INVESTMENT SECURITIES

The amortized cost and approximate fair value of investment securities as of June 30, 2016 and December 31, 2015 are summarized in the tables below:



	June 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(amounts in thousands)
Available for Sale:
Agency-guaranteed residential mortgage-backed securities	$	269,044	$	3,484	$	(552	)	$	271,976
Agency-guaranteed commercial real estate mortgage-backed securities	204,845		8,709		—			213,554
Corporate notes (1)	44,929		861		(78		)	45,712
Equity securities (2)	22,514		—		(5,821		)	16,693
	$	541,332	$	13,054	$	(6,451	)	$	547,935


(1)	Includes subordinated debt issued by other bank holding companies.

(2) Consists primarily of equity securities issued by a foreign entity.



	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(amounts in thousands)
Available for Sale:
Agency-guaranteed residential mortgage-backed securities	$	299,392	$	1,453	$	(2,741	)	$	298,104
Agency-guaranteed commercial real estate mortgage-backed securities	206,719		—		(3,849		)	202,870
Corporate notes (1)	39,925		320		(178		)	40,067
Equity securities (2)	22,514		—		(3,302		)	19,212
	$	568,550	$	1,773	$	(10,070	)	$	560,253


(1)	Includes subordinated debt issued by other bank holding companies.

(2) Consists primarily of equity securities issued by a foreign entity.

The following table presents proceeds from the sale of available-for-sale investment securities and gross gains and gross losses realized on those sales for the three and six months ended June 30, 2016 and 2015:



	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016		2015
(amounts in thousands)
Proceeds from sale of available-for-sale securities	$	—	$	492		$	2,848	$	492
Gross gains	$	—	—			$	26	$	—
Gross losses	—		(69		)	—		(69		)
Net gains	$	—	$	(69	)	$	26	$	(69	)

These gains and losses were determined using the specific identification method and were reported as gains (losses) on sale of investment securities included in non-interest income.

The following table presents available-for-sale 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:



	June 30, 2016
	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	37,929		38,427
Due after ten years	7,000		7,285
Agency-guaranteed residential mortgage-backed securities	269,044		271,976
Agency-guaranteed commercial real estate mortgage-backed securities	204,845		213,554
Total debt securities	$	518,818	$	531,242

Gross unrealized losses and fair value of Customers' investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2016 and December 31, 2015 were as follows:



	June 30, 2016
	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:
Agency-guaranteed residential mortgage-backed securities	$	—	$	—		$	53,069	$	(552	)	$	53,069	$	(552	)
Corporate notes (1)	13,923		(78		)	—		—			13,923		(78		)
Equity securities (2)	—		—			16,693		(5,821		)	16,693		(5,821		)
Total	$	13,923	$	(78	)	$	69,762	$	(6,373	)	$	83,685	$	(6,451	)



	December 31, 2015
	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:
Agency-guaranteed residential mortgage-backed securities	$	102,832	$	(535	)	$	57,357	$	(2,206	)	160,189		$	(2,741	)
Agency-guaranteed commercial real estate mortgage-backed securities	202,870		(3,849		)	—		—			202,870		(3,849		)
Corporate notes (1)	9,748		(178		)	—		—			9,748		(178		)
Equity securities (2)	19,206		(3,301		)	6		(1		)	19,212		(3,302		)
Total	$	334,656	$	(7,863	)	$	57,363	$	(2,207	)	$	392,019	$	(10,070	)


(1)	Includes subordinated debt issued by other bank holding companies.

(2) Consists primarily of equity securities in a foreign entity.

At June 30, 2016, there were two available-for-sale investment securities in the less-than-twelve-month category and fourteen available-for-sale investment securities in the twelve-month-or-more category. The unrealized losses on the residential mortgage-backed securities are guaranteed by government-sponsored entities and primarily relate to changes in market interest rates. All amounts are expected to be recovered when market prices recover or at maturity. The unrealized losses on the equity securities reflect decreases in market price and adverse changes in foreign currency exchange rates. Customers evaluated the financial condition and capital strength of the issuer of these securities and concluded that the decline in fair value was temporary and estimated the value could reasonably recover by way of increases in market price or positive changes in foreign currency exchange rates. Customers intends to hold these securities for the foreseeable future and does not intend to sell the securities before the price recovers. Customers considers it more likely than not that it will not be required to sell the securities. Accordingly, Customers concluded that the securities are not other-than-temporarily impaired as of June 30, 2016.

At June 30, 2016 and December 31, 2015, Customers Bank had pledged investment securities aggregating $272.0 million and $299.8 million 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.