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INVESTMENT SECURITIES (Tables)

9 Months Ended

Sep. 30, 2024

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, 2024 and December 31, 2023 are summarized as follows:

			September 30, 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			$	40,179					$	(307)					$	—					$	(2,202)					$	37,670
Agency-guaranteed residential mortgage-backed securities			216,821						—						4,357						—						221,178
Agency-guaranteed residential collateralized mortgage obligations			201,529						—						1,277						(7,933)						194,873
Agency-guaranteed commercial collateralized mortgage obligations			96,200						—						1,361						(618)						96,943
Collateralized loan obligations			315,096						—						100						(4,767)						310,429
Commercial mortgage-backed securities			78,711						—						—						(1,637)						77,074
Corporate notes			660,626						(4,332)						646						(61,969)						594,971
Private label collateralized mortgage obligations			879,555						—						1,573						(36,533)						844,595
Available for sale debt securities			$	2,488,717					$	(4,639)					$	9,314					$	(115,659)					2,377,733
Equity securities (2)																											34,336
Total investment securities, at fair value																											$	2,412,069

			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

(1)Accrued interest on AFS debt securities totaled $19.4 million and $14.7 million at September 30, 2024 and December 31, 2023, 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, 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.

The amortized cost, approximate fair value and allowance for credit losses of investment securities held to maturity as of September 30, 2024 and December 31, 2023 are summarized as follows:

			September 30, 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			$	538,832					$	—					$	538,832					$	1,628					$	(184)					$	540,276
Agency-guaranteed residential mortgage-backed securities			6,920						—						6,920						—						(522)						6,398
Agency-guaranteed commercial mortgage-backed securities			1,790						—						1,790						—						(271)						1,519
Agency-guaranteed residential collateralized mortgage obligations			174,098						—						174,098						—						(11,221)						162,877
Agency-guaranteed commercial collateralized mortgage obligations			159,050						—						159,050						—						(19,426)						139,624
Private label collateralized mortgage obligations			183,747						—						183,747						789						(7,716)						176,820
Total held to maturity debt securities			$	1,064,437					$	—					$	1,064,437					$	2,417					$	(39,340)					$	1,027,514

			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

(1)Accrued interest on HTM debt securities totaled $2.6 million and $2.7 million at September 30, 2024 and December 31, 2023, 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, 2024 and 2023:

			Three Months Ended September 30,												Nine Months Ended September 30,
(amounts in thousands)			2024						2023						2024						2023
Gross realized gains			$	—					$	—					$	176					$	—
Gross realized losses			—						(429)						(925)						(429)
Net realized gains (losses) on sale of available for sale debt securities			$	—					$	(429)					$	(749)					$	(429)

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, 2024
(amounts in thousands)			Amortized Cost						Fair Value
Due in one year or less			$	41,523					$	29,940
Due after one year through five years			531,379						484,726
Due after five years through ten years			87,724						80,305
Asset-backed securities			40,179						37,670
Agency-guaranteed residential mortgage-backed securities			216,821						221,178
Agency-guaranteed residential collateralized mortgage obligations			201,529						194,873
Agency-guaranteed commercial collateralized mortgage obligations			96,200						96,943
Collateralized loan obligations			315,096						310,429
Commercial mortgage-backed securities			78,711						77,074
Private label collateralized mortgage obligations			879,555						844,595
Total available for sale debt securities			$	2,488,717					$	2,377,733

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, 2024
(amounts in thousands)			Amortized Cost						Fair Value
Asset-backed securities			$	538,832					$	540,276
Agency-guaranteed residential mortgage-backed securities			6,920						6,398
Agency-guaranteed commercial mortgage-backed securities			1,790						1,519
Agency-guaranteed residential collateralized mortgage obligations			174,098						162,877
Agency-guaranteed commercial collateralized mortgage obligations			159,050						139,624
Private label collateralized mortgage obligations			183,747						176,820
Total held to maturity debt securities			$	1,064,437					$	1,027,514

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, 2024 and December 31, 2023 were as follows:

			September 30, 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			$	—					$	—					$	30,960					$	(1,241)					$	30,960					$	(1,241)
Agency-guaranteed residential collateralized mortgage obligations			—						—						109,456						(7,933)						109,456						(7,933)
Agency-guaranteed commercial collateralized mortgage obligations			45,080						(618)						—						—						45,080						(618)
Collateralized loan obligations			37,164						(284)						250,635						(4,483)						287,799						(4,767)
Commercial mortgage-backed securities			—						—						77,074						(1,637)						77,074						(1,637)
Corporate notes			59,408						(766)						319,371						(26,637)						378,779						(27,403)
Private label collateralized mortgage obligations			175,651						(3,367)						586,700						(33,166)						762,351						(36,533)
Total			$	317,303					$	(5,035)					$	1,374,196					$	(75,097)					$	1,691,499					$	(80,132)

			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)

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,
			2024																		2023
(amounts in thousands)			Asset-backed securities						Corporate notes						Total						Asset-backed securities						Corporate notes						Total
Balance at July 1			$	367					$	4,972					$	5,339					$	1,563					$	1,876					$	3,439
Credit losses on securities for which credit losses were not previously recorded			24						—						24						—						564						564
Credit losses on previously impaired securities			—						12						12						442						69						511
Decrease in allowance for credit losses on previously impaired securities			(84)						(652)						(736)						(250)						(24)						(274)
Reduction due to sales			—						—						—						—						(391)						(391)
Balance at September 30			$	307					$	4,332					$	4,639					$	1,755					$	2,094					$	3,849

			Nine Months Ended September 30,
			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			24						635						659						—						2,485						2,485
Credit losses on previously impaired securities			—						613						613						1,488						—						1,488
Decrease in allowance for credit losses on previously impaired securities			(200)						(385)						(585)						(311)						—						(311)
Reduction due to sales			—						—						—						—						(391)						(391)
Balance at September 30			$	307					$	4,332					$	4,639					$	1,755					$	2,094					$	3,849

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, 2024
(amounts in thousands)			AAA						AA																																																Not Rated						Total
Held to maturity debt securities:
Asset-backed securities			$	—					$	—																																															$	538,832					$	538,832
Agency-guaranteed residential mortgage-backed securities			—						—																																																6,920						6,920
Agency-guaranteed commercial mortgage-backed securities			—						—																																																1,790						1,790
Agency-guaranteed residential collateralized mortgage obligations			—						—																																																174,098						174,098
Agency-guaranteed commercial collateralized mortgage obligations			—						—																																																159,050						159,050
Private label collateralized mortgage obligations			100,287						9,301																																																74,159						183,747
Total held to maturity debt securities			$	100,287					$	9,301																																															$	954,849					$	1,064,437

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