Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Assets at Fair Value

As of September 30, 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges.

	Amortized Cost				Cumulative Amount of Fair Value Hedging Adjustment to Hedged Items
(amounts in thousands)	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
AFS debt securities	$	22,500	$	80,500	$	1,885	$	1,750

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 consolidated balance sheets as of September 30, 2022 and December 31, 2021.

	September 30, 2022
	Derivative Assets			Derivative Liabilities
(amounts in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as fair value hedges:
Interest rate swaps	Other assets	$	1,885	Other liabilities	$	—
Total		$	1,885		$	—
Derivatives not designated as hedging instruments:
Interest rate swaps and caps	Other assets	$	44,492	Other liabilities	$	43,727
Credit contracts	Other assets	33		Other liabilities	—
Residential mortgage loan commitments	Other assets	41		Other liabilities	—
Total		$	44,566		$	43,727

	December 31, 2021
	Derivative Assets			Derivative Liabilities
(amounts in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as fair value hedges:
Interest rate swaps	Other assets	$	1,750	Other liabilities	$	—
Total		$	1,750		$	—
Derivatives not designated as hedging instruments:
Interest rate swaps and caps	Other assets	$	25,235	Other liabilities	$	26,343
Credit contracts	Other assets	131		Other liabilities	201
Residential mortgage loan commitments	Other assets	179		Other liabilities	—
Total		$	25,545		$	26,544

Effect of Derivative Financial Instruments on Net Income and Comprehensive Income

The following table presents amounts included in the consolidated statements of income related to derivatives designated as fair value hedges and derivatives not designated as hedges for the three and nine months ended September 30, 2022 and 2021.

		Amount of Income (Loss) Recognized in Earnings
		Three Months Ended September 30,				Nine Months Ended September 30,
(amounts in thousands)	Income Statement Location	2022		2021		2022		2021
Derivatives designated as fair value hedges:
Recognized on interest rate swaps	Net interest income	$	510	$	—	$	3,530	$	4,777
Recognized on hedged AFS debt securities	Net interest income	(510)		—		(3,530)		(4,777)
Total		$	—	$	—	$	—	$	—
Derivatives not designated as hedging instruments:
Interest rate swaps and caps	Non-interest income (1)	$	503	$	517	$	2,244	$	2,540
Credit contracts	Non-interest income (1)	60		7		104		81
Residential mortgage loan commitments	Non-interest income (2)	(57)		(138)		(139)		(37)
Total		$	506	$	386	$	2,209	$	2,584

(1) Included in unrealized gain (loss) on derivatives.

(2) Included in mortgage banking income.

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, 2022 and 2021.

	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
	Three Months Ended September 30,					Three Months Ended September 30,
(amounts in thousands)	2022		2021			2022		2021
Derivatives in cash flow hedging relationships:
Interest rate swaps	$	—	$	—	Interest expense	$	—	$	—

	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
	Nine Months Ended September 30,					Nine Months Ended September 30,
(amounts in thousands)	2022		2021			2022		2021
Derivatives in cash flow hedging relationships:
Interest rate swaps	$	—	$	9,117	Interest expense	$	—	$	(2,505)
					Non-interest income (2)	—		(24,467)
					Total	$	—	$	(26,972)

(1) Amounts presented are net of taxes. See NOTE 5 – CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) for the total effect on other comprehensive income (loss) from derivatives designated as cash flow hedges for the periods presented.

(2) Included in loss on cash flow hedge derivative terminations.

Summary of Offsetting of Financial Assets and Derivative Assets

The following tables present derivative instruments that are subject to enforceable master netting arrangements. Customers' interest rate swaps and interest rate caps with institutional counterparties are subject to master netting arrangements and are included in the tables below. Interest rate swaps and interest rate caps with commercial banking customers and residential mortgage loan commitments are not subject to master netting arrangements and are excluded from the tables below. Customers has not made a policy election to offset its derivative positions.

	Gross Amounts Recognized on the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheet				Net Amount
(amounts in thousands)			Financial Instruments		Cash Collateral Received/Posted
September 30, 2022
Interest rate derivative assets with institutional counterparties	$	31,495	$	—	$	(31,495)	$	—
Interest rate derivative liabilities with institutional counterparties	$	—	$	—	$	—	$	—

	Gross Amounts Recognized on the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheet				Net Amount
(amounts in thousands)			Financial Instruments		Cash Collateral Received/Posted
December 31, 2021
Interest rate derivative assets with institutional counterparties	$	—	$	—	$	—	$	—
Interest rate derivative liabilities with institutional counterparties	$	23,348	$	—	$	(23,348)	$	—

Summary of Offsetting of Financial Liabilities and Derivative Liabilities

The following tables present derivative instruments that are subject to enforceable master netting arrangements. Customers' interest rate swaps and interest rate caps with institutional counterparties are subject to master netting arrangements and are included in the tables below. Interest rate swaps and interest rate caps with commercial banking customers and residential mortgage loan commitments are not subject to master netting arrangements and are excluded from the tables below. Customers has not made a policy election to offset its derivative positions.

	Gross Amounts Recognized on the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheet				Net Amount
(amounts in thousands)			Financial Instruments		Cash Collateral Received/Posted
September 30, 2022
Interest rate derivative assets with institutional counterparties	$	31,495	$	—	$	(31,495)	$	—
Interest rate derivative liabilities with institutional counterparties	$	—	$	—	$	—	$	—

	Gross Amounts Recognized on the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheet				Net Amount
(amounts in thousands)			Financial Instruments		Cash Collateral Received/Posted
December 31, 2021
Interest rate derivative assets with institutional counterparties	$	—	$	—	$	—	$	—
Interest rate derivative liabilities with institutional counterparties	$	23,348	$	—	$	(23,348)	$	—