The amortized cost, approximate fair value and allowance for credit losses of investment securities at fair value as of March 31, 2024 and December 31, 2023 are summarized as follows:


	March 31, 2024 (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	$	62,274	$	(450)	$	—	$	(3,590)	$	58,234

Agency-guaranteed residential mortgage-backed securities	86,227		—		299		(114)		86,412

Agency-guaranteed residential collateralized mortgage obligations	138,573		—		—		(13,615)		124,958
Agency-guaranteed commercial collateralized mortgage obligations	34,573		—		73		(872)		33,774
Collateralized loan obligations	593,236		—		55		(8,796)		584,495
Commercial mortgage-backed securities	114,445		—		—		(1,819)		112,626
Corporate notes	668,459		(4,619)		—		(53,370)		610,470
Private label collateralized mortgage obligations	1,017,587		—		628		(58,045)		960,170


Available for sale debt securities	$	2,715,374	$	(5,069)	$	1,055	$	(140,221)	2,571,139

Equity securities (2)									33,729
Total investment securities, at fair value									$	2,604,868


	December 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	$	97,359	$	(483)	$	15	$	(4,262)	$	92,629



Agency-guaranteed residential collateralized mortgage obligations	129,589		—		—		(12,681)		116,908

Collateralized loan obligations	500,109		—		1		(11,018)		489,092
Commercial mortgage-backed securities	125,885		—		—		(4,249)		121,636
Corporate notes	636,880		(3,469)		79		(50,456)		583,034
Private label collateralized mortgage obligations	1,034,841		—		1,201		(62,481)		973,561

Available for sale debt securities	$	2,524,663	$	(3,952)	$	1,296	$	(145,147)	2,376,860

Equity securities (2)									28,780
Total investment securities, at fair value									$	2,405,640

(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, 2024 and December 31, 2023. 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.

Proceeds from the sale of AFS debt securities were $22.0 million for the three months ended March 31, 2024. There were no sales of AFS debt securities for the three months ended March 31, 2023. The following table presents gross realized gains and realized losses from the sale of AFS debt securities for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
(amounts in thousands)	2024		2023
Gross realized gains	$	—	$	—
Gross realized losses	(30)		—
Net realized gains (losses) on sale of available for sale debt securities	$	(30)	$	—

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, 2024
(amounts in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	31,500	$	26,852
Due after one year through five years	569,353		525,291
Due after five years through ten years	67,606		58,327

Asset-backed securities	62,274		58,234
Agency-guaranteed residential mortgage-backed securities	86,227		86,412

Agency-guaranteed residential collateralized mortgage obligations	138,573		124,958
Agency-guaranteed commercial collateralized mortgage obligations	34,573		33,774
Collateralized loan obligations	593,236		584,495
Commercial mortgage-backed securities	114,445		112,626
Private label collateralized mortgage obligations	1,017,587		960,170


Total available for sale debt securities	$	2,715,374	$	2,571,139

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, 2024 and December 31, 2023 were as follows:


	March 31, 2024
	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	$	—	$	—	$	52,676	$	(3,261)	$	52,676	$	(3,261)
Agency-guaranteed residential mortgage-backed securities	47,014		(114)		—		—		47,014		(114)

Agency-guaranteed residential collateralized mortgage obligations	12,283		(105)		112,675		(13,510)		124,958		(13,615)
Agency-guaranteed commercial collateralized mortgage obligations	26,582		(872)		—		—		26,582		(872)
Collateralized loan obligations	114,173		(779)		429,799		(8,017)		543,972		(8,796)
Commercial mortgage-backed securities	—		—		112,626		(1,819)		112,626		(1,819)
Corporate notes	30,829		(532)		410,323		(36,201)		441,152		(36,733)
Private label collateralized mortgage obligations	260,549		(8,133)		572,448		(49,912)		832,997		(58,045)


Total	$	491,430	$	(10,535)	$	1,690,547	$	(112,720)	$	2,181,977	$	(123,255)


	December 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	$	—	$	—	$	64,029	$	(4,027)	$	64,029	$	(4,027)


Agency-guaranteed residential collateralized mortgage obligations	—		—		116,908		(12,681)		116,908		(12,681)

Collateralized loan obligations	29,241		(392)		438,551		(10,626)		467,792		(11,018)
Commercial mortgage-backed securities	—		—		121,636		(4,249)		121,636		(4,249)
Corporate notes	23,243		(1,147)		424,768		(33,764)		448,011		(34,911)
Private label collateralized mortgage obligations	303,750		(11,243)		613,007		(51,417)		916,757		(62,660)


Total	$	356,234	$	(12,782)	$	1,778,899	$	(116,764)	$	2,135,133	$	(129,546)

At March 31, 2024, there were 38 AFS debt securities with unrealized losses in the less-than-twelve-months category and 102 AFS debt securities with unrealized losses in the twelve-months-or-more category. Except for one asset-backed security and 19 corporate notes where there was a change in future estimated cash flows as further discussed below, the unrealized losses were principally due to changes in market interest rates and credit spreads that resulted in a negative impact on the respective securities’ fair value and expected to be recovered when market prices recover or at maturity. Customers does not intend to sell any of the 140 securities, and it is not more likely than not that Customers will be required to sell any of the 140 securities before recovery of the amortized cost basis. At December 31, 2023, there were 119 AFS debt securities in an unrealized loss position.

Customers recorded an allowance for credit losses on one asset-backed security and 19 corporate notes where there was a change in future estimated cash flows during the three months ended March 31, 2024 and on four asset-backed securities and six corporate notes during the three months ended March 31, 2023. 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 table presents 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,
	2024						2023
(amounts in thousands)	Asset-backed securities		Corporate notes		Total		Asset-backed securities		Corporate notes		Total
Balance at January 1	$	483	$	3,469	$	3,952	$	578	$	—	$	578
Credit losses on securities for which credit losses were not previously recorded	—		502		502		—		1,383		1,383
Credit losses on previously impaired securities	—		648		648		273		—		273
Decrease in allowance for credit losses on previously impaired securities	(33)		—		(33)		(61)		—		(61)

Balance at March 31	$	450	$	4,619	$	5,069	$	790	$	1,383	$	2,173

At March 31, 2024 and December 31, 2023, Customers Bank had pledged AFS investment securities aggregating $1.3 billion and $1.2 billion in fair value, respectively, as collateral for immediately available liquidity from the FRB. The counterparty does not have the ability to sell or repledge these securities.


	March 31, 2024 (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	$	509,690	$	—	$	509,690	$	345	$	(2,432)	$	507,603

Agency-guaranteed residential mortgage-backed securities	7,001		—		7,001		—		(1,087)		5,914
Agency-guaranteed commercial mortgage-backed securities	1,830		—		1,830		—		(151)		1,679
Agency-guaranteed residential collateralized mortgage obligations	182,856		—		182,856		—		(20,723)		162,133
Agency-guaranteed commercial collateralized mortgage obligations	146,001		—		146,001		—		(21,535)		124,466



Private label collateralized mortgage obligations	184,659		—		184,659		—		(13,826)		170,833

Total held to maturity debt securities	$	1,032,037	$	—	$	1,032,037	$	345	$	(59,754)	$	972,628


	December 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	$	575,990	$	—	$	575,990	$	202	$	(2,064)	$	574,128

Agency-guaranteed residential mortgage-backed securities	7,039		—		7,039		—		(649)		6,390
Agency-guaranteed commercial mortgage-backed securities	1,850		—		1,850		—		(134)		1,716
Agency-guaranteed residential collateralized mortgage obligations	186,636		—		186,636		—		(19,049)		167,587
Agency-guaranteed commercial collateralized mortgage obligations	146,765		—		146,765		—		(23,178)		123,587



Private label collateralized mortgage obligations	184,890		—		184,890		—		(11,859)		173,031

Total held to maturity debt securities	$	1,103,170	$	—	$	1,103,170	$	202	$	(56,933)	$	1,046,439

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:


	March 31, 2024
(amounts in thousands)	Amortized Cost		Fair Value




Asset-backed securities	$	509,690	$	507,603


Agency-guaranteed residential mortgage-backed securities	7,001		5,914
Agency-guaranteed commercial mortgage-backed securities	1,830		1,679
Agency-guaranteed residential collateralized mortgage obligations	182,856		162,133
Agency-guaranteed commercial collateralized mortgage obligations	146,001		124,466
Private label collateralized mortgage obligations	184,659		170,833
Total held to maturity debt securities	$	1,032,037	$	972,628

Customers recorded no allowance for credit losses on investment securities classified as held to maturity at March 31, 2024 and December 31, 2023. 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. The private label collateralized mortgage obligations are highly rated with sufficient overcollateralization, and therefore, are estimated to have no expected credit losses. Customers recorded no allowance for its investments in the asset-backed securities. Customers considered the seniority of its beneficial interests, which include overcollateralization of these asset-backed securities in the estimate of the ACL at March 31, 2024 and December 31, 2023. The unrealized losses on HTM debt securities with no ACL were primarily 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, 2024 and December 31, 2023. 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, 2024
(amounts in thousands)	AAA		AA		Not Rated		Total
Held to maturity debt securities:
Asset-backed securities	$	—	$	—	$	509,690	$	509,690

Agency-guaranteed residential mortgage-backed securities	—		—		7,001		7,001
Agency-guaranteed commercial mortgage-backed securities	—		—		1,830		1,830
Agency-guaranteed residential collateralized mortgage obligations	—		—		182,856		182,856
Agency-guaranteed commercial collateralized mortgage obligations	—		—		146,001		146,001



Private label collateralized mortgage obligations	66,371		44,429		73,859		184,659

Total held to maturity debt securities	$	66,371	$	44,429	$	921,237	$	1,032,037

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, 2024 and December 31, 2023, there were no HTM debt securities past due under the terms of their agreements or in nonaccrual status.

At March 31, 2024 and December 31, 2023, Customers Bank had pledged HTM investment securities aggregating $391.4 million and $398.4 million in fair value, respectively, as collateral primarily for immediately available liquidity from the FRB and unused lines of credit with another financial institution. The counterparties do not have the ability to sell or repledge these securities.