Investment Securities

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIESThe amortized cost and fair value of investment securities as of June 30, 2021 and December 31, 2020 are summarized in the tables below:


	June 30, 2021 (1)
(amounts in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale debt securities:
Asset-backed securities	$	319,682	$	3,649	$	(377)	$	322,954
U.S. government agencies securities	20,000		114		—		20,114
Agency-guaranteed residential mortgage-backed securities	10,620		—		(265)		10,355
Agency-guaranteed commercial mortgage-backed securities	2,206		—		(1)		2,205
Agency-guaranteed residential collateralized mortgage obligations	81,007		813		(62)		81,758
Agency-guaranteed commercial collateralized mortgage obligations	144,593		—		(1,752)		142,841
Collateralized loan obligations	162,960		148		(181)		162,927
Commercial mortgage-backed securities	23,054		33		—		23,087
Corporate notes (2)	345,909		4,974		(462)		350,421
Private label collateralized mortgage obligations	401,949		922		(1,295)		401,576
State and political subdivision debt securities (3)	8,543		11		—		8,554

Available for sale debt securities	$	1,520,523	$	10,664	$	(4,395)	$	1,526,792


	December 31, 2020 (1)
(amounts in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available for sale debt securities:
Asset-backed securities	$	372,640	$	4,515	$	(10)	$	377,145
U.S. government agencies securities	20,000		34		—		20,034
Agency-guaranteed residential mortgage-backed securities	61,178		1,913		—		63,091

Agency-guaranteed residential collateralized mortgage obligations	139,985		916		(60)		140,841
Agency-guaranteed commercial collateralized mortgage obligations	20,965		—		(39)		20,926
Collateralized loan obligations	32,367		—		—		32,367
Corporate notes (2)	372,764		24,144		(164)		396,744
Private label collateralized mortgage obligations	136,943		423		(374)		136,992
State and political subdivision debt securities (3)	17,346		945		—		18,291
Available for sale debt securities	$	1,174,188	$	32,890	$	(647)	1,206,431

Equity securities (4)							3,854
Total investment securities, at fair value							$	1,210,285

(1)Accrued interest on AFS debt securities totaled $5.0 million and $4.2 million at June 30, 2021 and December 31, 2020, respectively, and is included in accrued interest receivable on the consolidated balance sheet.

(2)Includes corporate securities issued by domestic bank holding companies.

(3)Includes both taxable and non-taxable municipal securities.

(4)Includes equity securities issued by a foreign entity.

During the three and six months ended June 30, 2021, Customers recognized unrealized gains of $1.7 million and $2.7 million, respectively, on its equity securities. During the three and six months ended June 30, 2020, Customers recognized unrealized gains of $1.2 million and unrealized losses of $0.2 million, respectively, on its equity securities. These unrealized gains and losses are reported as unrealized gain (loss) on investment securities within non-interest income on the consolidated statements of income. In June 2021, Customers sold all of the outstanding shares in CB Green Ventures Pte Ltd. and CUBI India Ventures Pte Ltd., which held the equity securities issued by a foreign entity, for $3.8 million, and recognized $2.8 million in loss on sale of foreign subsidiaries within non-interest income on the consolidated statement of income.

Proceeds from the sale of AFS securities were $53.7 million and $407.6 million for the three and six months ended June 30, 2021, respectively. Proceeds from the sale of AFS securities were $109.2 million during the three and six months ended June 30, 2020. Realized gains from the sale of AFS debt securities were $1.8 million and $25.4 million for the three and six months ended June 30, 2021, respectively. Realized gains from the sale of AFS debt securities were $4.4 million and $8.3 million for the three and six months ended June 30, 2020, respectively. These gains (losses) were determined using the specific identification method and were reported as gain (loss) on sale of investment securities within non-interest income on the consolidated statements of income.

The following table shows debt securities by stated maturity. Debt securities backed by mortgages and other assets 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, 2021
(amounts in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	4,901	$	5,032
Due after one year through five years	211,508		212,586
Due after five years through ten years	154,043		157,219
Due after ten years	4,000		4,252
Asset-backed securities	319,682		322,954
Collateralized loan obligations	162,960		162,927
Commercial mortgage-backed securities	23,054		23,087
Agency-guaranteed residential mortgage-backed securities	10,620		10,355
Agency-guaranteed commercial mortgage-backed securities	2,206		2,205
Agency-guaranteed residential collateralized mortgage obligations	81,007		81,758
Agency-guaranteed commercial collateralized mortgage obligations	144,593		142,841
Private label collateralized mortgage obligations	401,949		401,576


Total debt securities	$	1,520,523	$	1,526,792

Gross unrealized losses and fair value of Customers' AFS debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2021 were as follows:



	June 30, 2021
	Less Than 12 Months				12 Months or More				Total
(amounts in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale debt securities:
Asset-backed securities	$	61,515	$	(377)	$	—	$	—	$	61,515	$	(377)
Agency-guaranteed residential mortgage-backed securities	10,355		(265)		—		—		10,355		(265)
Agency-guaranteed commercial mortgage-backed securities	2,205		(1)		—		—		2,205		(1)
Agency-guaranteed residential collateralized mortgage obligations	18,158		(62)		—		—		18,158		(62)
Agency-guaranteed commercial collateralized mortgage obligations	142,841		(1,752)		—		—		142,841		(1,752)
Collateralized loan obligations	101,555		(181)		—		—		101,555		(181)
Corporate notes	67,230		(462)		—		—		67,230		(462)
Private label collateralized mortgage obligations	157,470		(1,295)		—		—		157,470		(1,295)

Total	$	561,329	$	(4,395)	$	—	$	—	$	561,329	$	(4,395)

At June 30, 2021, there were 38 AFS debt securities with unrealized losses in the less-than-twelve-month category and no AFS debt securities with unrealized losses in the twelve-month-or-more category. The unrealized losses were principally due to changes in market interest rates that resulted in a negative impact on the respective securities' fair value. All amounts related to these securities are expected to be recovered when market prices recover or at maturity. Customers does not intend to sell any of the 38 securities, and it is not more likely than not that Customers will be required to sell any of the 38 securities before recovery of the amortized cost basis. At December 31, 2020, there were 16 AFS debt securities in an unrealized loss position.

At June 30, 2021 and December 31, 2020, Customers Bank had pledged investment securities aggregating $16.0 million and $18.8 million in fair value, respectively, as collateral primarily for an unused line of credit with another financial institution. These counterparties do not have the ability to sell or repledge these securities.

At June 30, 2021 and December 31, 2020, no securities holding of any one issuer, other than the U.S. government and its agencies, amounted to greater than 10% of shareholders' equity.