602 |  |
Less: interest | 1,554 |  |
Present value of lease liabilities | $ | 18,048 |  |
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to operating lease liabilities was $5.4 million, $5.0 million and $4.9 million for the years ended December 31, 2023, 2022 and 2021, respectively, and reported as cash flows used in operating activities in the statement of cash flows. The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at December 31, 2023 and 2022:
| December 31, 2023 |  | December 31, 2022 |  |
Weighted average remaining lease term (years) |  |  |  |  |
Operating leases | 5.6 years |  | 5.1 years |  |
Weighted average discount rate |  |  |  |  |
Operating leases | 3.28 | % |  | 2.85 | % |  |
Equipment Lessor Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. The commercial equipment financing group is primarily focused on serving the following industries: transportation, construction (includes crane and utility), marine, franchise, general manufacturing (includes machine tool), helicopter/fixed wing, solar, packaging, plastics and food processing. Lease terms typically range from 24 months to 120 months. The commercial equipment financing group offers the following lease products: Loans, Capital Lease, Purchase Upon Termination (“PUT”), Terminal Rental Adjustment Clause ("TRAC”), Split-TRAC, and Fair Market Value (“FMV”). Direct finance equipment leases are included in commercial and industrial loans and leases receivable. The estimated residual values for direct finance and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only Customers’ Split-TRAC leases have residual risk and the unguaranteed portions are typically nominal. Expected credit losses on direct financing leases and the related estimated residual values are included in the ACL on loans and leases. Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment. The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at December 31, 2023 and 2022:
(amounts in thousands) | Classification |  | December 31, 2023 |  | December 31, 2022 |  |
ASSETS |  |  |  |  |  |  |
Direct financing leases |  |  |  |  |  |  |
Lease receivables | Loans and leases receivable |  | $ | 190,559 |  |  | $ | 140,182 |  |  |
Guaranteed residual assets | Loans and leases receivable |  | 15,783 |  |  | 12,370 |  |  |
Unguaranteed residual assets | Loans and leases receivable |  | 10,010 |  |  | 7,555 |  |  |
Deferred initial direct costs | Loans and leases receivable |  | 1,213 |  |  | 667 |  |  |
Unearned income | Loans and leases receivable |  | (11,891) |  |  | (3,404) |  |  |
Net investment in direct financing leases |  |  | $ | 205,674 |  |  | $ | 157,370 |  |  |
Operating leases |  |  |  |  |  |  |
Investment in operating leases | Other assets |  | $ | 282,208 |  |  | $ | 248,454 |  |  |
Accumulated depreciation | Other assets |  | (77,672) |  |  | (52,585) |  |  |
Deferred initial direct costs | Other assets |  | 1,192 |  |  | 1,461 |  |  |
Net investment in operating leases |  |  | 205,728 |  |  | 197,330 |  |  |
Total lease assets |  |  | $ | 411,402 |  |  | $ | 354,700 |  |  |
Maturities of operating and direct financing lease receivables were as follows at December 31, 2023:
(amounts in thousands) | Operating leases |  | Direct financing leases |
2024 | $ | 41,842 |  |  | $ | 50,761 |  |
2025 | 38,176 |  |  | 41,822 |  |
2026 | 43,852 |  |  | 34,055 |  |
2027 | 32,782 |  |  | 29,059 |  |
2028 | 52,716 |  |  | 21,401 |  |
Thereafter | 24,701 |  |  | 16,100 |  |
Total lease payments | $ | 234,069 |  |  | 193,198 |  |
Less: interest |  |  | 2,639 |  |
Present value of lease receivables |  |  | $ | 190,559 |  |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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- Definition The entire disclosure of lessor's direct financing leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-30/tableOfContent + Details
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- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-30/tableOfContent + Details
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