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Loans and Leases Receivable and Allowance for Credit Losses on Loans and Leases
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Loans and Leases Receivable and Allowance for Credit Losses on Loans and Leases LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS AND LEASES
The following table presents loans and leases receivable as of December 31, 2024 and 2023:
December 31,
(amounts in thousands)20242023
Loans and leases receivable:
Commercial:
Commercial and industrial:
Specialized lending (1)
$5,842,420 $5,006,693 
Other commercial and industrial (2)
1,182,350 1,279,147 
Multifamily2,252,246 2,138,622 
Commercial real estate owner occupied1,100,944 797,319 
Commercial real estate non-owner occupied1,359,130 1,177,650 
Construction147,209 166,393 
Total commercial loans and leases receivable11,884,299 10,565,824 
Consumer:
Residential real estate496,559 484,435 
Manufactured housing33,123 38,670 
Installment:
Personal463,854 555,533 
Other249,799 319,393 
Total consumer loans receivable1,243,335 1,398,031 
Loans and leases receivable13,127,634 11,963,855 
Loans receivable, mortgage finance, at fair value1,321,128 897,912 
Allowance for credit losses on loans and leases(136,775)(135,311)
Total loans and leases receivable, net of allowance for credit losses on loans and leases (3)
$14,311,987 $12,726,456 
(1)Includes direct finance and sales-type equipment leases of $262.7 million and $205.7 million at December 31, 2024 and 2023, respectively.
(2)Includes the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) loans of $22.8 million and $74.7 million at December 31, 2024 and 2023, respectively. The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), as amended, included the PPP designed to aid small-and medium sized businesses through federally guaranteed loans distributed through banks at the outset of the COVID-19 pandemic. The PPP loans are fully guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used for payroll and other permitted purposes in accordance with the requirements of the PPP. These loans carry a fixed rate of 1% and terms of two or five years, if not forgiven, in whole or in part. Customers classified the PPP loans as held for investment and these loans are reported at amortized cost and interest income is recognized using the interest method. The origination fees, net of direct origination costs, are deferred and recognized as an adjustment to the yield of the related loans over their contractual life using the interest method. Customers has elected to not estimate prepayments as a policy election.
(3)Includes deferred (fees) costs and unamortized (discounts) premiums, net of $(20.8) million and $(22.7) million at December 31, 2024 and 2023, respectively.

Customers’ total loans and leases receivable includes loans receivable reported at fair value based on an election made to account for these loans at fair value and loans and leases receivable predominately reported at their outstanding unpaid principal balance, net of charge-offs, deferred costs and fees and unamortized premiums and discounts, and evaluated for impairment. The total amount of accrued interest recorded for total loans was $88.2 million and $95.0 million at December 31, 2024 and 2023, respectively, and is presented in accrued interest receivable in the consolidated balance sheet. At December 31, 2024 and 2023, there were $31.9 million and $15.8 million of individually evaluated loans that were collateral-dependent, respectively. Substantially all individually evaluated loans are collateral-dependent and consisted primarily of commercial and industrial, commercial real estate, and residential real estate loans. Collateral-dependent commercial and industrial loans were secured by accounts receivable, inventory and equipment; collateral-dependent commercial real estate loans were secured by commercial real estate assets; and residential real estate loans were secured by residential real estate assets.
Loans and leases receivable
The following tables summarize loans and leases receivable by loan and lease type and performance status as of December 31, 2024 and 2023:
December 31, 2024
(amounts in thousands)
30-59 Days past due (1)
60-89 Days past due (1)
90 Days or more past due (2)
Total past due
Loans and leases not past due (3)(4)
Total loans and leases (4)
Commercial and industrial, including specialized lending$3,655 $19,854 $3,606 $27,115 $6,974,904 $7,002,019 
Multifamily— — 11,834 11,834 2,240,412 2,252,246 
Commercial real estate owner occupied11,395 — 8,071 19,466 1,081,478 1,100,944 
Commercial real estate non-owner occupied— — 17,007 17,007 1,342,123 1,359,130 
Construction— — — — 147,209 147,209 
Residential real estate9,541 4,560 3,384 17,485 479,074 496,559 
Manufactured housing766 155 2,262 3,183 29,940 33,123 
Installment7,918 5,108 5,613 18,639 695,014 713,653 
Total$33,275 $29,677 $51,777 $114,729 $12,990,154 $13,104,883 
December 31, 2023
(amounts in thousands)
30-59 Days past due (1)
60-89 Days past due (1)
90 Days or more past due (2)
Total past due
Loans and leases not past due (3)(4)
Total loans and leases (4)
Commercial and industrial, including specialized lending$1,516 $322 $4,153 $5,991 $6,205,114 $6,211,105 
Multifamily16,003 — — 16,003 2,122,619 2,138,622 
Commercial real estate owner occupied449 3,814 5,827 10,090 787,229 797,319 
Commercial real estate non-owner occupied16,653 — — 16,653 1,160,997 1,177,650 
Construction— — — — 166,393 166,393 
Residential real estate10,504 2,255 3,764 16,523 467,912 484,435 
Manufactured housing1,152 343 2,869 4,364 34,306 38,670 
Installment9,255 7,866 7,211 24,332 850,594 874,926 
Total$55,532 $14,600 $23,824 $93,956 $11,795,164 $11,889,120 
(1)Includes past due loans and leases that are accruing interest because collection is considered probable.
(2)Includes loans amounting to $17.1 million and $0.5 million as of December 31, 2024 and 2023, respectively, that are still accruing interest because collection is considered probable.
(3)Loans and leases where next payment due is less than 30 days from the report date. The tables exclude PPP loans of $22.8 million, of which $0.8 million were 30-59 days past due and $16.1 million were 60 days or more past due as of December 31, 2024, and PPP loans of $74.7 million, of which $0.7 million were 30-59 days past due and $48.5 million were 60 days or more past due as of December 31, 2023. Claims for guarantee payments are submitted to the SBA for eligible PPP loans that are more than 60 days past due.
(4)Includes PCD loans of $126.4 million and $157.2 million at December 31, 2024 and 2023, respectively. On June 15, 2023, Customers acquired $631.0 million of venture banking loan portfolio (included within specialized lending above) from the FDIC, which included $228.7 million of PCD loans.
Nonaccrual Loans and Leases
The following table presents the amortized cost of loans and leases held for investment on nonaccrual status.
 
December 31, 2024
December 31, 2023
(amounts in thousands)Nonaccrual loans with no related allowanceNonaccrual loans with related allowanceTotal nonaccrual loansNonaccrual loans with no related allowanceNonaccrual loans with related allowanceTotal nonaccrual loans
Commercial and industrial, including specialized lending$4,041 $— $4,041 $3,365 $1,071 $4,436 
Multifamily11,834 — 11,834 — — — 
Commercial real estate owner occupied8,090 — 8,090 5,869 — 5,869 
Commercial real estate non-owner occupied354 — 354 — — — 
Residential real estate8,274 440 8,714 6,685 117 6,802 
Manufactured housing— 1,852 1,852 — 2,331 2,331 
Installment— 5,613 5,613 — 7,211 7,211 
Total$32,593 $7,905 $40,498 $15,919 $10,730 $26,649 
Interest income recognized on nonaccrual loans was insignificant during the years ended December 31, 2024, 2023 and 2022. Accrued interest reversed when the loans went to nonaccrual status was insignificant during the years ended December 31, 2024, 2023 and 2022.
Loans receivable, mortgage finance, at fair value
Mortgage finance loans consist of commercial loans to mortgage companies. These mortgage finance lending transactions are subject to master repurchase agreements. As a result of the contractual provisions, for accounting purposes, control of the underlying mortgage loan has not transferred and the rewards and risks of the mortgage loans are not assumed by Customers. The mortgage finance loans are designated as loans held for investment and reported at fair value based on an election made to account for the loans at fair value. Pursuant to the agreements, Customers funds the pipelines for these mortgage lenders by sending payments directly to the closing agents for funded mortgage loans and receives proceeds directly from third party investors when the underlying mortgage loans are sold into the secondary market. The fair value of the mortgage finance loans is estimated as the amount of cash initially advanced to fund the mortgage, plus accrued interest and fees, as specified in the respective agreements. The interest rates on these loans are variable, and the lending transactions are short-term, with an average life under 30 days from purchase to sale. The primary goal of these lending transactions is to provide liquidity to mortgage companies.
At December 31, 2024 and 2023, all of Customers’ mortgage finance loans were current in terms of payment. As these loans are reported at their fair value, they do not have an ACL and are therefore excluded from ACL-related disclosures.
Allowance for credit losses on loans and leases
The changes in the ACL on loans and leases by loan and lease type for the years ended December 31, 2024, 2023 and 2022 are presented in the table below. ACL as of December 31, 2024, 2023 and 2022 is calculated in accordance with the CECL methodology as described in NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION.
(amounts in thousands)
Commercial and industrial (1)(2)
MultifamilyCommercial real estate owner occupiedCommercial real estate non-owner occupiedConstructionResidential real estateManufactured housingInstallmentTotal
Ending Balance,
December 31, 2021
$12,702 $4,477 $3,213 $6,210 $692 $2,383 $4,278 $103,849 $137,804 
Charge-offs(16,248)(1,990)— (6,075)— (17)— (52,866)(77,196)
Recoveries1,182 337 51 121 236 64 — 8,837 10,828 
Provision (benefit) for credit losses on loans and leases19,946 11,717 3,190 10,963 985 3,664 152 8,871 59,488 
Ending Balance,
December 31, 2022		$17,582 $14,541 $6,454 $11,219 $1,913 $6,094 $4,430 $68,691 $130,924 
Allowance for credit losses on FDIC PCD loans, net of charge-offs (3)
2,576 — — — — — — — 2,576 
Charge-offs
(16,915)(3,574)(39)(4,527)— (69)— (69,942)(95,066)
Recoveries8,472 — 34 315 116 35 — 17,059 26,031 
Provision (benefit) for credit losses on loans and leases11,788 5,376 3,433 9,852 (547)526 (191)40,609 70,846 
Ending Balance,
December 31, 2023		$23,503 $16,343 $9,882 $16,859 $1,482 $6,586 $4,239 $56,417 $135,311 
Charge-offs(23,735)(4,073)(365)(145)— (38)— (56,109)(84,465)
Recoveries5,689 — — — 10 79 — 10,352 16,130 
Provision (benefit) for credit losses on loans and leases23,922 6,241 1,238 691 (242)(659)(410)39,018 69,799 
Ending Balance,
December 31, 2024		$29,379 $18,511 $10,755 $17,405 $1,250 $5,968 $3,829 $49,678 $136,775 
(1)    Includes specialized lending.
(2)    PPP loans include an embedded credit enhancement from the SBA, which guarantees 100% of the principal and interest owed by the borrower provided that the SBA’s eligibility criteria are met. As a result, the eligible PPP loans do not have an ACL.
(3)    Represents $8.7 million of allowance for credit losses on PCD loans recognized upon acquisition of a venture banking loan portfolio (included within specialized lending) from the FDIC on June 15, 2023, net of $6.2 million of charge-offs for certain of these PCD loans upon acquisition.
At December 31, 2024, the ACL on loans and leases was $136.8 million, an increase of $1.5 million from the December 31, 2023 balance of $135.3 million. The increase in ACL for the year ended December 31, 2024 was primarily attributable to an increase in commercial and industrial loan balances held for investment, partially offset by the recognition of improvement in macroeconomic forecasts and a decrease in consumer installment loan balances held for investment. At December 31, 2023, the ACL was $135.3 million, an increase of $4.4 million from the December 31, 2022 balance of $130.9 million. The increase in ACL for the year ended December 31, 2023 resulted primarily from additional provision for credit losses from the recognition of weaker and increased uncertainties in macroeconomic forecasts and the recognition of ACL for PCD loans acquired from the FDIC, net of related charge-offs upon acquisition, partially offset by a decrease in loan balances held for investment.
Loan Modifications for Borrowers Experiencing Financial Difficulty
Customers adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measurement of TDRs and enhanced the disclosures for loan modifications to borrowers experiencing financial difficulty. Refer to NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for additional information on the adoption.
A borrower is considered to be experiencing financial difficulty when there is a significant doubt about the borrower’s ability to make the required principal and interest payments on the loan or to get an equivalent financing from another creditor at a market rate for a similar loan.
When borrowers are experiencing financial difficulty, Customers may make certain loan modifications as part of loss mitigation strategies to maximize expected payment. To be classified as a modification made to a borrower experiencing financial difficulty, the modification must be in the form of an interest rate reduction, principal forgiveness, or an other-than-insignificant payment delay (payment deferral), term extension, or combinations thereof.
Customers will generally try other forms of relief before principal forgiveness. Any contractual reduction in the amount of principal due without receiving payment or assets is considered forgiveness. For the purpose of this disclosure, Customers considers any contractual change in interest rate that results in a reduction in interest rate relative to the current stated interest rate as an interest rate reduction. Generally, Customers considers any delay in payment of greater than 90 days in the last twelve months to be significant. Term extensions extend the original contractual maturity of the loan. For the purpose of this disclosure, modification of contingent payment features or covenants that would have accelerated payment are not considered term extensions.
The following tables present the amortized cost of loans that were modified to borrowers experiencing financial difficulty for the years ended December 31, 2024 and 2023, disaggregated by class of financing receivable and type of modification granted.
For the Year Ended December 31, 2024
(dollars in thousands)Term ExtensionPayment DeferralDebt ForgivenessInterest Rate Reduction and Term ExtensionTotalPercentage of Total by Financing Class
Commercial and industrial, including specialized lending
$1,999 $9,114 $— $— $11,113 0.16 %
Multifamily— 10,694 — — 10,694 0.47 %
Residential real estate— 51 — 303 354 0.07 %
Manufactured housing100 — — 217 317 0.96 %
Personal installment4,937 171 73 — 5,181 1.12 %
Total$7,036 $20,030 $73 $520 $27,659 
For the Year Ended December 31, 2023
(dollars in thousands)Term ExtensionPayment DeferralDebt ForgivenessInterest Rate Reduction and Term ExtensionTotalPercentage of Total by Financing Class
Commercial and industrial, including specialized lending
$250 $14,791 $— $— $15,041 0.24 %
Commercial real estate owner occupied169 — — — 169 0.02 %
Residential real estate46 — — — 46 0.01 %
Manufactured housing158 — — 664 822 2.13 %
Personal installment14,075 756 312 — 15,143 2.73 %
Total$14,698 $15,547 $312 $664 $31,221 
As of December 31, 2024, there were no commitments to lend additional funds to debtors experiencing financial difficulty whose loans have been modified during the year ended December 31, 2024.
The following tables summarize the impacts of loan modifications made to borrowers experiencing financial difficulty for the years ended December 31, 2024 and 2023.
For the Year Ended December 31, 2024
Weighted Average
(dollars in thousands)Interest Rate Reduction (%)Term Extension
(in months)		Payment Deferral
(in months)		Debt Forgiven
Commercial and industrial, including specialized lending
—%18$— 
Multifamily—05— 
Residential real estate2.8135— 
Manufactured housing3.0830— 
Personal installment—67158 
For the Year Ended December 31, 2023
Weighted Average
(dollars in thousands)Interest Rate Reduction (%)Term Extension
(in months)		Payment Deferral
(in months)		Debt Forgiven
Commercial and industrial, including specialized lending
—%5610$— 
Commercial real estate owner occupied—40— 
Residential real estate—2280— 
Manufactured housing2.5560— 
Personal installment—56462 
The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. Loans are considered to be in payment default at 90 days or more past due. The following tables present an aging analysis of loan modifications made to borrowers experiencing financial difficulty during the years ended December 31, 2024 and 2023.
December 31, 2024
(dollars in thousands)30-59 Days past due60-89 Days past due90 Days or more past dueCurrentTotal
Commercial and industrial, including specialized lending
$— $— $— $11,113 $11,113 
Multifamily— — — 10,694 10,694 
Residential real estate— — — 354 354 
Manufactured housing17 31 — 269 317 
Personal installment356 302 121 4,402 5,181 
Total$373 $333 $121 $26,832 $27,659 
December 31, 2023
(dollars in thousands)30-59 Days past due60-89 Days past due90 Days or more past dueCurrentTotal
Commercial and industrial, including specialized lending
$— $— $— $15,041 $15,041 
Commercial real estate owner occupied— — 169 — 169 
Residential real estate— — — 46 46 
Manufactured housing51 31 — 740 822 
Personal installment1,000 785 518 12,840 15,143 
Total$1,051 $816 $687 $28,667 $31,221 
The loans to borrowers experiencing financial difficulty that were modified during the years ended December 31, 2024 and 2023, respectively, that subsequently defaulted were not material. Customers’ ACL is influenced by loan level characteristics that inform the assessed propensity to default. As such, the provision for credit losses is impacted by changes in such loan level characteristics, such as payment performance. Loans made to borrowers experiencing financial difficulty can be classified as either accrual or nonaccrual.
Troubled Debt Restructurings
For the year ended December 31, 2022, a loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties is considered to be a TDR. The ACL on a TDR is measured using the same method as all other loans held for investment, except in cases when the value of a concession cannot be measured using a method other than the discounted cash flow (“DCF”) method. When the value of a concession is measured using the DCF method, the ACL is determined by discounting the expected future cash flows at the original effective interest rate of the loan. At December 31, 2022, there were $16.8 million in loans reported as TDRs. TDRs were reported as impaired loans in the calendar year of their restructuring and were evaluated to determine whether they should be placed on non-accrual status. In subsequent years, a TDR might be returned to accrual status if it satisfied a minimum performance requirement of six months, however, it would remain classified as impaired. Generally, the Bank required sustained performance for nine months before returning a TDR to accrual status. Customers had no lease receivables that had been restructured as a TDR as of December 31, 2022.
The following table presents loans modified in a TDR by type of concession for the year ended December 31, 2022. There were no modifications that involved forgiveness of debt for the year ended December 31, 2022.
For the Year Ended December 31, 2022
(dollars in thousands)Number of loansRecorded investment
Interest-rate reductions18 $582 
Other (1)
241 2,748 
Total259 $3,330 
(1) Other includes covenant modifications, forbearance, loans discharged under Chapter 7 bankruptcy, or other concessions.
As of December 31, 2022, there were no commitments to lend additional funds to debtors whose loans have been modified in TDRs.
The following table presents, by loan type, the number of loans modified in TDRs and the related recorded investment, for which there was a payment default within twelve months following the modification:
December 31, 2022
(dollars in thousands)Number of loansRecorded investment
Installment212 $2,206 
Residential real estate2 201 
Manufactured housing15 491 
Total loans229 $2,898 
Loans modified in TDRs were evaluated for impairment. The nature and extent of impairment of TDRs, including those which had experienced a subsequent default, were considered in the determination of an appropriate level of ACL.
Credit Quality Indicators
The ACL represents management’s estimate of expected losses in Customers’ loans and leases receivable portfolio, excluding mortgage finance loans reported at fair value pursuant to a fair value option election and PPP loans receivable. Commercial and industrial including specialized lending, multifamily, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loans are rated based on an internally assigned risk rating system which is assigned at the time of loan origination and reviewed on a periodic, or on an “as needed” basis. Residential real estate loans, manufactured housing and installment loans are evaluated based on the payment activity of the loan.
To facilitate the monitoring of credit quality within the commercial and industrial including specialized lending, multifamily, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loan portfolios, and as an input in the ACL lifetime loss rate model for the commercial and industrial portfolio, the Bank utilizes the following categories of risk ratings: pass/satisfactory (includes risk rating 1 through 6), special mention, substandard, doubtful and loss. The risk rating categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass ratings, which are assigned to those borrowers who do not have identified potential or well-defined weaknesses and for whom there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter. While assigning risk ratings involves judgment, the risk-rating process allows management to identify riskier credits in a timely manner and allocate the appropriate resources to manage those loans and leases.
The risk rating grades are defined as follows:
“1” – Pass/Excellent
Loans and leases rated 1 represent a credit extension of the highest quality. The borrower’s historic (at least five years) cash flows manifest extremely large and stable margins of coverage. Balance sheets are conservative, well capitalized, and liquid. After considering debt service for proposed and existing debt, projected cash flows continue to be strong and provide ample coverage. The borrower typically reflects broad geographic and product diversification and has access to alternative financial markets.
“2” – Pass/Superior
Loans and leases rated 2 are those for which the borrower has a strong financial condition, balance sheet, operations, cash flow, debt capacity and coverage with ratios better than industry norms. The borrowers of these loans and leases exhibit a limited leverage position, are virtually immune to local economies, and are in stable growing industries. The management team is well respected, and the company has ready access to public markets.
“3” – Pass/Strong
Loans and leases rated 3 are those loans and leases for which the borrowers have above average financial condition and flexibility; more than satisfactory debt service coverage; balance sheet and operating ratios are consistent with or better than industry peers; operate in industries with little risk; move in diversified markets; and are experienced and competent in their industry. These borrowers’ access to capital markets is limited mostly to private sources, often secured, but the borrower typically has access to a wide range of refinancing alternatives.
“4” – Pass/Good
Loans and leases rated 4 have a sound primary and secondary source of repayment. The borrower may have access to alternative sources of financing, but sources are not as widely available as they are to a higher-grade borrower. These loans and leases carry a normal level of risk with very low loss exposure. The borrower has the ability to perform according to the terms of the credit facility. The margins of cash flow coverage are satisfactory but vulnerable to more rapid deterioration than the higher-quality loans and leases.
“5” – Satisfactory
Loans and leases rated 5 are extended to borrowers who are considered to be a reasonable credit risk and demonstrate the ability to repay the debt from normal business operations. Risk factors may include reliability of margins and cash flows, liquidity, dependence on a single product or industry, cyclical trends, depth of management, or limited access to alternative financing sources. The borrower’s historical financial information may indicate erratic performance, but current trends are positive and the quality of financial information is adequate, but is not as detailed and sophisticated as information found on higher grade loans. If adverse circumstances arise, the impact on the borrower may be significant.
“6” – Satisfactory/Bankable with Care
Loans and leases rated 6 are those for which the borrower has higher than normal credit risk; however, cash flow and asset values are generally intact. These borrowers may exhibit declining financial characteristics, with increasing leverage and decreasing liquidity and may have limited resources and access to financial alternatives. Signs of weakness in these borrowers may include delinquent taxes, trade slowness and eroding profit margins.
“7” – Special Mention
Loans and leases rated 7 are credit facilities that may have potential developing weaknesses and deserve extra attention from the account manager and other management personnel. In the event potential weaknesses are not corrected or mitigated, deterioration in the ability of the borrower to repay the debt in the future may occur. This grade is not assigned to loans and leases that bear certain peculiar risks normally associated with the type of financing involved, unless circumstances have caused the risk to increase to a level higher than would have been acceptable when the credit was originally approved. Loans and leases where significant actual, not potential, weaknesses or problems are clearly evident are graded in the category below.
“8” – Substandard
Loans and leases are rated 8 when the loans and leases are inadequately protected by the current sound worth and payment capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the company will sustain some loss if the weaknesses are not corrected.
“9” – Doubtful
The Bank assigns a doubtful rating to loans and leases that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.
“10” – Loss
The Bank assigns a loss rating to loans and leases considered uncollectible and of such little value that their continuance as an active asset is not warranted. Amounts classified as loss are immediately charged off.
Risk ratings are not established for certain consumer loans, including residential real estate, home equity, manufactured housing, and installment loans, mainly because these portfolios consist of a larger number of homogeneous loans with smaller balances. Instead, these portfolios are evaluated for risk mainly based upon aggregate payment history through the monitoring of delinquency levels and trends and are classified as performing and non-performing. PPP loans of $22.8 million and $74.7 million at December 31, 2024 and 2023, respectively, are excluded in the tables below as these loans are fully guaranteed by the SBA, provided that the eligibility criteria are met. The following tables present the credit ratings of loans and leases receivable and current period gross write-offs as of December 31, 2024 and 2023.
Term Loans Amortized Cost Basis by Origination Year as of December 31, 2024
(amounts in thousands)20242023202220212020PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
Commercial and industrial loans and leases, including specialized lending:
Pass$2,103,150 $738,456 $1,278,246 $333,068 $107,840 $6,742 $1,907,480 $336,100 $6,811,082 
Special mention
16,905 — 6,933 1,522 — 62 8,144 3,630 37,196 
Substandard
— 1,631 43,668 11,525 4,178 62,095 27,830 2,814 153,741 
Doubtful— — — — — — — — — 
Total commercial and industrial loans and leases$2,120,055 $740,087 $1,328,847 $346,115 $112,018 $68,899 $1,943,454 $342,544 $7,002,019 
Commercial and industrial loans and leases charge-offs:
For the Year Ended December 31, 2024 (1)
$312 $2,765 $5,833 $4,865 $2,429 $7,531 $— $— $23,735 
Multifamily loans:
Pass$235,685 $813 $1,182,371 $288,055 $124,779 $314,967 $— $— $2,146,670 
Special mention— — 14,040 12,093 — 32,316 — — 58,449 
Substandard— — — — — 47,127 — — 47,127 
Doubtful— — — — — — — — — 
Total multifamily loans$235,685 $813 $1,196,411 $300,148 $124,779 $394,410 $— $— $2,252,246 
Multifamily loans charge-offs:
For the Year Ended December 31, 2024$— $— $— $— $— $4,073 $— $— $4,073 
Commercial real estate owner occupied loans:
Pass$395,522 $54,356 $211,300 $195,169 $42,078 $118,677 $7,605 $104 $1,024,811 
Special mention— — 159 16,429 10,000 15,885 — 11,136 53,609 
Substandard— 2,944 703 — — 18,877 — — 22,524 
Doubtful— — — — — — — — — 
Total commercial real estate owner occupied loans$395,522 $57,300 $212,162 $211,598 $52,078 $153,439 $7,605 $11,240 $1,100,944 
Commercial real estate owner occupied loans charge-offs:
For the Year Ended December 31, 2024$— $— $— $— $— $365 $— $— $365 
Commercial real estate non-owner occupied loans:
Pass$163,429 $30,367 $412,352 $96,656 $165,111 $413,336 $2,000 $— $1,283,251 
Special mention— 12,000 4,277 — — 431 — — 16,708 
Substandard— — — — — 59,171 — — 59,171 
Doubtful— — — — — — — — 
Total commercial real estate non-owner occupied loans$163,429 $42,367 $416,629 $96,656 $165,111 $472,938 $2,000 $— $1,359,130 
Commercial real estate non-owner occupied loans charge-offs:
For the Year Ended December 31, 2024$— $— $— $— $145 $— $— $— $145 
Term Loans Amortized Cost Basis by Origination Year as of December 31, 2024
(amounts in thousands)20242023202220212020PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
Construction loans:
Pass$16,103 $22,610 $94,957 $— $— $4,446 $— $— $138,116 
Special mention— 9,093 — — — — — — 9,093 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total construction loans$16,103 $31,703 $94,957 $— $— $4,446 $— $— $147,209 
Construction loans charge-offs:
For the Year Ended December 31, 2024$— $— $— $— $— $— $— $— $— 
Total commercial loans and leases receivable$2,930,794 $872,270 $3,249,006 $954,517 $453,986 $1,094,132 $1,953,059 $353,784 $11,861,548 
Total commercial loans and leases receivable charge-offs:
For the Year Ended December 31, 2024$312 $2,765 $5,833 $4,865 $2,574 $11,969 $— $— $28,318 
Residential real estate loans:
Performing$45,757 $20,701 $163,473 $123,170 $5,827 $77,989 $50,807 $— $487,724 
Non-performing138 273 925 1,077 317 5,425 680 — 8,835 
Total residential real estate loans$45,895 $20,974 $164,398 $124,247 $6,144 $83,414 $51,487 $— $496,559 
Residential real estate loans charge-offs:
For the Year Ended December 31, 2024$— $— $— $— $— $38 $— $— $38 
Manufactured housing loans:
Performing$— $— $— $— $— $31,570 $— $— $31,570 
Non-performing— — — — — 1,553 — — 1,553 
Total manufactured housing loans$— $— $— $— $— $33,123 $— $— $33,123 
Manufactured housing loans charge-offs:
For the Year Ended December 31, 2024$— $— $— $— $— $— $— $— $— 
Installment loans:
Performing$86,018 $164,223 $255,777 $98,375 $31,808 $25,733 $46,126 $5 $708,065 
Non-performing238 1,829 1,698 918 260 504 141 — 5,588 
Total installment loans$86,256 $166,052 $257,475 $99,293 $32,068 $26,237 $46,267 $5 $713,653 
Installment loans charge-offs:
For the Year Ended December 31, 2024$2,797 $8,791 $22,707 $15,211 $2,811 $3,792 $— $— $56,109 
Total consumer loans$132,151 $187,026 $421,873 $223,540 $38,212 $142,774 $97,754 $5 $1,243,335 
Total consumer loans charge-offs:
For the Year Ended December 31, 2024$2,797 $8,791 $22,707 $15,211 $2,811 $3,830 $— $— $56,147 
Loans and leases receivable$3,062,945 $1,059,296 $3,670,879 $1,178,057 $492,198 $1,236,906 $2,050,813 $353,789 $13,104,883 
Loans and leases receivable charge-offs:
For the Year Ended December 31, 2024$3,109 $11,556 $28,540 $20,076 $5,385 $15,799 $— $— $84,465 
(1)    Charge-offs for the year ended December 31, 2024 included $5.0 million of commercial and industrial loans originated under the PPP that were subsequently determined to be ineligible for SBA forgiveness and guarantee and were ultimately deemed uncollectible.
Term Loans Amortized Cost Basis by Origination Year as of December 31, 2023
(amounts in thousands)
2023
2022202120202019PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
Commercial and industrial loans and leases, including specialized lending:
Pass$1,184,923 $1,909,592 $483,039 $170,384 $59,213 $63,480 $1,722,559 $384,947 $5,978,137 
Special mention18,000 3,377 5,127 1,986 — 595 7,916 2,903 39,904 
Substandard14,738 39,258 61,533 26,660 4,803 42,062 4,010 — 193,064 
Doubtful— — — — — — — — — 
Total commercial and industrial loans and leases$1,217,661 $1,952,227 $549,699 $199,030 $64,016 $106,137 $1,734,485 $387,850 $6,211,105 
Commercial and industrial loans and leases charge-offs:
For the Year Ended December 31, 2023 (1)(2)
$1,483 $381 $3,169 $10,348 $24 $1,510 $— $— $16,915 
Multifamily loans:
Pass$845 $1,229,198 $371,016 $127,493 $43,046 $253,806 $— $— $2,025,404 
Special mention— — — — 6,468 67,035 — — 73,503 
Substandard— — — — — 39,715 — — 39,715 
Doubtful— — — — — — — — — 
Total multifamily loans$845 $1,229,198 $371,016 $127,493 $49,514 $360,556 $— $— $2,138,622 
Multifamily loans charge-offs:
For the Year Ended December 31, 2023$— $— $— $— $— $3,574 $— $— $3,574 
Commercial real estate owner occupied loans:
Pass$41,011 $254,878 $180,289 $77,821 $44,382 $120,248 $— $11,318 $729,947 
Special mention— — 15,432 — 35,691 47 — — 51,170 
Substandard— — — — 347 15,855 — — 16,202 
Doubtful— — — — — — — — — 
Total commercial real estate owner occupied loans$41,011 $254,878 $195,721 $77,821 $80,420 $136,150 $— $11,318 $797,319 
Commercial real estate owner occupied loans charge-offs:
For the Year Ended December 31, 2023$— $— $— $— $— $39 $— $— $39 
Commercial real estate non-owner occupied loans:
Pass$12,906 $325,881 $109,521 $152,227 $88,586 $367,996 $— $— $1,057,117 
Special mention— — — 20,702 — 9,148 — — 29,850 
Substandard— 10,910 — — 8,113 71,660 — — 90,683 
Doubtful— — — — — — — — — 
Total commercial real estate non-owner occupied loans$12,906 $336,791 $109,521 $172,929 $96,699 $448,804 $— $— $1,177,650 
Commercial real estate non-owner occupied loans charge-offs:
For the Year Ended December 31, 2023$— $— $— $— $— $4,527 $— $— $4,527 
Construction loans:
Pass$17,594 $138,797 $2,567 $— $— $4,580 $— $1,100 $164,638 
Special mention1,755 — — — — — — — 1,755 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total construction loans$19,349 $138,797 $2,567 $— $— $4,580 $— $1,100 $166,393 
Construction loans charge-offs:
For the Year Ended December 31, 2023$— $— $— $— $— $— $— $— $— 
Total commercial loans and leases receivable$1,291,772 $3,911,891 $1,228,524 $577,273 $290,649 $1,056,227 $1,734,485 $400,268 $10,491,089 
Total commercial loans and leases receivable charge-offs:
For the Year Ended December 31, 2023$1,483 $381 $3,169 $10,348 $24 $9,650 $— $— $25,055 
Term Loans Amortized Cost Basis by Origination Year as of December 31, 2023
(amounts in thousands)
2023
2022202120202019PriorRevolving loans amortized cost basisRevolving loans converted to termTotal
Residential real estate loans:
Performing$22,613 $173,424 $131,621 $6,458 $15,508 $71,433 $56,844 $— $477,901 
Non-performing— 350 1,236 229 545 3,993 181 — 6,534 
Total residential real estate loans$22,613 $173,774 $132,857 $6,687 $16,053 $75,426 $57,025 $— $484,435 
Residential real estate loans charge-offs:
For the Year Ended December 31, 2023$— $— $— $— $— $69 $— $— $69 
Manufactured housing loans:
Performing$— $— $— $— $98 $36,464 $— $— $36,562 
Non-performing— — — — — 2,108 — — 2,108 
Total manufactured housing loans$— $— $— $— $98 $38,572 $— $— $38,670 
Manufactured housing loans charge-offs:
For the Year Ended December 31, 2023$— $— $— $— $— $— $— $— $— 
Installment loans:
Performing$253,958 $307,566 $158,381 $50,354 $39,953 $3,448 $51,480 $— $865,140 
Non-performing2,634 4,102 1,751 546 477 86 190 — 9,786 
Total installment loans$256,592 $311,668 $160,132 $50,900 $40,430 $3,534 $51,670 $— $874,926 
Installment loans charge-offs:
For the Year Ended December 31, 2023$7,728 $24,605 $23,984 $5,590 $6,797 $1,238 $— $— $69,942 
Total consumer loans$279,205 $485,442 $292,989 $57,587 $56,581 $117,532 $108,695 $— $1,398,031 
Consumer loans charge-offs:
For the Year Ended December 31, 2023$7,728 $24,605 $23,984 $5,590 $6,797 $1,307 $— $— $70,011 
Loans and leases receivable$1,570,977 $4,397,333 $1,521,513 $634,860 $347,230 $1,173,759 $1,843,180 $400,268 $11,889,120 
Loans and leases receivable charge-offs:
For the Year Ended December 31, 2023$9,211 $24,986 $27,153 $15,938 $6,821 $10,957 $— $— $95,066 
(1)    Excludes $6.2 million of charge-offs for certain PCD loans against $8.7 million of allowance for credit losses on PCD loans recognized upon acquisition of a venture banking loan portfolio (included within specialized lending) from the FDIC on June 15, 2023. These PCD loans were originated in years 2016 to 2022.
(2)    Charge-offs for the year ended December 31, 2023 included $10.7 million of commercial and industrial loans originated under the PPP that were subsequently determined to be ineligible for SBA forgiveness and guarantee and were ultimately deemed uncollectible.
Loan Purchases and Sales
Purchases and sales of loans held for investment were as follows for the years ended December 31, 2024, 2023 and 2022:
For the Years Ended December 31,
(amounts in thousands)202420232022
Purchases (1)
Specialized lending$— $631,252 $— 
Other commercial and industrial9,019 22,073 2,975 
Commercial real estate owner occupied— 2,867 — 
Residential real estate— 4,238 207,251 
Personal installment (2)
189,374 — 123,785 
Other installment (2)
— 96,758 149,969 
Total$198,393 $757,188 $483,980 
Sales (3)
Specialized lending (4)
$— $287,185 $2,200 
Other commercial and industrial (5)
23,708 54,083 22,880 
Multifamily— — 2,879 
Commercial real estate owner occupied (5)
— 24,522 8,960 
Commercial real estate non-owner occupied— 16,000 — 
Personal installment (6)
53,598 — 500,001 
Other installment— 154,042 — 
Total$77,306 $535,832 $536,920 
(1)Amounts reported in the above table are the unpaid principal balance at time of purchase. The purchase price was 97.5%, 87.9% and 99.1% of the loans’ unpaid principal balance for the years ended December 31, 2024, 2023 and 2022, respectively.
(2)Installment loan purchases for the years ended December 31, 2024, 2023 and 2022 consist of third-party originated unsecured consumer loans. None of the loans held for investment are considered sub-prime at the time of origination. Customers considers sub-prime borrowers to be those with FICO scores below 660.
(3)For the years ended December 31, 2024, 2023 and 2022, sales of loans held for investment resulted in net losses of $0.4 million, and net gains of $0.2 million and $3.2 million, respectively, included in net gain (loss) on sale of loans and leases in the consolidated statements of income.
(4)Includes a loss of $5.0 million from the sale of $670.0 million of short-term syndicated capital call lines of credit ($280.7 million of loans held for investment in unpaid principal balance and $389.3 million of unfunded loan commitments) included in loss on sale of capital call lines of credit in the consolidated statement of income for the year ended December 31, 2023.
(5)Primarily sales of SBA loans for the years ended December 31, 2023 and 2022.
(6)Customers sold $521.8 million of consumer installment loans held for investment, inclusive of accrued interest and unamortized deferred loan origination costs, to a third-party sponsored VIE for a loss of $23.5 million included in loss on sale of consumer installment loans in the consolidated statement of income for the year ended December 31, 2022. Customers provided financing to the purchaser for a portion of the sales price in the form of $400.0 million of asset-backed securities. $100.7 million of the remaining sales proceeds were paid in cash. Refer to “NOTE 5 – INVESTMENT SECURITIES” for additional information.
Loans Pledged as Collateral
Customers has pledged eligible commercial and residential real estate, multifamily, commercial and industrial, PPP and consumer installment loans as collateral for borrowings outstanding or available immediately from the FHLB and FRB in the amount of $8.0 billion and $7.0 billion at December 31, 2024 and 2023, respectively.