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Leases
 12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases LEASES
Lessee
Customers has operating leases for its branches, LPOs, and administrative offices, with remaining lease terms ranging between 4 months and 8 years. These operating leases comprise substantially all of Customers' obligations in which Customers is the lessee. Most lease agreements consist of initial lease terms ranging between 1 and 5 years, with options to renew the leases or extend the term up to 15 years at Customers' sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligations for those payments are incurred. Customers' operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers' operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate based on the information available at either the adoption of ASC 842 or the commencement date of the lease, whichever was later, when determining the present value of lease payments. Customers does not present ROU assets and corresponding liabilities for operating leases for fiscal years prior to the adoption of this standard.
A ROU asset of $23.8 million, net of $1.1 million in accrued rent, and lease liabilities of $24.9 million were recognized with the adoption of ASU 2016-02 on January 1, 2019.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands)ClassificationDecember 31, 2019
ASSETS
Operating lease ROU assetsOther assets$20,232  
LIABILITIES
Operating lease liabilitiesOther liabilities$21,358  
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
(amounts in thousands)Classification
Year Ended
December 31, 2019
Operating lease cost (1)
Occupancy expenses$5,823  
(1) There were no variable lease costs for the year ended December 31, 2019, and sublease income for operating leases is immaterial.
Maturities of non-cancelable operating lease liabilities were as follows at December 31, 2019:
(amounts in thousands)December 31, 2019
2020$5,539  
20214,792  
20224,167  
20233,174  
20242,100  
Thereafter2,817  
Total minimum payments22,589  
Less: interest1,231  
Present value of lease liabilities$21,358  
Customers does not have leases where it is involved with the construction or design of an underlying asset. Customers has signed leases that have not yet commenced as of December 31, 2019 with future minimum lease payments of $2.6 million. Cash paid pursuant to operating lease liabilities was $5.9 million for the year ended December 31, 2019, and is reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers' operating leases at December 31, 2019:
(amounts in thousands)December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.0 years
Weighted average discount rate
Operating leases2.90 %

Rent expense was approximately $5.8 million and $5.2 million for the years ended December 31, 2018 and 2017, respectively.
Equipment Lessor
CCF is a wholly-owned subsidiary of Customers Bank and is referred to as the Equipment Finance Group. CCF is primarily focused on originating equipment operating and direct finance equipment leases for a broad range of asset classes. It services vendors, dealers, independent finance companies, bank-owned leasing companies and strategic direct customers in the plastics, packaging, machine tool, construction, transportation and franchise markets. Lease terms typically range from 24 months to 120 months. CCF offers the following lease products: Capital Lease, Purchase Upon Termination, TRAC, Split-TRAC, and FMV. Direct finance equipment leases are included in commercial and industrial loans and leases receivable.
The estimated residual values for direct finance and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only for a Split-TRAC is there a residual risk and the unguaranteed portions are typically nominal.
Leased assets under operating leases are carried at amortized cost net of accumulated depreciation and any impairment charges and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its leased assets for impairment. An impairment loss is recognized if the carrying amount of the leased asset exceeds its fair value and is not recoverable. The carrying amount of leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at December 31, 2019:
(amounts in thousands)ClassificationDecember 31, 2019
ASSETS
Direct financing leases
Lease receivablesLoans and leases receivable$91,762  
Guaranteed residual assetsLoans and leases receivable7,435  
Unguaranteed residual assetsLoans and leases receivable1,260  
Deferred initial direct costsLoans and leases receivable721  
Unearned incomeLoans and leases receivable(11,300) 
Net investment in direct financing leases$89,878  
Operating leases
Investment in operating leasesOther assets$107,850  
Accumulated depreciationOther assets(14,251) 
Deferred initial direct costsOther assets1,052  
Net investment in operating leases94,651  
Total lease assets$184,529  
Leases LEASES
Lessee
Customers has operating leases for its branches, LPOs, and administrative offices, with remaining lease terms ranging between 4 months and 8 years. These operating leases comprise substantially all of Customers' obligations in which Customers is the lessee. Most lease agreements consist of initial lease terms ranging between 1 and 5 years, with options to renew the leases or extend the term up to 15 years at Customers' sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligations for those payments are incurred. Customers' operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers' operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate based on the information available at either the adoption of ASC 842 or the commencement date of the lease, whichever was later, when determining the present value of lease payments. Customers does not present ROU assets and corresponding liabilities for operating leases for fiscal years prior to the adoption of this standard.
A ROU asset of $23.8 million, net of $1.1 million in accrued rent, and lease liabilities of $24.9 million were recognized with the adoption of ASU 2016-02 on January 1, 2019.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands)ClassificationDecember 31, 2019
ASSETS
Operating lease ROU assetsOther assets$20,232  
LIABILITIES
Operating lease liabilitiesOther liabilities$21,358  
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
(amounts in thousands)Classification
Year Ended
December 31, 2019
Operating lease cost (1)
Occupancy expenses$5,823  
(1) There were no variable lease costs for the year ended December 31, 2019, and sublease income for operating leases is immaterial.
Maturities of non-cancelable operating lease liabilities were as follows at December 31, 2019:
(amounts in thousands)December 31, 2019
2020$5,539  
20214,792  
20224,167  
20233,174  
20242,100  
Thereafter2,817  
Total minimum payments22,589  
Less: interest1,231  
Present value of lease liabilities$21,358  
Customers does not have leases where it is involved with the construction or design of an underlying asset. Customers has signed leases that have not yet commenced as of December 31, 2019 with future minimum lease payments of $2.6 million. Cash paid pursuant to operating lease liabilities was $5.9 million for the year ended December 31, 2019, and is reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers' operating leases at December 31, 2019:
(amounts in thousands)December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.0 years
Weighted average discount rate
Operating leases2.90 %

Rent expense was approximately $5.8 million and $5.2 million for the years ended December 31, 2018 and 2017, respectively.
Equipment Lessor
CCF is a wholly-owned subsidiary of Customers Bank and is referred to as the Equipment Finance Group. CCF is primarily focused on originating equipment operating and direct finance equipment leases for a broad range of asset classes. It services vendors, dealers, independent finance companies, bank-owned leasing companies and strategic direct customers in the plastics, packaging, machine tool, construction, transportation and franchise markets. Lease terms typically range from 24 months to 120 months. CCF offers the following lease products: Capital Lease, Purchase Upon Termination, TRAC, Split-TRAC, and FMV. Direct finance equipment leases are included in commercial and industrial loans and leases receivable.
The estimated residual values for direct finance and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only for a Split-TRAC is there a residual risk and the unguaranteed portions are typically nominal.
Leased assets under operating leases are carried at amortized cost net of accumulated depreciation and any impairment charges and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its leased assets for impairment. An impairment loss is recognized if the carrying amount of the leased asset exceeds its fair value and is not recoverable. The carrying amount of leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at December 31, 2019:
(amounts in thousands)ClassificationDecember 31, 2019
ASSETS
Direct financing leases
Lease receivablesLoans and leases receivable$91,762  
Guaranteed residual assetsLoans and leases receivable7,435  
Unguaranteed residual assetsLoans and leases receivable1,260  
Deferred initial direct costsLoans and leases receivable721  
Unearned incomeLoans and leases receivable(11,300) 
Net investment in direct financing leases$89,878  
Operating leases
Investment in operating leasesOther assets$107,850  
Accumulated depreciationOther assets(14,251) 
Deferred initial direct costsOther assets1,052  
Net investment in operating leases94,651  
Total lease assets$184,529  
Leases LEASES
Lessee
Customers has operating leases for its branches, LPOs, and administrative offices, with remaining lease terms ranging between 4 months and 8 years. These operating leases comprise substantially all of Customers' obligations in which Customers is the lessee. Most lease agreements consist of initial lease terms ranging between 1 and 5 years, with options to renew the leases or extend the term up to 15 years at Customers' sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligations for those payments are incurred. Customers' operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers' operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate based on the information available at either the adoption of ASC 842 or the commencement date of the lease, whichever was later, when determining the present value of lease payments. Customers does not present ROU assets and corresponding liabilities for operating leases for fiscal years prior to the adoption of this standard.
A ROU asset of $23.8 million, net of $1.1 million in accrued rent, and lease liabilities of $24.9 million were recognized with the adoption of ASU 2016-02 on January 1, 2019.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands)ClassificationDecember 31, 2019
ASSETS
Operating lease ROU assetsOther assets$20,232  
LIABILITIES
Operating lease liabilitiesOther liabilities$21,358  
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
(amounts in thousands)Classification
Year Ended
December 31, 2019
Operating lease cost (1)
Occupancy expenses$5,823  
(1) There were no variable lease costs for the year ended December 31, 2019, and sublease income for operating leases is immaterial.
Maturities of non-cancelable operating lease liabilities were as follows at December 31, 2019:
(amounts in thousands)December 31, 2019
2020$5,539  
20214,792  
20224,167  
20233,174  
20242,100  
Thereafter2,817  
Total minimum payments22,589  
Less: interest1,231  
Present value of lease liabilities$21,358  
Customers does not have leases where it is involved with the construction or design of an underlying asset. Customers has signed leases that have not yet commenced as of December 31, 2019 with future minimum lease payments of $2.6 million. Cash paid pursuant to operating lease liabilities was $5.9 million for the year ended December 31, 2019, and is reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers' operating leases at December 31, 2019:
(amounts in thousands)December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.0 years
Weighted average discount rate
Operating leases2.90 %

Rent expense was approximately $5.8 million and $5.2 million for the years ended December 31, 2018 and 2017, respectively.
Equipment Lessor
CCF is a wholly-owned subsidiary of Customers Bank and is referred to as the Equipment Finance Group. CCF is primarily focused on originating equipment operating and direct finance equipment leases for a broad range of asset classes. It services vendors, dealers, independent finance companies, bank-owned leasing companies and strategic direct customers in the plastics, packaging, machine tool, construction, transportation and franchise markets. Lease terms typically range from 24 months to 120 months. CCF offers the following lease products: Capital Lease, Purchase Upon Termination, TRAC, Split-TRAC, and FMV. Direct finance equipment leases are included in commercial and industrial loans and leases receivable.
The estimated residual values for direct finance and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. For the direct finance leases, only for a Split-TRAC is there a residual risk and the unguaranteed portions are typically nominal.
Leased assets under operating leases are carried at amortized cost net of accumulated depreciation and any impairment charges and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its leased assets for impairment. An impairment loss is recognized if the carrying amount of the leased asset exceeds its fair value and is not recoverable. The carrying amount of leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at December 31, 2019:
(amounts in thousands)ClassificationDecember 31, 2019
ASSETS
Direct financing leases
Lease receivablesLoans and leases receivable$91,762  
Guaranteed residual assetsLoans and leases receivable7,435  
Unguaranteed residual assetsLoans and leases receivable1,260  
Deferred initial direct costsLoans and leases receivable721  
Unearned incomeLoans and leases receivable(11,300) 
Net investment in direct financing leases$89,878  
Operating leases
Investment in operating leasesOther assets$107,850  
Accumulated depreciationOther assets(14,251) 
Deferred initial direct costsOther assets1,052  
Net investment in operating leases94,651  
Total lease assets$184,529