x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Pennsylvania | 27-2290659 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | o | Smaller Reporting Company | ¨ | |||
Emerging Growth Company | ¨ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Ex-31.1 | ||
Ex-31.2 | ||
Ex-32.1 | ||
Ex-32.2 | ||
Ex-101 |
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | (As Restated) | ||||||
Cash and due from banks | $ | 12,943 | $ | 20,388 | |||
Interest-earning deposits | 653,091 | 125,935 | |||||
Cash and cash equivalents | 666,034 | 146,323 | |||||
Investment securities, at fair value | 668,851 | 471,371 | |||||
Loans held for sale (includes $1,383 and $1,886, respectively, at fair value) | 1,383 | 146,077 | |||||
Loans receivable, mortgage warehouse, at fair value | 1,516,327 | 1,793,408 | |||||
Loans receivable | 7,239,950 | 6,768,258 | |||||
Allowance for loan losses | (40,741 | ) | (38,015 | ) | |||
Total loans receivable, net of allowance for loan losses | 8,715,536 | 8,523,651 | |||||
FHLB, Federal Reserve Bank, and other restricted stock | 74,206 | 105,918 | |||||
Accrued interest receivable | 32,986 | 27,021 | |||||
Bank premises and equipment, net | 11,300 | 11,955 | |||||
Bank-owned life insurance | 263,117 | 257,720 | |||||
Other real estate owned | 1,450 | 1,726 | |||||
Goodwill and other intangibles | 16,825 | 16,295 | |||||
Other assets | 165,416 | 131,498 | |||||
Total assets | $ | 10,617,104 | $ | 9,839,555 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Deposits: | |||||||
Demand, non-interest bearing | $ | 1,338,167 | $ | 1,052,115 | |||
Interest-bearing | 7,175,547 | 5,748,027 | |||||
Total deposits | 8,513,714 | 6,800,142 | |||||
Federal funds purchased | — | 155,000 | |||||
FHLB advances | 835,000 | 1,611,860 | |||||
Other borrowings | 123,779 | 186,497 | |||||
Subordinated debt | 108,953 | 108,880 | |||||
Accrued interest payable and other liabilities | 80,846 | 56,212 | |||||
Total liabilities | 9,662,292 | 8,918,591 | |||||
Shareholders’ equity: | |||||||
Preferred stock, par value $1.00 per share; liquidation preference $25.00 per share; 100,000,000 shares authorized, 9,000,000 shares issued and outstanding as of September 30, 2018 and December 31, 2017 | 217,471 | 217,471 | |||||
Common stock, par value $1.00 per share; 200,000,000 shares authorized; 32,217,600 and 31,912,763 shares issued as of September 30, 2018 and December 31, 2017; 31,687,340 and 31,382,503 shares outstanding as of September 30, 2018 and December 31, 2017 | 32,218 | 31,913 | |||||
Additional paid in capital | 431,205 | 422,096 | |||||
Retained earnings | 302,404 | 258,076 | |||||
Accumulated other comprehensive loss, net | (20,253 | ) | (359 | ) | |||
Treasury stock, at cost (530,260 shares as of September 30, 2018 and December 31, 2017) | (8,233 | ) | (8,233 | ) | |||
Total shareholders’ equity | 954,812 | 920,964 | |||||
Total liabilities and shareholders’ equity | $ | 10,617,104 | $ | 9,839,555 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest income: | |||||||||||||||
Loans | $ | 97,815 | $ | 88,740 | $ | 278,986 | $ | 248,708 | |||||||
Investment securities | 8,495 | 7,307 | 26,932 | 21,017 | |||||||||||
Other | 3,735 | 2,238 | 8,731 | 5,507 | |||||||||||
Total interest income | 110,045 | 98,285 | 314,649 | 275,232 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 32,804 | 18,381 | 76,779 | 48,934 | |||||||||||
Other borrowings | 2,431 | 3,168 | 9,082 | 6,767 | |||||||||||
FHLB advances | 9,125 | 7,032 | 27,381 | 15,433 | |||||||||||
Subordinated debt | 1,684 | 1,685 | 5,053 | 5,055 | |||||||||||
Total interest expense | 46,044 | 30,266 | 118,295 | 76,189 | |||||||||||
Net interest income | 64,001 | 68,019 | 196,354 | 199,043 | |||||||||||
Provision for loan losses | 2,924 | 2,352 | 4,257 | 5,937 | |||||||||||
Net interest income after provision for loan losses | 61,077 | 65,667 | 192,097 | 193,106 | |||||||||||
Non-interest income: | |||||||||||||||
Interchange and card revenue | 7,084 | 9,570 | 23,127 | 31,729 | |||||||||||
Deposit fees | 2,002 | 2,659 | 5,726 | 7,918 | |||||||||||
Bank-owned life insurance | 1,869 | 1,672 | 5,769 | 5,297 | |||||||||||
Mortgage warehouse transactional fees | 1,809 | 2,396 | 5,663 | 7,139 | |||||||||||
Gain on sale of SBA and other loans | 1,096 | 1,144 | 3,404 | 3,045 | |||||||||||
Mortgage banking income | 207 | 257 | 532 | 703 | |||||||||||
Impairment loss on investment securities | — | (8,349 | ) | — | (12,934 | ) | |||||||||
(Loss) gain on sale of investment securities | (18,659 | ) | 5,349 | (18,659 | ) | 8,532 | |||||||||
Other | 6,676 | 3,328 | 13,558 | 7,741 | |||||||||||
Total non-interest income | 2,084 | 18,026 | 39,120 | 59,170 | |||||||||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | 25,462 | 24,807 | 78,135 | 69,569 | |||||||||||
Technology, communication, and bank operations | 11,657 | 14,401 | 32,923 | 33,227 | |||||||||||
Professional services | 4,743 | 7,403 | 14,563 | 21,142 | |||||||||||
Merger and acquisition related expenses | 2,945 | — | 3,920 | — | |||||||||||
Occupancy | 2,901 | 2,857 | 8,876 | 8,228 | |||||||||||
FDIC assessments, non-income taxes, and regulatory fees | 2,415 | 2,475 | 6,750 | 6,615 | |||||||||||
Provision for operating losses | 1,171 | 1,509 | 3,930 | 4,901 | |||||||||||
Advertising and promotion | 820 | 404 | 1,529 | 1,108 | |||||||||||
Loan workout | 516 | 915 | 1,823 | 1,844 | |||||||||||
Other real estate owned expenses | 66 | 445 | 164 | 550 | |||||||||||
Other | 4,408 | 5,824 | 10,521 | 13,634 | |||||||||||
Total non-interest expense | 57,104 | 61,040 | 163,134 | 160,818 | |||||||||||
Income before income tax expense | 6,057 | 22,653 | 68,083 | 91,458 | |||||||||||
Income tax expense | 28 | 14,899 | 14,250 | 34,236 | |||||||||||
Net income | 6,029 | 7,754 | 53,833 | 57,222 | |||||||||||
Preferred stock dividends | 3,615 | 3,615 | 10,844 | 10,844 | |||||||||||
Net income available to common shareholders | $ | 2,414 | $ | 4,139 | $ | 42,989 | $ | 46,378 | |||||||
Basic earnings per common share | $ | 0.08 | $ | 0.13 | $ | 1.36 | $ | 1.52 | |||||||
Diluted earnings per common share | $ | 0.07 | $ | 0.13 | $ | 1.33 | $ | 1.42 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 6,029 | $ | 7,754 | $ | 53,833 | $ | 57,222 | |||||||
Unrealized (losses) gains on available-for-sale debt securities: | |||||||||||||||
Unrealized (losses) gains arising during the period | (1,629 | ) | (3,570 | ) | (47,917 | ) | 15,192 | ||||||||
Income tax effect | 423 | 1,393 | 12,458 | (5,924 | ) | ||||||||||
Reclassification adjustments for losses (gains) on securities included in net income | 18,659 | (5,349 | ) | 18,659 | (8,532 | ) | |||||||||
Income tax effect | (4,851 | ) | 2,086 | (4,851 | ) | 3,327 | |||||||||
Net unrealized gains (losses) on available-for-sale debt securities | 12,602 | (5,440 | ) | (21,651 | ) | 4,063 | |||||||||
Unrealized gains on cash flow hedges: | |||||||||||||||
Unrealized gains (losses) arising during the period | 4,062 | 171 | 6,830 | (189 | ) | ||||||||||
Income tax effect | (1,056 | ) | (67 | ) | (1,775 | ) | 74 | ||||||||
Reclassification adjustment for (gains) losses included in net income | (2,519 | ) | 572 | (2,647 | ) | 2,166 | |||||||||
Income tax effect | 655 | (223 | ) | 688 | (845 | ) | |||||||||
Net unrealized gains on cash flow hedges | 1,142 | 453 | 3,096 | 1,206 | |||||||||||
Other comprehensive income (loss), net of income tax effect | 13,744 | (4,987 | ) | (18,555 | ) | 5,269 | |||||||||
Comprehensive income | $ | 19,773 | $ | 2,767 | $ | 35,278 | $ | 62,491 |
Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||
Shares of Preferred Stock Outstanding | Preferred Stock | Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||
Balance, June 30, 2018 | 9,000,000 | $ | 217,471 | 31,669,643 | $ | 32,200 | $ | 428,796 | $ | 299,990 | $ | (33,997 | ) | $ | (8,233 | ) | $ | 936,227 | |||||||||||||||
Net income | — | — | — | — | — | 6,029 | — | — | 6,029 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | 13,744 | — | 13,744 | ||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | (3,615 | ) | — | — | (3,615 | ) | ||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | 1,980 | — | — | — | 1,980 | ||||||||||||||||||||||||
Issuance of common stock under share-based compensation arrangements | — | — | 17,697 | 18 | 429 | — | — | — | 447 | ||||||||||||||||||||||||
Balance, September 30, 2018 | 9,000,000 | $ | 217,471 | 31,687,340 | $ | 32,218 | $ | 431,205 | $ | 302,404 | $ | (20,253 | ) | $ | (8,233 | ) | $ | 954,812 | |||||||||||||||
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||
Shares of Preferred Stock Outstanding | Preferred Stock | Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Treasury Stock | Total | |||||||||||||||||||||||||
Balance, June 30, 2017 | 9,000,000 | $ | 217,471 | 30,730,784 | $ | 31,261 | $ | 428,488 | $ | 235,938 | $ | 5,364 | $ | (8,233 | ) | $ | 910,289 | ||||||||||||||||
Net income | — | — | — | — | — | 7,754 | — | — | 7,754 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (4,987 | ) | — | (4,987 | ) | ||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | (3,615 | ) | — | — | (3,615 | ) | ||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | 1,602 | — | — | — | 1,602 | ||||||||||||||||||||||||
Exercise of warrants | — | — | 6,413 | 6 | 131 | — | — | — | 137 | ||||||||||||||||||||||||
Issuance of common stock under share-based compensation arrangements | — | — | 50,435 | 51 | (588 | ) | (1 | ) | — | — | (538 | ) | |||||||||||||||||||||
Balance, September 30, 2017 | 9,000,000 | $ | 217,471 | 30,787,632 | $ | 31,318 | $ | 429,633 | $ | 240,076 | $ | 377 | $ | (8,233 | ) | $ | 910,642 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||
Shares of Preferred Stock Outstanding | Preferred Stock | Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||
Balance, December 31, 2017 | 9,000,000 | $ | 217,471 | 31,382,503 | $ | 31,913 | $ | 422,096 | $ | 258,076 | $ | (359 | ) | $ | (8,233 | ) | $ | 920,964 | |||||||||||||||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive loss | — | — | — | — | — | 298 | (298 | ) | — | — | |||||||||||||||||||||||
Reclassification of net unrealized gains on equity securities from accumulated other comprehensive loss | — | — | — | — | — | 1,041 | (1,041 | ) | — | — | |||||||||||||||||||||||
Net income | — | — | — | — | — | 53,833 | — | — | 53,833 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (18,555 | ) | — | (18,555 | ) | ||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | (10,844 | ) | — | — | (10,844 | ) | ||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | 5,641 | — | — | — | 5,641 | ||||||||||||||||||||||||
Exercise of warrants | — | — | 5,242 | 5 | 107 | — | — | — | 112 | ||||||||||||||||||||||||
Issuance of common stock under share-based compensation arrangements | — | — | 299,595 | 300 | 3,361 | — | — | — | 3,661 | ||||||||||||||||||||||||
Balance, September 30, 2018 | 9,000,000 | $ | 217,471 | 31,687,340 | $ | 32,218 | $ | 431,205 | $ | 302,404 | $ | (20,253 | ) | $ | (8,233 | ) | $ | 954,812 | |||||||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||
Shares of Preferred Stock Outstanding | Preferred Stock | Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Treasury Stock | Total | |||||||||||||||||||||||||
Balance, December 31, 2016 | 9,000,000 | $ | 217,471 | 30,289,917 | $ | 30,820 | $ | 427,008 | $ | 193,698 | $ | (4,892 | ) | $ | (8,233 | ) | $ | 855,872 | |||||||||||||||
Net income | — | — | — | — | — | 57,222 | — | — | 57,222 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | 5,269 | — | 5,269 | ||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | (10,844 | ) | — | (10,844 | ) | |||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | 4,536 | — | — | — | 4,536 | ||||||||||||||||||||||||
Exercise of warrants | — | — | 50,387 | 50 | 507 | — | — | — | 557 | ||||||||||||||||||||||||
Issuance of common stock under share-based compensation arrangements | — | — | 447,328 | 448 | (2,418 | ) | — | — | — | (1,970 | ) | ||||||||||||||||||||||
Balance, September 30, 2017 | 9,000,000 | $ | 217,471 | 30,787,632 | $ | 31,318 | $ | 429,633 | $ | 240,076 | $ | 377 | $ | (8,233 | ) | $ | 910,642 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | (As Restated) | ||||||
Net income | $ | 53,833 | $ | 57,222 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 4,257 | 5,937 | |||||
Depreciation and amortization | 10,235 | 7,476 | |||||
Share-based compensation expense | 6,595 | 5,377 | |||||
Deferred taxes | 6,238 | 286 | |||||
Net amortization of investment securities premiums and discounts | 1,204 | 520 | |||||
Unrealized loss recognized on equity securities | 1,533 | — | |||||
Loss (gain) on sale of investment securities | 18,659 | (8,532 | ) | ||||
Impairment loss on investment securities | — | 12,934 | |||||
Gain on sale of SBA and other loans | (3,880 | ) | (3,553 | ) | |||
Origination of loans held for sale | (22,978 | ) | (32,343 | ) | |||
Proceeds from the sale of loans held for sale | 23,936 | 31,718 | |||||
Amortization of fair value discounts and premiums | 164 | 93 | |||||
Net (gain) loss on sales of other real estate owned | (35 | ) | 154 | ||||
Valuation and other adjustments to other real estate owned | 124 | 298 | |||||
Earnings on investment in bank-owned life insurance | (5,769 | ) | (5,297 | ) | |||
Increase in accrued interest receivable and other assets | (21,525 | ) | (27,862 | ) | |||
Increase (decrease) in accrued interest payable and other liabilities | 25,774 | (14,106 | ) | ||||
Net Cash Provided By Operating Activities | 98,365 | 30,322 | |||||
Cash Flows from Investing Activities | |||||||
Proceeds from maturities, calls and principal repayments of securities available for sale | 38,926 | 36,461 | |||||
Proceeds from sales of investment securities available for sale | 476,182 | 670,522 | |||||
Purchases of investment securities available for sale | (763,242 | ) | (796,594 | ) | |||
Origination of mortgage warehouse loans | (21,739,744 | ) | (22,738,383 | ) | |||
Proceeds from repayments of mortgage warehouse loans | 22,016,825 | 22,893,950 | |||||
Net increase in loans, excluding mortgage warehouse loans | (20,476 | ) | (921,049 | ) | |||
Proceeds from sales of loans | 42,211 | 124,703 | |||||
Purchase of loans | (347,740 | ) | (262,641 | ) | |||
Purchases of bank-owned life insurance | — | (90,000 | ) | ||||
Proceeds from bank-owned life insurance | 529 | 1,418 | |||||
Net proceeds from (purchases of) FHLB, Federal Reserve Bank, and other restricted stock | 31,712 | (30,203 | ) | ||||
Purchases of bank premises and equipment | (1,344 | ) | (1,725 | ) | |||
Proceeds from sales of other real estate owned | 421 | 1,680 | |||||
Purchase of university relationship intangible asset | (1,502 | ) | — | ||||
Purchase of leased assets under operating leases | (21,849 | ) | — | ||||
Net Cash Used In Investing Activities | (289,091 | ) | (1,111,861 | ) | |||
Cash Flows from Financing Activities | |||||||
Net increase in deposits | 1,713,572 | 293,301 | |||||
Net (decrease) increase in short-term borrowed funds from the FHLB | (776,860 | ) | 593,543 | ||||
Net (decrease) increase in federal funds purchased | (155,000 | ) | 64,000 | ||||
(Repayments of) proceeds from issuance of long-term debt | (63,250 | ) | 98,564 | ||||
Preferred stock dividends paid | (10,844 | ) | (10,844 | ) | |||
Exercise of warrants | 112 | 557 | |||||
Payments of employee taxes withheld from share-based awards | (711 | ) | (4,923 | ) | |||
Proceeds from issuance of common stock | 3,418 | 2,112 | |||||
Net Cash Provided By Financing Activities | 710,437 | 1,036,310 | |||||
Net Increase (Decrease) in Cash and Cash Equivalents | 519,711 | (45,229 | ) | ||||
Cash and Cash Equivalents – Beginning | 146,323 | 264,709 | |||||
Cash and Cash Equivalents – Ending | $ | 666,034 | $ | 219,480 | |||
(continued) | |||||||
Supplementary Cash Flows Information: | |||||||
Interest paid | $ | 114,973 | $ | 70,706 | |||
Income taxes paid | 4,156 | 31,545 | |||||
Non-cash items: | |||||||
Transfer of loans to other real estate owned | $ | 234 | $ | 83 | |||
Transfer of loans held for investment to held for sale | — | 150,638 | |||||
Transfer of loans held for sale to held for investment | 129,691 | — |
December 31, 2017 | ||||||||||||
Consolidated Balance Sheet | As Previously Reported | Adjustments | As Restated | |||||||||
(amounts in thousands) | ||||||||||||
Loans held for sale | $ | 1,939,485 | $ | (1,793,408 | ) | $ | 146,077 | |||||
Loans receivable, mortgage warehouse, at fair value | — | 1,793,408 | 1,793,408 | |||||||||
Total loans receivable, net of allowance for loan losses | 6,730,243 | 1,793,408 | 8,523,651 |
For the Nine Months Ended September 30, 2017 | ||||||||||||
Consolidated Statements of Cash Flows | As Previously Reported | Adjustments | As Restated | |||||||||
(amounts in thousands) | ||||||||||||
Origination of loans held for sale | $ | (22,770,726 | ) | $ | 22,738,383 | $ | (32,343 | ) | ||||
Proceeds from the sale of loans held for sale | 22,925,668 | (22,893,950 | ) | 31,718 | ||||||||
Net cash provided by operating activities | 185,889 | (155,567 | ) | 30,322 | ||||||||
Origination of mortgage warehouse loans | — | (22,738,383 | ) | (22,738,383 | ) | |||||||
Proceeds from repayments of mortgage warehouse loans | — | 22,893,950 | 22,893,950 | |||||||||
Net cash used in investing activities | (1,267,428 | ) | 155,567 | (1,111,861 | ) |
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2018-13, Fair Value (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement Issued August 2018 | Eliminates disclosure requirements for the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. Clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Expands disclosures to include unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain amendments are applied prospectively and retrospectively. Effective for fiscal year beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption permitted. | Customers early adopted on September 30, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10) Issued February 2018 | Clarifies certain aspects of the guidance issued in ASU 2016-01 including: the ability to irrevocably elect to change the measurement approach for equity securities measured using the practical expedient (at cost plus or minus observable transactions less impairment) to a fair value method in accordance with ASC 820, Fair Value Measurement. Provides clarification that if an observable transaction occurs for such securities, the adjustment is as of the observable transaction date. Effective July 1, 2018 on a prospective basis with early adoption permitted. | Customers adopted on July 1, 2018 on a prospective basis. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements as Customers currently does not have any significant equity securities without readily determinable fair values. | ||
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income/(Loss) ("AOCI") Issued February 2018 | Allows for reclassification from AOCI to retained earnings for stranded tax effects resulting from the 2017 Tax Cut and Jobs Act. Requires an entity to disclose whether it has elected to reclassify stranded tax effects from AOCI to retained earnings and its policy for releasing income tax effects from AOCI. Effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. | Customers early adopted on January 1, 2018. The adoption resulted in the reclassification of $0.3 million in stranded tax effects in Customers' AOCI related to net unrealized losses on its available-for-sale debt securities and cash flow hedges. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities Issued August 2017 | Aligns the entity's risk management activities and financial reporting for hedging relationships. Amends the existing hedge accounting model and expands an entity's ability to hedge nonfinancial and financial risk components and reduce complexity in fair value hedges of interest-rate risk. Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line item as the hedge item. Changes certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. In October 2018, the FASB issued ASU 2018-16 “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate ("SOFR") Overnight Index Swap ("OIS") Rate as a Benchmark Interest Rate for Hedge Accounting Purposes," which permits the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes. | Customers early adopted on January 1, 2018. With the early adoption, Customers is able to pursue additional hedging strategies including the ability to apply fair value hedge accounting to a specified pool of assets by excluding the portion of the hedged items related to prepayments, defaults and other events. These additional hedging strategies will allow Customers to better align the accounting and financial reporting of its hedging activities with the economic objectives thereby reducing the earnings volatility resulting from these hedging activities. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. Customers has updated its disclosures in NOTE 10 - DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES as a result of early adopting this ASU. | ||
ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting Issued May 2017 | Clarifies when to account for a change to the terms or conditions of a share-based-payment award as a modification in ASC 718. Provides that modification accounting is only required if the fair value, vesting conditions, or the classification of the award as equity or a liability changes as a result of the change in terms or conditions. Effective January 1, 2018 on a prospective basis for awards modified on or after the adoption date. | Customers adopted on January 1, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets Issued February 2017 | Clarifies the scope and application of the accounting guidance on the sale of nonfinancial assets to non-customers, including partial sales. Clarifies that if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. Effective January 1, 2018 on a prospective basis. | Customers adopted on January 1, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2017-01, Clarifying the Definition of a Business Issued January 2017 | Narrows the definition of a business and clarifies that to be considered a business, the fair value of gross assets acquired (or disposed of) should not be concentrated in a single identifiable asset or a group of similar identifiable assets. Also clarifies that in order to be considered a business, an acquisition would have to include an input and a substantive process that together will significantly contribute to the ability to create an output. Effective January 1, 2018 on a prospective basis. | Customers adopted on January 1, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2016-18, Statement of Cash Flows: Restricted Cash Issued November 2016 | Requires inclusion of restricted cash in cash and cash equivalents when reconciling the beginning-of-period total amounts shown on the statement of cash flows. Effective January 1, 2018 and requires retrospective application to all periods presented. | Customers adopted on January 1, 2018. The adoption did not result in any significant impact on Customers' financial condition, results of operations and consolidated financial statements, including its consolidated statement of cash flows, and therefore did not result in a retrospective application. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory Issued October 2016 | Requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Eliminates the current exception for all intra-entity transfers of an asset other than inventory that requires deferral of the tax effects until the asset is sold to a third party or otherwise recovered through use. Effective January 1, 2018 on a modified retrospective basis. | Customers adopted on January 1, 2018. The adoption of the ASU did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2016-15, Statement of Cash Flow: Classification of Certain Cash Receipts and Cash Payments Issued August 2016 | Aims to reduce the existing diversity in practice with regards to the classification of the following specific items in the statement of cash flows: 1. Cash payments for debt prepayment or debt extinguishment costs should be classified as a financing activity.2. Cash paid by an acquirer soon after a business combination for the settlement of a contingent consideration liability recognized at the acquisition date will be classified in investing activities.3. Cash proceeds received from the settlement of insurance claims will be classified on the basis of the related insurance coverage (i.e., the nature of the loss).4. Cash proceeds received from the settlement of bank-owned life insurance policies will be classified as cash inflows from investing activities.5. A transferor's beneficial interest obtained in a securitization of financial assets will be disclosed as a non-cash activity, and cash received from beneficial interests will be classified in investing activities. Effective January 1, 2018 and requires retrospective application to all periods presented. | Customers adopted on January 1, 2018. The adoption did not result in any significant impact on Customers' financial condition, results of operations and consolidated financial statements, including its consolidated statement of cash flows, and therefore it did not result in a retrospective application. | ||
ASU 2016-04, Liabilities - Extinguishment of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products Issued March 2016 | Requires issuers of prepaid stored-value products (such as gift cards, telecommunication cards, and traveler's checks), to derecognize the financial liability related to those products for breakage. Breakage is the value of prepaid stored-value products that is not redeemed by consumers for goods, services or cash. The amendments in this ASU provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage be accounted for consistent with the breakage guidance in Topic 606. Effective January 1, 2018 on a modified retrospective basis. | Customers adopted on January 1, 2018. The adoption of this ASU did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities Issued January 2016 | Requires equity investments with certain exceptions to be measured at fair value with changes in fair value recognized in net income. Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. Eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. Effective January 1, 2018 on a modified retrospective basis. | Customers adopted on January 1, 2018 using a modified retrospective approach. The adoption of this ASU resulted in a cumulative-effect adjustment that resulted in a $1.0 million reduction in AOCI and a corresponding increase in retained earnings for the same amount. The $1.0 million represented the net unrealized gain on Customers' investment in Religare equity securities at December 31, 2017, as disclosed in NOTE 5 - INVESTMENT SECURITIES. Customers also refined its calculation to determine the fair value of its held-for- investment loan portfolio for disclosure purposes using an exit price notion as part of adopting this ASU. The refined calculation did not have a significant impact on Customers' fair value disclosures. | ||
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Issued May 2014 | Supersedes the revenue recognition requirements in ASC 605. Requires an entity to recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment includes a five-step process to assist an entity in achieving the main principle(s) of revenue recognition under ASC 605. Reframed the structure of the indicators of when an entity is acting as an agent and focused on evidence that an entity is acting as the principal or agent in a revenue transaction. Requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Effective January 1 , 2018 and can either be applied retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption (modified retrospective approach). | Customers adopted on January 1, 2018 on a modified retrospective basis. Because the ASU does not apply to revenue associated with leases and financial instruments (including loans and securities), Customers concluded that the new guidance did not have a material impact on the elements of its consolidated statements of operations most closely associated with leases and financial instruments (such as interest income, interest expense and securities gains or losses). Customers has identified its deposit-related fees, service charges, debit and prepaid card interchange income and university fees to be within the scope of the standard. Customers has also completed its review of the related contracts and its evaluation of certain costs related to these revenue streams and determined that its debit and prepaid card interchange income, previously reported on a gross basis for periods prior to adoption, will need to be presented on a net basis under this ASU, as Customers is the agent. The adoption of this ASU, did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. Additional discussion related to the adoption and the required quantitative and qualitative disclosures are included in NOTE 12 - NON-INTEREST REVENUES. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2018-15, Internal-Use Software (Subtopic 350-40): Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Issued August 2018 | Clarifies that service contracts with hosting arrangements must follow internal-use software guidance Subtopic 350-40 when determining which implementation costs to capitalize as an asset related to the service contract and which costs to expense. Also clarifies that capitalized implementation costs of a hosting arrangement that is a service contract are to be amortized over the term of the hosting arrangement, which includes the noncancelable period of the arrangement plus options to extend the arrangement if reasonably certain to exercise. Clarifies that existing impairment guidance in Subtopic 350-40 must be applied to the capitalized implementation costs as if they were long-lived assets. Applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Effective for fiscal year beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption permitted. | Customers is currently evaluating the expected impact of this ASU on its financial condition, results of operations and consolidated financial statements. | ||
ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting Issued June 2018 | Expands the scope of Topic 718, Compensation - Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Applies to all share-based payment transactions in which a grantor acquires goods or services from non-employees to be used or consumed in a grantor's own operations by issuing share-based payment awards. With the amended guidance from ASU 2018-07, non-employees share-based payments are measured with an estimate of the fair value of the equity the business is obligated to issue at the grant date (the date that the business and the stock award recipient agree to the terms of the award). Compensation would be recognized in the same period and in the same manner as if the entity had paid cash for goods or services instead of stock. Effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. | Customers currently does not grant share-based payment awards to non-employees and, accordingly, does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements; however, Customers will continue to evaluate the potential impact of this ASU through the adoption date. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features Issued July 2017 | Changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity's own stock. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) would no longer be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity-classified financial instruments, the amendments require entities to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of net income available to common shareholders in basic earnings per share ("EPS"). Effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. | Customers currently does not have any equity-linked financial instruments (or embedded features) with down round features and, accordingly, does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements; however, Customers will continue to evaluate the potential impact of this ASU through the adoption date. | ||
ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities Issued March 2017 | Requires that premiums for certain callable debt securities held be amortized to their earliest call date. Effective for Customers beginning after December 15, 2018, with early adoption permitted. Adoption of this new guidance must be applied on a modified retrospective approach. | Customers currently has an immaterial amount of callable debt securities purchased at a premium and, accordingly, does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements; however, Customers will continue to evaluate the potential impact through the adoption date. | ||
ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments Issued June 2016 | Requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate lifetime expected credit loss and record an allowance that, when deducted from the amortized cost basis of the financial asset (including HTM securities), presents the net amount expected to be collected on the financial asset. Replaces today's "incurred loss" approach and is expected to result in earlier recognition of credit losses. For available-for-sale debt securities, entities will be required to record allowances for credit losses rather than reduce the carrying amount, as they do today under the OTTI model, and will be allowed to reverse previously established allowances in the event the credit of the issuer improves. Simplifies the accounting model for purchased credit-impaired debt securities and loans. Effective beginning after December 15, 2019 with early adoption permitted. Adoption can be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. | Customers has established a company-wide, cross-discipline governance structure, which provides implementation oversight and continues evaluating the impact of this ASU and reviewing the loss modeling requirements consistent with lifetime expected loss estimates. Customers has selected a third-party vendor to assist in the implementation process of its new model, which will include different assumptions used in calculating credit losses, such as estimating losses over the estimated life of a financial asset and will consider expected future changes in macroeconomic conditions. The adoption of this ASU may result in an increase to Customers' allowance for loan losses which will depend upon the nature and characteristics of Customers' loan portfolio at the adoption date, as well as the macroeconomic conditions and forecasts at that date. Customers currently does not intend to early adopt this new guidance. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2016-02, Leases Issued February 2016 | Supersedes the current lease accounting guidance for both lessees and lessors under ASC 840, Leases. From the lessee's perspective, the new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. This ASU will require lessors to account for leases using an approach that is substantially similar to the existing guidance for sales-type, direct financing leases and operating leases. Effective beginning after December 15, 2018 with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. In July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements,” which provides lessees the option to apply the new leasing standard to all open leases as of the adoption date. | Customers is in the process of its implementation, which includes evaluating its leasing activities and certain contracts for embedded leases. Customers will be utilizing a lease accounting software solution for its real estate leases and updating processing and internal controls for its leasing activities. Customers expects to recognize a lease liability and a corresponding right-of-use asset, at their present value, to predominately all of the $22 million of future minimum payments required under operating leases as disclosed in Note 10 of Customers’ 2017 Form 10-K, along with any leases entered into or extended during 2018. However, the population of contracts subject to balance sheet recognition and their initial measurement remains under evaluation. Customers does not expect material changes to the recognition of operating lease expense in its consolidated statements of income. Customers expects to adopt certain practical expedients available under the new guidance, which will not require it to (1) reassess whether any expired or existing contracts contain leases, (2) reassess the lease classification for any expired or existing leases, or (3) reassess initial direct costs for any existing leases. Additionally, Customers will elect to apply the new lease guidance at the adoption date, rather than at the beginning of the earliest period presented and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, while continuing to present the comparative periods under Topic 840. Customers does not intend to early adopt this new guidance. | ||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(amounts in thousands, except share and per share data) | |||||||||||||||
Net income available to common shareholders | $ | 2,414 | $ | 4,139 | $ | 42,989 | $ | 46,378 | |||||||
Weighted-average number of common shares outstanding - basic | 31,671,122 | 30,739,671 | 31,554,407 | 30,597,314 | |||||||||||
Share-based compensation plans | 601,622 | 1,754,480 | 750,573 | 2,004,917 | |||||||||||
Warrants | 4,846 | 18,541 | 7,475 | 24,392 | |||||||||||
Weighted-average number of common shares - diluted | 32,277,590 | 32,512,692 | 32,312,455 | 32,626,623 | |||||||||||
Basic earnings per common share | $ | 0.08 | $ | 0.13 | $ | 1.36 | $ | 1.52 | |||||||
Diluted earnings per common share | $ | 0.07 | $ | 0.13 | $ | 1.33 | $ | 1.42 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Anti-dilutive securities: | |||||||||||
Share-based compensation awards | 1,787,670 | 409,225 | 1,105,287 | 409,225 | |||||||
Warrants | — | 52,242 | — | 52,242 | |||||||
Total anti-dilutive securities | 1,787,670 | 461,467 | 1,105,287 | 461,467 |
Three Months Ended September 30, 2018 | |||||||||||||||||
Available-for-sale debt securities | |||||||||||||||||
(amounts in thousands) | Unrealized Gains (Losses) | Foreign Currency Items | Total Unrealized Gains (Losses) | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||||||
Balance - June 30, 2018 | $ | (35,711 | ) | $ | — | $ | (35,711 | ) | $ | 1,714 | $ | (33,997 | ) | ||||
Other comprehensive income (loss) before reclassifications | (1,206 | ) | — | (1,206 | ) | 3,006 | 1,800 | ||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | 13,808 | — | 13,808 | (1,864 | ) | 11,944 | |||||||||||
Net current-period other comprehensive income | 12,602 | — | 12,602 | 1,142 | 13,744 | ||||||||||||
Balance - September 30, 2018 | $ | (23,109 | ) | $ | — | $ | (23,109 | ) | $ | 2,856 | $ | (20,253 | ) |
Nine Months Ended September 30, 2018 | |||||||||||||||||
Available-for-sale securities | |||||||||||||||||
(amounts in thousands) | Unrealized Gains (Losses) | Foreign Currency Items | Total Unrealized Gains (Losses) | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||||||
Balance - December 31, 2017 | $ | (249 | ) | $ | 88 | $ | (161 | ) | $ | (198 | ) | $ | (359 | ) | |||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act (2) | (256 | ) | — | (256 | ) | (42 | ) | (298 | ) | ||||||||
Reclassification of net unrealized gains on equity securities (2) | (953 | ) | (88 | ) | (1,041 | ) | — | (1,041 | ) | ||||||||
Balance after reclassification adjustments on January 1, 2018 | (1,458 | ) | — | (1,458 | ) | (240 | ) | (1,698 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | (35,459 | ) | — | (35,459 | ) | 5,055 | (30,404 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | 13,808 | — | 13,808 | (1,959 | ) | 11,849 | |||||||||||
Net current-period other comprehensive income (loss) | (21,651 | ) | — | (21,651 | ) | 3,096 | (18,555 | ) | |||||||||
Balance - September 30, 2018 | $ | (23,109 | ) | $ | — | $ | (23,109 | ) | $ | 2,856 | $ | (20,253 | ) | ||||
Three Months Ended September 30, 2017 | |||||||||||
(amounts in thousands) | Unrealized Gains (Losses) on Available-For-Sale Securities | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||
Balance - June 30, 2017 | $ | 6,822 | $ | (1,458 | ) | $ | 5,364 | ||||
Other comprehensive income (loss) before reclassifications | (2,177 | ) | 104 | (2,073 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | (3,263 | ) | 349 | (2,914 | ) | ||||||
Net current-period other comprehensive income (loss) | (5,440 | ) | 453 | (4,987 | ) | ||||||
Balance - September 30, 2017 | $ | 1,382 | $ | (1,005 | ) | $ | 377 |
Nine Months Ended September 30, 2017 | |||||||||||
(amounts in thousands) | Unrealized Gains (Losses) on Available-For-Sale Securities | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||
Balance - December 31, 2016 | $ | (2,681 | ) | $ | (2,211 | ) | $ | (4,892 | ) | ||
Other comprehensive income (loss) before reclassifications | 9,268 | (115 | ) | 9,153 | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | (5,205 | ) | 1,321 | (3,884 | ) | ||||||
Net current-period other comprehensive income | 4,063 | 1,206 | 5,269 | ||||||||
Balance - September 30, 2017 | $ | 1,382 | $ | (1,005 | ) | $ | 377 | ||||
September 30, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(amounts in thousands) | |||||||||||||||
Available-for-sale debt securities: | |||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 316,785 | $ | — | $ | (11,367 | ) | $ | 305,418 | ||||||
Corporate notes | 381,475 | 347 | (20,208 | ) | 361,614 | ||||||||||
Available-for-sale debt securities | $ | 698,260 | $ | 347 | $ | (31,575 | ) | 667,032 | |||||||
Equity securities (1) | 1,819 | ||||||||||||||
Total investment securities, at fair value | $ | 668,851 |
December 31, 2017 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(amounts in thousands) | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 186,221 | $ | 36 | $ | (2,799 | ) | $ | 183,458 | ||||||
Agency-guaranteed commercial real estate mortgage-backed securities | 238,809 | 432 | (769 | ) | 238,472 | ||||||||||
Corporate notes (1) | 44,959 | 1,130 | — | 46,089 | |||||||||||
Equity securities (2) | 2,311 | 1,041 | — | 3,352 | |||||||||||
Total available-for-sale securities, at fair value | $ | 472,300 | $ | 2,639 | $ | (3,568 | ) | $ | 471,371 |
(1) | Includes subordinated debt issued by other bank holding companies. |
(2) | Includes equity securities issued by a foreign entity. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(amounts in thousands) | |||||||||||||||
Proceeds from sale of available-for-sale securities | $ | 476,182 | $ | 554,540 | $ | 476,182 | $ | 670,522 | |||||||
Gross gains | $ | — | $ | 5,349 | $ | — | $ | 8,532 | |||||||
Gross losses | (18,659 | ) | — | (18,659 | ) | — | |||||||||
Net (losses)/gains | $ | (18,659 | ) | $ | 5,349 | $ | (18,659 | ) | $ | 8,532 |
September 30, 2018 | |||||||
Amortized Cost | Fair Value | ||||||
(amounts in thousands) | |||||||
Due in one year or less | $ | — | $ | — | |||
Due after one year through five years | — | — | |||||
Due after five years through ten years | 229,807 | 218,904 | |||||
Due after ten years | 151,668 | 142,710 | |||||
Agency-guaranteed residential mortgage-backed securities | 316,785 | 305,418 | |||||
Total debt securities | $ | 698,260 | $ | 667,032 |
September 30, 2018 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 305,418 | $ | (11,367 | ) | $ | — | $ | — | $ | 305,418 | $ | (11,367 | ) | |||||||||
Corporate notes | 321,303 | (20,208 | ) | — | — | 321,303 | (20,208 | ) | |||||||||||||||
Total | $ | 626,721 | $ | (31,575 | ) | $ | — | $ | — | $ | 626,721 | $ | (31,575 | ) |
December 31, 2017 | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | |||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 104,861 | $ | (656 | ) | $ | 66,579 | $ | (2,143 | ) | $ | 171,440 | $ | (2,799 | ) | ||||||||
Agency-guaranteed commercial real estate mortgage-backed securities | 115,970 | (740 | ) | 6,151 | (29 | ) | 122,121 | (769 | ) | ||||||||||||||
Total | $ | 220,831 | $ | (1,396 | ) | $ | 72,730 | $ | (2,172 | ) | $ | 293,561 | $ | (3,568 | ) |
September 30, 2018 | December 31, 2017 | ||||||
(amounts in thousands) | (As Restated) | ||||||
Commercial loans: | |||||||
Multi-family loans at lower of cost or fair value | $ | — | $ | 144,191 | |||
Total commercial loans held for sale | — | 144,191 | |||||
Consumer loans: | |||||||
Residential mortgage loans, at fair value | 1,383 | 1,886 | |||||
Loans held for sale | $ | 1,383 | $ | 146,077 |
September 30, 2018 | December 31, 2017 | ||||||
(amounts in thousands) | (As Restated) | ||||||
Loans receivable, mortgage warehouse, at fair value | $ | 1,516,327 | $ | 1,793,408 | |||
Loans receivable: | |||||||
Commercial: | |||||||
Multi-family | 3,504,540 | 3,502,381 | |||||
Commercial and industrial (including owner occupied commercial real estate) | 1,841,704 | 1,633,818 | |||||
Commercial real estate non-owner occupied | 1,157,849 | 1,218,719 | |||||
Construction | 95,250 | 85,393 | |||||
Total commercial loans receivable | 6,599,343 | 6,440,311 | |||||
Consumer: | |||||||
Residential real estate | 509,853 | 234,090 | |||||
Manufactured housing | 82,589 | 90,227 | |||||
Other | 51,210 | 3,547 | |||||
Total consumer loans receivable | 643,652 | 327,864 | |||||
Loans receivable | 7,242,995 | 6,768,175 | |||||
Deferred (fees)/costs and unamortized (discounts)/premiums, net | (3,045 | ) | 83 | ||||
Allowance for loan losses | (40,741 | ) | (38,015 | ) | |||
Total loans receivable, net of allowance for loan losses | $ | 8,715,536 | $ | 8,523,651 |
September 30, 2018 | |||||||||||||||||||||||||||
30-89 Days Past Due (1) | 90 Days Or More Past Due (1) | Total Past Due (1) | Non- Accrual | Current (2) | Purchased- Credit- Impaired Loans (3) | Total Loans (4) | |||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
Multi-family | $ | — | $ | — | $ | — | $ | 1,343 | $ | 3,501,450 | $ | 1,747 | $ | 3,504,540 | |||||||||||||
Commercial and industrial | 418 | — | 418 | 13,287 | 1,271,813 | 572 | 1,286,090 | ||||||||||||||||||||
Commercial real estate owner occupied | — | — | — | 1,298 | 545,647 | 8,669 | 555,614 | ||||||||||||||||||||
Commercial real estate non-owner occupied | — | — | — | 158 | 1,153,107 | 4,584 | 1,157,849 | ||||||||||||||||||||
Construction | — | — | — | — | 95,250 | — | 95,250 | ||||||||||||||||||||
Residential real estate | 2,321 | — | 2,321 | 5,522 | 497,211 | 4,799 | 509,853 | ||||||||||||||||||||
Manufactured housing (5) | 3,475 | 2,300 | 5,775 | 1,921 | 72,777 | 2,116 | 82,589 | ||||||||||||||||||||
Other consumer | 45 | — | 45 | 112 | 50,832 | 221 | 51,210 | ||||||||||||||||||||
Total | $ | 6,259 | $ | 2,300 | $ | 8,559 | $ | 23,641 | $ | 7,188,087 | $ | 22,708 | $ | 7,242,995 | |||||||||||||
December 31, 2017 | |||||||||||||||||||||||||||
30-89 Days Past Due (1) | 90 Days Or More Past Due (1) | Total Past Due (1) | Non- Accrual | Current (2) | Purchased- Credit- Impaired Loans (3) | Total Loans (4) | |||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
Multi-family | $ | 4,900 | $ | — | $ | 4,900 | $ | — | $ | 3,495,600 | $ | 1,881 | $ | 3,502,381 | |||||||||||||
Commercial and industrial | 103 | — | 103 | 17,392 | 1,130,831 | 764 | 1,149,090 | ||||||||||||||||||||
Commercial real estate owner occupied | 202 | — | 202 | 1,453 | 472,501 | 10,572 | 484,728 | ||||||||||||||||||||
Commercial real estate non-owner occupied | 93 | — | 93 | 160 | 1,213,216 | 5,250 | 1,218,719 | ||||||||||||||||||||
Construction | — | — | — | — | 85,393 | — | 85,393 | ||||||||||||||||||||
Residential real estate | 7,628 | — | 7,628 | 5,420 | 215,361 | 5,681 | 234,090 | ||||||||||||||||||||
Manufactured housing (5) | 4,028 | 2,743 | 6,771 | 1,959 | 78,946 | 2,551 | 90,227 | ||||||||||||||||||||
Other consumer | 116 | — | 116 | 31 | 3,184 | 216 | 3,547 | ||||||||||||||||||||
Total | $ | 17,070 | $ | 2,743 | $ | 19,813 | $ | 26,415 | $ | 6,695,032 | $ | 26,915 | $ | 6,768,175 |
(1) | Includes past due loans that are accruing interest because collection is considered probable. |
(2) | Loans where next payment due is less than 30 days from the report date. |
(3) | Purchased-credit-impaired loans aggregated into a pool are accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, and the past due status of the pools, or that of the individual loans within the pools, is not meaningful. Due to the credit impaired nature of the loans, the loans are recorded at a discount reflecting estimated future cash flows and the Bank recognizes interest income on each pool of loans reflecting the estimated yield and passage of time. Such loans are considered to be performing. Purchased-credit-impaired loans that are not in pools accrete interest when the timing and amount of their expected cash flows are reasonably estimable, and are reported as performing loans. |
(4) | Amounts exclude deferred costs and fees, unamortized premiums and discounts, and the allowance for loan losses. |
(5) | Manufactured housing loans purchased in 2010 are supported by cash reserves held at the Bank that are used to fund past-due payments when the loan becomes 90 days or more delinquent. Subsequent purchases are subject to varying provisions in the event of borrowers’ delinquencies. |
Three Months Ended September 30, 2018 | Multi-family | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-Owner Occupied | Construction | Residential Real Estate | Manufactured Housing | Other Consumer | Total | ||||||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||||||||||
Ending Balance, June 30, 2018 | $ | 12,069 | $ | 12,258 | $ | 2,988 | $ | 6,698 | $ | 992 | $ | 2,908 | $ | 149 | $ | 226 | $ | 38,288 | |||||||||||||||||
Charge-offs | — | (90 | ) | — | — | — | — | — | (437 | ) | (527 | ) | |||||||||||||||||||||||
Recoveries | — | 30 | — | 5 | 11 | 6 | — | 4 | 56 | ||||||||||||||||||||||||||
Provision for loan losses | (240 | ) | 516 | 164 | (254 | ) | 59 | 987 | (55 | ) | 1,747 | 2,924 | |||||||||||||||||||||||
Ending Balance, September 30, 2018 | $ | 11,829 | $ | 12,714 | $ | 3,152 | $ | 6,449 | $ | 1,062 | $ | 3,901 | $ | 94 | $ | 1,540 | $ | 40,741 | |||||||||||||||||
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||||||||||
Ending Balance, December 31, 2017 | $ | 12,168 | $ | 10,918 | $ | 3,232 | $ | 7,437 | $ | 979 | $ | 2,929 | $ | 180 | $ | 172 | $ | 38,015 | |||||||||||||||||
Charge-offs | — | (314 | ) | (501 | ) | — | — | (407 | ) | — | (1,155 | ) | (2,377 | ) | |||||||||||||||||||||
Recoveries | — | 205 | 326 | 5 | 231 | 69 | — | 10 | 846 | ||||||||||||||||||||||||||
Provision for loan losses | (339 | ) | 1,905 | 95 | (993 | ) | (148 | ) | 1,310 | (86 | ) | 2,513 | 4,257 | ||||||||||||||||||||||
Ending Balance, September 30, 2018 | $ | 11,829 | $ | 12,714 | $ | 3,152 | $ | 6,449 | $ | 1,062 | $ | 3,901 | $ | 94 | $ | 1,540 | $ | 40,741 | |||||||||||||||||
As of September 30, 2018 | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | 1,343 | $ | 13,353 | $ | 1,335 | $ | 158 | $ | — | $ | 8,581 | $ | 10,378 | $ | 112 | $ | 35,260 | |||||||||||||||||
Collectively evaluated for impairment | 3,501,450 | 1,272,165 | 545,610 | 1,153,107 | 95,250 | 496,473 | 70,095 | 50,877 | 7,185,027 | ||||||||||||||||||||||||||
Loans acquired with credit deterioration | 1,747 | 572 | 8,669 | 4,584 | — | 4,799 | 2,116 | 221 | 22,708 | ||||||||||||||||||||||||||
Total loans receivable (1) | $ | 3,504,540 | $ | 1,286,090 | $ | 555,614 | $ | 1,157,849 | $ | 95,250 | $ | 509,853 | $ | 82,589 | $ | 51,210 | $ | 7,242,995 | |||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 1,381 | $ | 80 | $ | — | $ | — | $ | 306 | $ | 4 | $ | — | $ | 1,771 | |||||||||||||||||
Collectively evaluated for impairment | 11,829 | 10,881 | 3,072 | 4,298 | 1,062 | 3,072 | 88 | 1,471 | 35,773 | ||||||||||||||||||||||||||
Loans acquired with credit deterioration | — | 452 | — | 2,151 | — | 523 | 2 | 69 | 3,197 | ||||||||||||||||||||||||||
Allowance for loan losses | $ | 11,829 | $ | 12,714 | $ | 3,152 | $ | 6,449 | $ | 1,062 | $ | 3,901 | $ | 94 | $ | 1,540 | $ | 40,741 |
Three Months Ended September 30, 2017 | Multi-family | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-Owner Occupied | Construction | Residential Real Estate | Manufactured Housing | Other Consumer | Total | ||||||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||||||||||
Ending Balance, June 30, 2017 | $ | 12,028 | $ | 11,585 | $ | 2,976 | $ | 7,786 | $ | 716 | $ | 2,995 | $ | 268 | $ | 104 | $ | 38,458 | |||||||||||||||||
Charge-offs | — | (2,032 | ) | — | (77 | ) | — | (120 | ) | — | (356 | ) | (2,585 | ) | |||||||||||||||||||||
Recoveries | — | 54 | — | — | 27 | 7 | — | 1 | 89 | ||||||||||||||||||||||||||
Provision for loan losses | 668 | 966 | 262 | (53 | ) | 104 | 72 | (77 | ) | 410 | 2,352 | ||||||||||||||||||||||||
Ending Balance, September 30, 2017 | $ | 12,696 | $ | 10,573 | $ | 3,238 | $ | 7,656 | $ | 847 | $ | 2,954 | $ | 191 | $ | 159 | $ | 38,314 | |||||||||||||||||
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||||||||||
Ending Balance, December 31, 2016 | $ | 11,602 | $ | 11,050 | $ | 2,183 | $ | 7,894 | $ | 840 | $ | 3,342 | $ | 286 | $ | 118 | $ | 37,315 | |||||||||||||||||
Charge-offs | — | (4,079 | ) | — | (485 | ) | — | (410 | ) | — | (602 | ) | (5,576 | ) | |||||||||||||||||||||
Recoveries | — | 337 | 9 | — | 157 | 34 | — | 101 | 638 | ||||||||||||||||||||||||||
Provision for loan losses | 1,094 | 3,265 | 1,046 | 247 | (150 | ) | (12 | ) | (95 | ) | 542 | 5,937 | |||||||||||||||||||||||
Ending Balance, September 30, 2017 | $ | 12,696 | $ | 10,573 | $ | 3,238 | $ | 7,656 | $ | 847 | $ | 2,954 | $ | 191 | $ | 159 | $ | 38,314 | |||||||||||||||||
As of December 31, 2017 | |||||||||||||||||||||||||||||||||||
Loans: | |||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 17,461 | $ | 1,448 | $ | 160 | $ | — | $ | 9,247 | $ | 10,089 | $ | 30 | $ | 38,435 | |||||||||||||||||
Collectively evaluated for impairment | 3,500,500 | 1,130,865 | 472,708 | 1,213,309 | 85,393 | 219,162 | 77,587 | 3,301 | 6,702,825 | ||||||||||||||||||||||||||
Loans acquired with credit deterioration | 1,881 | 764 | 10,572 | 5,250 | — | 5,681 | 2,551 | 216 | 26,915 | ||||||||||||||||||||||||||
Total loans receivable | $ | 3,502,381 | $ | 1,149,090 | $ | 484,728 | $ | 1,218,719 | $ | 85,393 | $ | 234,090 | $ | 90,227 | $ | 3,547 | $ | 6,768,175 | |||||||||||||||||
Allowance for loan losses: | |||||||||||||||||||||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 650 | $ | 642 | $ | — | $ | — | $ | 155 | $ | 4 | $ | — | $ | 1,451 | |||||||||||||||||
Collectively evaluated for impairment | 12,168 | 9,804 | 2,580 | 4,630 | 979 | 2,177 | 82 | 117 | 32,537 | ||||||||||||||||||||||||||
Loans acquired with credit deterioration | — | 464 | 10 | 2,807 | — | 597 | 94 | 55 | 4,027 | ||||||||||||||||||||||||||
Allowance for loan losses | $ | 12,168 | $ | 10,918 | $ | 3,232 | $ | 7,437 | $ | 979 | $ | 2,929 | $ | 180 | $ | 172 | $ | 38,015 |
September 30, 2018 | Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||
Recorded Investment Net of Charge-offs | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
With no recorded allowance: | |||||||||||||||||||||||||||
Multi-family | $ | 1,343 | $ | 1,343 | $ | — | $ | 1,343 | $ | — | $ | 672 | $ | 8 | |||||||||||||
Commercial and industrial | 9,888 | 10,224 | — | 7,765 | 166 | 7,623 | 168 | ||||||||||||||||||||
Commercial real estate owner occupied | 704 | 1,187 | — | 711 | — | 711 | — | ||||||||||||||||||||
Commercial real estate non-owner occupied | 158 | 271 | — | 1,347 | — | 774 | 8 | ||||||||||||||||||||
Other consumer | 112 | 112 | — | 103 | 1 | 83 | 1 | ||||||||||||||||||||
Residential real estate | 4,259 | 4,504 | — | 4,281 | 23 | 3,952 | 25 | ||||||||||||||||||||
Manufactured housing | 10,152 | 10,152 | — | 10,147 | 144 | 10,011 | 421 | ||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||
Commercial and industrial | 3,465 | 3,648 | 1,381 | 5,787 | 27 | 7,089 | 39 | ||||||||||||||||||||
Commercial real estate owner occupied | 631 | 631 | 80 | 336 | 9 | 546 | 11 | ||||||||||||||||||||
Residential real estate | 4,322 | 4,329 | 306 | 4,398 | 61 | 4,760 | 124 | ||||||||||||||||||||
Manufactured housing | 226 | 226 | 4 | 227 | 4 | 225 | 10 | ||||||||||||||||||||
Total | $ | 35,260 | $ | 36,627 | $ | 1,771 | $ | 36,445 | $ | 435 | $ | 36,446 | $ | 815 |
December 31, 2017 | Three Months Ended September 30, 2017 | Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||
Recorded Investment Net of Charge-offs | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||
With no recorded allowance: | |||||||||||||||||||||||||||
Commercial and industrial | $ | 9,138 | $ | 9,287 | $ | — | $ | 13,345 | $ | 354 | $ | 8,796 | $ | 450 | |||||||||||||
Commercial real estate owner occupied | 806 | 806 | — | 1,744 | 15 | 1,589 | 18 | ||||||||||||||||||||
Commercial real estate non-owner occupied | 160 | 272 | — | 184 | 91 | 989 | 93 | ||||||||||||||||||||
Other consumer | 30 | 30 | — | 44 | — | 50 | — | ||||||||||||||||||||
Residential real estate | 3,628 | 3,801 | — | 5,228 | 125 | 4,865 | 126 | ||||||||||||||||||||
Manufactured housing | 9,865 | 9,865 | — | 10,243 | 164 | 10,038 | 457 | ||||||||||||||||||||
With an allowance recorded: | |||||||||||||||||||||||||||
Commercial and industrial | 8,323 | 8,506 | 650 | 1,963 | — | 5,400 | 22 | ||||||||||||||||||||
Commercial real estate owner occupied | 642 | 642 | 642 | 1,056 | 1 | 950 | 3 | ||||||||||||||||||||
Commercial real estate non-owner occupied | — | — | — | 51 | — | 94 | — | ||||||||||||||||||||
Other consumer | — | — | — | 12 | — | 6 | — | ||||||||||||||||||||
Residential real estate | 5,619 | 5,656 | 155 | 2,862 | — | 2,729 | 84 | ||||||||||||||||||||
Manufactured housing | 224 | 224 | 4 | 114 | — | 108 | 8 | ||||||||||||||||||||
Total | $ | 38,435 | $ | 39,089 | $ | 1,451 | $ | 36,846 | $ | 750 | $ | 35,614 | $ | 1,261 |
September 30, 2018 | December 31, 2017 | ||||||||||||||||||
Accruing TDRs | Nonaccrual TDRs | Total | Accruing TDRs | Nonaccrual TDRs | Total | ||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Commercial and industrial | $ | 66 | $ | 5,311 | $ | 5,377 | $ | 63 | $ | 5,939 | $ | 6,002 | |||||||
Commercial real estate owner occupied | 37 | — | 37 | — | — | — | |||||||||||||
Manufactured housing | 8,457 | 1,781 | 10,238 | 8,130 | 1,766 | 9,896 | |||||||||||||
Residential real estate | 3,059 | 698 | 3,757 | 3,828 | 703 | 4,531 | |||||||||||||
Other consumer | — | 13 | 13 | — | — | — | |||||||||||||
Total TDRs | $ | 11,619 | $ | 7,803 | $ | 19,422 | $ | 12,021 | $ | 8,408 | $ | 20,429 |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | ||||||||||||
Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | ||||||||||
(dollars in thousands) | |||||||||||||
Extensions of maturity | — | $ | — | 1 | $ | 60 | |||||||
Interest-rate reductions | 8 | 473 | 3 | 122 | |||||||||
Total | 8 | $ | 473 | 4 | $ | 182 |
Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | ||||||||||||
Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | ||||||||||
(dollars in thousands) | |||||||||||||
Extensions of maturity | 1 | $ | 56 | 4 | $ | 6,263 | |||||||
Interest-rate reductions | 32 | 1,402 | 32 | 1,297 | |||||||||
Total | 33 | $ | 1,458 | 36 | $ | 7,560 |
Three Months Ended September 30, 2018 | Three Months Ended September 30, 2017 | ||||||||||||
Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | ||||||||||
(dollars in thousands) | |||||||||||||
Manufactured housing | 7 | $ | 321 | 4 | $ | 182 | |||||||
Residential real estate | 1 | 152 | — | — | |||||||||
Total loans | 8 | $ | 473 | 4 | $ | 182 |
Nine Months Ended September 30, 2018 | Nine Months Ended September 30, 2017 | ||||||||||||
Number of Loans | Recorded Investment | Number of Loans | Recorded Investment | ||||||||||
(dollars in thousands) | |||||||||||||
Commercial and industrial | — | $ | — | 3 | $ | 6,203 | |||||||
Manufactured housing | 30 | 1,093 | 33 | 1,357 | |||||||||
Residential real estate | 2 | 352 | — | — | |||||||||
Other consumer | 1 | 13 | — | — | |||||||||
Total loans | 33 | $ | 1,458 | 36 | $ | 7,560 |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Accretable yield balance as of June 30, | $ | 7,403 | $ | 9,006 | |||
Accretion to interest income | (310 | ) | (368 | ) | |||
Reclassification from nonaccretable difference and disposals, net | (4 | ) | (276 | ) | |||
Accretable yield balance as of September 30, | $ | 7,089 | $ | 8,362 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Accretable yield balance as of December 31, | $ | 7,825 | $ | 10,202 | |||
Accretion to interest income | (1,164 | ) | (1,326 | ) | |||
Reclassification from nonaccretable difference and disposals, net | 428 | (514 | ) | ||||
Accretable yield balance as of September 30, | $ | 7,089 | $ | 8,362 |
September 30, 2018 | |||||||||||||||||||||||||||||||||||
Multi-Family | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-Owner Occupied | Construction | Residential Real Estate | Manufactured Housing | Other Consumer | Total (3) | |||||||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||||||||||
Pass/Satisfactory | $ | 3,399,892 | $ | 1,235,945 | $ | 539,252 | $ | 1,084,388 | $ | 95,250 | $ | — | $ | — | $ | — | $ | 6,354,727 | |||||||||||||||||
Special Mention | 81,253 | 7,756 | 8,793 | 30,406 | — | — | — | — | 128,208 | ||||||||||||||||||||||||||
Substandard | 23,395 | 42,389 | 7,569 | 43,055 | — | — | — | — | 116,408 | ||||||||||||||||||||||||||
Performing (1) | — | — | — | — | — | 502,010 | 74,893 | 51,053 | 627,956 | ||||||||||||||||||||||||||
Non-performing (2) | — | — | — | — | — | 7,843 | 7,696 | 157 | 15,696 | ||||||||||||||||||||||||||
Total | $ | 3,504,540 | $ | 1,286,090 | $ | 555,614 | $ | 1,157,849 | $ | 95,250 | $ | 509,853 | $ | 82,589 | $ | 51,210 | $ | 7,242,995 |
December 31, 2017 | |||||||||||||||||||||||||||||||||||
Multi-Family | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-Owner Occupied | Construction | Residential Real Estate | Manufactured Housing | Other Consumer | Total (3) | |||||||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||||||||||||||
Pass/Satisfactory | $ | 3,438,554 | $ | 1,118,889 | $ | 471,826 | $ | 1,185,933 | $ | 85,393 | $ | — | $ | — | $ | — | $ | 6,300,595 | |||||||||||||||||
Special Mention | 53,873 | 7,652 | 5,987 | 31,767 | — | — | — | — | 99,279 | ||||||||||||||||||||||||||
Substandard | 9,954 | 22,549 | 6,915 | 1,019 | — | — | — | — | 40,437 | ||||||||||||||||||||||||||
Performing (1) | — | — | — | — | — | 221,042 | 81,497 | 3,400 | 305,939 | ||||||||||||||||||||||||||
Non-performing (2) | — | — | — | — | — | 13,048 | 8,730 | 147 | 21,925 | ||||||||||||||||||||||||||
Total | $ | 3,502,381 | $ | 1,149,090 | $ | 484,728 | $ | 1,218,719 | $ | 85,393 | $ | 234,090 | $ | 90,227 | $ | 3,547 | $ | 6,768,175 |
(1) | Includes residential real estate, manufactured housing, and other consumer loans not subject to risk ratings. |
(2) | Includes residential real estate, manufactured housing, and other consumer loans that are past due and still accruing interest or on nonaccrual status. |
(3) | Excludes mortgage warehouse loans carried under the fair value option. |
Minimum Capital Levels to be Classified as: | |||||||||||||||||||||||||||
Actual | Adequately Capitalized | Well Capitalized | Basel III Compliant | ||||||||||||||||||||||||
(amounts in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
As of September 30, 2018: | |||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 740,968 | 8.703 | % | $ | 383,113 | 4.500 | % | N/A | N/A | $ | 542,744 | 6.375 | % | |||||||||||||
Customers Bank | $ | 1,054,869 | 12.393 | % | $ | 383,042 | 4.500 | % | $ | 553,282 | 6.500 | % | $ | 542,642 | 6.375 | % | |||||||||||
Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 958,418 | 11.257 | % | $ | 510,818 | 6.000 | % | N/A | N/A | $ | 670,448 | 7.875 | % | |||||||||||||
Customers Bank | $ | 1,054,869 | 12.393 | % | $ | 510,722 | 6.000 | % | $ | 680,963 | 8.000 | % | $ | 670,323 | 7.875 | % | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 1,080,245 | 12.688 | % | $ | 681,090 | 8.000 | % | N/A | N/A | $ | 840,721 | 9.875 | % | |||||||||||||
Customers Bank | $ | 1,204,825 | 14.154 | % | $ | 680,963 | 8.000 | % | $ | 851,204 | 10.000 | % | $ | 840,563 | 9.875 | % | |||||||||||
Tier 1 capital (to average assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 958,418 | 8.913 | % | $ | 430,099 | 4.000 | % | N/A | N/A | $ | 430,099 | 4.000 | % | |||||||||||||
Customers Bank | $ | 1,054,869 | 9.814 | % | $ | 429,939 | 4.000 | % | $ | 537,423 | 5.000 | % | $ | 429,939 | 4.000 | % | |||||||||||
As of December 31, 2017: | |||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 689,494 | 8.805 | % | $ | 352,368 | 4.500 | % | N/A | N/A | $ | 450,248 | 5.750 | % | |||||||||||||
Customers Bank | $ | 1,023,564 | 13.081 | % | $ | 352,122 | 4.500 | % | $ | 508,621 | 6.500 | % | $ | 449,934 | 5.750 | % | |||||||||||
Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 906,963 | 11.583 | % | $ | 469,824 | 6.000 | % | N/A | N/A | $ | 567,704 | 7.250 | % | |||||||||||||
Customers Bank | $ | 1,023,564 | 13.081 | % | $ | 469,496 | 6.000 | % | $ | 625,994 | 8.000 | % | $ | 567,307 | 7.250 | % | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 1,021,601 | 13.047 | % | $ | 626,432 | 8.000 | % | N/A | N/A | $ | 724,313 | 9.250 | % | |||||||||||||
Customers Bank | $ | 1,170,666 | 14.961 | % | $ | 625,994 | 8.000 | % | $ | 782,493 | 10.000 | % | $ | 723,806 | 9.250 | % | |||||||||||
Tier 1 capital (to average assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 906,963 | 8.937 | % | $ | 405,949 | 4.000 | % | N/A | N/A | $ | 405,949 | 4.000 | % | |||||||||||||
Customers Bank | $ | 1,023,564 | 10.092 | % | $ | 405,701 | 4.000 | % | $ | 507,126 | 5.000 | % | $ | 405,701 | 4.000 | % |
Fair Value Measurements at September 30, 2018 | |||||||||||||||||||
Carrying Amount | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
(amounts in thousands) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 666,034 | $ | 666,034 | $ | 666,034 | $ | — | $ | — | |||||||||
Debt securities, available for sale | 667,032 | 667,032 | — | 667,032 | — | ||||||||||||||
Equity securities | 1,819 | 1,819 | 1,819 | — | — | ||||||||||||||
Loans held for sale | 1,383 | 1,383 | — | 1,383 | — | ||||||||||||||
Total loans receivable, net of allowance for loan losses | 8,715,536 | 8,646,346 | — | 1,516,327 | 7,130,019 | ||||||||||||||
FHLB, Federal Reserve Bank and other restricted stock | 74,206 | 74,206 | — | 74,206 | — | ||||||||||||||
Derivatives | 22,613 | 22,613 | — | 22,491 | 122 | ||||||||||||||
Liabilities: | |||||||||||||||||||
Deposits | $ | 8,513,714 | $ | 8,506,804 | $ | 6,120,233 | $ | 2,386,571 | $ | — | |||||||||
FHLB advances | 835,000 | 834,968 | — | 834,968 | — | ||||||||||||||
Other borrowings | 123,779 | 124,724 | — | 124,724 | — | ||||||||||||||
Subordinated debt | 108,953 | 114,400 | — | 114,400 | — | ||||||||||||||
Derivatives | 15,684 | 15,684 | — | 15,684 | — |
Fair Value Measurements at December 31, 2017 | |||||||||||||||||||
Carrying Amount | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||
(amounts in thousands) (as restated) | |||||||||||||||||||
Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 146,323 | $ | 146,323 | $ | 146,323 | $ | — | $ | — | |||||||||
Investment securities, available for sale | 471,371 | 471,371 | 3,352 | 468,019 | — | ||||||||||||||
Loans held for sale (as restated) | 146,077 | 146,251 | — | 1,886 | 144,365 | ||||||||||||||
Total loans receivable, net of allowance for loan losses (as restated) | 8,523,651 | 8,470,171 | — | 1,793,408 | 6,676,763 | ||||||||||||||
FHLB, Federal Reserve Bank and other restricted stock | 105,918 | 105,918 | — | 105,918 | — | ||||||||||||||
Derivatives | 9,752 | 9,752 | — | 9,692 | 60 | ||||||||||||||
Liabilities: | |||||||||||||||||||
Deposits | $ | 6,800,142 | $ | 6,796,095 | $ | 4,894,449 | $ | 1,901,646 | $ | — | |||||||||
Federal funds purchased | 155,000 | 155,000 | 155,000 | — | — | ||||||||||||||
FHLB advances | 1,611,860 | 1,611,603 | 881,860 | 729,743 | — | ||||||||||||||
Other borrowings | 186,497 | 193,557 | 65,072 | 128,485 | — | ||||||||||||||
Subordinated debt | 108,880 | 115,775 | — | 115,775 | — | ||||||||||||||
Derivatives | 10,074 | 10,074 | — | 10,074 | — |
September 30, 2018 | |||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
(amounts in thousands) | |||||||||||||||
Measured at Fair Value on a Recurring Basis: | |||||||||||||||
Assets | |||||||||||||||
Available-for-sale debt securities: | |||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | — | $ | 305,418 | $ | — | $ | 305,418 | |||||||
Corporate notes | — | 361,614 | — | 361,614 | |||||||||||
Equity securities | 1,819 | — | — | 1,819 | |||||||||||
Derivatives | — | 22,491 | 122 | 22,613 | |||||||||||
Loans held for sale – fair value option | — | 1,383 | — | 1,383 | |||||||||||
Loans receivable, mortgage warehouse - fair value option | — | 1,516,327 | — | 1,516,327 | |||||||||||
Total assets - recurring fair value measurements | $ | 1,819 | $ | 2,207,233 | $ | 122 | $ | 2,209,174 | |||||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 15,684 | $ | — | $ | 15,684 | |||||||
Measured at Fair Value on a Nonrecurring Basis: | |||||||||||||||
Assets | |||||||||||||||
Impaired loans, net of reserves of $1,771 | $ | — | $ | — | $ | 7,295 | $ | 7,295 | |||||||
Other real estate owned | — | — | 1,078 | 1,078 | |||||||||||
Total assets - nonrecurring fair value measurements | $ | — | $ | — | $ | 8,373 | $ | 8,373 |
December 31, 2017 | |||||||||||||||
Fair Value Measurements at the End of the Reporting Period Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
(amounts in thousands) (as restated) | |||||||||||||||
Measured at Fair Value on a Recurring Basis: | |||||||||||||||
Assets | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | — | $ | 183,458 | $ | — | $ | 183,458 | |||||||
Agency-guaranteed commercial real estate mortgage-backed securities | — | 238,472 | — | 238,472 | |||||||||||
Corporate notes | — | 46,089 | — | 46,089 | |||||||||||
Equity securities | 3,352 | — | — | 3,352 | |||||||||||
Derivatives | — | 9,692 | 60 | 9,752 | |||||||||||
Loans held for sale – fair value option (as restated) | — | 1,886 | — | 1,886 | |||||||||||
Loans receivable, mortgage warehouse - fair value option (as restated) | — | 1,793,408 | — | 1,793,408 | |||||||||||
Total assets - recurring fair value measurements | $ | 3,352 | $ | 2,273,005 | $ | 60 | $ | 2,276,417 | |||||||
Liabilities | |||||||||||||||
Derivatives | $ | — | $ | 10,074 | $ | — | $ | 10,074 | |||||||
Measured at Fair Value on a Nonrecurring Basis: | |||||||||||||||
Assets | |||||||||||||||
Impaired loans, net of reserves of $1,451 | $ | — | $ | — | $ | 13,902 | $ | 13,902 | |||||||
Other real estate owned | — | — | 1,449 | 1,449 | |||||||||||
Total assets - nonrecurring fair value measurements | $ | — | $ | — | $ | 15,351 | $ | 15,351 |
Residential Mortgage Loan Commitments | |||||||
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Balance at June 30 | $ | 133 | $ | 102 | |||
Issuances | 122 | 103 | |||||
Settlements | (133 | ) | (102 | ) | |||
Balance at September 30 | $ | 122 | $ | 103 |
Residential Mortgage Loan Commitments | |||||||
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
(amounts in thousands) | |||||||
Balance at December 31 | $ | 60 | $ | 45 | |||
Issuances | 338 | 300 | |||||
Settlements | (276 | ) | (242 | ) | |||
Balance at September 30 | $ | 122 | $ | 103 |
Quantitative Information about Level 3 Fair Value Measurements | |||||||||
September 30, 2018 | Fair Value Estimate | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||
(amounts in thousands) | |||||||||
Impaired loans - Real Estate | $ | 5,211 | Collateral appraisal (1) | Liquidation expenses (2) | 8% - 8% (8%) | ||||
Impaired loans - C&I | 2,084 | Business asset valuation (3) | Business asset valuation adjustments (4) | 6% - 63% (12%) | |||||
Other real estate owned | 1,078 | Collateral appraisal (1) | Liquidation expenses (2) | 8% - 10% (8%) | |||||
Residential mortgage loan commitments | 122 | Adjusted market bid | Pull-through rate | 90% - 90% (90%) |
Quantitative Information about Level 3 Fair Value Measurements | |||||||||
December 31, 2017 | Fair Value Estimate | Valuation Technique | Unobservable Input | Range (Weighted Average) | |||||
(amounts in thousands) | |||||||||
Impaired loans | $ | 13,902 | Collateral appraisal (1) | Liquidation expenses (2) | 8% - 8% (8%) | ||||
Other real estate owned | 1,449 | Collateral appraisal (1) | Liquidation expenses (2) | 8% - 8% (8%) | |||||
Residential mortgage loan commitments | 60 | Adjusted market bid | Pull-through rate | 90% - 90% (90%) |
(1) | Obtained from approved independent appraisers. Appraisals are current and in compliance with credit policy. The Bank does not generally discount appraisals. |
(2) | Appraisals are adjusted by management for liquidation expenses. The range and weighted average of liquidation expense adjustments are presented as a percentage of the appraisal. |
(3) | Business asset valuation obtained from independent party. |
(4) | Business asset valuations may be adjusted by management for qualitative factors including economic conditions and the condition of the business assets. The range and weighted average of the business asset adjustments are presented as a percent of the business asset valuation. |
September 30, 2018 | ||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||
(amounts in thousands) | ||||||||||||
Derivatives designated as cash flow hedges: | ||||||||||||
Interest rate swaps | Other assets | $ | 3,859 | Other liabilities | $ | — | ||||||
Total | $ | 3,859 | $ | — | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Interest rate swaps | Other assets | $ | 18,596 | Other liabilities | $ | 15,653 | ||||||
Credit contracts | Other assets | 36 | Other liabilities | 31 | ||||||||
Residential mortgage loan commitments | Other assets | 122 | Other liabilities | — | ||||||||
Total | $ | 18,754 | $ | 15,684 |
December 31, 2017 | ||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||
Balance Sheet | Balance Sheet | |||||||||||
Location | Fair Value | Location | Fair Value | |||||||||
(amounts in thousands) | ||||||||||||
Derivatives designated as cash flow hedges: | ||||||||||||
Interest rate swaps | Other assets | $ | 816 | Other liabilities | $ | 1,140 | ||||||
Total | $ | 816 | $ | 1,140 | ||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Interest rate swaps | Other assets | $ | 8,776 | Other liabilities | $ | 8,897 | ||||||
Credit contracts | Other assets | 100 | Other liabilities | 37 | ||||||||
Residential mortgage loan commitments | Other assets | 60 | Other liabilities | — | ||||||||
Total | $ | 8,936 | $ | 8,934 |
Three Months Ended September 30, 2018 | |||||
Income Statement Location | Amount of Income (Loss) Recognized in Earnings | ||||
(amounts in thousands) | |||||
Derivatives not designated as hedging instruments: | |||||
Interest rate swaps | Other non-interest income | $ | 1,139 | ||
Credit contracts | Other non-interest income | 156 | |||
Residential mortgage loan commitments | Mortgage banking income | (11 | ) | ||
Total | $ | 1,284 |
Three Months Ended September 30, 2017 | |||||
Income Statement Location | Amount of Income (Loss) Recognized in Earnings | ||||
(amounts in thousands) | |||||
Derivatives not designated as hedging instruments: | |||||
Interest rate swaps | Other non-interest income | $ | 91 | ||
Credit contracts | Other non-interest income | (6 | ) | ||
Residential mortgage loan commitments | Mortgage banking income | 1 | |||
Total | $ | 86 |
Nine Months Ended September 30, 2018 | |||||
Income Statement Location | Amount of Income Recognized in Earnings | ||||
(amounts in thousands) | |||||
Derivatives not designated as hedging instruments: | |||||
Interest rate swaps | Other non-interest income | $ | 1,472 | ||
Credit contracts | Other non-interest income | 119 | |||
Residential mortgage loan commitments | Mortgage banking income | 62 | |||
Total | $ | 1,653 | |||
Nine Months Ended September 30, 2017 | |||||
Income Statement Location | Amount of Income (Loss) Recognized in Earnings | ||||
(amounts in thousands) | |||||
Derivatives not designated as hedging instruments: | |||||
Interest rate swaps | Other non-interest income | $ | 429 | ||
Credit contracts | Other non-interest income | (5 | ) | ||
Residential mortgage loan commitments | Mortgage banking income | 58 | |||
Total | $ | 482 | |||
Three Months Ended September 30, 2018 | |||||||||
Amount of Gain (Loss) Recognized in OCI on Derivatives (1) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | |||||||
(amounts in thousands) | |||||||||
Derivatives in cash flow hedging relationships: | |||||||||
Interest rate swaps | $ | 3,006 | Interest expense | $ | (303 | ) | |||
Other non-interest income (2) | 2,822 | ||||||||
Total | $ | 2,519 |
Three Months Ended September 30, 2017 | |||||||||
Amount of Gain (Loss) Recognized in OCI on Derivatives (1) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | |||||||
(amounts in thousands) | |||||||||
Derivatives in cash flow hedging relationships: | |||||||||
Interest rate swaps | $ | 104 | Interest expense | $ | (572 | ) |
Nine Months Ended September 30, 2018 | |||||||||
Amount of Gain (Loss) Recognized in OCI on Derivatives (1) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | |||||||
(amounts in thousands) | |||||||||
Derivative in cash flow hedging relationships: | |||||||||
Interest rate swaps | $ | 5,055 | Interest expense | $ | (175 | ) | |||
Other non-interest income (2) | 2,822 | ||||||||
Total | $ | 2,647 | |||||||
Nine Months Ended September 30, 2017 | |||||||||
Amount of Gain (Loss) Recognized in OCI on Derivatives (1) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | |||||||
(amounts in thousands) | |||||||||
Derivative in cash flow hedging relationships: | |||||||||
Interest rate swaps | $ | (115 | ) | Interest expense | $ | (2,166 | ) | ||
Gross Amount of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | Gross Amounts Not Offset in the Consolidated Balance Sheet | Net Amount | |||||||||||||||||||
Financial Instruments | Cash Collateral Received | ||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Description | |||||||||||||||||||||||
Interest rate swap derivatives with institutional counterparties | $ | 20,688 | $ | — | $ | 20,688 | $ | — | $ | 19,330 | $ | 1,358 |
Gross Amount of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | Gross Amounts Not Offset in the Consolidated Balance Sheet | ||||||||||||||||||||
Financial Instruments | Cash Collateral Pledged | Net Amount | |||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Description | |||||||||||||||||||||||
Interest rate swap derivatives with institutional counterparties | $ | 1,924 | $ | — | $ | 1,924 | $ | — | $ | 2 | $ | 1,922 |
Gross Amount of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Assets Presented in the Consolidated Balance Sheet | Gross Amounts Not Offset in the Consolidated Balance Sheet | Net Amount | |||||||||||||||||||
Financial Instruments | Cash Collateral Received | ||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Description | |||||||||||||||||||||||
Interest rate swap derivatives with institutional counterparties | $ | 5,930 | $ | — | $ | 5,930 | $ | — | $ | 5,070 | $ | 860 |
Gross Amount of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | Gross Amounts Not Offset in the Consolidated Balance Sheet | Net Amount | |||||||||||||||||||
Financial Instruments | Cash Collateral Pledged | ||||||||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Description | |||||||||||||||||||||||
Interest rate swap derivatives with institutional counterparties | $ | 5,058 | $ | — | $ | 5,058 | $ | — | $ | 4,872 | $ | 186 |
Three Months Ended September 30, 2018 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Interest income (1) | $ | 106,156 | $ | 3,889 | $ | 110,045 | |||||
Interest expense | 45,982 | 62 | 46,044 | ||||||||
Net interest income | 60,174 | 3,827 | 64,001 | ||||||||
Provision for loan losses | 2,502 | 422 | 2,924 | ||||||||
Non-interest income | (7,756 | ) | 9,840 | 2,084 | |||||||
Non-interest expense | 36,115 | 20,989 | 57,104 | ||||||||
Income (loss) before income tax expense (benefit) | 13,801 | (7,744 | ) | 6,057 | |||||||
Income tax expense (benefit) | 1,930 | (1,902 | ) | 28 | |||||||
Net income (loss) | 11,871 | (5,842 | ) | 6,029 | |||||||
Preferred stock dividends | 3,615 | — | 3,615 | ||||||||
Net income (loss) available to common shareholders | $ | 8,256 | $ | (5,842 | ) | $ | 2,414 | ||||
Three Months Ended September 30, 2017 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Interest income (1) | $ | 95,585 | $ | 2,700 | $ | 98,285 | |||||
Interest expense | 30,250 | 16 | 30,266 | ||||||||
Net interest income | 65,335 | 2,684 | 68,019 | ||||||||
Provision for loan losses | 1,874 | 478 | 2,352 | ||||||||
Non-interest income | 4,190 | 13,836 | 18,026 | ||||||||
Non-interest expense | 33,990 | 27,050 | 61,040 | ||||||||
Income (loss) before income tax expense (benefit) | 33,661 | (11,008 | ) | 22,653 | |||||||
Income tax expense (benefit) | 18,999 | (4,100 | ) | 14,899 | |||||||
Net income (loss) | 14,662 | (6,908 | ) | 7,754 | |||||||
Preferred stock dividends | 3,615 | — | 3,615 | ||||||||
Net income (loss) available to common shareholders | $ | 11,047 | $ | (6,908 | ) | $ | 4,139 | ||||
Nine Months Ended September 30, 2018 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Interest income (2) | $ | 302,820 | $ | 11,829 | $ | 314,649 | |||||
Interest expense | 118,081 | 214 | 118,295 | ||||||||
Net interest income | 184,739 | 11,615 | 196,354 | ||||||||
Provision for loan losses | 3,128 | 1,129 | 4,257 | ||||||||
Non-interest income | 8,147 | 30,973 | 39,120 | ||||||||
Non-interest expense | 108,168 | 54,966 | 163,134 | ||||||||
Income (loss) before income tax expense (benefit) | 81,590 | (13,507 | ) | 68,083 | |||||||
Income tax expense (benefit) | 17,567 | (3,317 | ) | 14,250 | |||||||
Net income (loss) | 64,023 | (10,190 | ) | 53,833 | |||||||
Preferred stock dividends | 10,844 | — | 10,844 | ||||||||
Net income (loss) available to common shareholders | $ | 53,179 | $ | (10,190 | ) | $ | 42,989 | ||||
As of September 30, 2018 | |||||||||||
Goodwill and other intangibles | $ | 3,629 | $ | 13,196 | $ | 16,825 | |||||
Total assets | $ | 10,542,175 | $ | 74,929 | $ | 10,617,104 | |||||
Total deposits | $ | 7,781,225 | $ | 732,489 | $ | 8,513,714 | |||||
Total non-deposit liabilities | $ | 1,134,251 | $ | 14,327 | $ | 1,148,578 | |||||
Nine Months Ended September 30, 2017 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Interest income (2) | $ | 265,524 | $ | 9,708 | $ | 275,232 | |||||
Interest expense | 76,134 | 55 | 76,189 | ||||||||
Net interest income | 189,390 | 9,653 | 199,043 | ||||||||
Provision for loan losses | 5,459 | 478 | 5,937 | ||||||||
Non-interest income | 16,587 | 42,583 | 59,170 | ||||||||
Non-interest expense | 94,704 | 66,114 | 160,818 | ||||||||
Income (loss) before income tax expense (benefit) | 105,814 | (14,356 | ) | 91,458 | |||||||
Income tax expense (benefit) | 39,584 | (5,348 | ) | 34,236 | |||||||
Net income (loss) | 66,230 | (9,008 | ) | 57,222 | |||||||
Preferred stock dividends | 10,844 | — | 10,844 | ||||||||
Net income (loss) available to common shareholders | $ | 55,386 | $ | (9,008 | ) | $ | 46,378 | ||||
As of September 30, 2017 | |||||||||||
Goodwill and other intangibles | $ | 3,632 | $ | 12,972 | $ | 16,604 | |||||
Total assets | $ | 10,405,452 | $ | 66,377 | $ | 10,471,829 | |||||
Total deposits | $ | 6,815,994 | $ | 781,082 | $ | 7,597,076 | |||||
Total non-deposit liabilities | $ | 1,947,213 | $ | 16,898 | $ | 1,964,111 | |||||
Three Months Ended September 30, 2018 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Revenue from contracts with customers: | |||||||||||
Revenue recognized at point in time: | |||||||||||
Interchange and Card Revenue | $ | 181 | $ | 6,903 | $ | 7,084 | |||||
Deposit Fees | 311 | 1,691 | 2,002 | ||||||||
University Fees - Card and Disbursement Fees | — | 261 | 261 | ||||||||
Total revenue recognized at point in time | 492 | 8,855 | 9,347 | ||||||||
Revenue recognized over time: | |||||||||||
University Fees - Subscription Revenue | — | 950 | 950 | ||||||||
Total revenue recognized over time | — | 950 | 950 | ||||||||
Total revenue from contracts with customers | $ | 492 | $ | 9,805 | $ | 10,297 |
Three Months Ended September 30, 2017 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Revenue from contracts with customers: | |||||||||||
Revenue recognized at point in time: | |||||||||||
Interchange and Card Revenue | $ | 215 | $ | 9,355 | $ | 9,570 | |||||
Deposit Fees | 321 | 2,338 | 2,659 | ||||||||
University Fees - Card and Disbursement Fees | — | 283 | 283 | ||||||||
Total revenue recognized at point in time | 536 | 11,976 | 12,512 | ||||||||
Revenue recognized over time: | |||||||||||
University Fees - Subscription Revenue | — | 829 | 829 | ||||||||
Total revenue recognized over time | — | 829 | 829 | ||||||||
Total revenue from contracts with customers | $ | 536 | $ | 12,805 | $ | 13,341 |
Nine Months Ended September 30, 2018 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Revenue from contracts with customers: | |||||||||||
Revenue recognized at point in time: | |||||||||||
Interchange and Card Revenue | $ | 588 | $ | 22,539 | $ | 23,127 | |||||
Deposit Fees | 892 | 4,834 | 5,726 | ||||||||
University Fees - Card and Disbursement Fees | — | 772 | 772 | ||||||||
Total revenue recognized at point in time | 1,480 | 28,145 | 29,625 | ||||||||
Revenue recognized over time: | |||||||||||
University Fees - Subscription Revenue | — | 2,727 | 2,727 | ||||||||
Total revenue recognized over time | — | 2,727 | 2,727 | ||||||||
Total revenue from contracts with customers | $ | 1,480 | $ | 30,872 | $ | 32,352 |
Nine Months Ended September 30, 2017 | |||||||||||
(amounts in thousands) | Community Business Banking | BankMobile | Consolidated | ||||||||
Revenue from contracts with customers: | |||||||||||
Revenue recognized at point in time: | |||||||||||
Interchange and Card Revenue | $ | 544 | $ | 31,185 | $ | 31,729 | |||||
Deposit Fees | 902 | 7,016 | 7,918 | ||||||||
University Fees - Card and Disbursement Fees | — | 878 | 878 | ||||||||
Total revenue recognized at point in time | 1,446 | 39,079 | 40,525 | ||||||||
Revenue recognized over time: | |||||||||||
University Fees - Subscription Revenue | — | 2,408 | 2,408 | ||||||||
Total revenue recognized over time | — | 2,408 | 2,408 | ||||||||
Total revenue from contracts with customers | $ | 1,446 | $ | 41,487 | $ | 42,933 |
Three Months Ended September 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
Average Balance | Interest Income or Expense | Average Yield or Cost (%) | Average Balance | Interest Income or Expense | Average Yield or Cost (%) | ||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning deposits | $ | 309,588 | $ | 1,538 | 1.97 | % | $ | 280,845 | $ | 923 | 1.30 | % | |||||||||
Investment securities (1) | 1,029,857 | 8,495 | 3.30 | % | 1,017,065 | 7,307 | 2.87 | % | |||||||||||||
Loans: | |||||||||||||||||||||
Commercial loans to mortgage companies | 1,680,441 | 21,274 | 5.02 | % | 1,956,587 | 21,099 | 4.28 | % | |||||||||||||
Multi-family loans | 3,555,223 | 34,901 | 3.89 | % | 3,639,566 | 33,301 | 3.63 | % | |||||||||||||
Commercial and industrial loans (2) | 1,782,500 | 21,692 | 4.83 | % | 1,491,833 | 15,792 | 4.20 | % | |||||||||||||
Non-owner occupied commercial real estate | 1,255,206 | 12,753 | 4.03 | % | 1,294,996 | 12,706 | 3.89 | % | |||||||||||||
All other loans | 594,528 | 7,195 | 4.80 | % | 546,161 | 5,842 | 4.24 | % | |||||||||||||
Total loans (3) | 8,867,898 | 97,815 | 4.38 | % | 8,929,143 | 88,740 | 3.94 | % | |||||||||||||
Other interest-earning assets | 111,600 | 2,197 | 7.81 | % | 125,341 | 1,315 | 4.16 | % | |||||||||||||
Total interest-earning assets | 10,318,943 | 110,045 | 4.24 | % | 10,352,394 | 98,285 | 3.77 | % | |||||||||||||
Non-interest-earning assets | 409,396 | 389,797 | |||||||||||||||||||
Total assets | $ | 10,728,339 | $ | 10,742,191 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest checking accounts | $ | 696,827 | 2,690 | 1.53 | % | $ | 351,422 | 708 | 0.80 | % | |||||||||||
Money market deposit accounts | 3,564,148 | 17,855 | 1.99 | % | 3,427,682 | 9,866 | 1.14 | % | |||||||||||||
Other savings accounts | 116,172 | 464 | 1.59 | % | 40,310 | 29 | 0.28 | % | |||||||||||||
Certificates of deposit | 2,288,237 | 11,795 | 2.05 | % | 2,361,069 | 7,778 | 1.31 | % | |||||||||||||
Total interest-bearing deposits | 6,665,384 | 32,804 | 1.95 | % | 6,180,483 | 18,381 | 1.18 | % | |||||||||||||
Borrowings | 1,918,577 | 13,240 | 2.74 | % | 2,414,086 | 11,885 | 1.96 | % | |||||||||||||
Total interest-bearing liabilities | 8,583,961 | 46,044 | 2.13 | % | 8,594,569 | 30,266 | 1.40 | % | |||||||||||||
Non-interest-bearing deposits | 1,109,819 | 1,158,911 | |||||||||||||||||||
Total deposits and borrowings | 9,693,780 | 1.89 | % | 9,753,480 | 1.23 | % | |||||||||||||||
Other non-interest-bearing liabilities | 84,786 | 66,220 | |||||||||||||||||||
Total liabilities | 9,778,566 | 9,819,700 | |||||||||||||||||||
Shareholders’ Equity | 949,773 | 922,491 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 10,728,339 | $ | 10,742,191 | |||||||||||||||||
Net interest income | 64,001 | 68,019 | |||||||||||||||||||
Tax-equivalent adjustment (4) | 172 | 203 | |||||||||||||||||||
Net interest earnings | $ | 64,173 | $ | 68,222 | |||||||||||||||||
Interest spread | 2.35 | % | 2.54 | % | |||||||||||||||||
Net interest margin | 2.46 | % | 2.61 | % | |||||||||||||||||
Net interest margin tax equivalent (4) | 2.47 | % | 2.62 | % |
(1) | For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for other-than-temporary impairment and amortization of premiums and accretion of discounts. |
(2) | Includes owner occupied commercial real estate loans. |
(3) | Includes non-accrual loans, the effect of which is to reduce the yield earned on loans, and deferred loan fees. |
(4) | Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the three months ended September 30, 2018 and 35% for the three months ended September 30, 2017, presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. |
Three Months Ended September 30, | |||||||||||
2018 vs. 2017 | |||||||||||
Increase (Decrease) due to Change in | |||||||||||
Rate | Volume | Total | |||||||||
(amounts in thousands) | |||||||||||
Interest income | |||||||||||
Interest-earning deposits | $ | 513 | $ | 102 | $ | 615 | |||||
Investment securities | 1,095 | 93 | 1,188 | ||||||||
Loans: | |||||||||||
Commercial loans to mortgage companies | 3,385 | (3,210 | ) | 175 | |||||||
Multi-family loans | 2,385 | (785 | ) | 1,600 | |||||||
Commercial and industrial loans, including owner occupied commercial real estate | 2,563 | 3,337 | 5,900 | ||||||||
Non-owner occupied commercial real estate | 444 | (397 | ) | 47 | |||||||
All other loans | 808 | 545 | 1,353 | ||||||||
Total loans | 9,585 | (510 | ) | 9,075 | |||||||
Other interest-earning assets | 1,040 | (158 | ) | 882 | |||||||
Total interest income | 12,233 | (473 | ) | 11,760 | |||||||
Interest expense | |||||||||||
Interest checking accounts | 956 | 1,026 | 1,982 | ||||||||
Money market deposit accounts | 7,581 | 408 | 7,989 | ||||||||
Other savings accounts | 308 | 127 | 435 | ||||||||
Certificates of deposit | 4,264 | (247 | ) | 4,017 | |||||||
Total interest-bearing deposits | 13,109 | 1,314 | 14,423 | ||||||||
Borrowings | 4,128 | (2,773 | ) | 1,355 | |||||||
Total interest expense | 17,237 | (1,459 | ) | 15,778 | |||||||
Net interest income | $ | (5,004 | ) | $ | 986 | $ | (4,018 | ) |
Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Interchange and card revenue | $ | 7,084 | $ | 9,570 | $ | (2,486 | ) | (26.0 | )% | |||||
Deposit fees | 2,002 | 2,659 | (657 | ) | (24.7 | )% | ||||||||
Bank-owned life insurance | 1,869 | 1,672 | 197 | 11.8 | % | |||||||||
Mortgage warehouse transactional fees | 1,809 | 2,396 | (587 | ) | (24.5 | )% | ||||||||
Gain on sale of SBA and other loans | 1,096 | 1,144 | (48 | ) | (4.2 | )% | ||||||||
Mortgage banking income | 207 | 257 | (50 | ) | (19.5 | )% | ||||||||
(Loss) gain on sale of investment securities | (18,659 | ) | 5,349 | (24,008 | ) | (448.8 | )% | |||||||
Impairment loss on investment securities | — | (8,349 | ) | 8,349 | (100.0 | )% | ||||||||
Other | 6,676 | 3,328 | 3,348 | 100.6 | % | |||||||||
Total non-interest income | $ | 2,084 | $ | 18,026 | $ | (15,942 | ) | (88.4 | )% |
Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Salaries and employee benefits | $ | 25,462 | $ | 24,807 | $ | 655 | 2.6 | % | ||||||
Technology, communication, and bank operations | 11,657 | 14,401 | (2,744 | ) | (19.1 | )% | ||||||||
Professional services | 4,743 | 7,403 | (2,660 | ) | (35.9 | )% | ||||||||
Merger and acquisition related expenses | 2,945 | — | 2,945 | N/A | ||||||||||
Occupancy | 2,901 | 2,857 | 44 | 1.5 | % | |||||||||
FDIC assessments, non-income taxes, and regulatory fees | 2,415 | 2,475 | (60 | ) | (2.4 | )% | ||||||||
Provision for operating losses | 1,171 | 1,509 | (338 | ) | (22.4 | )% | ||||||||
Advertising and promotion | 820 | 404 | 416 | 103.0 | % | |||||||||
Loan workout | 516 | 915 | (399 | ) | (43.6 | )% | ||||||||
Other real estate owned expenses | 66 | 445 | (379 | ) | (85.2 | )% | ||||||||
Other | 4,408 | 5,824 | (1,416 | ) | (24.3 | )% | ||||||||
Total non-interest expense | $ | 57,104 | $ | 61,040 | $ | (3,936 | ) | (6.4 | )% |
Three Months Ended September 30, | ||||||||||||||
2018 | 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Income before income tax expense | $ | 6,057 | $ | 22,653 | $ | (16,596 | ) | (73.3 | )% | |||||
Income tax expense | 28 | 14,899 | (14,871 | ) | (99.8 | )% | ||||||||
Effective tax rate | 0.46 | % | 65.77 | % |
Nine Months Ended September 30, | |||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||
Average Balance | Interest Income or Expense | Average Yield or Cost (%) | Average Balance | Interest Income or Expense | Average Yield or Cost (%) | ||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning deposits | $ | 227,960 | $ | 3,071 | 1.80 | % | $ | 327,154 | $ | 2,446 | 1.00 | % | |||||||||
Investment securities (1) | 1,109,555 | 26,932 | 3.24 | % | 971,710 | 21,017 | 2.88 | % | |||||||||||||
Loans: | |||||||||||||||||||||
Commercial loans to mortgage companies | 1,677,895 | 61,294 | 4.88 | % | 1,734,874 | 53,860 | 4.15 | % | |||||||||||||
Multi-family loans | 3,584,640 | 102,859 | 3.84 | % | 3,496,276 | 96,570 | 3.69 | % | |||||||||||||
Commercial and industrial loans (2) | 1,716,907 | 59,682 | 4.65 | % | 1,416,418 | 44,034 | 4.16 | % | |||||||||||||
Non-owner occupied commercial real estate | 1,268,597 | 37,996 | 4.00 | % | 1,290,762 | 37,654 | 3.90 | % | |||||||||||||
All other loans | 469,877 | 17,155 | 4.88 | % | 501,799 | 16,590 | 4.42 | % | |||||||||||||
Total loans (3) | 8,717,916 | 278,986 | 4.28 | % | 8,440,129 | 248,708 | 3.94 | % | |||||||||||||
Other interest-earning assets | 122,736 | 5,660 | 6.17 | % | 102,590 | 3,061 | 3.99 | % | |||||||||||||
Total interest earning assets | 10,178,167 | 314,649 | 4.13 | % | 9,841,583 | 275,232 | 3.74 | % | |||||||||||||
Non-interest-earning assets | 398,570 | 367,595 | |||||||||||||||||||
Total assets | $ | 10,576,737 | $ | 10,209,178 | |||||||||||||||||
Liabilities | |||||||||||||||||||||
Interest checking accounts | $ | 584,228 | 6,305 | 1.44 | % | $ | 338,991 | 1,839 | 0.73 | % | |||||||||||
Money market deposit accounts | 3,426,620 | 42,769 | 1.67 | % | 3,347,661 | 24,462 | 0.98 | % | |||||||||||||
Other savings accounts | 63,772 | 514 | 1.08 | % | 41,685 | 87 | 0.28 | % | |||||||||||||
Certificates of deposit | 2,041,721 | 27,191 | 1.78 | % | 2,489,970 | 22,546 | 1.21 | % | |||||||||||||
Total interest-bearing deposits | 6,116,341 | 76,779 | 1.68 | % | 6,218,307 | 48,934 | 1.05 | % | |||||||||||||
Borrowings | 2,278,262 | 41,516 | 2.44 | % | 1,836,654 | 27,255 | 1.98 | % | |||||||||||||
Total interest-bearing liabilities | 8,394,603 | 118,295 | 1.88 | % | 8,054,961 | 76,189 | 1.26 | % | |||||||||||||
Non-interest-bearing deposits | 1,165,478 | 1,185,062 | |||||||||||||||||||
Total deposits and borrowings | 9,560,081 | 1.65 | % | 9,240,023 | 1.10 | % | |||||||||||||||
Other non-interest-bearing liabilities | 81,663 | 72,622 | |||||||||||||||||||
Total liabilities | 9,641,744 | 9,312,645 | |||||||||||||||||||
Shareholders’ Equity | 934,993 | 896,533 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 10,576,737 | $ | 10,209,178 | |||||||||||||||||
Net interest income | 196,354 | 199,043 | |||||||||||||||||||
Tax-equivalent adjustment (4) | 514 | 399 | |||||||||||||||||||
Net interest earnings | $ | 196,868 | $ | 199,442 | |||||||||||||||||
Interest spread | 2.48 | % | 2.64 | % | |||||||||||||||||
Net interest margin | 2.58 | % | 2.70 | % | |||||||||||||||||
Net interest margin tax equivalent (4) | 2.58 | % | 2.71 | % |
(1) | For presentation in this table, average balances and the corresponding average yields for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts. |
(2) | Includes owner occupied commercial real estate loans. |
(3) | Includes non-accrual loans, the effect of which is to reduce the yield earned on loans, and deferred loan fees. |
(4) | Non-GAAP tax-equivalent basis, using an estimated marginal tax rate of 26% for the nine months ended September 30, 2018 and 35% for the nine months ended September 30, 2017 presented to approximate interest income as a taxable asset. Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of these non-GAAP measures provides additional clarity when assessing Customers’ financial results. These disclosures should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities. |
Nine Months Ended September 30, | |||||||||||
2018 vs. 2017 | |||||||||||
Increase (Decrease) due to Change in | |||||||||||
Rate | Volume | Total | |||||||||
(amounts in thousands) | |||||||||||
Interest income | |||||||||||
Interest-earning deposits | $ | 1,530 | $ | (905 | ) | $ | 625 | ||||
Investment securities | 2,738 | 3,177 | 5,915 | ||||||||
Loans: | |||||||||||
Commercial loans to mortgage companies | 9,252 | (1,818 | ) | 7,434 | |||||||
Multi-family loans | 3,811 | 2,478 | 6,289 | ||||||||
Commercial and industrial loans, including owner occupied commercial real estate | 5,597 | 10,051 | 15,648 | ||||||||
Non-owner occupied commercial real estate | 995 | (653 | ) | 342 | |||||||
All other loans | 1,662 | (1,097 | ) | 565 | |||||||
Total loans | 21,317 | 8,961 | 30,278 | ||||||||
Other interest-earning assets | 1,911 | 688 | 2,599 | ||||||||
Total interest income | 27,496 | 11,921 | 39,417 | ||||||||
Interest expense | |||||||||||
Interest checking accounts | 2,580 | 1,886 | 4,466 | ||||||||
Money market deposit accounts | 17,717 | 590 | 18,307 | ||||||||
Other savings accounts | 360 | 67 | 427 | ||||||||
Certificates of deposit | 9,232 | (4,587 | ) | 4,645 | |||||||
Total interest-bearing deposits | 29,889 | (2,044 | ) | 27,845 | |||||||
Borrowings | 6,943 | 7,318 | 14,261 | ||||||||
Total interest expense | 36,832 | 5,274 | 42,106 | ||||||||
Net interest income | $ | (9,336 | ) | $ | 6,647 | $ | (2,689 | ) |
Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Interchange and card revenue | $ | 23,127 | $ | 31,729 | $ | (8,602 | ) | (27.1 | )% | |||||
Bank-owned life insurance | 5,769 | 5,297 | 472 | 8.9 | % | |||||||||
Deposit fees | 5,726 | 7,918 | (2,192 | ) | (27.7 | )% | ||||||||
Mortgage warehouse transactional fees | 5,663 | 7,139 | (1,476 | ) | (20.7 | )% | ||||||||
Gain on sale of SBA and other loans | 3,404 | 3,045 | 359 | 11.8 | % | |||||||||
Mortgage banking income | 532 | 703 | (171 | ) | (24.3 | )% | ||||||||
(Loss) gain on sale of investment securities | (18,659 | ) | 8,532 | (27,191 | ) | (318.7 | )% | |||||||
Impairment loss on investment securities | — | (12,934 | ) | 12,934 | (100.0 | )% | ||||||||
Other | 13,558 | 7,741 | 5,817 | 75.1 | % | |||||||||
Total non-interest income | $ | 39,120 | $ | 59,170 | $ | (20,050 | ) | (33.9 | )% |
Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Salaries and employee benefits | $ | 78,135 | $ | 69,569 | $ | 8,566 | 12.3 | % | ||||||
Technology, communication, and bank operations | 32,923 | 33,227 | (304 | ) | (0.9 | )% | ||||||||
Professional services | 14,563 | 21,142 | (6,579 | ) | (31.1 | )% | ||||||||
Occupancy | 8,876 | 8,228 | 648 | 7.9 | % | |||||||||
FDIC assessments, non-income taxes, and regulatory fees | 6,750 | 6,615 | 135 | 2.0 | % | |||||||||
Provision for operating losses | 3,930 | 4,901 | (971 | ) | (19.8 | )% | ||||||||
Merger and acquisition related expenses | 3,920 | — | 3,920 | N/A | ||||||||||
Loan workout | 1,823 | 1,844 | (21 | ) | (1.1 | )% | ||||||||
Advertising and promotion | 1,529 | 1,108 | 421 | 38.0 | % | |||||||||
Other real estate owned expenses | 164 | 550 | (386 | ) | (70.2 | )% | ||||||||
Other | 10,521 | 13,634 | (3,113 | ) | (22.8 | )% | ||||||||
Total non-interest expense | $ | 163,134 | $ | 160,818 | $ | 2,316 | 1.4 | % |
Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Income before income tax expense | $ | 68,083 | $ | 91,458 | $ | (23,375 | ) | (25.6 | )% | |||||
Income tax expense | 14,250 | 34,236 | (19,986 | ) | (58.4 | )% | ||||||||
Effective tax rate | 20.93 | % | 37.43 | % |
September 30, 2018 | December 31, 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | (As Restated) | |||||||||||||
Cash and cash equivalents | $ | 666,034 | $ | 146,323 | $ | 519,711 | 355.2 | % | ||||||
Investment securities, at fair value | 668,851 | 471,371 | 197,480 | 41.9 | % | |||||||||
Loans held for sale (includes $1,383 and $1,886, respectively, at fair value) | 1,383 | 146,077 | (144,694 | ) | (99.1 | )% | ||||||||
Loans receivable, mortgage warehouse, at fair value | 1,516,327 | 1,793,408 | (277,081 | ) | (15.4 | )% | ||||||||
Loans receivable | 7,239,950 | 6,768,258 | 471,692 | 7.0 | % | |||||||||
Allowance for loan losses | (40,741 | ) | (38,015 | ) | (2,726 | ) | 7.2 | % | ||||||
Total assets | 10,617,104 | 9,839,555 | 777,549 | 7.9 | % | |||||||||
Total deposits | 8,513,714 | 6,800,142 | 1,713,572 | 25.2 | % | |||||||||
Federal funds purchased | — | 155,000 | (155,000 | ) | (100.0 | )% | ||||||||
FHLB advances | 835,000 | 1,611,860 | (776,860 | ) | (48.2 | )% | ||||||||
Other borrowings | 123,779 | 186,497 | (62,718 | ) | (33.6 | )% | ||||||||
Subordinated debt | 108,953 | 108,880 | 73 | 0.1 | % | |||||||||
Total liabilities | 9,662,292 | 8,918,591 | 743,701 | 8.3 | % | |||||||||
Total shareholders’ equity | 954,812 | 920,964 | 33,848 | 3.7 | % | |||||||||
Total liabilities and shareholders’ equity | 10,617,104 | 9,839,555 | 777,549 | 7.9 | % |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
(amounts in thousands) | (As Restated) | ||||||
Commercial loans: | |||||||
Multi-family loans at lower of cost or fair value | $ | — | $ | 144,191 | |||
Total commercial loans held for sale | — | 144,191 | |||||
Consumer loans: | |||||||
Residential mortgage loans, at fair value | 1,383 | 1,886 | |||||
Loans held for sale | $ | 1,383 | $ | 146,077 |
September 30, | December 31, | ||||||
2018 | 2017 | ||||||
(amounts in thousands) | (As Restated) | ||||||
Loans receivable, mortgage warehouse, at fair value | $ | 1,516,327 | $ | 1,793,408 | |||
Loans receivable: | |||||||
Commercial: | |||||||
Multi-family | 3,504,540 | 3,502,381 | |||||
Commercial and industrial (including owner occupied commercial real estate) | 1,841,704 | 1,633,818 | |||||
Commercial real estate non-owner occupied | 1,157,849 | 1,218,719 | |||||
Construction | 95,250 | 85,393 | |||||
Total commercial loans receivable | 6,599,343 | 6,440,311 | |||||
Consumer: | |||||||
Residential real estate | 509,853 | 234,090 | |||||
Manufactured housing | 82,589 | 90,227 | |||||
Other | 51,210 | 3,547 | |||||
Total consumer loans receivable | 643,652 | 327,864 | |||||
Loans receivable | 7,242,995 | 6,768,175 | |||||
Deferred (fees)/costs and unamortized (discounts)/premiums, net | (3,045 | ) | 83 | ||||
Allowance for loan losses | (40,741 | ) | (38,015 | ) | |||
Total loans receivable, net of allowance for loan losses | $ | 8,715,536 | $ | 8,523,651 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(amounts in thousands) | |||||||||||||||
Balance at the beginning of the period | $ | 38,288 | $ | 38,458 | $ | 38,015 | $ | 37,315 | |||||||
Loan charge-offs (1) | |||||||||||||||
Commercial and industrial | 90 | 2,032 | 314 | 4,079 | |||||||||||
Commercial real estate owner occupied | — | — | 501 | — | |||||||||||
Commercial real estate non-owner occupied | — | 77 | — | 485 | |||||||||||
Residential real estate | — | 120 | 407 | 410 | |||||||||||
Other consumer | 437 | 356 | 1,155 | 602 | |||||||||||
Total Charge-offs | 527 | 2,585 | 2,377 | 5,576 | |||||||||||
Loan recoveries (1) | |||||||||||||||
Commercial and industrial | 30 | 54 | 205 | 337 | |||||||||||
Commercial real estate owner occupied | — | — | 326 | 9 | |||||||||||
Commercial real estate non-owner occupied | 5 | — | 5 | — | |||||||||||
Construction | 11 | 27 | 231 | 157 | |||||||||||
Residential real estate | 6 | 7 | 69 | 34 | |||||||||||
Other consumer | 4 | 1 | 10 | 101 | |||||||||||
Total Recoveries | 56 | 89 | 846 | 638 | |||||||||||
Total net charge-offs | 471 | 2,496 | 1,531 | 4,938 | |||||||||||
Provision for loan losses | 2,924 | 2,352 | 4,257 | 5,937 | |||||||||||
Balance at the end of the period | $ | 40,741 | $ | 38,314 | $ | 40,741 | $ | 38,314 |
(1) | Charge-offs and recoveries on purchased-credit-impaired loans that are accounted for in pools are recognized on a net basis when the pool matures. |
Loan Type | Total Loans | Current | 30-89 Days Past Due | 90 Days or More Past Due and Accruing | Non- accrual/ NPL (a) | OREO (b) | NPA (a)+(b) | NPL to Loan Type (%) | NPA to Loans + OREO (%) | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||
Originated Loans | |||||||||||||||||||||||||||||||||
Multi-Family | $ | 3,502,079 | $ | 3,500,736 | $ | — | $ | — | $ | 1,343 | $ | — | $ | 1,343 | 0.04 | % | 0.04 | % | |||||||||||||||
Commercial & Industrial (1) | 1,760,668 | 1,746,352 | — | — | 14,316 | 621 | 14,937 | 0.81 | % | 0.85 | % | ||||||||||||||||||||||
Commercial Real Estate Non-Owner Occupied | 1,144,214 | 1,144,214 | — | — | — | — | — | — | % | — | % | ||||||||||||||||||||||
Residential | 106,052 | 103,018 | 979 | — | 2,055 | 57 | 2,112 | 1.94 | % | 1.99 | % | ||||||||||||||||||||||
Construction | 95,250 | 95,250 | — | — | — | — | — | — | % | — | % | ||||||||||||||||||||||
Other consumer | 1,359 | 1,322 | 37 | — | — | — | — | — | % | — | % | ||||||||||||||||||||||
Total Originated Loans (2) | 6,609,622 | 6,590,892 | 1,016 | — | 17,714 | 678 | 18,392 | 0.27 | % | 0.28 | % | ||||||||||||||||||||||
Loans Acquired | |||||||||||||||||||||||||||||||||
Bank Acquisitions | 131,854 | 125,399 | 1,969 | 480 | 4,006 | 400 | 4,406 | 3.04 | % | 3.33 | % | ||||||||||||||||||||||
Loan Purchases | 501,519 | 492,971 | 3,518 | 3,109 | 1,921 | 372 | 2,293 | 0.38 | % | 0.46 | % | ||||||||||||||||||||||
Total Loans Acquired | 633,373 | 618,370 | 5,487 | 3,589 | 5,927 | 772 | 6,699 | 0.94 | % | 1.06 | % | ||||||||||||||||||||||
Deferred costs and unamortized premiums, net | (3,045 | ) | (3,045 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Loans Receivable | 7,239,950 | 7,206,217 | 6,503 | 3,589 | 23,641 | 1,450 | 25,091 | 0.33 | % | 0.35 | % | ||||||||||||||||||||||
Loans Receivable, Mortgage Warehouse, at Fair Value | 1,516,327 | 1,516,327 | — | — | — | — | — | ||||||||||||||||||||||||||
Total Loans Held for Sale | 1,383 | 1,383 | — | — | — | — | — | ||||||||||||||||||||||||||
Total Portfolio | $ | 8,757,660 | $ | 8,723,927 | $ | 6,503 | $ | 3,589 | $ | 23,641 | $ | 1,450 | $ | 25,091 | 0.27 | % | 0.29 | % |
Loan Type | Total Loans | NPL | ALL | Cash Reserve | Total Credit Reserves | Reserves to Loans (%) | Reserves to NPLs (%) | ||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||
Originated Loans | |||||||||||||||||||||||||
Multi-Family | $ | 3,502,079 | $ | 1,343 | $ | 11,829 | $ | — | $ | 11,829 | 0.34 | % | 880.79 | % | |||||||||||
Commercial & Industrial (1) | 1,760,668 | 14,316 | 15,268 | — | 15,268 | 0.87 | % | 106.65 | % | ||||||||||||||||
Commercial Real Estate Non-Owner Occupied | 1,144,214 | — | 4,246 | — | 4,246 | 0.37 | % | — | % | ||||||||||||||||
Residential | 106,052 | 2,055 | 2,048 | — | 2,048 | 1.93 | % | 99.66 | % | ||||||||||||||||
Construction | 95,250 | — | 1,062 | — | 1,062 | 1.11 | % | — | % | ||||||||||||||||
Other consumer | 1,359 | — | 103 | — | 103 | 7.58 | % | — | % | ||||||||||||||||
Total Originated Loans (2) | 6,609,622 | 17,714 | 34,556 | — | 34,556 | 0.52 | % | 195.08 | % | ||||||||||||||||
Loans Acquired | |||||||||||||||||||||||||
Bank Acquisitions | 131,854 | 4,006 | 3,773 | — | 3,773 | 2.86 | % | 94.18 | % | ||||||||||||||||
Loan Purchases | 501,519 | 1,921 | 2,412 | 527 | 2,939 | 0.59 | % | 152.99 | % | ||||||||||||||||
Total Loans Acquired | 633,373 | 5,927 | 6,185 | 527 | 6,712 | 1.06 | % | 113.24 | % | ||||||||||||||||
Deferred costs and unamortized premiums, net | (3,045 | ) | — | — | — | — | |||||||||||||||||||
Loans Receivable | 7,239,950 | 23,641 | 40,741 | 527 | 41,268 | 0.57 | % | 174.56 | % | ||||||||||||||||
Loans Receivable, Mortgage Warehouse, at Fair Value | 1,516,327 | — | — | — | — | ||||||||||||||||||||
Total Loans Held for Sale | 1,383 | — | — | — | — | ||||||||||||||||||||
Total Portfolio | $ | 8,757,660 | $ | 23,641 | $ | 40,741 | $ | 527 | $ | 41,268 | 0.47 | % | 174.56 | % |
September 30, 2018 | December 31, 2017 | Change | Percentage Change | |||||||||||
(dollars in thousands) | ||||||||||||||
Demand, non-interest bearing | $ | 1,338,167 | $ | 1,052,115 | $ | 286,052 | 27.2 | % | ||||||
Demand, interest bearing | 833,176 | 523,848 | 309,328 | 59.0 | % | |||||||||
Savings, including MMDA | 3,948,890 | 3,318,486 | 630,404 | 19.0 | % | |||||||||
Time, $100,000 and over | 1,271,783 | 1,284,855 | (13,072 | ) | (1.0 | )% | ||||||||
Time, other | 1,121,698 | 620,838 | 500,860 | 80.7 | % | |||||||||
Total deposits | $ | 8,513,714 | $ | 6,800,142 | $ | 1,713,572 | 25.2 | % |
• | Originations of mortgage warehouse loans totaled $21.7 billion during the nine months ended September 30, 2018, compared to $22.7 billion during the nine months ended September 30, 2017. |
• | Purchases of investment securities available for sale totaled $763.2 million during the nine months ended September 30, 2018, compared to $796.6 million during the nine months ended September 30, 2017. |
• | Cash flows used to fund new loans held for investment totaled $20.5 million and $921.0 million during the nine months ended September 30, 2018 and 2017, respectively. |
• | Cash flows used to purchase loans totaled $347.7 million and $262.6 million during the nine months ended September 30, 2018 and 2017, respectively. |
• | Purchases of bank owned life insurance policies were $90.0 million during the nine months ended September 30, 2017. There were no such purchases of bank owned life insurance policies during the nine months ended September 30, 2018. |
• | Net purchases of FHLB, Federal Reserve Bank, and other restricted stock totaled $30.2 million during the nine months ended September 30, 2017. |
• | Purchases of leased assets under operating leases were $21.8 million during the nine months ended September 30, 2018. There were no such purchases of leased assets under operating leases during the nine months ended September 30, 2017. |
• | Proceeds from repayments of mortgage warehouse loans totaled $22.0 billion during the nine months ended September 30, 2018, compared to $22.9 billion during the nine months ended September 30, 2017. |
• | Proceeds from maturities, calls and principal repayments of securities available for sale totaled $38.9 million for the nine months ended September 30, 2018, compared to $36.5 million for the nine months ended September 30, 2017. |
• | Proceeds from sales of investment securities available for sale amounted to $476.2 million during the nine months ended September 30, 2018, compared to $670.5 million for the nine months ended September 30, 2017. |
• | Proceeds from the sale of loans held for investment totaled $42.2 million during the nine months ended September 30, 2018, compared to $124.7 million during the nine months ended September 30, 2017. |
• | Proceeds from FHLB, Federal Reserve Bank and other restricted stock totaled $31.7 million during the nine months ended September 30, 2018. |
• | net income of $53.8 million for the nine months ended September 30, 2018; |
• | share-based compensation expense of $5.6 million for the nine months ended September 30, 2018; and |
• | issuance of common stock under share-based compensation arrangements of $3.7 million for the nine months ended September 30, 2018. |
• | other comprehensive loss of $18.6 million for the nine months ended September 30, 2018, arising primarily from unrealized fair value losses recognized on available-for-sale debt securities; and |
• | preferred stock dividends of $10.8 million for the nine months ended September 30, 2018. |
Minimum Capital Levels to be Classified as: | |||||||||||||||||||||||||||
Actual | Adequately Capitalized | Well Capitalized | Basel III Compliant | ||||||||||||||||||||||||
(dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
As of September 30, 2018: | |||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 740,968 | 8.703 | % | $ | 383,113 | 4.500 | % | N/A | N/A | $ | 542,744 | 6.375 | % | |||||||||||||
Customers Bank | $ | 1,054,869 | 12.393 | % | $ | 383,042 | 4.500 | % | $ | 553,282 | 6.500 | % | $ | 542,642 | 6.375 | % | |||||||||||
Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 958,418 | 11.257 | % | $ | 510,818 | 6.000 | % | N/A | N/A | $ | 670,448 | 7.875 | % | |||||||||||||
Customers Bank | $ | 1,054,869 | 12.393 | % | $ | 510,722 | 6.000 | % | $ | 680,963 | 8.000 | % | $ | 670,323 | 7.875 | % | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 1,080,245 | 12.688 | % | $ | 681,090 | 8.000 | % | N/A | N/A | $ | 840,721 | 9.875 | % | |||||||||||||
Customers Bank | $ | 1,204,825 | 14.154 | % | $ | 680,963 | 8.000 | % | $ | 851,204 | 10.000 | % | $ | 840,563 | 9.875 | % | |||||||||||
Tier 1 capital (to average assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 958,418 | 8.913 | % | $ | 430,099 | 4.000 | % | N/A | N/A | $ | 430,099 | 4.000 | % | |||||||||||||
Customers Bank | $ | 1,054,869 | 9.814 | % | $ | 429,939 | 4.000 | % | $ | 537,423 | 5.000 | % | $ | 429,939 | 4.000 | % | |||||||||||
As of December 31, 2017: | |||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 689,494 | 8.805 | % | $ | 352,368 | 4.500 | % | N/A | N/A | $ | 450,248 | 5.750 | % | |||||||||||||
Customers Bank | $ | 1,023,564 | 13.081 | % | $ | 352,122 | 4.500 | % | $ | 508,621 | 6.500 | % | $ | 449,934 | 5.750 | % | |||||||||||
Tier 1 capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 906,963 | 11.583 | % | $ | 469,824 | 6.000 | % | N/A | N/A | $ | 567,704 | 7.250 | % | |||||||||||||
Customers Bank | $ | 1,023,564 | 13.081 | % | $ | 469,496 | 6.000 | % | $ | 625,994 | 8.000 | % | $ | 567,307 | 7.250 | % | |||||||||||
Total capital (to risk-weighted assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 1,021,601 | 13.047 | % | $ | 626,432 | 8.000 | % | N/A | N/A | $ | 724,313 | 9.250 | % | |||||||||||||
Customers Bank | $ | 1,170,666 | 14.961 | % | $ | 625,994 | 8.000 | % | $ | 782,493 | 10.000 | % | $ | 723,806 | 9.250 | % | |||||||||||
Tier 1 capital (to average assets) | |||||||||||||||||||||||||||
Customers Bancorp, Inc. | $ | 906,963 | 8.937 | % | $ | 405,949 | 4.000 | % | N/A | N/A | $ | 405,949 | 4.000 | % | |||||||||||||
Customers Bank | $ | 1,023,564 | 10.092 | % | $ | 405,701 | 4.000 | % | $ | 507,126 | 5.000 | % | $ | 405,701 | 4.000 | % |
September 30, 2018 | December 31, 2017 | ||||||
(amounts in thousands) | |||||||
Commitments to fund loans | $ | 171,538 | $ | 333,874 | |||
Unfunded commitments to fund mortgage warehouse loans | 1,535,720 | 1,567,139 | |||||
Unfunded commitments under lines of credit and credit card | 821,601 | 485,345 | |||||
Letters of credit | 45,188 | 39,890 | |||||
Other unused commitments | 5,104 | 6,679 |
Rate Shocks | % Change | |
Up 3% | (3.0 | )% |
Up 2% | (1.4 | )% |
Up 1% | (0.4 | )% |
Down 1% | (4.4 | )% |
Rate Shocks | From base | |
Up 3% | (21.2 | )% |
Up 2% | (12.8 | )% |
Up 1% | (5.7 | )% |
Down 1% | 1.2 | % |
Exhibit No. | Description | |
101 | The Exhibits filed as part of this report are as follows: | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definitions Linkbase Document. |
Customers Bancorp, Inc. | |||
November 13, 2018 | By: | /s/ Jay S. Sidhu | |
Name: | Jay S. Sidhu | ||
Title: | Chairman and Chief Executive Officer (Principal Executive Officer) | ||
November 13, 2018 | By: | /s/ Robert E. Wahlman | |
Name: | Robert E. Wahlman | ||
Title: | Chief Financial Officer (Principal Financial Officer) |
Exhibit No. | Description | |
101 | The Exhibits filed as part of this report are as follows: | |
101.INS | XBRL Instance Document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definitions Linkbase Document. |
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1. | I have reviewed this quarterly report on Form 10-Q of Customers Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jay S. Sidhu |
Jay S. Sidhu Chairman and Chief Executive Officer (Principal Executive Officer) |
Date: November 13, 2018 |
1. | I have reviewed this quarterly report on Form 10-Q of Customers Bancorp, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Robert E. Wahlman |
Robert E. Wahlman Chief Financial Officer (Principal Financial Officer) |
Date: November 13, 2018 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
Date: November 13, 2018 | /s/ Jay S. Sidhu | |
Jay S. Sidhu, Chairman and Chief Executive Officer (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
Date: November 13, 2018 | /s/ Robert E. Wahlman | |
Robert E. Wahlman, Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Nov. 02, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CUBI | |
Entity Registrant Name | Customers Bancorp, Inc. | |
Entity Central Index Key | 0001488813 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 31,687,340 |
Consolidated Balance Sheet - Unaudited (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Loans held for sale at fair value | $ 1,383 | $ 146,251 |
Preferred stock, par value (usd per share) | $ 1.0 | $ 1.00 |
Preferred stock, liquidation preference (usd per share) | $ 25.00 | $ 25.00 |
Preferred stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (shares) | 9,000,000 | 9,000,000 |
Preferred stock, shares outstanding (shares) | 9,000,000 | 9,000,000 |
Common stock, par value (usd per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 32,217,600 | 31,912,763 |
Common stock, shares outstanding (shares) | 31,687,340 | 30,820,177 |
Treasury stock, shares (shares) | 530,260 | 530,260 |
Significant Other Observable Inputs (Level 2) | ||
Loans held for sale at fair value | $ 1,383 | $ 1,886 |
Consolidated Statements of Income - Unaudited - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Interest income: | ||||
Loans | $ 97,815 | $ 88,740 | $ 278,986 | $ 248,708 |
Investment securities | 8,495 | 7,307 | 26,932 | 21,017 |
Other | 3,735 | 2,238 | 8,731 | 5,507 |
Total interest income | 110,045 | 98,285 | 314,649 | 275,232 |
Interest expense: | ||||
Deposits | 32,804 | 18,381 | 76,779 | 48,934 |
Other borrowings | 2,431 | 3,168 | 9,082 | 6,767 |
FHLB advances | 9,125 | 7,032 | 27,381 | 15,433 |
Subordinated debt | 1,684 | 1,685 | 5,053 | 5,055 |
Total interest expense | 46,044 | 30,266 | 118,295 | 76,189 |
Net interest income | 64,001 | 68,019 | 196,354 | 199,043 |
Provision for loan losses | 2,924 | 2,352 | 4,257 | 5,937 |
Net interest income after provision for loan losses | 61,077 | 65,667 | 192,097 | 193,106 |
Non-interest income: | ||||
Bank-owned life insurance | 1,869 | 1,672 | 5,769 | 5,297 |
Mortgage warehouse transactional fees | 1,809 | 2,396 | 5,663 | 7,139 |
Gain on sale of SBA and other loans | 1,096 | 1,144 | 3,404 | 3,045 |
Mortgage banking income | 207 | 257 | 532 | 703 |
Impairment loss on investment securities | 0 | (8,349) | 0 | (12,934) |
(Loss) gain on sale of investment securities | (18,659) | 5,349 | (18,659) | 8,532 |
Other | 6,676 | 3,328 | 13,558 | 7,741 |
Total non-interest income | 2,084 | 18,026 | 39,120 | 59,170 |
Non-interest expense: | ||||
Salaries and employee benefits | 25,462 | 24,807 | 78,135 | 69,569 |
Technology, communication, and bank operations | 11,657 | 14,401 | 32,923 | 33,227 |
Professional services | 4,743 | 7,403 | 14,563 | 21,142 |
Merger and acquisition related expenses | 2,945 | 0 | 3,920 | 0 |
Occupancy | 2,901 | 2,857 | 8,876 | 8,228 |
FDIC assessments, non-income taxes, and regulatory fees | 2,415 | 2,475 | 6,750 | 6,615 |
Provision for operating losses | 1,171 | 1,509 | 3,930 | 4,901 |
Advertising and promotion | 820 | 404 | 1,529 | 1,108 |
Loan workout | 516 | 915 | 1,823 | 1,844 |
Other real estate owned expenses | 66 | 445 | 164 | 550 |
Other | 4,408 | 5,824 | 10,521 | 13,634 |
Total non-interest expense | 57,104 | 61,040 | 163,134 | 160,818 |
Income before income tax expense | 6,057 | 22,653 | 68,083 | 91,458 |
Income tax expense | 28 | 14,899 | 14,250 | 34,236 |
Net income (loss) | 6,029 | 7,754 | 53,833 | 57,222 |
Preferred stock dividends | 3,615 | 3,615 | 10,844 | 10,844 |
Net income (loss) available to common shareholders | $ 2,414 | $ 4,139 | $ 42,989 | $ 46,378 |
Basic earnings per common share (usd per share) | $ 0.08 | $ 0.13 | $ 1.36 | $ 1.52 |
Diluted earnings per common share (usd per share) | $ 0.07 | $ 0.13 | $ 1.33 | $ 1.42 |
Interchange and card revenue | ||||
Non-interest income: | ||||
Non-interest income | $ 7,084 | $ 9,570 | $ 23,127 | $ 31,729 |
Deposit fees | ||||
Non-interest income: | ||||
Non-interest income | $ 2,002 | $ 2,659 | $ 5,726 | $ 7,918 |
Description of the Business |
9 Months Ended |
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Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | DESCRIPTION OF THE BUSINESS Customers Bancorp, Inc. (the “Bancorp” or “Customers Bancorp”) is a bank holding company engaged in banking activities through its wholly owned subsidiary, Customers Bank (the “Bank”), collectively referred to as “Customers” herein. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Customers Bancorp, Inc. and its wholly owned subsidiaries, Customers Bank, and non-bank subsidiaries, serve residents and businesses in Southeastern Pennsylvania (Bucks, Berks, Chester, Philadelphia and Delaware Counties); Rye Brook, New York (Westchester County); Hamilton, New Jersey (Mercer County); Boston, Massachusetts; Providence, Rhode Island; Portsmouth, New Hampshire (Rockingham County); Manhattan and Melville, New York; Washington, D.C.; Chicago, Illinois; and nationally for certain loan and deposit products. The Bank has 13 full-service branches and provides commercial banking products, primarily loans and deposits. In addition, Customers Bank also administratively supports loan and other financial products to customers through its limited-purpose offices in Boston, Massachusetts, Providence, Rhode Island, Portsmouth, New Hampshire, Manhattan and Melville, New York, Philadelphia, Pennsylvania, Washington, D.C., and Chicago, Illinois. The Bank also provides liquidity to residential mortgage originators nationwide through commercial loans to mortgage companies. Through BankMobile, a division of Customers Bank, Customers offers state of the art high tech digital banking services to consumers, students, and the "under banked" nationwide. Customers is subject to regulation of the Pennsylvania Department of Banking and Securities and the Federal Reserve Bank and is periodically examined by those regulatory authorities. Customers Bancorp has made certain equity investments through its wholly owned subsidiaries CB Green Ventures Pte Ltd. and CUBI India Ventures Pte Ltd. |
Significant Accounting Policies and Basis of Presentation |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies and Basis of Presentation | IGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION Basis of Presentation The interim unaudited consolidated financial statements of Customers have been prepared in conformity with U.S. GAAP and pursuant to the rules and regulations of the SEC. These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Customers for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted from these interim unaudited consolidated financial statements as permitted by SEC rules and regulations. On November 13, 2018, Customers Bancorp filed with the SEC a report on Form 8-K advising that its 2017, 2016, and 2015 audited consolidated financial statements and its interim unaudited consolidated financial statements as of and for the three and six month periods ended March 31, 2018 and 2017 and June 30, 2018 and 2017, respectively, should no longer be relied upon because of incorrect classifications of the cash flows used in and provided by its commercial mortgage warehouse lending activities between operating and investing activities on the consolidated statements of cash flows because the related loan balances were incorrectly classified as held for sale instead of held for investment (i.e., loans receivable) on its consolidated balance sheets. These misclassifications have no impact on total cash balances, total loans, total assets, the allowance for loan losses, total capital, regulatory capital ratios, net interest income, net interest margin, net income to shareholders, basic or diluted earnings per share, return on average assets, return on average equity, the efficiency ratio, asset quality ratios or other key performance metrics, including non-GAAP performance metrics, that Customers routinely discusses with analysts and investors. The December 31, 2017 consolidated balance sheet presented in this report has been derived from Customers' audited 2017 consolidated financial statements, restated to correct the classification of the mortgage warehouse loans as held for investment instead of held for sale. Because of a fair value option election that Customers made on July 1, 2012 that continues today, these loans are, and will continue to be, reported at their fair value and accordingly do not have an allowance for loan losses. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2017 consolidated financial statements of Customers included in its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 23, 2018 (the "2017 Form 10-K") except to the extent they are affected by the restatement. That Form 10-K describes Customers Bancorp’s significant accounting policies, which include its policies on Principles of Consolidation; Cash and Cash Equivalents and Statements of Cash Flows; Restrictions on Cash and Amounts due from Banks; Business Combinations; Investment Securities; Loan Accounting Framework; Loans Held for Sale and Loans at Fair Value; Loans Receivable; Purchased Loans; Allowance for Loan Losses; Goodwill and Other Intangible Assets; Investments in FHLB, Federal Reserve Bank, and Other Restricted Stock; Other Real Estate Owned; Bank-Owned Life Insurance; Bank Premises and Equipment; Operating Leases; Treasury Stock; Income Taxes; Share-Based Compensation; Transfer of Financial Assets; Business Segments; Derivative Instruments and Hedging; Comprehensive Income (Loss); Earnings per Share; and Loss Contingencies. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year or any other period. There have been no material changes to Customers' significant accounting policies as disclosed in Customers' 2017 Form 10-K, except for the accounting policies related to Cash and Cash Equivalents and Statements of Cash Flows and Loans Held for Sale and Loans at Fair Value as described below. Restatement of Previously Issued Financial Statements In November 2018, Customers determined that the cash flow activities associated with its commercial mortgage warehouse lending transactions should have been reported as investing activities in its consolidated statements of cash flows because the related loan balances should have been classified as held for investment (i.e., loans receivable). Effective with the filing of this quarterly report on Form 10-Q, Customers changed its accounting policies such that commercial mortgage warehouse loans will be classified as held for investment and presented them as "Loans receivable, mortgage warehouse, at fair value" on its consolidated balance sheets. The cash flow activities associated with these commercial mortgage warehouse lending activities will be reported as investing activities in the consolidated statements of cash flows. The following tables set forth the effects of the correction on the consolidated balance sheet as of December 31, 2017 and the consolidated statements of cash flows for the nine months ended September 30, 2017.
In addition, the December 31, 2017 comparative balances disclosed in NOTE 6 - LOANS HELD FOR SALE, NOTE 7 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES, and NOTE 9 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, and the comparative balances reported throughout Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this quarterly report on Form 10-Q, have been restated to present the corrected classification. Presented below are recently issued accounting standards that Customers has adopted as well as those that the Financial Accounting Standards Board (“FASB”) has issued but are not yet effective. Recently Issued Accounting Standards Accounting Standards Adopted in 2018
Accounting Standards Adopted in 2018 (continued)
Accounting Standards Adopted in 2018 (continued)
Accounting Standards Adopted in 2018 (continued)
Accounting Standards Issued But Not Yet Adopted
Accounting Standards Issued But Not Yet Adopted (continued)
Accounting Standards Issued But Not Yet Adopted (continued)
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | ARNINGS PER SHARE The following are the components and results of Customers' earnings per common share calculations for the periods presented.
The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because either the performance conditions for certain of the share-based compensation awards have not been met or to do so would have been anti-dilutive for the periods presented.
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Changes in Accumulated Other Comprehensive Income (Loss) By Component |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (Loss) By Component | HANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT The following tables present the changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2018 and 2017. All amounts are presented net of tax. Amounts in parentheses indicate reductions to accumulated other comprehensive income.
(1) Reclassification amounts for available-for-sale debt securities are reported as loss on sale of investment securities on the consolidated statements of income. During the three and nine months ended September 30, 2018, reclassification amounts of $18.7 million ($13.8 million net of taxes), respectively, were reported as loss on sale of investment securities on the consolidated statements of income. Reclassification amounts for cash flow hedges are reported as either interest expense on FHLB advances on the consolidated statements of income or other non-interest income on the consolidated statements of income for gains from the discontinuance of cash flow hedge accounting for certain interest rate swaps. During the three and nine months ended September 30, 2018, reclassification amounts of $303 thousand ($224 thousand net of taxes) and $175 thousand ($129 thousand net of taxes) were reported as interest expense on FHLB advances on the consolidated statements of income. During the three and nine months ended September 30, 2018, reclassification amounts of $2.8 million ($2.1 million net of taxes), respectively, were reported as other non-interest income on the consolidated statements of income from the discontinuance of cash flow hedge accounting for certain interest rate swaps. (2) Amounts reclassified from accumulated other comprehensive income (loss) on January 1, 2018 as a result of the adoption of ASU 2018-02 and ASU 2016-01 resulted in a decrease in accumulated other comprehensive income of $1.3 million and a corresponding increase in retained earnings for the same amount. See NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for more information.
(1) Reclassification amounts for available-for-sale debt securities are reported as gain on sale of investment securities on the consolidated statements of income. During the three and nine months ended September 30, 2017, reclassification amounts of $5.3 million ($3.3 million net of taxes) and $8.5 million ($5.2 million net of taxes), respectively, were reported as gain on sale of investment securities on the consolidated statements of income. Reclassification amounts for cash flow hedges are reported as interest expense on FHLB advances on the consolidated statements of income. During the three and nine months ended September 30, 2017, reclassification amounts of $572 thousand ($349 thousand net of taxes) and $2.2 million ($1.3 million net of taxes) were reported as interest expense on FHLB advances on the consolidated statements of income. |
Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | NVESTMENT SECURITIES The amortized cost and approximate fair value of investment securities as of September 30, 2018 and December 31, 2017 are summarized in the tables below:
(1) Includes equity securities issued by a foreign entity that are being measured at fair value with changes in fair value recognized directly in earnings effective January 1, 2018 as a result of adopting ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (see NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for additional information related to the adoption of this new standard).
The following table presents proceeds from the sale of investment securities and gross gains and gross losses realized on those sales for the three and nine month periods ended September 30, 2018 and 2017:
These (losses)/gains were determined using the specific identification method and were reported as (loss) gain on sale of investment securities included in non-interest income on the consolidated statements of income. The following table shows debt securities by stated maturity. Debt securities backed by mortgages 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:
Gross unrealized losses and fair value of Customers' available-for-sale debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017 were as follows:
At September 30, 2018, there were twenty-eight available-for-sale debt securities in the less-than-twelve-month category and no available-for-sale debt securities in the twelve-month-or-more category. The unrealized losses on the mortgage-backed securities are guaranteed by government-sponsored entities and primarily relate to changes in market interest rates. The unrealized losses on the corporate notes relate to securities with no company specific concentration. The unrealized losses were due to an upward shift in interest rates that resulted in a negative impact on the respective note's fair value. All amounts related to the mortgage-backed securities and the corporate notes are expected to be recovered when market prices recover or at maturity. Customers does not intend to sell these securities and it is not more likely than not that Customers will be required to sell the securities before recovery of the amortized cost basis. During the three and nine month periods ended September 30, 2017, Customers recorded other-than-temporary impairment losses of $8.3 million and $12.9 million, respectively, related to its equity holdings in Religare Enterprises Ltd. ("Religare") for the full amount of the decline in fair value from the cost basis established at December 31, 2016 through September 30, 2017 because Customers no longer had the intent to hold these securities until a recovery in fair value. At December 31, 2017, the fair value of the Religare equity securities was $3.4 million, which resulted in an unrealized gain of $1.0 million being recognized in accumulated other comprehensive income with no adjustment for deferred taxes as Customers currently does not have a tax strategy in place capable of generating sufficient capital gains to utilize any capital losses resulting from the Religare investment. As described in NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION, the adoption of ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, on January 1, 2018 resulted in a cumulative effect adjustment to Customers' consolidated balance sheet with a $1.0 million reduction in accumulated other comprehensive income and a corresponding increase in retained earnings related to the December 31, 2017 unrealized gain on the Religare equity securities. In accordance with the new accounting guidance, changes in the fair value of the Religare equity securities since adoption are recorded directly in earnings, which resulted in an unrealized loss of $1.2 million and $1.5 million being recognized in other non-interest income in the accompanying consolidated statements of income for the three and nine months ended September 30, 2018, respectively. At September 30, 2018 and December 31, 2017, Customers Bank had pledged investment securities aggregating $187.1 million and $16.9 million in fair value, respectively, as collateral against its borrowings primarily with the FHLB and an unused line of credit with another financial institution. These counterparties do not have the ability to sell or repledge these securities. |
Loans Held for Sale |
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Receivables Held-for-sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Sale | LOANS HELD FOR SALE - As Restated The composition of loans held for sale as of September 30, 2018 and December 31, 2017 was as follows:
Effective March 31, 2018, Customers Bank transferred $129.7 million of multi-family loans from loans held for sale to loan receivable (held for investment) because the Bank no longer has the intent to sell these loans. Customers Bank transferred these loans at their carrying value, which approximated their fair value at the time of transfer. On June 30, 2017, Customers Bank transferred $150.6 million of multi-family loans from held for investment to loans held for sale. Customers Bank transferred these loans at their carrying value, which was lower than the estimated fair value at the time of transfer. At December 31, 2017, the carrying value of these loans approximated their fair value. Accordingly, a lower of cost or fair value adjustment was not recorded as of December 31, 2017. See NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for more information on the reclassification of loans previously reported as held for sale. |
Loans Receivable and Allowance for Loan Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable and Allowance for Loan Losses | OANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES - As Restated The following table presents loans receivable as of September 30, 2018 and December 31, 2017.
Customers' total loans receivable portfolio includes loans receivable which are reported at fair value based on an election made to account for these loans at fair value and loans receivable which are predominately reported at their outstanding unpaid principal balance, net of charge-offs and deferred costs and fees and unamortized premiums and discounts and are evaluated for impairment. Loans receivable mortgage warehouse, at fair value: Mortgage warehouse loans consist of commercial loans to mortgage companies. These mortgage warehouse 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 warehouse loans receivable 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 warehouse 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 of 25 days from purchase to sale. The primary goal of these lending transactions is to provide liquidity to mortgage companies. At September 30, 2018 and December 31, 2017, all of Customers' commercial mortgage warehouse loans were current in terms of payment. Because these loans are reported at their fair value, they do not have an allowance for loan loss and are therefore excluded from allowance for loan losses related disclosures. Loans receivable: The following tables summarize loans receivable by loan type and performance status as of September 30, 2018 and December 31, 2017:
As of September 30, 2018 and December 31, 2017, the Bank had $0.4 million and $0.3 million, respectively, of residential real estate held in other real estate owned. As of September 30, 2018 and December 31, 2017, the Bank had initiated foreclosure proceedings on $2.1 million and $1.6 million, respectively, in loans secured by residential real estate. Allowance for loan losses The changes in the allowance for loan losses for the three and nine months ended September 30, 2018 and 2017, and the loans and allowance for loan losses by loan type based on impairment-evaluation method as of September 30, 2018 and December 31, 2017 are presented in the tables below.
Certain manufactured housing loans were purchased in August 2010. A portion of the purchase price may be used to reimburse the Bank under the specified terms in the purchase agreement for defaults of the underlying borrower and other specified items. At September 30, 2018 and December 31, 2017, funds available for reimbursement, if necessary, were $0.5 million and $0.6 million, respectively. Each quarter, these funds are evaluated to determine if they would be sufficient to absorb the probable incurred losses within the manufactured housing portfolio. Impaired Loans - Individually Evaluated for Impairment The following tables present the recorded investment (net of charge-offs), unpaid principal balance, and related allowance by loan type for impaired loans that were individually evaluated for impairment as of September 30, 2018 and December 31, 2017 and the average recorded investment and interest income recognized for the three and nine months ended September 30, 2018 and 2017. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.
Troubled Debt Restructurings At September 30, 2018 and December 31, 2017, there were $19.4 million and $20.4 million, respectively, in loans reported as troubled debt restructurings (“TDRs”). TDRs are reported as impaired loans in the calendar year of their restructuring and are evaluated to determine whether they should be placed on non-accrual status. In subsequent years, a TDR may be returned to accrual status if it satisfies a minimum performance requirement of six months, however, it will remain classified as impaired. Generally, the Bank requires sustained performance for nine months before returning a TDR to accrual status. Modifications of purchased-credit-impaired loans that are accounted for within loan pools in accordance with the accounting standards for purchased-credit-impaired loans do not result in the removal of these loans from the pool even if the modifications would otherwise be considered a TDR. Accordingly, as each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, modifications of loans within such pools are not considered TDRs. The following table presents total TDRs based on loan type and accrual status at September 30, 2018 and December 31, 2017. Nonaccrual TDRs are included in the reported amount of total non-accrual loans.
The following table presents loans modified in a troubled debt restructuring by type of concession for the three and nine months ended September 30, 2018 and 2017. There were no modifications that involved forgiveness of debt for the three and nine months ended September 30, 2018 and 2017.
The following table provides, by loan type, the number of loans modified in troubled debt restructurings, and the related recorded investment, during the three and nine months ended September 30, 2018 and 2017.
As of September 30, 2018 and December 31, 2017, except for one commercial and industrial loan with an outstanding commitment of $1.5 million and $2.1 million, respectively, there were no other commitments to lend additional funds to debtors whose loans have been modified in TDRs. As of September 30, 2018, there were no loans modified in a TDR within the past twelve months that defaulted on payments. As of September 30, 2017, ten manufactured housing loans totaling $0.5 million, that were modified in TDRs within the past twelve months, defaulted on payments. Loans modified in troubled debt restructurings are evaluated for impairment. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses. There was no allowance recorded as a result of TDR modifications during the three and nine months ended September 30, 2018. There was no allowance recorded as a result of TDR modifications during the three months ended September 30, 2017. For the nine months ended September 30, 2017, there was one allowance recorded resulting from TDR modifications, totaling $1 thousand for one manufactured housing loan. Purchased-Credit-Impaired Loans The changes in accretable yield related to purchased-credit-impaired loans for the three and nine months ended September 30, 2018 and 2017 were as follows:
Credit Quality Indicators The allowance for loan losses represents management's estimate of probable losses in Customers loans receivable portfolio, excluding mortgage warehouse loans carried under the fair value option. Multi-family, commercial and industrial, 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 other consumer loans are evaluated based on the payment activity of the loan. To facilitate the monitoring of credit quality within the multi-family, commercial and industrial, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loan portfolios, and for purposes of analyzing historical loss rates used in the determination of the allowance for loan losses for the respective loan portfolios, 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/satisfactory 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. The risk rating grades are defined as follows: “1” – Pass/Excellent Loans 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 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 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 rated 3 are those loans 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 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 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. “5” – Satisfactory Loans 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 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 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 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 where significant actual, not potential, weaknesses or problems are clearly evident are graded in the category below. “8” – Substandard Loans are rated 8 when the loans are inadequately protected by the current sound worth and payment capacity of the obligor or of the collateral pledged, if any. Loans 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 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, 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 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. The following tables present the credit ratings of loans receivable as of September 30, 2018 and December 31, 2017.
Loan Purchases and Sales During third quarter 2018, Customers purchased $72.7 million of mortgage and consumer loans from third party financial institutions. The purchase price was 95.3% of loans outstanding. During third quarter 2018, Customers sold $12.1 million of Small Business Administration (SBA) loans resulting in a gain on sale of $1.1 million. There were no loan purchases during third quarter 2017. In third quarter 2017, Customers sold $11.0 million of SBA loans resulting in a gain on sale of $1.1 million. In second quarter 2018, Customers purchased $277.4 million of thirty-year fixed-rate residential mortgage loans from a third party financial institution. The purchase price was 100.4% of loans outstanding. During second quarter 2018, Customers sold $11.7 million of SBA loans resulting in a gain on sale of $0.9 million. In second quarter 2017, Customers purchased $90 million of thirty-year fixed-rate residential mortgage loans from a third party financial institution. The purchase price was 101.0% of loans outstanding. In second quarter 2017, Customers sold $7.0 million of SBA loans resulting in a gain on sale of $0.6 million. Customers did not purchase any loans during first quarter 2018. During first quarter 2018, Customers sold $15.0 million of SBA loans resulting in a gain on sale of $1.4 million. In first quarter 2017, Customers purchased $174.2 million of thirty-year fixed-rate residential mortgage loans from a third party financial institution. The purchase price was 98.5% of loans outstanding. In first quarter 2017, Customers sold $94.9 million of multi-family loans for $95.4 million resulting in a gain on sale of $0.5 million and $8.7 million of SBA loans resulting in a gain on sale of $0.8 million. None of the purchases and sales during the three and nine months ended September 30, 2018 and 2017 materially affected the credit profile of Customers’ loan portfolio. Loans Pledged as Collateral Customers has pledged eligible real estate loans as collateral for potential borrowings from the Federal Home Loan Bank of Pittsburgh ("FHLB") and Federal Reserve Bank of Philadelphia ("FRB") in the amount of $5.5 billion at both September 30, 2018 and December 31, 2017. |
Regulatory Capital |
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Regulatory Capital | REGULATORY CAPITAL The Bank and the Bancorp are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on Customers' financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank and the Bancorp must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items, as calculated under the regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies. Quantitative measures established by regulation to ensure capital adequacy require the Bank and the Bancorp to maintain minimum amounts and ratios (set forth in the following table) of common equity Tier 1, Tier 1, and total capital to risk-weighted assets, and Tier 1 capital to average assets (as defined in the regulations). At September 30, 2018 and December 31, 2017, the Bank and the Bancorp satisfied all capital requirements to which they were subject. Generally, to comply with the regulatory definition of adequately capitalized, or well capitalized, respectively, or to comply with the Basel III capital requirements, an institution must at least maintain the common equity Tier 1, Tier 1 and total risk-based capital ratios and the Tier 1 leverage ratio in excess of the related minimum ratios as set forth in the following table:
The Basel III risk-based capital rules adopted effective January 1, 2015 require that banks and holding companies maintain a "capital conservation buffer" of 250 basis points in excess of the "minimum capital ratio" or certain elective distributions would be limited. The minimum capital ratio is equal to the prompt corrective action adequately capitalized threshold ratio. The capital conservation buffer is being phased in over four years beginning on January 1, 2016, with a maximum buffer of 0.625% of risk weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter. Effective January 1, 2018, the capital level required to avoid limitation on elective distributions applicable to the Bancorp and the Bank were as follows: (i) a common equity Tier 1 risk-based capital ratio of 6.375%; (ii) a Tier 1 risk-based capital ratio of 7.875%; and (iii) a Total risk-based capital ratio of 9.875%. Failure to maintain the required capital conservation buffer will result in limitations on capital distributions and on discretionary bonuses to executive officers. |
Disclosures About Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosures About Fair Value of Financial Instruments | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS - As Restated Customers uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. ASC Topic 825, Financial Instruments, requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For Customers, as for most financial institutions, the majority of its assets and liabilities are considered to be financial instruments. Many of these financial instruments lack an available trading market as characterized by a willing buyer and a willing seller engaging in an exchange transaction. For fair value disclosure purposes, Customers utilized certain fair value measurement criteria under ASC Topic 820, Fair Value Measurements and Disclosures, as explained below. In accordance with ASC 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for Customers' various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, focusing on an exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements. Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require adjustments to inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following methods and assumptions were used to estimate the fair values of Customers' financial instruments as of September 30, 2018 and December 31, 2017: Financial Instruments Recorded at Fair Value on a Recurring Basis Investment securities: The fair values of equity securities and available-for-sale debt securities are determined by obtaining quoted market prices on nationally recognized and foreign securities exchanges (Level 1), matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices, or externally developed models that use unobservable inputs due to limited or no market activity of the instrument (Level 3). These assets are classified as Level 1, 2 or 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The carrying amount of investments in FHLB, Federal Reserve Bank, and other restricted stock approximates fair value, and considers the limited marketability of such securities. These assets are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements. Loans held for sale - Consumer residential mortgage loans (fair value option): The Bank generally estimates the fair values of residential mortgage loans held for sale based on commitments on hand from investors within the secondary market for loans with similar characteristics. These assets are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements. Loans receivable - Commercial mortgage warehouse loans (fair value option): The fair value of mortgage warehouse loans is the amount of cash initially advanced to fund the mortgage, plus accrued interest and fees, as specified in the respective agreements. The loan is used by mortgage companies as short-term bridge financing between the funding of mortgage loans and the finalization of the sale of the loans to an investor. Changes in fair value are not expected to be recognized because at inception of the transaction the underlying loans have already been sold to an approved investor. Additionally, the interest rate is variable, and the transaction is short-term, with an average life of 25 days from purchase to sale. These assets are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements. Derivatives (Assets and Liabilities): The fair values of interest rate swaps and credit derivatives are determined using models that incorporate readily observable market data into a market standard methodology. This methodology nets the discounted future cash receipts and the discounted expected cash payments. The discounted variable cash receipts and payments are based on expectations of future interest rates derived from observable market interest rate curves. In addition, fair value is adjusted for the effect of nonperformance risk by incorporating credit valuation adjustments for the Bank and its counterparties. These assets and liabilities are classified as Level 2 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair values of the residential mortgage loan commitments are derived from the estimated fair values that can be generated when the underlying mortgage loan is sold in the secondary market. The Bank generally uses commitments on hand from third- party investors to estimate an exit price and adjusts for the probability of the commitment being exercised based on the Bank’s internal experience (i.e., pull-through rate). These assets and liabilities are classified as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. Derivative assets and liabilities are presented in "Other assets" and "Accrued interest payable and other liabilities" on the consolidated balance sheet. The following information should not be interpreted as an estimate of Customers' fair value in its entirety because fair value calculations are only provided for a limited portion of Customers' assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making these estimates, comparisons between Customer’s disclosures and those of other companies may not be meaningful. The estimated fair values of Customers' financial instruments at September 30, 2018 and December 31, 2017 were as follows.
For financial assets and liabilities measured at fair value on a recurring and nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2018 and December 31, 2017 were as follows:
The changes in Level 3 assets measured at fair value on a recurring basis for the three and nine months ended September 30, 2018 and 2017 are summarized in the tables below. Additional information about residential mortgage loan commitments can be found in NOTE 10 - DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES.
There were no transfers between levels during the three and nine months ended September 30, 2018 and 2017. The following table summarizes financial assets and financial liabilities measured at fair value as of September 30, 2018 and December 31, 2017 on a recurring and nonrecurring basis for which Customers utilized Level 3 inputs to measure fair value. The unobservable Level 3 inputs noted below contain a level of uncertainty that may differ from what is realized in an immediate settlement of the assets. Therefore, Customers may realize a value higher or lower than the current estimated fair value of the assets.
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Risk Management Objectives of Using Derivatives Customers is exposed to certain risks arising from both its business operations and economic conditions. Customers manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and durations of its assets and liabilities. Specifically, Customers enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Customers' derivative financial instruments are used to manage differences in the amount, timing, and duration of Customers' known or expected cash receipts and its known or expected cash payments principally related to certain borrowings. Customers also has interest-rate derivatives resulting from a service provided to certain qualifying customers, and therefore, they are not used to manage Customers' interest-rate risk in assets or liabilities. Customers manages a matched book with respect to its derivative instruments used in this customer service in order to minimize its net risk exposure resulting from such transactions. Cash Flow Hedges of Interest Rate Risk Customers' objectives in using interest-rate derivatives are to add stability to interest expense and to manage exposure to interest-rate movements. To accomplish this objective, Customers primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for Customers making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. To date, such derivatives were used to hedge the variable cash flows associated with the forecasted issuances of debt. Customers discontinues cash flow hedge accounting if it is probable the forecasted hedged transactions will not occur in the initially identified time period. At such time, the associated gains and losses deferred in accumulated other comprehensive income are reclassified immediately into earnings and any subsequent changes in the fair value of such derivatives are recognized directly in earnings. During the three months ended September 30, 2018, Customers recognized gains of $2.8 million in other non-interest income on discontinued cash flow hedge accounting for three interest rate swaps with notional amounts totaling $500 million. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on Customers' variable-rate debt. Customers expects to reclassify $1.0 million from accumulated other comprehensive income as a reduction to interest expense during the next 12 months. Customers is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of 33 months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments). At September 30, 2018, Customers had eight outstanding interest rate derivatives with notional amounts totaling $835.0 million that were designated as cash flow hedges of interest rate risk. At December 31, 2017, Customers had nine outstanding interest rate derivatives with notional amounts totaling $550.0 million that were designated as cash flow hedges of interest rate risk. The outstanding cash flow hedges at September 30, 2018 expire between October 2018 and July 2021. Derivatives Not Designated as Hedging Instruments Customers executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies (typically the loan customers will swap a floating-rate loan for a fixed-rate loan). The customer interest rate swaps are simultaneously offset by interest rate swaps that Customers executes with a third party in order to minimize interest rate risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting third-party market swaps are recognized directly in earnings. At September 30, 2018, Customers had 98 interest rate swaps with an aggregate notional amount of $956.8 million related to this program. At December 31, 2017, Customers had 76 interest rate swaps with an aggregate notional amount of $800.5 million related to this program. Customers enters into residential mortgage loan commitments in connection with its consumer mortgage banking activities to fund mortgage loans at specified rates and times in the future. These commitments are short-term in nature and generally expire in 30 to 60 days. The residential mortgage loan commitments that relate to the origination of mortgage loans that will be held for sale are considered derivative instruments under the applicable accounting guidance and are reported at fair value, with changes in fair value recorded directly in earnings. At September 30, 2018 and December 31, 2017, Customers had an outstanding notional balance of residential mortgage loan commitments of $6.1 million and $2.7 million, respectively. Customers has also purchased and sold credit derivatives to either hedge or participate in the performance risk associated with some of its counterparties. These derivatives are not designated as hedging instruments and are reported at fair value, with changes in fair value recorded directly in earnings. At September 30, 2018 and December 31, 2017, Customers had outstanding notional balances of credit derivatives of $95.5 million and $80.5 million, respectively. Fair Value of Derivative Instruments on the Balance Sheet The following tables present the fair value of Customers' derivative financial instruments as well as their presentation on the balance sheet as of September 30, 2018 and December 31, 2017.
Effect of Derivative Instruments on Comprehensive Income The following tables present the effect of Customers' derivative financial instruments on comprehensive income for the three and nine months ended September 30, 2018 and 2017.
(1) Amounts presented are net of taxes. See NOTE 4 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) for total effect on other comprehensive income (loss) from derivatives designated as cash flow hedges for the periods presented. (2) Includes income recognized from discontinued cash flow hedges. Credit-risk-related Contingent Features By entering into derivative contracts, Customers is exposed to credit risk. The credit risk associated with derivatives executed with customers is the same as that involved in extending the related loans and is subject to the same standard credit policies. To mitigate the credit-risk exposure to major derivative dealer counterparties, Customers only enters into agreements with those counterparties that maintain credit ratings of high quality. Agreements with major derivative dealer counterparties contain provisions whereby default on any of Customers' indebtedness would be considered a default on its derivative obligations. Customers also has entered into agreements that contain provisions under which the counterparty could require Customers to settle its obligations if Customers fails to maintain its status as a well/adequately capitalized institution. As of September 30, 2018, all derivatives with major derivative dealer counterparties were in a net asset position. Disclosures about Offsetting Assets and Liabilities The following tables present derivative instruments that are subject to enforceable master netting arrangements. Customers' interest rate swaps with institutional counterparties are subject to master netting arrangements and are included in the table below. Interest rate swaps with commercial banking customers and residential mortgage loan commitments are not subject to master netting arrangements and are excluded from the table below. Customers has not made a policy election to offset its derivative positions. Offsetting of Financial Assets and Derivative Assets At September 30, 2018
Offsetting of Financial Liabilities and Derivative Liabilities At September 30, 2018
Offsetting of Financial Assets and Derivative Assets At December 31, 2017
Offsetting of Financial Liabilities and Derivative Liabilities At December 31, 2017
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Business Segments | BUSINESS SEGMENTS Customers' segment financial reporting reflects the manner in which its chief operating decision makers allocate resources and assess performance. Management has determined that Customers' operations consist of two reportable segments - Community Business Banking and BankMobile. Each segment generates revenues, manages risk, and offers distinct products and services to targeted customers through different delivery channels. The strategy, marketing, and analysis of these segments vary considerably. The Community Business Banking segment is delivered predominately to commercial customers in Southeastern Pennsylvania, New York, New Jersey, Massachusetts, Rhode Island, New Hampshire, Washington D.C., and Illinois through a single-point-of-contact business model and provides liquidity to residential mortgage originators nationwide through commercial loans to mortgage companies. Lending and deposit gathering activities are focused primarily on privately held businesses, high-net-worth families, selected commercial real estate lending, and commercial mortgage companies. Revenues are generated primarily through net interest income (the difference between interest earned on loans, investments, and other interest earning assets and interest paid on deposits and other borrowed funds) and other non-interest income, such as mortgage warehouse transactional fees and bank owned life insurance. The BankMobile segment provides state-of-the-art high-tech digital banking and disbursement services to consumers, students, and the "under banked" nationwide. BankMobile is a full-service banking platform that is accessible to customers anywhere and anytime through the customer's smartphone or other web-enabled device. Revenues are currently being generated primarily through interchange and card revenue, deposit and wire transfer fees and university fees. The majority of revenue and expenses for BankMobile are related to the segment's operation of the ongoing business acquired through the Disbursement business acquisition. The following tables present the operating results for Customers' reportable business segments for the three and nine month periods ended September 30, 2018 and 2017. The segment financial results include directly attributable revenues and expenses. Corporate overhead costs were assigned to the Community Business Banking segment as those expenses were expected to continue following the planned spin-off of BankMobile. Similarly, the preferred stock dividends have been allocated in their entirety to the Community Business Banking segment. The tax benefit assigned to BankMobile was based on an estimated effective tax rate of 24.57% for 2018 and 37.25% for 2017, respectively. Please refer to NOTE 13 - SUBSEQUENT EVENTS for more information on the spin-off of BankMobile.
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Non-Interest Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Interest Revenues | NON-INTEREST REVENUES As provided in NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION, Customers' adoption of ASU 2014-09, Revenue from Contracts with Customers (ASC 606), on January 1, 2018, did not have a significant impact to Customers' consolidated financial statements and, as such, a cumulative effect adjustment to beginning retained earnings was not necessary. Customers determined that its debit and prepaid card interchange income, previously reported on a gross basis for periods prior to adoption, will need to be presented on a net basis under this ASU. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the previous accounting guidance under ASC 605. Debit and prepaid card interchange expense for the three months ended September 30, 2018 and 2017 amounted to $1.2 million and $1.2 million, respectively. Debit and prepaid card interchange expense for the nine months ended September 30, 2018 and 2017 amounted to $3.9 million and $4.4 million, respectively. In addition, as part of the enhanced disclosure requirements under the new guidance, Customers is presenting disaggregated revenue by business segment, nature of the revenue stream, and the pattern or timing of revenue recognition. The accounting treatment for interest-related revenues is covered under ASC 310 and is out of the scope of ASC 606. The following tables present Customers' non-interest revenues affected by ASC 606 by business segment for the three and nine months ended September 30, 2018 and 2017:
The following is a discussion of revenues within the scope of ASC 606: Card revenue Card revenue primarily relates to debit and prepaid card fees earned from interchange and ATM fees. Interchange fees are earned whenever Customers' issued debit and prepaid cards are processed through card payment networks. Interchange fees are recognized concurrent with the processing of the debit or prepaid card transaction. Deposit fees Deposit fees relate to service charges on deposit accounts for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as stop-payment charges, wire transfer fees, cashier and money order fees are recognized at the time the transaction is executed. Account maintenance fees, which relate primarily to monthly maintenance and account analysis fees, are earned on a monthly basis representing the period over which Customers satisfies its performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposit accounts are withdrawn from the depositor's account balance. The revenues recognized at a point in time primarily consist of contracts with no specified terms, but which may be terminated at any time by the customer without penalty. Due to the transactional nature and indefinite term of these agreements, there were no related contract balances that were recorded for these revenue streams on Customers' consolidated balance sheets as of September 30, 2018 and December 31, 2017. University fees University fees represent revenues from higher education institutions and are generated from fees charged for the services provided. For higher education institution clients, Customers, through BankMobile, facilitates the distribution of financial aid and other refunds to students, while simultaneously enhancing the ability of the higher education institutions to comply with the federal regulations applicable to financial aid transactions. For these services, higher education institution clients are charged an annual subscription fee and/or per-transaction fee (e.g., new card or card replacement fees) for certain transactions. The annual subscription fee is recognized ratably over the period of service and the transaction fees are recognized when the transaction is completed. BankMobile also enters into long-term (generally three- or five-year initial term) contracts with higher education institutions to provide these refund management disbursement services. Deferred revenue consists of amounts billed to or received from clients prior to the performance of services. The deferred revenues are earned over the service period on a straight-line basis. As of September 30, 2018 and December 31, 2017, Customers recorded deferred revenue of $2.8 million and $2.0 million, respectively, related to these university subscription contracts. At September 30, 2018 and December 31, 2017, Customers had accounts receivable of $1.5 million and $1.1 million, respectively, related to the university fee arrangements. |
Subsequent Event |
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Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTS On October 18, 2018, the Amended and Restated Purchase and Assumption Agreement and Plan of Merger (the "Agreement"), dated November 17, 2017 by and among Customers Bancorp, its subsidiary, Customers Bank, and Customers Bank's subsidiary, BankMobile Technologies, Inc. ("BMT") and Flagship Community Bank ("Flagship"), was terminated. In connection with the termination of the Agreement, Customers Bancorp recognized merger and acquisition related expenses of $2.7 million during third quarter 2018 for amounts that, under the terms of the Agreement, would have been reimbursed by Flagship only upon completion of the spin-off and merger. |
Significant Accounting Policies and Basis of Presentation (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The interim unaudited consolidated financial statements of Customers have been prepared in conformity with U.S. GAAP and pursuant to the rules and regulations of the SEC. These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Customers for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted from these interim unaudited consolidated financial statements as permitted by SEC rules and regulations. On November 13, 2018, Customers Bancorp filed with the SEC a report on Form 8-K advising that its 2017, 2016, and 2015 audited consolidated financial statements and its interim unaudited consolidated financial statements as of and for the three and six month periods ended March 31, 2018 and 2017 and June 30, 2018 and 2017, respectively, should no longer be relied upon because of incorrect classifications of the cash flows used in and provided by its commercial mortgage warehouse lending activities between operating and investing activities on the consolidated statements of cash flows because the related loan balances were incorrectly classified as held for sale instead of held for investment (i.e., loans receivable) on its consolidated balance sheets. These misclassifications have no impact on total cash balances, total loans, total assets, the allowance for loan losses, total capital, regulatory capital ratios, net interest income, net interest margin, net income to shareholders, basic or diluted earnings per share, return on average assets, return on average equity, the efficiency ratio, asset quality ratios or other key performance metrics, including non-GAAP performance metrics, that Customers routinely discusses with analysts and investors. The December 31, 2017 consolidated balance sheet presented in this report has been derived from Customers' audited 2017 consolidated financial statements, restated to correct the classification of the mortgage warehouse loans as held for investment instead of held for sale. Because of a fair value option election that Customers made on July 1, 2012 that continues today, these loans are, and will continue to be, reported at their fair value and accordingly do not have an allowance for loan losses. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2017 consolidated financial statements of Customers included in its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 23, 2018 (the "2017 Form 10-K") except to the extent they are affected by the restatement. That Form 10-K describes Customers Bancorp’s significant accounting policies, which include its policies on Principles of Consolidation; Cash and Cash Equivalents and Statements of Cash Flows; Restrictions on Cash and Amounts due from Banks; Business Combinations; Investment Securities; Loan Accounting Framework; Loans Held for Sale and Loans at Fair Value; Loans Receivable; Purchased Loans; Allowance for Loan Losses; Goodwill and Other Intangible Assets; Investments in FHLB, Federal Reserve Bank, and Other Restricted Stock; Other Real Estate Owned; Bank-Owned Life Insurance; Bank Premises and Equipment; Operating Leases; Treasury Stock; Income Taxes; Share-Based Compensation; Transfer of Financial Assets; Business Segments; Derivative Instruments and Hedging; Comprehensive Income (Loss); Earnings per Share; and Loss Contingencies. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year or any other period. |
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Reclassifications | There have been no material changes to Customers' significant accounting policies as disclosed in Customers' 2017 Form 10-K, except for the accounting policies related to Cash and Cash Equivalents and Statements of Cash Flows and Loans Held for Sale and Loans at Fair Value as described below. Restatement of Previously Issued Financial Statements In November 2018, Customers determined that the cash flow activities associated with its commercial mortgage warehouse lending transactions should have been reported as investing activities in its consolidated statements of cash flows because the related loan balances should have been classified as held for investment (i.e., loans receivable). Effective with the filing of this quarterly report on Form 10-Q, Customers changed its accounting policies such that commercial mortgage warehouse loans will be classified as held for investment and presented them as "Loans receivable, mortgage warehouse, at fair value" on its consolidated balance sheets. The cash flow activities associated with these commercial mortgage warehouse lending activities will be reported as investing activities in the consolidated statements of cash flows. The following tables set forth the effects of the correction on the consolidated balance sheet as of December 31, 2017 and the consolidated statements of cash flows for the nine months ended September 30, 2017.
In addition, the December 31, 2017 comparative balances disclosed in NOTE 6 - LOANS HELD FOR SALE, NOTE 7 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES, and NOTE 9 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, and the comparative balances reported throughout Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this quarterly report on Form 10-Q, have been restated to present the corrected classification. |
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Recently Issued Accounting Standards | Presented below are recently issued accounting standards that Customers has adopted as well as those that the Financial Accounting Standards Board (“FASB”) has issued but are not yet effective. Recently Issued Accounting Standards Accounting Standards Adopted in 2018
Accounting Standards Adopted in 2018 (continued)
Accounting Standards Adopted in 2018 (continued)
Accounting Standards Adopted in 2018 (continued)
Accounting Standards Issued But Not Yet Adopted
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Fair Value Measurement | Customers uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. ASC Topic 825, Financial Instruments, requires disclosure of the estimated fair value of an entity’s assets and liabilities considered to be financial instruments. For Customers, as for most financial institutions, the majority of its assets and liabilities are considered to be financial instruments. Many of these financial instruments lack an available trading market as characterized by a willing buyer and a willing seller engaging in an exchange transaction. For fair value disclosure purposes, Customers utilized certain fair value measurement criteria under ASC Topic 820, Fair Value Measurements and Disclosures, as explained below. In accordance with ASC 820, the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for Customers' various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The fair value guidance provides a consistent definition of fair value, focusing on an exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The fair value guidance also establishes a fair value hierarchy and describes the following three levels used to classify fair value measurements. Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Prices or valuation techniques that require adjustments to inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. |
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Derivatives | Risk Management Objectives of Using Derivatives Customers is exposed to certain risks arising from both its business operations and economic conditions. Customers manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and durations of its assets and liabilities. Specifically, Customers enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Customers' derivative financial instruments are used to manage differences in the amount, timing, and duration of Customers' known or expected cash receipts and its known or expected cash payments principally related to certain borrowings. Customers also has interest-rate derivatives resulting from a service provided to certain qualifying customers, and therefore, they are not used to manage Customers' interest-rate risk in assets or liabilities. Customers manages a matched book with respect to its derivative instruments used in this customer service in order to minimize its net risk exposure resulting from such transactions. Cash Flow Hedges of Interest Rate Risk Customers' objectives in using interest-rate derivatives are to add stability to interest expense and to manage exposure to interest-rate movements. To accomplish this objective, Customers primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for Customers making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. To date, such derivatives were used to hedge the variable cash flows associated with the forecasted issuances of debt. |
Significant Accounting Policies and Basis of Presentation (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | The following tables set forth the effects of the correction on the consolidated balance sheet as of December 31, 2017 and the consolidated statements of cash flows for the nine months ended September 30, 2017.
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Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Earnings Per Share | The following are the components and results of Customers' earnings per common share calculations for the periods presented.
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Anti-dilutive Securities Excluded from Computation of Earnings Per Share | The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because either the performance conditions for certain of the share-based compensation awards have not been met or to do so would have been anti-dilutive for the periods presented.
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Changes in Accumulated Other Comprehensive Income (Loss) By Component (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Income (loss) | The following tables present the changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2018 and 2017. All amounts are presented net of tax. Amounts in parentheses indicate reductions to accumulated other comprehensive income.
(1) Reclassification amounts for available-for-sale debt securities are reported as loss on sale of investment securities on the consolidated statements of income. During the three and nine months ended September 30, 2018, reclassification amounts of $18.7 million ($13.8 million net of taxes), respectively, were reported as loss on sale of investment securities on the consolidated statements of income. Reclassification amounts for cash flow hedges are reported as either interest expense on FHLB advances on the consolidated statements of income or other non-interest income on the consolidated statements of income for gains from the discontinuance of cash flow hedge accounting for certain interest rate swaps. During the three and nine months ended September 30, 2018, reclassification amounts of $303 thousand ($224 thousand net of taxes) and $175 thousand ($129 thousand net of taxes) were reported as interest expense on FHLB advances on the consolidated statements of income. During the three and nine months ended September 30, 2018, reclassification amounts of $2.8 million ($2.1 million net of taxes), respectively, were reported as other non-interest income on the consolidated statements of income from the discontinuance of cash flow hedge accounting for certain interest rate swaps. (2) Amounts reclassified from accumulated other comprehensive income (loss) on January 1, 2018 as a result of the adoption of ASU 2018-02 and ASU 2016-01 resulted in a decrease in accumulated other comprehensive income of $1.3 million and a corresponding increase in retained earnings for the same amount. See NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for more information.
(1) Reclassification amounts for available-for-sale debt securities are reported as gain on sale of investment securities on the consolidated statements of income. During the three and nine months ended September 30, 2017, reclassification amounts of $5.3 million ($3.3 million net of taxes) and $8.5 million ($5.2 million net of taxes), respectively, were reported as gain on sale of investment securities on the consolidated statements of income. Reclassification amounts for cash flow hedges are reported as interest expense on FHLB advances on the consolidated statements of income. During the three and nine months ended September 30, 2017, reclassification amounts of $572 thousand ($349 thousand net of taxes) and $2.2 million ($1.3 million net of taxes) were reported as interest expense on FHLB advances on the consolidated statements of income. |
Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amortized Cost and Approximate Fair Value of Investment Securities | The amortized cost and approximate fair value of investment securities as of September 30, 2018 and December 31, 2017 are summarized in the tables below:
(1) Includes equity securities issued by a foreign entity that are being measured at fair value with changes in fair value recognized directly in earnings effective January 1, 2018 as a result of adopting ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (see NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION for additional information related to the adoption of this new standard).
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Available-for-sale Securities | The following table presents proceeds from the sale of investment securities and gross gains and gross losses realized on those sales for the three and nine month periods ended September 30, 2018 and 2017:
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Summary of Available-for-Sale Debt Securities by Stated Maturity | The following table shows debt securities by stated maturity. Debt securities backed by mortgages 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:
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Gross Unrealized Losses and Fair Value, Aggregated by Investment Category | Gross unrealized losses and fair value of Customers' available-for-sale debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017 were as follows:
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Loans Held for Sale (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables Held-for-sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Loans Held for Sale | The composition of loans held for sale as of September 30, 2018 and December 31, 2017 was as follows:
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Loans Receivable and Allowance for Loan Losses (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable | The following table presents loans receivable as of September 30, 2018 and December 31, 2017.
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Loans Receivable by Loan Type and Performance Status | The following tables summarize loans receivable by loan type and performance status as of September 30, 2018 and December 31, 2017:
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Schedule of Allowance for Loan Losses | The changes in the allowance for loan losses for the three and nine months ended September 30, 2018 and 2017, and the loans and allowance for loan losses by loan type based on impairment-evaluation method as of September 30, 2018 and December 31, 2017 are presented in the tables below.
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Summary of Recorded Investment Net Charge-Offs, Unpaid Principal Balance and Related Allowance for Impaired Loans | The following tables present the recorded investment (net of charge-offs), unpaid principal balance, and related allowance by loan type for impaired loans that were individually evaluated for impairment as of September 30, 2018 and December 31, 2017 and the average recorded investment and interest income recognized for the three and nine months ended September 30, 2018 and 2017. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.
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Summary of Loans Modified in Troubled Debt Restructurings and Related Recorded Investment | The following table presents total TDRs based on loan type and accrual status at September 30, 2018 and December 31, 2017. Nonaccrual TDRs are included in the reported amount of total non-accrual loans.
The following table provides, by loan type, the number of loans modified in troubled debt restructurings, and the related recorded investment, during the three and nine months ended September 30, 2018 and 2017.
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Analysis of Loans Modified in Troubled Debt Restructuring by Type of Concession | The following table presents loans modified in a troubled debt restructuring by type of concession for the three and nine months ended September 30, 2018 and 2017. There were no modifications that involved forgiveness of debt for the three and nine months ended September 30, 2018 and 2017.
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Changes in Accretable Yield Related to Purchased-credit-impaired Loans | The changes in accretable yield related to purchased-credit-impaired loans for the three and nine months ended September 30, 2018 and 2017 were as follows:
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Credit Ratings of Covered and Non-Covered Loan Portfolio | The following tables present the credit ratings of loans receivable as of September 30, 2018 and December 31, 2017.
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Regulatory Capital (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Capital Amounts, Tier 1 Risk Based and Tier 1 Leveraged Ratios | Generally, to comply with the regulatory definition of adequately capitalized, or well capitalized, respectively, or to comply with the Basel III capital requirements, an institution must at least maintain the common equity Tier 1, Tier 1 and total risk-based capital ratios and the Tier 1 leverage ratio in excess of the related minimum ratios as set forth in the following table:
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Disclosures About Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Fair Values of Financial Instruments | The estimated fair values of Customers' financial instruments at September 30, 2018 and December 31, 2017 were as follows.
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Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis | For financial assets and liabilities measured at fair value on a recurring and nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at September 30, 2018 and December 31, 2017 were as follows:
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Statement of Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis | The changes in Level 3 assets measured at fair value on a recurring basis for the three and nine months ended September 30, 2018 and 2017 are summarized in the tables below. Additional information about residential mortgage loan commitments can be found in NOTE 10 - DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES.
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Summary of Financial Assets and Financial Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis | The following table summarizes financial assets and financial liabilities measured at fair value as of September 30, 2018 and December 31, 2017 on a recurring and nonrecurring basis for which Customers utilized Level 3 inputs to measure fair value. The unobservable Level 3 inputs noted below contain a level of uncertainty that may differ from what is realized in an immediate settlement of the assets. Therefore, Customers may realize a value higher or lower than the current estimated fair value of the assets.
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Derivative Instruments and Hedging Activities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Derivative Financial Instruments | The following tables present the fair value of Customers' derivative financial instruments as well as their presentation on the balance sheet as of September 30, 2018 and December 31, 2017.
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Effect of Derivative Financial Instruments on Comprehensive Income | The following tables present the effect of Customers' derivative financial instruments on comprehensive income for the three and nine months ended September 30, 2018 and 2017.
(1) Amounts presented are net of taxes. See NOTE 4 - CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) for total effect on other comprehensive income (loss) from derivatives designated as cash flow hedges for the periods presented. |
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Summary of Offsetting of Financial Assets and Derivative Assets | Offsetting of Financial Assets and Derivative Assets At December 31, 2017
Offsetting of Financial Assets and Derivative Assets At September 30, 2018
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Summary of Offsetting of Financial Liabilities and Derivative Liabilities | Offsetting of Financial Liabilities and Derivative Liabilities At December 31, 2017
Offsetting of Financial Liabilities and Derivative Liabilities At September 30, 2018
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Business Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables present the operating results for Customers' reportable business segments for the three and nine month periods ended September 30, 2018 and 2017. The segment financial results include directly attributable revenues and expenses. Corporate overhead costs were assigned to the Community Business Banking segment as those expenses were expected to continue following the planned spin-off of BankMobile. Similarly, the preferred stock dividends have been allocated in their entirety to the Community Business Banking segment. The tax benefit assigned to BankMobile was based on an estimated effective tax rate of 24.57% for 2018 and 37.25% for 2017, respectively. Please refer to NOTE 13 - SUBSEQUENT EVENTS for more information on the spin-off of BankMobile.
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Non-Interest Revenues (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following tables present Customers' non-interest revenues affected by ASC 606 by business segment for the three and nine months ended September 30, 2018 and 2017:
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Disaggregation of Revenue | The following tables present Customers' non-interest revenues affected by ASC 606 by business segment for the three and nine months ended September 30, 2018 and 2017:
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Description of the Business - Additional Information (Detail) |
Sep. 30, 2018
Branch
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of branches (branch) | 13 |
Significant Accounting Policies and Basis of Presentation - Schedule of Error Correction on Balance Sheet (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Loans held for sale | $ 1,383 | $ 146,077 |
Loans receivable, mortgage warehouse, at fair value | 1,516,327 | 1,793,408 |
Total loans receivable, net of allowance for loan losses | $ 8,715,536 | 8,523,651 |
Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Loans held for sale | 1,939,485 | |
Loans receivable, mortgage warehouse, at fair value | 0 | |
Total loans receivable, net of allowance for loan losses | 6,730,243 | |
Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Loans held for sale | (1,793,408) | |
Loans receivable, mortgage warehouse, at fair value | 1,793,408 | |
Total loans receivable, net of allowance for loan losses | $ 1,793,408 |
Earnings Per Share - Components of Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Earnings Per Share [Abstract] | ||||
Net income (loss) available to common shareholders | $ 2,414 | $ 4,139 | $ 42,989 | $ 46,378 |
Weighted-average number of common shares outstanding - basic (shares) | 31,671,122 | 30,739,671 | 31,554,407 | 30,597,314 |
Share-based compensation plans (shares) | 601,622 | 1,754,480 | 750,573 | 2,004,917 |
Warrants (shares) | 4,846 | 18,541 | 7,475 | 24,392 |
Weighted-average number of common shares - diluted (shares) | 32,277,590 | 32,512,692 | 32,312,455 | 32,626,623 |
Basic earnings per common share (usd per share) | $ 0.08 | $ 0.13 | $ 1.36 | $ 1.52 |
Diluted earnings per common share (usd per share) | $ 0.07 | $ 0.13 | $ 1.33 | $ 1.42 |
Earnings Per Share - Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Anti-dilutive securities: | ||||
Total anti-dilutive securities (shares) | 1,787,670 | 461,467 | 1,105,287 | 461,467 |
Share-based compensation awards | ||||
Anti-dilutive securities: | ||||
Total anti-dilutive securities (shares) | 1,787,670 | 409,225 | 1,105,287 | 409,225 |
Warrants | ||||
Anti-dilutive securities: | ||||
Total anti-dilutive securities (shares) | 0 | 52,242 | 0 | 52,242 |
Investment Securities - Statement of Proceeds from Sale of Available for Sale Investment Securities (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from sale of available-for-sale securities | $ 476,182 | $ 554,540 | $ 476,182 | $ 670,522 |
Gross gains | 0 | 5,349 | 0 | 8,532 |
Gross losses | (18,659) | 0 | (18,659) | 0 |
Net (losses)/gains | $ (18,659) | $ 5,349 | $ (18,659) | $ 8,532 |
Loans Held for Sale - Composition of Loans Held for Sale (Detail) - USD ($) |
9 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Jun. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
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Receivables Held-for-sale [Abstract] | |||||
Multi-family loans at lower of cost or fair value | $ 0 | $ 144,191,000 | |||
Total commercial loans held for sale | 0 | 144,191,000 | |||
Residential mortgage loans, at fair value | 1,383,000 | 1,886,000 | |||
Loans held for sale | 1,383,000 | $ 146,077,000 | |||
Transfer of loans held for sale to held for investment | $ 129,700,000 | 129,691,000 | $ 0 | ||
Transfer of loans held for investment to held for sale | $ 150,600,000 | $ 0 | $ 150,638,000 |
Loans Receivable and Allowance for Loan Losses - Analysis of Loans Modified in Troubled Debt Restructuring by Type of Concession (Detail) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018
USD ($)
Loan
|
Sep. 30, 2017
USD ($)
Loan
|
Sep. 30, 2018
USD ($)
Loan
|
Sep. 30, 2017
USD ($)
Loan
|
|
Financing Receivable, Modifications [Line Items] | ||||
Number of Loans | Loan | 8 | 4 | 33 | 36 |
Recorded Investment | $ | $ 473 | $ 182 | $ 1,458 | $ 7,560 |
Extensions of maturity | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number of Loans | Loan | 0 | 1 | 1 | 4 |
Recorded Investment | $ | $ 0 | $ 60 | $ 56 | $ 6,263 |
Interest-rate reductions | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number of Loans | Loan | 8 | 3 | 32 | 32 |
Recorded Investment | $ | $ 473 | $ 122 | $ 1,402 | $ 1,297 |
Forgiveness of debt | ||||
Financing Receivable, Modifications [Line Items] | ||||
Number of Loans | Loan | 0 | 0 | 0 | 0 |
Recorded Investment | $ | $ 0 | $ 0 | $ 0 | $ 0 |
Loans Receivable and Allowance for Loan Losses - Changes in Accretable Yield Related to Purchased-credit-impaired Loans (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Changes in Accretable Yield | ||||
Accretable yield balance, beginning of period | $ 7,403 | $ 9,006 | $ 7,825 | $ 10,202 |
Accretion to interest income | (310) | (368) | (1,164) | (1,326) |
Reclassification from nonaccretable difference and disposals, net | (4) | (276) | 428 | (514) |
Accretable yield balance, end of period | $ 7,089 | $ 8,362 | $ 7,089 | $ 8,362 |
Disclosures About Fair Value of Financial Instruments - Narrative (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Loans held for sale, average life from purchase to sale | 25 days |
Disclosures About Fair Value of Financial Instruments - Statement of Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (Detail) - Significant Unobservable Inputs (Level 3) - Residential Mortgage Loan Commitments - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning | $ 133 | $ 102 | $ 60 | $ 45 |
Issuances | 122 | 103 | 338 | 300 |
Settlements | (133) | (102) | (276) | (242) |
Balance at ending | $ 122 | $ 103 | $ 122 | $ 103 |
Derivative Instruments and Hedging Activities - Summary of Offsetting of Financial Assets and Derivative Assets (Detail) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Offsetting Assets [Line Items] | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | $ 22,613 | $ 9,752 |
Interest Rate Swaps | ||
Offsetting Assets [Line Items] | ||
Gross Amount of Recognized Assets | 20,688 | 5,930 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 20,688 | 5,930 |
Gross amounts not offset in the consolidated balance sheet, Financial instruments | 0 | 0 |
Gross amounts not offset in the consolidated balance sheet, Cash collateral received | 19,330 | 5,070 |
Gross amounts not offset in the consolidated balance sheet, Net amount | $ 1,358 | $ 860 |
Derivative Instruments and Hedging Activities - Summary of Offsetting of Financial Liabilities and Derivative Liabilities (Detail) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Offsetting Liabilities [Line Items] | ||
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | $ 15,684 | $ 10,074 |
Interest Rate Swaps | ||
Offsetting Liabilities [Line Items] | ||
Gross Amount of Recognized Liabilities | 1,924 | 5,058 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 1,924 | 5,058 |
Gross amounts not offset in the consolidated balance sheet, Financial instruments | 0 | 0 |
Gross amounts not offset in the consolidated balance sheet, Cash collateral pledged | 2 | 4,872 |
Gross amounts not offset in the consolidated balance sheet, Net amount | $ 1,922 | $ 186 |
Business Segments (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018
USD ($)
Segment
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2017
USD ($)
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Dec. 31, 2017
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||
Number of reportable segments (segment) | Segment | 2 | ||||
Interest income | $ 110,045 | $ 98,285 | $ 314,649 | $ 275,232 | |
Interest expense | 46,044 | 30,266 | 118,295 | 76,189 | |
Net interest income | 64,001 | 68,019 | 196,354 | 199,043 | |
Provision for loan losses | 2,924 | 2,352 | 4,257 | 5,937 | |
Total non-interest income | 2,084 | 18,026 | 39,120 | 59,170 | |
Non-interest expense | 57,104 | 61,040 | 163,134 | 160,818 | |
Income before income tax expense | 6,057 | 22,653 | 68,083 | 91,458 | |
Income tax expense (benefit) | 28 | 14,899 | 14,250 | 34,236 | |
Net income (loss) | 6,029 | 7,754 | 53,833 | 57,222 | |
Preferred stock dividends | 3,615 | 3,615 | 10,844 | 10,844 | |
Net income (loss) available to common shareholders | 2,414 | 4,139 | 42,989 | 46,378 | |
Goodwill and other intangibles | 16,825 | 16,825 | $ 16,295 | ||
Assets | 10,617,104 | 10,617,104 | 9,839,555 | ||
Deposits | 8,513,714 | 8,513,714 | $ 6,800,142 | ||
Combined Business Segments | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 110,045 | 98,285 | 314,649 | 275,232 | |
Interest expense | 46,044 | 30,266 | 118,295 | 76,189 | |
Net interest income | 64,001 | 68,019 | 196,354 | 199,043 | |
Provision for loan losses | 2,924 | 2,352 | 4,257 | 5,937 | |
Total non-interest income | 2,084 | 18,026 | 39,120 | 59,170 | |
Non-interest expense | 57,104 | 61,040 | 163,134 | 160,818 | |
Income before income tax expense | 6,057 | 22,653 | 68,083 | 91,458 | |
Income tax expense (benefit) | 28 | 14,899 | 14,250 | 34,236 | |
Net income (loss) | 6,029 | 7,754 | 53,833 | 57,222 | |
Preferred stock dividends | 3,615 | 3,615 | 10,844 | 10,844 | |
Net income (loss) available to common shareholders | 2,414 | 4,139 | 42,989 | 46,378 | |
Goodwill and other intangibles | 16,825 | 16,604 | 16,825 | 16,604 | |
Assets | 10,617,104 | 10,471,829 | 10,617,104 | 10,471,829 | |
Deposits | 8,513,714 | 7,597,076 | 8,513,714 | 7,597,076 | |
Non-deposit Liabilities | $ 1,148,578 | $ 1,964,111 | 1,148,578 | 1,964,111 | |
Operating Segments | Community Business Banking | |||||
Segment Reporting Information [Line Items] | |||||
Effective tax rate | 24.57% | 37.25% | |||
Interest income | $ 106,156 | $ 95,585 | 302,820 | 265,524 | |
Interest expense | 45,982 | 30,250 | 118,081 | 76,134 | |
Net interest income | 60,174 | 65,335 | 184,739 | 189,390 | |
Provision for loan losses | 2,502 | 1,874 | 3,128 | 5,459 | |
Total non-interest income | (7,756) | 4,190 | 8,147 | 16,587 | |
Non-interest expense | 36,115 | 33,990 | 108,168 | 94,704 | |
Income before income tax expense | 13,801 | 33,661 | 81,590 | 105,814 | |
Income tax expense (benefit) | 1,930 | 18,999 | 17,567 | 39,584 | |
Net income (loss) | 11,871 | 14,662 | 64,023 | 66,230 | |
Preferred stock dividends | 3,615 | 3,615 | 10,844 | 10,844 | |
Net income (loss) available to common shareholders | 8,256 | 11,047 | 53,179 | 55,386 | |
Goodwill and other intangibles | 3,629 | 3,632 | 3,629 | 3,632 | |
Assets | 10,542,175 | 10,405,452 | 10,542,175 | 10,405,452 | |
Deposits | 7,781,225 | 6,815,994 | 7,781,225 | 6,815,994 | |
Non-deposit Liabilities | 1,134,251 | 1,947,213 | 1,134,251 | 1,947,213 | |
Operating Segments | BankMobile | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 3,889 | 2,700 | 11,829 | 9,708 | |
Interest expense | 62 | 16 | 214 | 55 | |
Net interest income | 3,827 | 2,684 | 11,615 | 9,653 | |
Provision for loan losses | 422 | 478 | 1,129 | 478 | |
Total non-interest income | 9,840 | 13,836 | 30,973 | 42,583 | |
Non-interest expense | 20,989 | 27,050 | 54,966 | 66,114 | |
Income before income tax expense | (7,744) | (11,008) | (13,507) | (14,356) | |
Income tax expense (benefit) | (1,902) | (4,100) | (3,317) | (5,348) | |
Net income (loss) | (5,842) | (6,908) | (10,190) | (9,008) | |
Preferred stock dividends | 0 | 0 | 0 | 0 | |
Net income (loss) available to common shareholders | (5,842) | (6,908) | (10,190) | (9,008) | |
Goodwill and other intangibles | 13,196 | 12,972 | 13,196 | 12,972 | |
Assets | 74,929 | 66,377 | 74,929 | 66,377 | |
Deposits | 732,489 | 781,082 | 732,489 | 781,082 | |
Non-deposit Liabilities | 14,327 | 16,898 | 14,327 | 16,898 | |
Segment Reconciling Items | BankMobile | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | $ 3,900 | $ 2,700 | $ 11,800 | $ 9,700 |
Non-Interest Revenues - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Contract with customer, liability | $ 2,796 | $ 2,796 | $ 2,001 | ||
Contract with customer, asset | 1,500 | 1,500 | $ 1,100 | ||
Accounting Standards Update 2014-09 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,200 | $ 1,200 | $ 3,900 | $ 4,400 | |
BankMobile | Minimum | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Contract with customer, timing of satisfaction of performance obligation and payment | P3Y | ||||
BankMobile | Maximum | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Contract with customer, timing of satisfaction of performance obligation and payment | P5Y |
Subsequent Event - Narrative (Details) $ in Millions |
Oct. 18, 2018
USD ($)
|
---|---|
Subsequent Event | |
Subsequent Event [Line Items] | |
Payments for merger and acquisition related costs | $ 2.7 |
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