x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Pennsylvania | 27-2290659 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller Reporting Company | ¨ | |||
Emerging Growth Company | ¨ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
• | The Consolidated Balance Sheet (unaudited) included in Part I, Item 1 "Customers Bancorp, Inc. Consolidated Financial Statements as of June 30, 2018 and for the three month and six month periods ended June 30, 2018 and 2017 (unaudited)" are being amended and restated as of June 30, 2018 as set forth in the Consolidated Balance Sheets (unaudited) and described in NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION. |
• | The Consolidated Statements of Cash Flows (unaudited) included in Part I, Item 1 are being amended and restated for the six months ended June 30, 2018 and 2017 as set forth in the Consolidated Statements of Cash Flows (unaudited) and described in NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION. |
• | NOTE 7 - LOANS HELD FOR SALE, NOTE 8 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES, AND NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS included in Part I, Item 1 are being amended and restated as set forth in the notes accompanying the unaudited consolidated financial statements and described in NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION. |
• | Part I, Item 4 "Controls and Procedures" is being amended to address management's re-evaluation of disclosure controls and procedures and reflect the identification of a material weakness in internal control over financial reporting in conjunction with the restatement. |
• | Part II, Item 1A "Risk Factors" is being amended to address risks related to the identification of a material weakness in internal control over financial reporting in conjunction with the restatement. |
• | Part II, Item 6 "Exhibits" also has been amended to include currently dated certifications from Customers Bancorp, Inc's Principal Executive Officer and Principal Financial Officer as required by sections 302 and 906 of the Sarbanes Oxley Act of 2002. The certifications are attached to this June 30, 2018 Form 10-Q/A as Exhibits 31.1, 31.2, 32.1 and 32.2. The Interactive Data Files have also been amended in conjunction with the restatement and are attached to this June 30, 2018 Form 10-Q/A as Exhibit 101. |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1A. | ||
Item 6. | ||
Ex-31.1 | ||
Ex-31.2 | ||
Ex-32.1 | ||
Ex-32.2 | ||
Ex-101 |
June 30, 2018 | December 31, 2017 | ||||||
(As Restated) | (As Restated) | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 22,969 | $ | 20,388 | |||
Interest-earning deposits | 228,757 | 125,935 | |||||
Cash and cash equivalents | 251,726 | 146,323 | |||||
Investment securities, at fair value | 1,161,000 | 471,371 | |||||
Loans held for sale (includes $1,043 and $1,886, respectively, at fair value) | 1,043 | 146,077 | |||||
Loans receivable, mortgage warehouse, at fair value | 1,930,738 | 1,793,408 | |||||
Loans receivable | 7,181,726 | 6,768,258 | |||||
Allowance for loan losses | (38,288 | ) | (38,015 | ) | |||
Total loans receivable, net of allowance for loan losses | 9,074,176 | 8,523,651 | |||||
FHLB, Federal Reserve Bank, and other restricted stock | 136,066 | 105,918 | |||||
Accrued interest receivable | 33,956 | 27,021 | |||||
Bank premises and equipment, net | 11,224 | 11,955 | |||||
Bank-owned life insurance | 261,121 | 257,720 | |||||
Other real estate owned | 1,705 | 1,726 | |||||
Goodwill and other intangibles | 17,150 | 16,295 | |||||
Other assets | 143,679 | 131,498 | |||||
Total assets | $ | 11,092,846 | $ | 9,839,555 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Deposits: | |||||||
Demand, non-interest bearing | $ | 1,090,744 | $ | 1,052,115 | |||
Interest-bearing | 6,205,210 | 5,748,027 | |||||
Total deposits | 7,295,954 | 6,800,142 | |||||
Federal funds purchased | 105,000 | 155,000 | |||||
FHLB advances | 2,389,797 | 1,611,860 | |||||
Other borrowings | 186,888 | 186,497 | |||||
Subordinated debt | 108,929 | 108,880 | |||||
Accrued interest payable and other liabilities | 70,051 | 56,212 | |||||
Total liabilities | 10,156,619 | 8,918,591 | |||||
Shareholders’ equity: | |||||||
Preferred stock, par value $1.00 per share; liquidation preference $25.00 per share; 100,000,000 shares authorized, 9,000,000 shares issued and outstanding as of June 30, 2018 and December 31, 2017 | 217,471 | 217,471 | |||||
Common stock, par value $1.00 per share; 200,000,000 shares authorized; 32,199,903 and 31,912,763 shares issued as of June 30, 2018 and December 31, 2017; 31,669,643 and 31,382,503 shares outstanding as of June 30, 2018 and December 31, 2017 | 32,200 | 31,913 | |||||
Additional paid in capital | 428,796 | 422,096 | |||||
Retained earnings | 299,990 | 258,076 | |||||
Accumulated other comprehensive loss, net | (33,997 | ) | (359 | ) | |||
Treasury stock, at cost (530,260 shares as of June 30, 2018 and December 31, 2017) | (8,233 | ) | (8,233 | ) | |||
Total shareholders’ equity | 936,227 | 920,964 | |||||
Total liabilities and shareholders’ equity | $ | 11,092,846 | $ | 9,839,555 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest income: | |||||||||||||||
Loans | $ | 95,240 | $ | 84,560 | $ | 181,171 | $ | 159,967 | |||||||
Investment securities | 9,765 | 7,823 | 18,437 | 13,710 | |||||||||||
Other | 2,634 | 1,469 | 4,996 | 3,269 | |||||||||||
Total interest income | 107,639 | 93,852 | 204,604 | 176,946 | |||||||||||
Interest expense: | |||||||||||||||
Deposits | 24,182 | 16,228 | 43,975 | 30,551 | |||||||||||
Other borrowings | 3,275 | 1,993 | 6,651 | 3,600 | |||||||||||
FHLB advances | 11,176 | 5,340 | 18,256 | 8,401 | |||||||||||
Subordinated debt | 1,684 | 1,685 | 3,369 | 3,370 | |||||||||||
Total interest expense | 40,317 | 25,246 | 72,251 | 45,922 | |||||||||||
Net interest income | 67,322 | 68,606 | 132,353 | 131,024 | |||||||||||
Provision for loan losses | (784 | ) | 535 | 1,333 | 3,585 | ||||||||||
Net interest income after provision for loan losses | 68,106 | 68,071 | 131,020 | 127,439 | |||||||||||
Non-interest income: | |||||||||||||||
Interchange and card revenue | 6,382 | 8,648 | 16,043 | 22,158 | |||||||||||
Mortgage warehouse transactional fees | 1,967 | 2,523 | 3,854 | 4,743 | |||||||||||
Bank-owned life insurance | 1,869 | 2,258 | 3,900 | 3,624 | |||||||||||
Deposit fees | 1,632 | 2,133 | 3,724 | 5,260 | |||||||||||
Gain on sale of SBA and other loans | 947 | 573 | 2,308 | 1,901 | |||||||||||
Mortgage banking income | 205 | 291 | 325 | 446 | |||||||||||
Gain on sale of investment securities | — | 3,183 | — | 3,183 | |||||||||||
Impairment loss on investment securities | — | (2,882 | ) | — | (4,585 | ) | |||||||||
Other | 3,125 | 1,664 | 6,883 | 4,414 | |||||||||||
Total non-interest income | 16,127 | 18,391 | 37,037 | 41,144 | |||||||||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | 27,748 | 23,651 | 52,673 | 44,763 | |||||||||||
Technology, communication and bank operations | 11,322 | 8,910 | 21,266 | 18,827 | |||||||||||
Professional services | 3,811 | 6,227 | 9,820 | 13,739 | |||||||||||
Occupancy | 3,141 | 2,657 | 5,975 | 5,371 | |||||||||||
FDIC assessments, non-income taxes, and regulatory fees | 2,135 | 2,416 | 4,335 | 4,141 | |||||||||||
Provision for operating losses | 1,233 | 1,746 | 2,759 | 3,392 | |||||||||||
Merger and acquisition related expenses | 869 | — | 975 | — | |||||||||||
Loan workout | 648 | 408 | 1,307 | 929 | |||||||||||
Advertising and promotion | 319 | 378 | 709 | 704 | |||||||||||
Other real estate owned expenses | 58 | 160 | 98 | 105 | |||||||||||
Other | 2,466 | 3,860 | 6,114 | 7,807 | |||||||||||
Total non-interest expense | 53,750 | 50,413 | 106,031 | 99,778 | |||||||||||
Income before income tax expense | 30,483 | 36,049 | 62,026 | 68,805 | |||||||||||
Income tax expense | 6,820 | 12,327 | 14,222 | 19,336 | |||||||||||
Net income | 23,663 | 23,722 | 47,804 | 49,469 | |||||||||||
Preferred stock dividends | 3,615 | 3,615 | 7,229 | 7,229 | |||||||||||
Net income available to common shareholders | $ | 20,048 | $ | 20,107 | $ | 40,575 | $ | 42,240 | |||||||
Basic earnings per common share | $ | 0.64 | $ | 0.66 | $ | 1.29 | $ | 1.38 | |||||||
Diluted earnings per common share | $ | 0.62 | $ | 0.62 | $ | 1.26 | $ | 1.29 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 23,663 | $ | 23,722 | $ | 47,804 | $ | 49,469 | |||||||
Unrealized (losses) gains on available-for-sale debt securities: | |||||||||||||||
Unrealized (losses) gains arising during the period | (12,190 | ) | 19,885 | (46,288 | ) | 18,762 | |||||||||
Income tax effect | 3,170 | (7,755 | ) | 12,035 | (7,317 | ) | |||||||||
Reclassification adjustments for gains on securities included in net income | — | (3,183 | ) | — | (3,183 | ) | |||||||||
Income tax effect | — | 1,241 | — | 1,241 | |||||||||||
Net unrealized (losses) gains on available-for-sale debt securities | (9,020 | ) | 10,188 | (34,253 | ) | 9,503 | |||||||||
Unrealized gains on cash flow hedges: | |||||||||||||||
Unrealized gains (losses) arising during the period | 1,895 | (689 | ) | 2,768 | (360 | ) | |||||||||
Income tax effect | (492 | ) | 269 | (719 | ) | 141 | |||||||||
Reclassification adjustment for (gains) losses included in net income | (259 | ) | 767 | (128 | ) | 1,594 | |||||||||
Income tax effect | 67 | (299 | ) | 33 | (622 | ) | |||||||||
Net unrealized gains on cash flow hedges | 1,211 | 48 | 1,954 | 753 | |||||||||||
Other comprehensive (loss) income, net of income tax effect | (7,809 | ) | 10,236 | (32,299 | ) | 10,256 | |||||||||
Comprehensive income | $ | 15,854 | $ | 33,958 | $ | 15,505 | $ | 59,725 |
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||
Shares of Preferred Stock Outstanding | Preferred Stock | Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||||||
Balance, December 31, 2017 | 9,000,000 | $ | 217,471 | 31,382,503 | $ | 31,913 | $ | 422,096 | $ | 258,076 | $ | (359 | ) | $ | (8,233 | ) | $ | 920,964 | |||||||||||||||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive loss | — | — | — | — | — | 298 | (298 | ) | — | — | |||||||||||||||||||||||
Reclassification of net unrealized gains on equity securities from accumulated other comprehensive loss | — | — | — | — | — | 1,041 | (1,041 | ) | — | — | |||||||||||||||||||||||
Net income | — | — | — | — | — | 47,804 | — | — | 47,804 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (32,299 | ) | — | (32,299 | ) | ||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | (7,229 | ) | — | — | (7,229 | ) | ||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | 3,661 | — | — | — | 3,661 | ||||||||||||||||||||||||
Exercise of warrants | — | — | 5,242 | 5 | 107 | — | — | — | 112 | ||||||||||||||||||||||||
Issuance of common stock under share-based compensation arrangements | — | — | 281,898 | 282 | 2,932 | — | — | — | 3,214 | ||||||||||||||||||||||||
Balance, June 30, 2018 | 9,000,000 | $ | 217,471 | 31,669,643 | $ | 32,200 | $ | 428,796 | $ | 299,990 | $ | (33,997 | ) | $ | (8,233 | ) | $ | 936,227 | |||||||||||||||
Six Months Ended June 30, 2017 | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||||||
Shares of Preferred Stock Outstanding | Preferred Stock | Shares of Common Stock Outstanding | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Treasury Stock | Total | |||||||||||||||||||||||||
Balance, December 31, 2016 | 9,000,000 | $ | 217,471 | 30,289,917 | $ | 30,820 | $ | 427,008 | $ | 193,698 | $ | (4,892 | ) | $ | (8,233 | ) | $ | 855,872 | |||||||||||||||
Net income | — | — | — | — | — | 49,469 | — | — | 49,469 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | 10,256 | — | 10,256 | ||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | (7,229 | ) | — | (7,229 | ) | |||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | 2,934 | — | — | — | 2,934 | ||||||||||||||||||||||||
Exercise of warrants | — | — | 43,974 | 44 | 376 | — | — | — | 420 | ||||||||||||||||||||||||
Issuance of common stock under share-based compensation arrangements | — | — | 396,893 | 397 | (1,830 | ) | — | — | — | (1,433 | ) | ||||||||||||||||||||||
Balance, June 30, 2017 | 9,000,000 | $ | 217,471 | 30,730,784 | $ | 31,261 | $ | 428,488 | $ | 235,938 | $ | 5,364 | $ | (8,233 | ) | $ | 910,289 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(As Restated) | (As Restated) | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 47,804 | $ | 49,469 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for loan losses | 1,333 | 3,585 | |||||
Depreciation and amortization | 6,716 | 2,393 | |||||
Share-based compensation expense | 4,384 | 3,562 | |||||
Deferred taxes | 4,172 | (2,588 | ) | ||||
Net amortization of investment securities premiums and discounts | 813 | 232 | |||||
Unrealized loss recognized on equity securities | 296 | — | |||||
Gain on sale of investment securities | — | (3,183 | ) | ||||
Impairment loss on investment securities | — | 4,585 | |||||
Gain on sale of SBA and other loans | (2,572 | ) | (2,183 | ) | |||
Origination of loans held for sale | (11,554 | ) | (20,442 | ) | |||
Proceeds from the sale of loans held for sale | 12,640 | 18,721 | |||||
Amortization of fair value discounts and premiums | 85 | 98 | |||||
Net gain on sales of other real estate owned | (28 | ) | (163 | ) | |||
Valuation and other adjustments to other real estate owned | 78 | 231 | |||||
Earnings on investment in bank-owned life insurance | (3,900 | ) | (3,624 | ) | |||
Increase in accrued interest receivable and other assets | (7,857 | ) | (9,003 | ) | |||
Increase (decrease) in accrued interest payable and other liabilities | 13,061 | (29,357 | ) | ||||
Net Cash Provided By Operating Activities | 65,471 | 12,333 | |||||
Cash Flows from Investing Activities | |||||||
Proceeds from maturities, calls and principal repayments of securities available for sale | 26,216 | 22,843 | |||||
Proceeds from sales of investment securities available for sale | — | 115,982 | |||||
Purchases of investment securities available for sale | (763,242 | ) | (644,011 | ) | |||
Origination of mortgage warehouse loans | (14,260,621 | ) | (14,693,838 | ) | |||
Proceeds from repayments of mortgage warehouse loans | 14,123,291 | 14,709,013 | |||||
Net increase in loans | (18,680 | ) | (572,253 | ) | |||
Proceeds from sales of loans | 29,038 | 112,927 | |||||
Purchase of loans | (278,508 | ) | (262,641 | ) | |||
Purchases of bank-owned life insurance | — | (50,000 | ) | ||||
Proceeds from bank-owned life insurance | 529 | 1,418 | |||||
Net purchases of FHLB, Federal Reserve Bank, and other restricted stock | (30,148 | ) | (61,281 | ) | |||
Purchases of bank premises and equipment | (608 | ) | (1,732 | ) | |||
Proceeds from sales of other real estate owned | 28 | 682 | |||||
Purchase of leased assets under operating leases | (6,486 | ) | — | ||||
Net Cash Used In Investing Activities | (1,179,191 | ) | (1,322,891 | ) | |||
Cash Flows from Financing Activities | |||||||
Net increase in deposits | 495,812 | 171,587 | |||||
Net increase in short-term borrowed funds from the FHLB | 777,937 | 1,130,800 | |||||
Net (decrease) increase in federal funds purchased | (50,000 | ) | 67,000 | ||||
Net proceeds from issuance of long-term debt | — | 98,574 | |||||
Preferred stock dividends paid | (7,229 | ) | (7,229 | ) | |||
Exercise of warrants | 112 | 420 | |||||
Payments of employee taxes withheld from share-based awards | (700 | ) | (3,961 | ) | |||
Proceeds from issuance of common stock | 3,191 | 1,900 | |||||
Net Cash Provided By Financing Activities | 1,219,123 | 1,459,091 | |||||
Net Increase in Cash and Cash Equivalents | 105,403 | 148,533 | |||||
Cash and Cash Equivalents – Beginning | 146,323 | 264,709 | |||||
Cash and Cash Equivalents – Ending | $ | 251,726 | $ | 413,242 | |||
(continued) | |||||||
Supplementary Cash Flows Information: | |||||||
Interest paid | $ | 73,162 | $ | 44,983 | |||
Income taxes paid | 4,174 | 21,715 | |||||
Non-cash items: | |||||||
Transfer of loans to other real estate owned | $ | 57 | $ | — | |||
Transfer of loans held for investment to held for sale | — | 150,758 | |||||
Transfer of loans held for sale to held for investment | 129,691 | — | |||||
University relationship intangible purchased not settled | 1,502 | — |
Three Months Ended June 30, 2017 | |||||||||||
(amounts in thousands) | As Previously Reported | Effect of Reclassification From Held For Sale to Held and Used | After Reclassification | ||||||||
Interest income | $ | 93,852 | $ | — | $ | 93,852 | |||||
Interest expense | 25,236 | 10 | 25,246 | ||||||||
Net interest income | 68,616 | (10 | ) | 68,606 | |||||||
Provision for loan losses | 535 | — | 535 | ||||||||
Non-interest income | 6,971 | 11,420 | 18,391 | ||||||||
Non-interest expense | 30,567 | 19,846 | 50,413 | ||||||||
Income from continuing operations before income taxes | 44,485 | (8,436 | ) | 36,049 | |||||||
Provision for income taxes | 15,533 | (3,206 | ) | 12,327 | |||||||
Net income from continuing operations | 28,952 | (5,230 | ) | 23,722 | |||||||
Loss from discontinued operations before income taxes | (8,436 | ) | 8,436 | — | |||||||
Income tax benefit from discontinued operations | (3,206 | ) | 3,206 | — | |||||||
Net loss from discontinued operations | (5,230 | ) | 5,230 | — | |||||||
Net income | 23,722 | — | 23,722 | ||||||||
Preferred stock dividends | 3,615 | — | 3,615 | ||||||||
Net income available to common shareholders | $ | 20,107 | $ | — | $ | 20,107 | |||||
Six Months Ended June 30, 2017 | |||||||||||
(amounts in thousands) | As Previously Reported | Effect of Reclassification From Held For Sale to Held and Used | After Reclassification | ||||||||
Interest income | $ | 176,946 | $ | — | $ | 176,946 | |||||
Interest expense | 45,906 | 16 | 45,922 | ||||||||
Net interest income | 131,040 | (16 | ) | 131,024 | |||||||
Provision for loan losses | 3,585 | — | 3,585 | ||||||||
Non-interest income | 12,398 | 28,746 | 41,144 | ||||||||
Non-interest expense | 60,714 | 39,064 | 99,778 | ||||||||
Income from continuing operations before income taxes | 79,139 | (10,334 | ) | 68,805 | |||||||
Provision for income taxes | 23,263 | (3,927 | ) | 19,336 | |||||||
Net income from continuing operations | 55,876 | (6,407 | ) | 49,469 | |||||||
Loss from discontinued operations before income taxes | (10,334 | ) | 10,334 | — | |||||||
Income tax benefit from discontinued operations | (3,927 | ) | 3,927 | — | |||||||
Net loss from discontinued operations | (6,407 | ) | 6,407 | — | |||||||
Net income | 49,469 | — | 49,469 | ||||||||
Preferred stock dividends | 7,229 | — | 7,229 | ||||||||
Net income available to common shareholders | $ | 42,240 | $ | — | $ | 42,240 | |||||
June 30, 2018 | |||||||||||
Consolidated Balance Sheet | As Previously Reported | Adjustments | As Restated | ||||||||
(amounts in thousands) | |||||||||||
Loans held for sale | $ | 1,931,781 | $ | (1,930,738 | ) | $ | 1,043 | ||||
Loans receivable, mortgage warehouse, at fair value | — | 1,930,738 | 1,930,738 | ||||||||
Total loans receivable, net of allowance for loan losses | $ | 7,143,438 | $ | 1,930,738 | $ | 9,074,176 |
Six Months Ended June 30, | |||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Consolidated Statements of Cash Flows | As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | |||||||||||||||||
(amounts in thousands) | |||||||||||||||||||||||
Origination of loans held for sale | $ | (14,272,175 | ) | $ | 14,260,621 | $ | (11,554 | ) | $ | (14,714,280 | ) | $ | 14,693,838 | $ | (20,442 | ) | |||||||
Proceeds from the sale of loans held for sale | 14,135,931 | (14,123,291 | ) | 12,640 | 14,727,734 | (14,709,013 | ) | 18,721 | |||||||||||||||
Net Cash Provided by (Used in) Operating Activities | (71,859 | ) | 137,330 | 65,471 | 27,508 | (15,175 | ) | 12,333 | |||||||||||||||
Origination of mortgage warehouse loans | — | (14,260,621 | ) | (14,260,621 | ) | — | (14,693,838 | ) | (14,693,838 | ) | |||||||||||||
Proceeds from repayments of mortgage warehouse loans | — | 14,123,291 | 14,123,291 | — | 14,709,013 | 14,709,013 | |||||||||||||||||
Net Cash Used In Investing Activities | $ | (1,041,861 | ) | $ | (137,330 | ) | $ | (1,179,191 | ) | $ | (1,338,066 | ) | $ | 15,175 | $ | (1,322,891 | ) |
• | NOTE 7 - LOANS HELD FOR SALE; |
• | NOTE 8 - LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES; and |
• | NOTE 10 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. |
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10) Issued February 2018 | Clarifies certain aspects of the guidance issued in ASU 2016-01 including: the ability to irrevocably elect to change the measurement approach for equity securities measured using the practical expedient (at cost plus or minus observable transactions less impairment) to a fair value method in accordance with ASC 820, Fair Value Measurement. Provides clarification that if an observable transaction occurs for such securities, the adjustment is as of the observable transaction date. Effective July 1, 2018 on a prospective basis with early adoption permitted. | Customers adopted on July 1, 2018 on a prospective basis. The adoption did not have a significant impact as Customers currently does not have any significant equity securities without readily determinable fair values. | ||
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income/(Loss) ("AOCI") Issued February 2018 | Allows for reclassification from AOCI to retained earnings for stranded tax effects resulting from the 2017 Tax Cut and Jobs Act. Requires an entity to disclose whether it has elected to reclassify stranded tax effects from AOCI to retained earnings and its policy for releasing income tax effects from AOCI. Effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. | Customers early adopted on January 1, 2018. The adoption resulted in the reclassification of $0.3 million in stranded tax effects in Customers' AOCI related to net unrealized losses on its available-for-sale debt securities and cash flow hedges. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities Issued August 2017 | Aligns the entity's risk management activities and financial reporting for hedging relationships. Amends the existing hedge accounting model and expands an entity's ability to hedge nonfinancial and financial risk components and reduce complexity in fair value hedges of interest-rate risk. Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line item as the hedge item. Changes certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. | Customers early adopted on January 1, 2018. With the early adoption, Customers is able to pursue additional hedging strategies including the ability to apply fair value hedge accounting to a specified pool of assets by excluding the portion of the hedged items related to prepayments, defaults and other events. These additional hedging strategies will allow Customers to better align the accounting and financial reporting of its hedging activities with the economic objectives thereby reducing the earnings volatility resulting from these hedging activities. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. Customers has updated its disclosures in NOTE 11 - DERIVATIVES INSTRUMENTS AND HEDGING ACTIVITIES as a result of early adopting this ASU. | ||
ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting Issued May 2017 | Clarifies when to account for a change to the terms or conditions of a share-based-payment award as a modification in ASC 718. Provides that modification accounting is only required if the fair value, vesting conditions, or the classification of the award as equity or a liability changes as a result of the change in terms or conditions. Effective January 1, 2018 on a prospective basis for awards modified on or after the adoption date. | Customers adopted on January 1, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets Issued February 2017 | Clarifies the scope and application of the accounting guidance on the sale of nonfinancial assets to non-customers, including partial sales. Clarifies that if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. Effective January 1, 2018 on a prospective basis. | Customers adopted on January 1, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2017-01, Clarifying the Definition of a Business Issued January 2017 | Narrows the definition of a business and clarifies that to be considered a business, the fair value of gross assets acquired (or disposed of) should not be concentrated in a single identifiable asset or a group of similar identifiable assets. Also clarifies that in order to be considered a business, an acquisition would have to include an input and a substantive process that together will significantly contribute to the ability to create an output. Effective January 1, 2018 on a prospective basis. | Customers adopted on January 1, 2018. The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2016-18, Statement of Cash Flows: Restricted Cash Issued November 2016 | Requires inclusion of restricted cash in cash and cash equivalents when reconciling the beginning-of-period total amounts shown on the statement of cash flows. Effective January 1, 2018 and requires retrospective application to all periods presented. | Customers adopted on January 1, 2018. The adoption did not result in any significant impact on Customers' consolidated financial statements, including its consolidated statement of cash flows, and therefore did not result in a retrospective application. | ||
ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory Issued October 2016 | Requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Eliminates the current exception for all intra-entity transfers of an asset other than inventory that requires deferral of the tax effects until the asset is sold to a third party or otherwise recovered through use. Effective January 1, 2018 on a modified retrospective basis. | Customers adopted on January 1, 2018. The adoption of the ASU did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
ASU 2016-15, Statement of Cash Flow: Classification of Certain Cash Receipts and Cash Payments Issued August 2016 | Aims to reduce the existing diversity in practice with regards to the classification of the following specific items in the statement of cash flows: 1. Cash payments for debt prepayment or extinguishment costs will be classified as an operating activity, while the portion of the payment attributable to principal will be classified as a financing activity.2. Cash paid by an acquirer soon after a business combination for the settlement of a contingent consideration liability recognized at the acquisition date will be classified in investing activities.3. Cash proceeds received from the settlement of insurance claims will be classified on the basis of the related insurance coverage (i.e., the nature of the loss).4. Cash proceeds received from the settlement of bank-owned life insurance policies will be classified as cash inflows from investing activities.5. A transferor's beneficial interest obtained in a securitization of financial assets will be disclosed as a non-cash activity, and cash received from beneficial interests will be classified in investing activities. Effective January 1, 2018 and requires retrospective application to all periods presented. | Customers adopted on January 1, 2018. The adoption did not result in any significant impact on Customers' consolidated financial statements, including its consolidated statement of cash flows, and therefore it did not result in a retrospective application. | ||
ASU 2016-04, Liabilities - Extinguishment of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products Issued March 2016 | Requires issuers of prepaid stored-value products (such as gift cards, telecommunication cards, and traveler's checks), to derecognize the financial liability related to those products for breakage. Breakage is the value of prepaid stored-value products that is not redeemed by consumers for goods, services or cash. The amendments in this ASU provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage be accounted for consistent with the breakage guidance in Topic 606. Effective January 1, 2018 on a modified retrospective basis. | Customers adopted on January 1, 2018. The adoption of this ASU did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities Issued January 2016 | Requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income. Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. Eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. Effective January 1, 2018 on a modified retrospective basis. | Customers adopted on January 1, 2018 using a modified retrospective approach. The adoption of this ASU resulted in a cumulative-effect adjustment that resulted in a $1.0 million reduction in AOCI and a corresponding increase in retained earnings for the same amount. The $1.0 million represented the net unrealized gain on Customers' investment in Religare equity securities at December 31, 2017, as disclosed in NOTE 6 - INVESTMENT SECURITIES. Customers also refined its calculation to determine the fair value of its held-for- investment loan portfolio for disclosure purposes using an exit price notion as part of adopting this ASU. The refined calculation did not have a significant impact on Customers' fair value disclosures. | ||
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Issued May 2014 | Supersedes the revenue recognition requirements in ASC 605. Requires an entity to recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment includes a five-step process to assist an entity in achieving the main principle(s) of revenue recognition under ASC 605. Reframed the structure of the indicators of when an entity is acting as an agent and focused on evidence that an entity is acting as the principal or agent in a revenue transaction. Requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Effective January 1 , 2018 and can be either applied retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption (modified retrospective approach). | Customers adopted on January 1, 2018 on a modified retrospective basis. Because the ASU does not apply to revenue associated with leases and financial instruments (including loans and securities), Customers concluded that the new guidance did not have a material impact on the elements of its consolidated statements of operations most closely associated with leases and financial instruments (such as interest income, interest expense and securities gain). Customers has identified its deposit-related fees, service charges, debit and prepaid card interchange income and university fees to be within the scope of the standard. Customers has also completed its review of the related contracts and its evaluation of certain costs related to these revenue streams and determined that its debit and prepaid card interchange income, previously reported on a gross basis for periods prior to adoption, will need to be presented on a net basis under this ASU, as Customers is the agent. The adoption of this ASU, did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements. Additional discussion related to the adoption and the required quantitative and qualitative disclosures are included in NOTE 13 - NON-INTEREST REVENUES. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting Issued June 2018 | Expands the scope of Topic 718, Compensation - Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Applies to all share-based payment transactions in which a grantor acquires goods or services from non-employees to be used or consumed in a grantor's own operations by issuing share-based payment awards. With the amended guidance from ASU 2018-07, non-employees share-based payments are measured with an estimate of the fair value of the equity the business is obligated to issue at the grant date (the date that the business and the stock award recipient agree to the terms of the award). Compensation would be recognized in the same period and in the same manner as if the entity had paid cash for goods or services instead of stock. Effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. | Customers currently does not grant share-based payment awards to non-employees and, accordingly, does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements; however, Customers will continue to evaluate the potential impact of this ASU through the adoption date. | ||
ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features Issued July 2017 | Changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity's own stock. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) would no longer be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity-classified financial instruments, the amendments require entities to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of net income available to common shareholders in basic earnings per share ("EPS"). Effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. | Customers currently does not have any equity-linked financial instruments (or embedded features) with down round features and, accordingly, does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements; however, Customers will continue to evaluate the potential impact of this ASU through the adoption date. | ||
ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities Issued March 2017 | Requires that premiums for certain callable debt securities held be amortized to their earliest call date. Effective for Customers beginning after December 15, 2018, with early adoption permitted. Adoption of this new guidance must be applied on a modified retrospective approach. | Customers currently has an immaterial amount of callable debt securities purchased at a premium and, accordingly, does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements; however, Customers will continue to evaluate the potential impact through the adoption date. | ||
Standard | Summary of guidance | Effects on Financial Statements | ||
ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments Issued June 2016 | Requires an entity to utilize a new impairment model known as the current expected credit loss ("CECL") model to estimate lifetime expected credit loss and record an allowance that, when deducted from the amortized cost basis of the financial asset (including HTM securities), presents the net amount expected to be collected on the financial asset. Replaces today's "incurred loss" approach and is expected to result in earlier recognition of credit losses. For available-for-sale debt securities, entities will be required to record allowances for credit losses rather than reduce the carrying amount, as they do today under the OTTI model, and will be allowed to reverse previously established allowances in the event the credit of the issuer improves. Simplifies the accounting model for purchased credit-impaired debt securities and loans. Effective beginning after December 15, 2019 with early adoption permitted. Adoption can be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. | Customers is currently evaluating the impact of this ASU, continuing its implementation efforts across the company and reviewing the loss modeling requirements consistent with lifetime expected loss estimates. Customers expects that the new model will include different assumptions used in calculating credit losses, such as estimating losses over the estimated life of a financial asset and will consider expected future changes in macroeconomic conditions. The adoption of this ASU may result in an increase to Customers' allowance for loan losses which will depend upon the nature and characteristics of Customers' loan portfolio at the adoption date, as well as the macroeconomic conditions and forecasts at that date. Customers currently does not intend to early adopt this new guidance. | ||
ASU 2016-02, Leases Issued February 2016 | Supersedes the current lease accounting guidance for both lessees and lessors under ASC 840, Leases. From the lessee's perspective, the new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. This ASU will require lessors to account for leases using an approach that is substantially similar to the existing guidance for sales-type, direct financing leases and operating leases. Effective beginning after December 15, 2018 with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. In July 2018, the FASB issued ASU 2018-11 “Leases (Topic 842): Targeted Improvements,” which provides lessees the option to apply the new leasing standard to all open leases as of the adoption date. | Customers is currently evaluating the impact of this ASU on its financial condition and results of operations and expects to recognize right-of-use assets and lease liabilities for substantially all of its operating lease commitments based on the present value of unpaid lease payments as of the date of adoption. Customers expects to apply the new transition option under ASU 2018-11. Customers does not intend to early adopt this ASU. | ||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(amounts in thousands, except share and per share data) | |||||||||||||||
Net income available to common shareholders | $ | 20,048 | $ | 20,107 | $ | 40,575 | $ | 42,240 | |||||||
Weighted-average number of common shares outstanding - basic | 31,564,893 | 30,641,554 | 31,495,082 | 30,524,955 | |||||||||||
Share-based compensation plans | 807,258 | 1,910,634 | 823,245 | 2,129,773 | |||||||||||
Warrants | 8,511 | 17,464 | 8,566 | 27,318 | |||||||||||
Weighted-average number of common shares - diluted | 32,380,662 | 32,569,652 | 32,326,893 | 32,682,046 | |||||||||||
Basic earnings per common share | $ | 0.64 | $ | 0.66 | $ | 1.29 | $ | 1.38 | |||||||
Diluted earnings per common share | $ | 0.62 | $ | 0.62 | $ | 1.26 | $ | 1.29 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Anti-dilutive securities: | |||||||||||
Share-based compensation awards | 1,069,225 | 288,325 | 1,069,225 | 282,725 | |||||||
Warrants | — | 52,242 | — | 52,242 | |||||||
Total anti-dilutive securities | 1,069,225 | 340,567 | 1,069,225 | 334,967 |
Three Months Ended June 30, 2018 | |||||||||||||||||
Available-for-sale debt securities | |||||||||||||||||
(amounts in thousands) | Unrealized Gains (Losses) | Foreign Currency Items | Total Unrealized Gains (Losses) | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||||||
Balance - March 31, 2018 | $ | (26,691 | ) | $ | — | $ | (26,691 | ) | $ | 503 | $ | (26,188 | ) | ||||
Other comprehensive income (loss) before reclassifications | (9,020 | ) | — | (9,020 | ) | 1,403 | (7,617 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | — | — | — | (192 | ) | (192 | ) | ||||||||||
Net current-period other comprehensive income (loss) | (9,020 | ) | — | (9,020 | ) | 1,211 | (7,809 | ) | |||||||||
Balance - June 30, 2018 | $ | (35,711 | ) | $ | — | $ | (35,711 | ) | $ | 1,714 | $ | (33,997 | ) |
Six Months Ended June 30, 2018 | |||||||||||||||||
Available-for-sale securities | |||||||||||||||||
(amounts in thousands) | Unrealized Gains (Losses) | Foreign Currency Items | Total Unrealized Gains (Losses) | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||||||
Balance - December 31, 2017 | $ | (249 | ) | $ | 88 | $ | (161 | ) | $ | (198 | ) | $ | (359 | ) | |||
Reclassification of the income tax effects of the Tax Cuts and Jobs Act (2) | (256 | ) | — | (256 | ) | (42 | ) | (298 | ) | ||||||||
Reclassification of net unrealized gains on equity securities (2) | (953 | ) | (88 | ) | (1,041 | ) | — | (1,041 | ) | ||||||||
Balance after reclassification adjustments on January 1, 2018 | (1,458 | ) | — | (1,458 | ) | (240 | ) | (1,698 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | (34,253 | ) | — | (34,253 | ) | 2,049 | (32,204 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | — | — | — | (95 | ) | (95 | ) | ||||||||||
Net current-period other comprehensive income (loss) | (34,253 | ) | — | (34,253 | ) | 1,954 | (32,299 | ) | |||||||||
Balance - June 30, 2018 | $ | (35,711 | ) | $ | — | $ | (35,711 | ) | $ | 1,714 | $ | (33,997 | ) | ||||
Three Months Ended June 30, 2017 | |||||||||||
(amounts in thousands) | Unrealized Gains (Losses) on Available-For-Sale Debt Securities | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||
Balance - March 31, 2017 | $ | (3,366 | ) | $ | (1,506 | ) | $ | (4,872 | ) | ||
Other comprehensive income (loss) before reclassifications | 12,130 | (420 | ) | 11,710 | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | (1,942 | ) | 468 | (1,474 | ) | ||||||
Net current-period other comprehensive income | 10,188 | 48 | 10,236 | ||||||||
Balance - June 30, 2017 | $ | 6,822 | $ | (1,458 | ) | $ | 5,364 |
Six Months Ended June 30, 2017 | |||||||||||
(amounts in thousands) | Unrealized Gains (Losses) on Available-For-Sale Debt Securities | Unrealized Gains (Losses) on Cash Flow Hedges | Total | ||||||||
Balance - December 31, 2016 | $ | (2,681 | ) | $ | (2,211 | ) | $ | (4,892 | ) | ||
Other comprehensive income (loss) before reclassifications | 11,445 | (219 | ) | 11,226 | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) to net income (1) | (1,942 | ) | 972 | (970 | ) | ||||||
Net current-period other comprehensive income | 9,503 | 753 | 10,256 | ||||||||
Balance - June 30, 2017 | $ | 6,822 | $ | (1,458 | ) | $ | 5,364 | ||||
June 30, 2018 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(amounts in thousands) | |||||||||||||||
Available-for-Sale Debt Securities: | |||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 490,425 | $ | — | $ | (13,862 | ) | $ | 476,563 | ||||||
Agency-guaranteed commercial real estate mortgage-backed securities | 334,232 | — | (13,859 | ) | 320,373 | ||||||||||
Corporate notes | 381,545 | 798 | (21,335 | ) | 361,008 | ||||||||||
Available-for-Sale Debt Securities | $ | 1,206,202 | $ | 798 | $ | (49,056 | ) | 1,157,944 | |||||||
Equity Securities (1) | 3,056 | ||||||||||||||
Total Investment Securities, at Fair Value | $ | 1,161,000 |
December 31, 2017 | |||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
(amounts in thousands) | |||||||||||||||
Available-for-Sale Securities: | |||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 186,221 | $ | 36 | $ | (2,799 | ) | $ | 183,458 | ||||||
Agency-guaranteed commercial real estate mortgage-backed securities | 238,809 | 432 | (769 | ) | 238,472 | ||||||||||
Corporate notes (1) | 44,959 | 1,130 | — | 46,089 | |||||||||||
Equity securities (2) | 2,311 | 1,041 | — | 3,352 | |||||||||||
Total Available-for-Sale Securities, at Fair Value | $ | 472,300 | $ | 2,639 | $ | (3,568 | ) | $ | 471,371 |
(1) | Includes subordinated debt issued by other bank holding companies. |
(2) | Includes equity securities issued by a foreign entity. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(amounts in thousands) | |||||||||||||||
Proceeds from sale of available-for-sale securities | $ | — | $ | 115,982 | $ | — | $ | 115,982 | |||||||
Gross gains | $ | — | $ | 3,183 | $ | — | $ | 3,183 | |||||||
Gross losses | — | — | — | — | |||||||||||
Net gains (losses) | $ | — | $ | 3,183 | $ | — | $ | 3,183 |
June 30, 2018 | |||||||
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 | 179,413 | 171,214 | |||||
Due after ten years | 202,132 | 189,794 | |||||
Agency-guaranteed residential mortgage-backed securities | 490,425 | 476,563 | |||||
Agency-guaranteed commercial real estate mortgage-backed securities | 334,232 | 320,373 | |||||
Total debt securities | $ | 1,206,202 | $ | 1,157,944 |
June 30, 2018 | |||||||||||||||||||||||
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 Debt Securities: | |||||||||||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 416,002 | $ | (10,256 | ) | $ | 60,561 | $ | (3,606 | ) | $ | 476,563 | $ | (13,862 | ) | ||||||||
Agency-guaranteed commercial real estate mortgage-backed securities | 314,525 | (13,532 | ) | 5,848 | (327 | ) | 320,373 | (13,859 | ) | ||||||||||||||
Corporate notes | 315,249 | (21,335 | ) | — | — | 315,249 | (21,335 | ) | |||||||||||||||
Total | $ | 1,045,776 | $ | (45,123 | ) | $ | 66,409 | $ | (3,933 | ) | $ | 1,112,185 | $ | (49,056 | ) |
December 31, 2017 | |||||||||||||||||||||||
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 Debt Securities: | |||||||||||||||||||||||
Agency-guaranteed residential mortgage-backed securities | $ | 104,861 | $ | (656 | ) | $ | 66,579 | $ | (2,143 | ) | $ | 171,440 | $ | (2,799 | ) | ||||||||
Agency-guaranteed commercial real estate mortgage-backed securities | 115,970 |