XML 98 R24.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The components of income tax expense were as follows:
| For the Years Ended December 31,
(amounts in thousands) | 2024 |  | 2023 |  | 2022
Current |  |  |  |  |
Federal | $ | 23,723 |  |  | $ | 42,485 |  |  | $ | 37,476 |
State | 20,324 |  |  | 15,935 |  |  | 18,880 |
Total current expense | 44,047 |  |  | 58,420 |  |  | 56,356 |
Deferred |  |  |  |  |
Federal | (1,204) |  |  | 17,478 |  |  | 7,249 |
State | 61 |  |  | 4,699 |  |  | (342) |
Total deferred expense (benefit) | (1,143) |  |  | 22,177 |  |  | 6,907 |
Income tax expense | $ | 42,904 |  |  | $ | 80,597 |  |  | $ | 63,263 |
Effective tax rates differ from the federal statutory rate of 21% at December 31, 2024, 2023, and 2022, which was applied to income before income tax expense, due to the following:
| For the Years Ended December 31,
| 2024 |  | 2023 |  | 2022
(dollars in thousands) | Amount |  | % of pretax income |  | Amount |  | % of pretax income |  | Amount |  | % of pretax income
Federal income tax at statutory rate | $ | 47,118 |  |  | 21.00 | % |  | $ | 69,455 |  |  | 21.00 | % |  | $ | 61,173 |  |  | 21.00 | %
State income tax, net of federal benefit | 9,831 |  |  | 4.38 |  |  | 16,447 |  |  | 4.97 |  |  | 9,184 |  |  | 3.15 |
Tax-exempt interest, net of disallowance | (769) |  |  | (0.34) |  |  | (769) |  |  | (0.23) |  |  | (650) |  |  | (0.22) |
Bank-owned life insurance | (2,129) |  |  | (0.95) |  |  | 1,286 |  |  | 0.39 |  |  | (3,084) |  |  | (1.06) |
Tax credits, net of basis reduction | (19,902) |  |  | (8.87) |  |  | (11,199) |  |  | (3.39) |  |  | (8,644) |  |  | (2.97) |
Equity-based compensation | (1,888) |  |  | (0.84) |  |  | (679) |  |  | (0.21) |  |  | (2,293) |  |  | (0.79) |
Non-deductible executive compensation | 2,868 |  |  | 1.28 |  |  | 1,872 |  |  | 0.57 |  |  | 2,074 |  |  | 0.71 |
FDIC premium limitation | 2,440 |  |  | 1.09 |  |  | 1,604 |  |  | 0.49 |  |  | 268 |  |  | 0.09 |
Unrecognized tax benefits | 4,993 |  |  | 2.23 |  |  | (785) |  |  | (0.24) |  |  | 3,633 |  |  | 1.25 |
Other | 342 |  |  | 0.14 |  |  | 3,365 |  |  | 1.02 |  |  | 1,602 |  |  | 0.56 |
Effective income tax rate | $ | 42,904 |  |  | 19.12 | % |  | $ | 80,597 |  |  | 24.37 | % |  | $ | 63,263 |  |  | 21.72 | %
Deferred income taxes reflect temporary differences in the recognition of revenue and expenses for tax reporting and financial statement purposes, principally because certain items are recognized in different periods for financial reporting and tax return purposes. The following represents Customers’ deferred tax assets and liabilities as December 31, 2024 and 2023:
| December 31,
(amounts in thousands) | 2024 |  | 2023
Deferred tax assets |  |  |
Allowance for credit losses on loans and leases | $ | 35,733 |  |  | $ | 33,978 |
Net operating losses | 551 |  |  | 643 |
Compensation and benefits | 12,716 |  |  | 8,576 |
Net deferred loan fees and costs | 2,032 |  |  | — |
Lease liability | 9,951 |  |  | 4,618 |
Net unrealized losses on securities | 34,203 |  |  | 46,281 |
Accrued severance | 797 |  |  | 51 |
Other | 7,467 |  |  | 6,100 |
Total deferred tax assets | 103,450 |  |  | 100,247 |
Deferred tax liabilities |  |  |
Net deferred loan fees and costs | — |  |  | (1,236) |
Tax qualified lease adjustments | (86,522) |  |  | (80,749) |
Right of use asset | (9,278) |  |  | (4,037) |
Other | (5,974) |  |  | (1,614) |
Total deferred tax liabilities | (101,774) |  |  | (87,636) |
Net deferred tax asset | $ | 1,676 |  |  | $ | 12,611 |
The net deferred tax asset is recorded in other assets and other liabilities at December 31, 2024 and in other assets at December 31, 2023. Customers had approximately $2.6 million of federal net operating loss carryovers subject to the annual limitation under Section 382 of the Code at December 31, 2024, that begin to expire in 2029. At December 31, 2024, Customers had approximately $122.3 million of Pennsylvania net operating loss carryovers for which a deferred tax asset was not established because realization of the loss carryovers was considered remote. The following table presents changes in unrecognized tax benefits for the years ended December 31, 2024, 2023, and 2022:
| For the Years Ended December 31,
(amounts in thousands) | 2024 |  | 2023 |  | 2022
Balance at January 1 | $ | 1,796 |  |  | $ | 4,065 |  |  | $ | — |
Increases related to prior year tax positions | 4,987 |  |  | — |  |  | 1,221 |
Decreases related to prior year tax positions | (104) |  |  | (1,474) |  |  | — |
Increases related to current year tax positions | 289 |  |  | 361 |  |  | 2,844 |
Settlements | (230) |  |  | (1,156) |  |  | — |
Lapse of statute | — |  |  | — |  |  | — |
Balance at December 31 | $ | 6,738 |  |  | $ | 1,796 |  |  | $ | 4,065 |
As of December 31, 2024, all of Customers’ unrecognized tax benefits, if recognized, would impact the effective tax rate. Not included in the table above is $1.7 million of federal income tax benefit on unrecognized state tax benefits recognized in deferred taxes. Customers recognizes interest related to unrecognized tax benefits in income tax expense and penalties in other non-interest expense. During the years ended December 31, 2024, 2023 and 2022, Customers recognized $1.3 million, $0.1 million and $1.4 million, respectively, of interest related to unrecognized tax benefits in income tax expense. It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change from the re-evaluation of uncertain tax positions arising in examinations, in appeals, in the courts, or from the closure of tax statutes. While the net effect on the total unrecognized tax benefits during the next twelve months cannot be reasonably estimated, Customers expects a $1.5 million to $2.2 million reduction in unrecognized tax benefits in 2025 due to the closure of tax statutes and/or potential settlement with taxing authorities. Customers is subject to U.S. federal income tax as well as income tax in various state and local taxing jurisdictions. Generally, Customers is no longer subject to examination by federal, state, and local taxing authorities for years prior to the year ended December 31, 2021, with the exception of New Jersey and New York City. In 2023, Customers settled the audit examination with New York State for the 2015-2017 tax years and with New York City for the 2016-2018 tax years. Customers is currently under audit by New Jersey for the 2018 tax year and by New York City for the 2019-2021 tax years. Any potential adjustments for open audits have been considered in the balance of unrecognized tax benefits as of December 31, 2024.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration