Disclosures About Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers' financial instruments at March 31, 2020 and December 31, 2019 were as follows.

					Fair Value Measurements at March 31, 2020
(amounts in thousands)	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)
Assets:
Cash and cash equivalents	$	256,232	$	256,232	$	256,232	$	—	$	—
Debt securities, available for sale	696,353		696,353		—		696,353		—
Interest-only GNMA securities	15,276		15,276		—		—		15,276
Equity securities	1,028		1,028		1,028		—		—
Loans held for sale	450,157		450,157		—		1,388		448,769
Total loans and leases receivable, net of allowance for credit losses on loans and leases	9,721,991		10,198,615		—		2,518,012		7,680,603
FHLB, Federal Reserve Bank and other restricted stock	87,140		87,140		—		87,140		—
Derivatives	66,449		66,449		—		66,234		215
Liabilities:
Deposits	$	8,413,643	$	8,425,067	$	7,014,296	$	1,410,771	$	—
FRB advances	175,000		175,000		175,000		—		—
Federal funds purchased	705,000		705,000		705,000		—		—
FHLB advances	1,260,000		1,266,251		410,000		856,251		—
Other borrowings	123,732		97,517		—		97,517		—
Subordinated debt	181,185		154,304		—		154,304		—
Derivatives	118,189		118,189		—		118,189		—

					Fair Value Measurements at December 31, 2019
(amounts in thousands)	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)
Assets:
Cash and cash equivalents	$	212,505	$	212,505	$	212,505	$	—	$	—
Debt securities, available for sale	577,198		577,198		—		577,198		—
Interest-only GNMA securities	16,272		16,272		—		—		16,272
Equity securities	2,406		2,406		2,406		—		—
Loans held for sale	486,328		486,328		—		2,130		484,198
Total loans and leases receivable, net of allowance for credit losses on loans and leases	9,508,367		9,853,037		—		2,245,758		7,607,279
FHLB, Federal Reserve Bank and other restricted stock	84,214		84,214		—		84,214		—
Derivatives	23,608		23,608		—		23,529		79
Liabilities:
Deposits	$	8,648,936	$	8,652,340	$	6,980,402	$	1,671,938	$	—
Federal funds purchased	538,000		538,000		538,000		—		—
FHLB advances	850,000		852,162		—		852,162		—
Other borrowings	123,630		127,603		—		127,603		—
Subordinated debt	181,115		192,217		—		192,217		—
Derivatives	45,939		45,939		—		45,939		—

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 March 31, 2020 and December 31, 2019 were as follows:

	March 31, 2020
	Fair Value Measurements at the End of the Reporting Period Using
(amounts in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Measured at Fair Value on a Recurring Basis:
Assets
Available for sale debt securities:
Agency-guaranteed residential mortgage-backed securities	$	—	$	172,814	$	—	$	172,814
Agency-guaranteed collateralized mortgage obligations	—		153,952		—		153,952
State and political subdivision debt securities	—		15,157		—		15,157
Collateralized mortgage obligations	—		5,566		—		5,566
Corporate notes	—		348,864		—		348,864
Interest-only GNMA securities	—		—		15,276		15,276
Equity securities	1,028		—		—		1,028
Derivatives	—		66,234		215		66,449
Loans held for sale – fair value option	—		1,388		—		1,388
Loans receivable, mortgage warehouse – fair value option	—		2,518,012		—		2,518,012
Total assets – recurring fair value measurements	$	1,028	$	3,281,987	$	15,491	$	3,298,506
Liabilities
Derivatives	$	—	$	118,189	$	—	$	118,189
Measured at Fair Value on a Nonrecurring Basis:
Assets
Collateral-dependent loans, net of specific reserves of $854	$	—	$	—	$	28,923	$	28,923

	December 31, 2019
	Fair Value Measurements at the End of the Reporting Period Using
(amounts in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Measured at Fair Value on a Recurring Basis:
Assets
Available for sale debt securities:
Agency-guaranteed residential mortgage–backed securities	$	—	$	278,321	$	—	$	278,321
Corporate notes	—		298,877		—		298,877
Interest-only GNMA securities	—		—		16,272		16,272
Equity securities	2,406		—		—		2,406
Derivatives	—		23,529		79		23,608
Loans held for sale – fair value option	—		2,130		—		2,130
Loans receivable, mortgage warehouse – fair value option	—		2,245,758		—		2,245,758
Total assets – recurring fair value measurements	$	2,406	$	2,848,615	$	16,351	$	2,867,372
Liabilities
Derivatives	$	—	$	45,939	$	—	$	45,939
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of specific reserves of $852	$	—	$	—	$	14,272	$	14,272
Other real estate owned	—		—		78		78
Total assets – nonrecurring fair value measurements	$	—	$	—	$	14,350	$	14,350

Statement of Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

The changes in residential mortgage loan commitments (Level 3 assets) measured at fair value on a recurring basis for the three months ended March 31, 2020 and 2019 are summarized in the tables below. Additional information about residential mortgage loan commitments can be found in NOTE 11 - DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES.

	Residential Mortgage Loan Commitments
	Three Months Ended March 31,
(amounts in thousands)	2020		2019
Balance at December 31	$	79	$	69
Issuances	215		77
Settlements	(79)		(69)
Balance at March 31	$	215	$	77

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 March 31, 2020 and December 31, 2019 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. The interest-only GNMA securities are Level 3 assets measured at fair value on a recurring basis under a fair value option election. For the three months ended March 31, 2020, cash settlements of $1.0 million were applied to the carrying value of the interest-only GNMA securities, net of premium amortization expense. At March 31, 2020, Customers used an internally developed discounted cash flow model to value the interest-only GNMA securities. The significant unobservable input used in the discounted cash flow model included prepayment speed. Significant increases (decreases) in this input would result in a significantly lower (higher) fair value measurement.

	Quantitative Information about Level 3 Fair Value Measurements
March 31, 2020	Fair Value Estimate		Valuation Technique	Unobservable Input	Range  (Weighted Average) (4)
(amounts in thousands)
Collateral-dependent – real estate	$	27,735	Collateral appraisal (1) Business asset valuation (3)	Liquidation expenses (2) Business asset valuation (4)	8% - 10% (8%) 11% - 45% (20%)
Collateral-dependent loans – commercial & industrial	1,188		Collateral appraisal (1) Business asset valuation (3)	Liquidation expenses (2) Business asset valuation adjustments (4)	8% - 8% (8%) 8% - 8% (8%)
Interest-only GNMA securities	15,276		Discounted cash flow	Constant prepayment rate	5% - 13% (12%)
Residential mortgage loan commitments	215		Adjusted market bid	Pull-through rate	80% - 80% (80%)

(1)Obtained from approved independent appraisers. Appraisals are current and in compliance with credit policy. Customers does not generally discount appraisals. 
 Fair value is also estimated based on sale agreements or letters of intent with third parties.

(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.

	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2019	Fair Value Estimate		Valuation Technique	Unobservable Input	Range  (Weighted Average) (4)
(amounts in thousands)
Impaired loans – real estate	$	12,767	Collateral appraisal (1) Business asset valuation (3)	Liquidation expenses (2) Business asset valuation (4)	8% - 10% (8%) 34% - 45% (37%)
Impaired loans – commercial & industrial	1,505		Collateral appraisal (1) Business asset valuation (3)	Liquidation expenses (2) Business asset valuation adjustments (4)	8% - 8% (8%) 8% - 50% (22%)
Interest-only GNMA securities	16,272		Discounted cash flow	Constant prepayment rate	9% - 14% 12%
Other real estate owned	78		Collateral appraisal (1)	Liquidation expenses (2)	8% - 9% (9%)
Residential mortgage loan commitments	79		Adjusted market bid	Pull-through rate	85% - 85% (85%)

(1)Obtained from approved independent appraisers. Appraisals are current and in compliance with credit policy. Customers 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.