~~Customers also adopted ASU 2016-17,~~ ~~Consolidation - Interests Held Through Related Parties that are Under Common Control. This ASU amends the guidance included in ASU 2015-02,~~ ~~Consolidation: Amendments to Consolidation Analysis~~ which Customers adopted in first quarter 2016. This ASU makes a narrow amendment that requires that a single decision maker considers indirect economic interests in an entity held through related parties that are under common control on a proportionate basis when determining whether it is the primary beneficiary of that VIE. Prior to this amendment, indirect interests held through related parties that are under common control were to be considered equivalent of the single decision maker’s direct interests in their entirety which could result in a single decision maker consolidating the VIE. As the adoption did not result in any significant impact to Customers’ consolidated financial statements, it did not result in a full or modified retrospective application.



Standard	Summary of guidance	Effects on Financial Statements
ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income/(Loss)	Ÿ Allows for reclassification from AOCI to retained earnings for stranded tax effects resulting from the 2017 Tax Cut and Jobs Act. Ÿ 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. Ÿ Effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted.	Ÿ Customers early adopted on January 1, 2018. Ÿ 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 securities and cash flow hedges. Ÿ The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements.
Issued February 2018
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities	Ÿ Aligns the entity's risk management activities and financial reporting for hedging relationships. Ÿ 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. Ÿ 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. Ÿ Changes certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. Ÿ Effective for fiscal years beginning after December 15, 2018. Early adoption is permitted.	Ÿ Customers early adopted on January 1, 2018. Ÿ With the early adoption, Customers is now 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. Ÿ These additional hedging strategies will allow Customers to better align its accounting and the financial reporting of its hedging activities with its economic objectives thereby reducing the earnings volatility resulting from these hedging activities. Ÿ 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.
Issued August 2017
ASU 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting	Ÿ Clarifies when to account for a change to the terms or conditions of a share-based-payment award as a modification in ASC 718. Ÿ 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. Ÿ Effective January 1, 2018 on a prospective basis for awards modified on or after the adoption date.	Ÿ Customers adopted on January 1, 2018. Ÿ Customers generally does not modify the terms or conditions of its share-based-payment awards. Ÿ The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements.
Issued May 2017
ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets	Ÿ Clarifies the scope and application of the accounting guidance on the sale of nonfinancial assets to non-customers, including partial sales. Ÿ 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. Ÿ Effective January 1, 2018 on a prospective basis.	Ÿ Customers adopted on January 1, 2018. Ÿ The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements.
Issued February 2017
ASU 2017-01, Clarifying the Definition of a Business	Ÿ 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. Ÿ 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. Ÿ Effective January 1, 2018 on a prospective basis.	Ÿ Customers adopted on January 1, 2018. Ÿ The adoption did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements.
Issued January 2017

Accounting Standards ~~Issued But Not Yet~~ Adopted

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation - Stock Compensation: Scope of Modification Accounting~~, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification in Accounting Standards Codification (“ASC”) 718. Under this ASU, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award as equity or a liability changes as a result of the change in terms or conditions. This ASU does not change the accounting for modifications under ASC 718. The ASU will be effective for Customers for its first reporting period beginning after December 15, 2017, with early adoption permitted. Adoption of this new guidance must be applied prospectively to an award modified on ~~or after the adoption date. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.~~

~~In March 2017, the FASB issued ASU 2017-08,~~ ~~Receivables-Nonrefundable Fees and Other Costs:~~ ~~Premium Amortization on Purchased Callable Debt Securities,~~ which requires that premiums for certain callable debt securities held be amortized to their earliest call date. This ASU does not affect the accounting for securities purchased at a discount. This ASU will be effective for Customers for its first reporting period beginning after December 15, 2018, with earlier adoption permitted. Adoption of this new guidance must be applied on a modified retrospective approach. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.

~~In February 2017, the FASB issued ASU 2017-05,~~ ~~Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets,~~ which clarifies the scope and application of the accounting guidance on the sale of nonfinancial assets to non-customers, including partial sales. This ASU defines an in-substance nonfinancial asset, in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. 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. This ASU also unifies the guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing the sales of real estate, removes exceptions to the financial asset derecognition model, and clarifies the accounting for contributions of nonfinancial assets to joint ventures. This ASU will be effective for Customers for its first reporting period beginning after December 15, 2017, with early adoption permitted. The adoption of this new guidance must be applied on a full or modified retrospective basis. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~, which will simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test that requires an entity to determine the implied fair value of its goodwill through a hypothetical purchase price allocation. Instead, under this ASU, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. All other goodwill impairment guidance will remain largely unchanged. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will also be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This ASU is effective for Customers for its first reporting period beginning after December 15, 2019. Early adoption is permitted for impairment tests performed after January 1, ~~2017. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.~~2018 (continued)

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Clarifying the Definition of a Business, which 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. In addition, 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. Also, the amendments narrow the definition of the term “output” so that it is consistent with how outputs are defined in ASC Topic 606, ~~Revenue from Contracts with Customers~~. This ASU is effective for Customers for its first reporting period beginning after December 15, 2017. Adoption of this new guidance must be applied on a prospective basis. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash~~, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for Customers for its first reporting period beginning after December 15, 2017, with early adoption permitted. Customers does not expect the adoption to this ASU to have a significant impact on the presentation of its statement of cash flows.

~~In October 2016, the FASB issued ASU 2016-16-Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory~~, which requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This 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.

This ASU is effective for Customers for its first reporting period beginning after December 15, 2017, with early adoption permitted. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which aims to reduce the existing diversity in practice with regards to the following specific items in the Statement of Cash Flows:~~



1.Standard	Summary of guidance	Effects on Financial Statements
ASU 2016-18, Statement of Cash Flows: Restricted Cash	Ÿ 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. Ÿ Effective January 1, 2018 and requires retrospective application to all periods presented.	Ÿ Customers adopted on January 1, 2018. Ÿ 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.
Issued November 2016
ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory	Ÿ Requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Ÿ 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. Ÿ Effective January 1, 2018 on a modified retrospective basis.	Ÿ Customers adopted on January 1, 2018. Ÿ The adoption of the ASU did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements.
Issued October 2016
ASU 2016-15, Statement of Cash Flow: Classification of Certain Cash Receipts and Cash Payments	Ÿ 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 in financing activities.~~


2.	~~Upon settlement of zero-coupon bonds and bonds with insignificant cash coupons, the portion of the payment attributable to imputed interest~~ will be classified as an operating activity, while the portion of the payment attributable to principal will be classified as a financing activity.

Cash paid by an acquirer soon after a business combination ~~(i.e. approximately three months or less)~~ for the settlement of a contingent consideration liability will be classified in investing activities. Payments made thereafter should be separated between financing activities and operating activities. Cash payments up to the amount of the contingent consideration liability recognized at the acquisition date will be classified in ~~financing activities; any excess will be classified in operating~~investing activities.


4.	3. Cash proceeds received from the settlement of insurance claims will be classified on the basis of the related insurance coverage ~~(that is,~~(i.e., the nature of the loss). ~~Cash proceeds from lump-sum settlements will be classified based on the nature of each loss component included in the settlement.~~


5.	4. Cash proceeds received from the settlement of bank-owned life insurance ~~(BOLI)~~ policies will be classified as cash inflows from investing activities. ~~Cash payments for premiums on BOLI may be classified as cash outflows for investing, operating, or a combination of both.~~


6.	5. A ~~transferor’s~~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.

Ÿ Effective January 1, 2018 and requires retrospective application to all periods presented.		Ÿ Customers adopted on January 1, 2018. Ÿ 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.
7.Issued August 2016	~~Distributions received from equity method investees will be classified using either a cumulative earnings approach or a look-through approach as an accounting policy election.~~

The ASU contains additional guidance clarifying when an entity should separate cash receipts and cash payments and classify them into more than one class of cash flows (including when reasonable judgment is required to estimate and allocate cash flows) versus when an entity should classify the aggregate amount into one class of cash flows on the basis of predominance.This ASU is effective for Customers for its first reporting period beginning after December 15, 2017, with early adoption permitted. Customers is currently evaluating the impact of this ASU and does not expect the ASU to have a material impact on the presentation of its statement of cash flows.

~~In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.~~ This ASU 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. This ASU will replace today’s “incurred loss” approach. The CECL model 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. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This ASU is effective for Customers for its first reporting period beginning after December 15, 2019. Earlier adoption is also permitted. Adoption of the new guidance 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, initiating implementation efforts across the company, and planning for loss modeling requirements consistent with lifetime expected loss estimates. It is expected 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.

~~In March 2016, the FASB issued ASU 2016-04,~~ ~~Liabilities - Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products~~, that would require issuers of prepaid stored-value product (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. There is currently a diversity in the methodology used to recognize breakage. Subtopic 405-20, ~~Extinguishment of Liabilities, includes derecognition guidance for both financial liabilities and nonfinancial liabilities, and Topic 606,~~ ~~Revenue from Contracts with Customers~~, includes authoritative breakage guidance but excludes financial liabilities. 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. This ASU is effective for Customers for its first reporting period beginning after December 15, 2017. Customers does not expect the adoption of this ASU to have a significant impact on its financial condition, results of operations and consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases, which 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. The new guidance 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. The new standard is effective for Customers for its first reporting period beginning after December 15, 2018. Early adoption is 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. A modified retrospective transition approach is required for lessors for sales-type, direct financing, 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. 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 does not intend to early adopt this ASU.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities.~~ The guidance in this ASU among other things, (1) requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (3) 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, (4) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (5) 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, (6) 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 and (7) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to

available-for-sale securities. The guidance in this ASU is effective for Customers for its first reporting period beginning after December 15, 2017, including interim periods within those fiscal years. Customers is in the process of evaluating the impacts of the adoption of this ASU, however, it does not expect the impact to be significant to its financial condition, results of operations and consolidated financial statements given the immaterial amount of its investment in equity securities.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, superseding the revenue recognition requirements in ASC 605. This ASU 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. In August 2015, the FASB issued ASU 2015-14, which formalized the deferral of the effective date of the amendment for a period of one-year from the original effective date. Following the issuance of ASU 2015-14, the amendment will be effective for Customers for its first reporting period beginning after December 15, 2017. In March 2016, the FASB also issued ASU 2016-08, an amendment to the guidance in ASU 2014-09, which 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. ASU 2016-08 also eliminated two of the indicators (the entity’s consideration is in the form of a commission and the entity is not exposed to credit risk) in making that determination. This amendment also clarifies that each indicator may be more or less relevant to the assessment depending on the terms and conditions of the contract. In April 2016, the FASB also issued ASU 2016-10, which clarifies the implementation guidance on identifying promised goods or services and on determining whether an entity's promise to grant a license with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a right to access the entity's intellectual property (which is satisfied over time). In May 2016, the FASB issued ASU 2016-12, an amendment to ASU 2014-09, which provided practical expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on transition, collectability, non-cash consideration and the presentation of sales and other similar taxes. The amendments, collectively, should be applied retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption.

Because the ASU does not apply to revenue associated with leases and financial instruments (including loans and securities), Customers does not expect the new guidance to 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 intends to adopt this ASUAccounting Standards Adopted on January 1, 2018 using a modified retrospective approach. Customers’ ongoing implementation efforts include the identification of other revenue streams that are within the scope of the new guidance and reviewing the related contracts with customers to determine the effect on certain non-interest income items presented in the consolidated statements of operations. As provided above, Customers does not expect the adoption of this ASU to have a significant impact to its(continued)



Standard	Summary of guidance	Effects on Financial Statements
ASU 2016-04, Liabilities - Extinguishment of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products	Ÿ 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. Ÿ 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. ŸEffective January 1, 2018 on a modified retrospective basis.	Ÿ Customers adopted on January 1, 2018. Ÿ The adoption of this ASU did not have a significant impact on Customers' financial condition, results of operations and consolidated financial statements.
Issued March 2016
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	Ÿ Requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income. Ÿ Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. Ÿ 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. Ÿ Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Ÿ 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. Ÿ 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. Ÿ Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. ŸEffective January 1, 2018 on a modified retrospective basis.	Ÿ Customers adopted on January 1, 2018 using a modified retrospective approach. Ÿ 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. Ÿ 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. Ÿ 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.
Issued January 2016

Accounting Standards Adopted on January 1, 2018 (continued)



Standard	Summary of guidance	Effects on Financial Statements
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Issued May 2014	Ÿ Supersedes the revenue recognition requirements in ASC 605. Ÿ 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. Ÿ The amendment includes a five-step process to assist an entity in achieving the main principle(s) of revenue recognition under ASC 605. Ÿ 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. Ÿ Requires additional qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Ÿ 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).	Ÿ Customers adopted on January 1, 2018 on a modified retrospective basis. Ÿ 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). Ÿ 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. Ÿ 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. Ÿ 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.

Accounting Standards Issued But Not Yet Adopted



Standard	Summary of guidance	Effects on Financial Statements
ASU 2018-03 Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10)	Ÿ 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. Ÿ Provides clarification that if an observable transaction occurs for such securities, the adjustment is as of the observable transaction date. Ÿ Effective July 1, 2018 on a prospective basis with early adoption permitted.	Ÿ Customers currently does not have any significant equity securities without readily determinable fair values 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.
Issued February 2018
ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features	Ÿ Changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. Ÿ 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. Ÿ 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"). Ÿ Effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.	Ÿ 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.
Issued July 2017
ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities	Ÿ Requires that premiums for certain callable debt securities held be amortized to their earliest call date. Ÿ Effective for Customers beginning after December 15, 2018, with early adoption permitted. Ÿ Adoption of this new guidance must be applied on a modified retrospective approach.	Ÿ 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.
Issued March 2017

Accounting Standards Issued But Not Yet Adopted (continued)



Standard	Summary of guidance	Effects on Financial Statements
ASU 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments	Ÿ 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. Ÿ Replaces today's "incurred loss" approach and is expected to result in earlier recognition of credit losses. Ÿ 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. Ÿ Simplifies the accounting model for purchased credit-impaired debt securities and loans. Ÿ Effective beginning after December 15, 2019 with early adoption permitted. Ÿ 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.	Ÿ Customers is currently evaluating the impact of this ASU, initiating implementation efforts across the company and planning for loss modeling requirements consistent with lifetime expected loss estimates. Ÿ 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. Ÿ 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. Ÿ Customers currently does not intend to early adopt this new guidance.
Issued June 2016
ASU 2016-02, Leases	Ÿ Supersedes the current lease accounting guidance for both lessees and lessors under ASC 840, Leases. Ÿ 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. Ÿ Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. Ÿ 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. Ÿ Effective beginning after December 15, 2018 with early adoption permitted. Ÿ 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.	Ÿ 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. Ÿ Customers does not intend to early adopt this ASU.
Issued February 2016

NOTE 54 — EARNINGS PER SHARE

The following are the components and results of Customers' earnings per common share calculations for the periods presented.

Three Months Ended
June 30, Six Months Ended
June 30,
2017 2016 2017 2016
(amounts in thousands, except share and per share data)
Net income from continuing operations available to common shareholders (1) $ 25,337
$ 19,712
$ 48,647
$ 37,734
Net loss from discontinued operations (5,230 ) (2,291 ) (6,407 ) (3,415 )
Net income available to common shareholders $ 20,107
$ 17,421
$ 42,240
$ 34,319

Weighted-average number of common shares outstanding - basic 30,641,554
27,080,676
30,524,955
27,012,869
Share-based compensation plans 1,910,634
2,123,745
2,129,773
2,077,219
Warrants 17,464
299,908
27,318
303,769
Weighted-average number of common shares - diluted 32,569,652
29,504,329
32,682,046
29,393,857

Basic earnings per common share from continuing operations $ 0.83
$ 0.73
$ 1.59
$ 1.40
Basic loss per common share from discontinued operations $ (0.17 ) $ (0.09 ) $ (0.21 ) $ (0.13 )
Basic earnings per common share $ 0.66
$ 0.64
$ 1.38
$ 1.27
Diluted earnings per common share from continuing operations $ 0.78
$ 0.67
$ 1.49
$ 1.28
Diluted loss per common share from discontinued operations $ (0.16 ) $ (0.08 ) $ (0.20 ) $ (0.11 )
Diluted earnings per common share $ 0.62
$ 0.59
$ 1.29
$ 1.17

~~(1) Net income from continuing operations, net of preferred stock dividends~~



	Three Months Ended March 31,
	2018		2017
(amounts in thousands, except share and per share data)
Net income available to common shareholders	$	20,527	$	22,132

Weighted-average number of common shares outstanding - basic	31,424,496		30,407,060
Share-based compensation plans	840,561		2,344,929
Warrants	8,916		37,171
Weighted-average number of common shares - diluted	32,273,973		32,789,160

Basic earnings per common share	$	0.65	$	0.73
Diluted earnings per common share	$	0.64	$	0.67

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the periods presented.


	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended March 31,
	2017	2016	2017	2016	2018	2017
Anti-dilutive securities:
Share-based compensation awards	288,325	616,995	282,725	616,995	1,059,225	—
Warrants	52,242	52,242	52,242	52,242	—	52,242
Total anti-dilutive securities	340,567	669,237	334,967	669,237	1,059,225	52,242



Pennsylvania		27-2290659
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)



Large accelerated filer	¨x	Accelerated filer	x¨

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.			¨



Part I

Item 1.	Customers Bancorp, Inc. Consolidated Financial Statements as of ~~June 30, 2017~~March 31, 2018 and for the three ~~and six~~ month periods ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ (unaudited)	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5148

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	7767


Item 4.	Controls and Procedures	7868

PART II

Item 1.	Legal Proceedings	7969

Item 1A.	Risk Factors	7969

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8170

Item 3.	Defaults Upon Senior Securities	8170

Item 4.	Mine Safety Disclosures	8170

Item 5.	Other Information	8170

Item 6.	Exhibits	8273

SIGNATURES		8475

Ex-31.1

Ex-31.2

Ex-32.1

Ex-32.2

Ex-101


	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
ASSETS
Cash and due from banks	$	18,503		$	17,485		$	9,198		$	20,388
Interest-earning deposits	383,187			227,224			206,213			125,935
Cash and cash equivalents	401,690			244,709			215,411			146,323
Investment securities available for sale, at fair value	1,012,605			493,474
Loans held for sale (includes $2,104,338 and $2,117,510, respectively, at fair value)	2,255,096			2,117,510
Investment securities, at fair value							1,181,661			471,371
Loans held for sale (includes $1,875,515 and $1,795,294, respectively, at fair value)							1,875,515			1,939,485
Loans receivable	6,723,278			6,142,390			6,943,566			6,768,258
Allowance for loan losses	(38,458		)	(37,315		)	(39,499		)	(38,015		)
Total loans receivable, net of allowance for loan losses	6,684,820			6,105,075			6,904,067			6,730,243
FHLB, Federal Reserve Bank, and other restricted stock	129,689			68,408			130,302			105,918
Accrued interest receivable	26,163			23,690			31,812			27,021
Bank premises and equipment, net	12,028			12,259			11,556			11,955
Bank-owned life insurance	213,902			161,494			259,222			257,720
Other real estate owned	2,358			3,108			1,742			1,726
Goodwill and other intangibles	3,633			3,639			17,477			16,295
Assets held for sale	67,796			79,271
Other assets	73,768			70,099			140,501			131,498
Total assets	$	10,883,548		$	9,382,736		$	10,769,266		$	9,839,555
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand, non-interest bearing	$	661,914		$	512,664		$	1,260,853		$	1,052,115
Interest-bearing	6,360,008			6,334,316			5,781,606			5,748,027
Total deposits	7,021,922			6,846,980			7,042,459			6,800,142
Non-interest bearing deposits held for sale	447,325			453,394
Federal funds purchased	150,000			83,000			195,000			155,000
FHLB advances	1,999,600			868,800			2,252,615			1,611,860
Other borrowings	186,030			87,123			186,735			186,497
Subordinated debt	108,831			108,783			108,904			108,880
Other liabilities held for sale	22,394			31,403
Accrued interest payable and other liabilities	37,157			47,381			64,465			56,212
Total liabilities	9,973,259			8,526,864			9,850,178			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, 2017 and December 31, 2016	217,471			217,471
Common stock, par value $1.00 per share; 200,000,000 shares authorized; 31,261,044 and 30,820,177 shares issued as of June 30, 2017 and December 31, 2016; 30,730,784 and 30,289,917 shares outstanding as of June 30, 2017 and December 31, 2016	31,261			30,820
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 March 31, 2018 and December 31, 2017							217,471			217,471
Common stock, par value $1.00 per share; 200,000,000 shares authorized; 31,996,531 and 31,912,763 shares issued as of March 31, 2018 and December 31, 2017; 31,466,271 and 31,382,503 shares outstanding as of March 31, 2018 and December 31, 2017							31,997			31,913
Additional paid in capital	428,488			427,008			424,099			422,096
Retained earnings	235,938			193,698			279,942			258,076
Accumulated other comprehensive income (loss), net	5,364			(4,892		)
Treasury stock, at cost (530,260 shares as of June 30, 2017 and December 31, 2016)	(8,233		)	(8,233		)
Accumulated other comprehensive loss, net							(26,188		)	(359		)
Treasury stock, at cost (530,260 shares as of March 31, 2018 and December 31, 2017)							(8,233		)	(8,233		)
Total shareholders’ equity	910,289			855,872			919,088			920,964
Total liabilities and shareholders’ equity	$	10,883,548		$	9,382,736		$	10,769,266		$	9,839,555


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
	2017			2016			2017			2016			2018		2017
Interest income:
Loans receivable	$	67,036		$	59,013		$	128,497		$	113,485
Loans receivable, including fees													$	66,879	$	61,461
Loans held for sale	17,524			17,429			31,470			31,534			19,052		13,946
Investment securities	7,823			3,638			13,710			7,347			8,672		5,887
Other	1,469			1,240			3,269			2,352			2,361		1,800
Total interest income	93,852			81,320			176,946			154,718			96,964		83,094
Interest expense:
Deposits	16,218			11,138			30,535			21,347			19,793		14,323
Other borrowings	1,993			1,620			3,600			3,225			3,376		1,608
FHLB advances	5,340			3,716			8,401			5,984			7,080		3,060
Subordinated debt	1,685			1,685			3,370			3,370			1,684		1,685
Total interest expense	25,236			18,159			45,906			33,926			31,933		20,676
Net interest income	68,616			63,161			131,040			120,792			65,031		62,418
Provision for loan losses	535			786			3,585			2,766			2,117		3,050
Net interest income after provision for loan losses	68,081			62,375			127,455			118,026			62,914		59,368
Non-interest income:
Interchange and card revenue													9,661		13,511
Deposit fees													2,092		3,127
Bank-owned life insurance													2,031		1,367
Mortgage warehouse transactional fees	2,523			3,074			4,743			5,622			1,887		2,221
Bank-owned life insurance	2,258			1,120			3,624			2,243
Gain on sale of SBA and other loans	573			285			1,901			929			1,361		1,328
Mortgage banking income	291			285			446			450			121		155
Deposit fees	258			278			582			531
Interchange and card revenue	126			160			329			304
Gain on sale of investment securities	3,183			—			3,183			26
Impairment loss on investment securities	(2,882		)	—			(4,585		)	—			—		(1,703		)
Other	641			651			2,175			1,016			3,757		2,748
Total non-interest income	6,971			5,853			12,398			11,121			20,910		22,754
Non-interest expense:
Salaries and employee benefits	16,687			16,401			32,850			32,799			24,925		21,112
Technology, communication and bank operations													9,943		9,916
Professional services	2,834			2,750			5,827			5,071			6,008		7,512
Technology, communication and bank operations	2,542			2,448			5,861			4,833
Occupancy	2,536			2,363			5,121			4,600			2,834		2,714
FDIC assessments, taxes, and regulatory fees	2,320			4,289			3,953			8,130
FDIC assessments, non-income taxes, and regulatory fees													2,200		1,725
Provision for operating losses													1,526		1,646
Loan workout	408			487			928			905			659		521
Other real estate owned	160			183			105			470
Advertising and promotion	153			194			334			337			390		326
Merger and acquisition related expenses													106		—
Other real estate owned expenses (income)													40		(55		)
Other	2,927			2,970			5,735			6,812			3,649		3,949
Total non-interest expense	30,567			32,085			60,714			63,957			52,280		49,366
Income from continuing operations before income tax expense	44,485			36,143			79,139			65,190
Income before income tax expense													31,544		32,756
Income tax expense	15,533			14,369			23,263			24,108			7,402		7,009
Net income from continuing operations	28,952			21,774			55,876			41,082
Loss from discontinued operations before income tax benefit	(8,436		)	(3,696		)	(10,334		)	(5,508		)
Income tax benefit from discontinued operations	(3,206		)	(1,405		)	(3,927		)	(2,093		)
Net loss from discontinued operations	(5,230		)	(2,291		)	(6,407		)	(3,415		)
Net income	23,722			19,483			49,469			37,667			24,142		25,747
Preferred stock dividends	3,615			2,062			7,229			3,348			3,615		3,615
Net income available to common shareholders	$	20,107		$	17,421		$	42,240		$	34,319		$	20,527	$	22,132
Basic earnings per common share from continuing operations	$	0.83		$	0.73		$	1.59		$	1.40
Basic earnings per common share	$	0.66		$	0.64		$	1.38		$	1.27		$	0.65	$	0.73
Diluted earnings per common share from continuing operations	$	0.78		$	0.67		$	1.49		$	1.28
Diluted earnings per common share	$	0.62		$	0.59		$	1.29		$	1.17		$	0.64	$	0.67



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


	Six Months Ended June 30, 2017																					Three Months Ended March 31, 2018
	Preferred Stock			Common Stock																		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			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																						—	—		—	—		—			24,142			—			—			24,142
Other comprehensive loss																						—	—		—	—		—			—			(24,490		)	—			(24,490		)
Preferred stock dividends																						—	—		—	—		—			(3,615		)	—			—			(3,615		)
Share-based compensation expense																						—	—		—	—		1,786			—			—			—			1,786
Exercise of warrants																						—	—		5,242	5		107			—			—			—			112
Issuance of common stock under share-based compensation arrangements																						—	—		78,526	79		110			—			—			—			189
Balance, March 31, 2018																						9,000,000	$	217,471	31,466,271	$	31,997	$	424,099		$	279,942		$	(26,188	)	$	(8,233	)	$	919,088

																						Three Months Ended March 31, 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 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		9,000,000	$	217,471	30,289,917	$	30,820	$	427,008		$	193,698		$	(4,892	)	$	(8,233	)	$	855,872
Net income from continuing operations	—	—		—	—		—			55,876			—			—			55,876
Net loss from discontinued operations	—	—		—	—		—			(6,407		)	—			—			(6,407		)
Net income																						—	—		—	—		—			25,747			—			—			25,747
Other comprehensive income	—	—		—	—		—			—			10,256			—			10,256			—	—		—	—		—			—			20			—			20
Preferred stock dividends	—	—		—	—		—			(7,229		)	—			—			(7,229		)	—	—		—	—		—			(3,615		)	—						(3,615		)
Share-based compensation expense	—	—		—	—		2,934			—			—			—			2,934			—	—		—	—		1,413			—			—			—			1,413
Exercise of warrants	—	—		43,974	44		376			—			—			—			420			—	—		43,974	44		376			—			—			—			420
Issuance of common stock under share-based compensation arrangements	—	—		396,893	397		(1,830		)	—			—			—			(1,433		)	—	—		302,436	303		(343		)	—			—			—			(40		)
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, 2016
	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, 2015	2,300,000	$	55,569	26,901,801	$	27,432	$	362,607		$	124,511		$	(7,984	)	$	(8,233	)	$	553,902
Net income from continuing operations	—	—		—	—		—			41,082			—			—			41,082
Net loss from discontinued operations	—	—		—	—		—			(3,415		)	—			—			(3,415		)
Other comprehensive income	—	—		—	—		—			—			7,557			—			7,557
Issuance of common stock, net of offering costs of $15	—	—		7,291	7		152			—			—			—			159
Issuance of preferred stock, net of offering costs of $2,799	3,300,000	79,701		—	—		—			—			—			—			79,701
Preferred stock dividends	—	—		—	—		—			(3,348		)	—						(3,348		)
Share-based compensation expense	—	—		—	—		2,941			—			—			—			2,941
Exercise of warrants	—	—		239,478	240		831			—			—			—			1,071
Issuance of common stock under share-based compensation arrangements	—	—		138,263	138		764			—			—			—			902
Balance, June 30, 2016	5,600,000	$	135,270	27,286,833	$	27,817	$	367,295		$	158,830		$	(427	)	$	(8,233	)	$	680,552
Balance, March 31, 2017																						9,000,000	$	217,471	30,636,327	$	31,167	$	428,454		$	215,830		$	(4,872	)	$	(8,233	)	$	879,817




(amounts in thousands)
Fair value of assets acquired:
Developed software	$	27,400
Other intangible assets	9,300
Accounts receivable	2,784
Prepaid expenses	418
Fixed assets, net	229
Total assets acquired	40,131

Fair value of liabilities assumed:
Other liabilities	5,735
Deferred revenue	2,655
Total liabilities assumed	8,390

Net assets acquired	$	31,741

Transaction cash consideration (1)	$	37,000

Goodwill recognized	$	5,259



	Three Months Ended June 30,						Six Months Ended June 30,
(amounts in thousands)	2017			2016			2017			2016
Discontinued operations:
Interest income	$	1		$	—		$	2		$	—
Interest expense	11			4			18			9
Net interest income	(10		)	(4		)	(16		)	(9		)
Non-interest income	11,420			2,403			28,746			2,630
Non-interest expense	19,846			6,095			39,064			8,129
Loss from discontinued operations before income tax benefit	(8,436		)	(3,696		)	(10,334		)	(5,508		)
Income tax benefit from discontinued operations	(3,206		)	(1,405		)	(3,927		)	(2,093		)
Net loss from discontinued operations	$	(5,230	)	$	(2,291	)	$	(6,407	)	$	(3,415	)



	June 30, 2017		December 31, 2016
(amounts in thousands)	June 30, 2017		December 31, 2016
ASSETS
Cash and cash equivalents (1)	$	11,552	$	20,000
Loans receivable	1,930		12,248
Bank premises and equipment, net	968		510
Goodwill and other intangibles	13,982		13,982
Other assets	39,364		32,531
Assets held for sale	$	67,796	$	79,271
LIABILITIES
Demand, non-interest bearing deposits	$	447,325	$	453,394
Other liabilities:
Interest bearing deposits	6,116		3,401
Accrued expenses and other liabilities (1)	16,278		28,002
Other liabilities held for sale	22,394		31,403
Liabilities held for sale	$	469,719	$	484,797



	Three Months Ended March 31, 2017
				Effect of Reclassification From Held For Sale to Held and Used
(amounts in thousands)	As Previously Reported						After Reclassification
Interest income	$	83,094		$	—		$	83,094
Interest expense	20,670			6			20,676
Net interest income	62,424			(6		)	62,418
Provision for loan losses	3,050			—			3,050
Non-interest income	5,427			17,327			22,754
Non-interest expenses	30,147			19,219			49,366
Income from continuing operations before income taxes	34,654			(1,898		)	32,756
Provision for income taxes	7,730			(721		)	7,009
Net income from continuing operations	26,924			(1,177		)	25,747
Loss from discontinued operations before income taxes	(1,898		)	1,898			—
Income tax benefit from discontinued operations	(721		)	721			—
Net loss from discontinued operations	(1,177		)	1,177			—
Net income	25,747			—			25,747
Preferred stock dividend	3,615			—			3,615
Net income available to common shareholders	$	22,132		$	—		$	22,132


										Three Months Ended March 31, 2018
	Three Months Ended June 30, 2017									Available-for-sale securities
(amounts in thousands)	Unrealized Gains (Losses) on Available-For-Sale Securities			Unrealized Gain (Loss) on Cash Flow Hedges			Total			Unrealized Gains (Losses)			Foreign Currency Items			Total Unrealized Gains (Losses)			Unrealized Gains (Losses) on Cash Flow Hedges			Total
Balance - March 31 2017	$	(3,366	)	$	(1,506	)	$	(4,872	)
Balance - December 31, 2017										$	(249	)	$	88		$	(161	)	$	(198	)	$	(359	)
Reclassification of the income tax effects of the Tax Cuts and Jobs Act (1)										(256		)	—			(256		)	(42		)	(298		)
Reclassification of net unrealized gains on equity securities (1)										(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	12,130			(420		)	11,710			(25,233		)	—			(25,233		)	646			(24,587		)
Amounts reclassified from accumulated other comprehensive income (loss) to net income (2)	(1,942		)	468			(1,474		)	—			—			—			97			97
Net current-period other comprehensive income	10,188			48			10,236
Balance - June 30, 2017	$	6,822		$	(1,458	)	$	5,364
Net current-period other comprehensive income (loss)										(25,233		)	—			(25,233		)	743			(24,490		)
Balance - March 31, 2018										$	(26,691	)	$	—		$	(26,691	)	$	503		$	(26,188	)


(1)	~~All amounts are presented net of tax. Amounts in parentheses indicate reductions to accumulated other comprehensive income.~~


~~(2)~~	Reclassification amounts for available-for-sale securities are reported as gain (loss) on sale of investment securities on the consolidated statements of income. Reclassification amounts for cash flow hedges are reported as interest expense on FHLB advances on the consolidated statements of income.



	Three Months Ended June 30, 2016
	Available-for-sale-securities
(amounts in thousands)	Unrealized Gains (Losses)			Foreign Currency Items			Total Unrealized Gains (Losses)			Unrealized Loss on Cash Flow Hedge			Total
Balance - March 31 2016	$	(363	)	$	(547	)	$	(910	)	$	(4,423	)	$	(5,333	)
Other comprehensive income (loss) before reclassifications	5,258			(221		)	5,037			(508		)	4,529
Amounts reclassified from accumulated other comprehensive income (loss) to net income (2)	—			—			—			377			377
Net current-period other comprehensive income (loss)	5,258			(221		)	5,037			(131		)	4,906
Balance - June 30, 2016	$	4,895		$	(768	)	$	4,127		$	(4,554	)	$	(427	)


~~(1)~~	~~All amounts are presented net of tax. Amounts in parentheses indicate reductions to accumulated other comprehensive income.~~


	June 30, 2017									March 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(amounts in thousands)
Available for Sale:
Available for Sale Debt Securities:
Agency-guaranteed residential mortgage-backed securities	$	210,688	$	755	$	(1,699	)	$	209,744	$	505,113	$	—	$	(11,856	)	$	493,257
Agency-guaranteed commercial real estate mortgage-backed securities	735,116		11,318		(11		)	746,423		334,643		—		(10,109		)	324,534
Corporate notes ~~(1)~~	44,956		821		—			45,777		374,611		947		(15,050		)	360,508
Equity securities (2)	10,661		—		—			10,661
	$	1,001,421	$	12,894	$	(1,710	)	$	1,012,605
Available for Sale Debt Securities										$	1,214,367	$	947	$	(37,015	)	1,178,299
Equity Securities (1)																	3,362
Total Investment Securities, at Fair Value																	$	1,181,661



	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
(amounts in thousands)
Available for Sale:
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.



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


	June 30, 2017															March 31, 2018
	Less Than 12 Months					12 Months or More					Total					Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
(amounts in thousands)
Available for Sale:
Available for Sale Debt Securities:
Agency-guaranteed residential mortgage-backed securities	$	76,237	$	(660	)	$	29,797	$	(1,039	)	$	106,034	$	(1,699	)	$	430,735	$	(8,161	)	$	62,522	$	(3,695	)	$	493,257	$	(11,856	)
Agency-guaranteed commercial real estate mortgage-backed securities	6,172		(11		)	—		—			6,172		(11		)	318,635		(9,831		)	5,899		(278		)	324,534		(10,109		)
Corporate notes																309,601		(15,050		)	—		—			309,601		(15,050		)
Total	$	82,409	$	(671	)	$	29,797	$	(1,039	)	$	112,206	$	(1,710	)	$	1,058,971	$	(33,042	)	$	68,421	$	(3,973	)	$	1,127,392	$	(37,015	)


	June 30, 2017														March 31, 2018
	30-89 Days Past Due (1)		90 Days Or More Past Due(1)		Total Past Due (1)		Non- Accrual		Current (2)		Purchased- Credit- Impaired Loans (3)		Total Loans (4)		30-89 Days Past Due (1)		90 Days Or More Past Due(1)		Total Past Due (1)		Non- Accrual		Current (2)		Purchased- Credit- Impaired Loans (3)		Total Loans (4)
(amounts in thousands)
Multi-family	$	—	$	—	$	—	$	—	$	3,397,645	$	1,972	$	3,399,617	$	—	$	—	$	—	$	—	$	3,643,539	$	1,835	$	3,645,374
Commercial and industrial	—		—		—		10,051		1,051,303		929		1,062,283		129		—		129		14,220		1,187,571		721		1,202,641
Commercial real estate - owner occupied	—		—		—		2,645		429,283		11,276		443,204		—		—		—		1,437		490,277		10,436		502,150
Commercial real estate - non-owner occupied	—		—		—		285		1,209,987		5,740		1,216,012		—		—		—		242		1,190,591		5,071		1,195,904
Construction	—		—		—		—		61,226		—		61,226		—		—		—		—		81,101		—		81,101
Residential real estate	1,113		—		1,113		4,059		433,243		6,038		444,453		4,490		—		4,490		5,216		210,825		5,308		225,839
Manufactured housing (5)	2,480		3,163		5,643		2,075		85,570		2,860		96,148		3,444		2,746		6,190		1,979		77,042		2,476		87,687
Other consumer	1		—		1		56		2,281		223		2,561		75		—		75		97		3,148		250		3,570
Total	$	3,594	$	3,163	$	6,757	$	19,171	$	6,670,538	$	29,038	$	6,725,504	$	8,138	$	2,746	$	10,884	$	23,191	$	6,884,094	$	26,097	$	6,944,266
	December 31, 2016														December 31, 2017
	30-89 Days Past Due (1)		90 Days Or More Past Due(1)		Total Past Due (1)		Non- Accrual		Current (2)		Purchased- Credit- Impaired Loans (3)		Total Loans (4)		30-89 Days Past Due (1)		90 Days Or More Past Due(1)		Total Past Due (1)		Non- Accrual		Current (2)		Purchased- Credit- Impaired Loans (3)		Total Loans (4)
(amounts in thousands)
Multi-family	$	12,573	$	—	$	12,573	$	—	$	3,200,322	$	2,104	$	3,214,999	$	4,900	$	—	$	4,900	$	—	$	3,495,600	$	1,881	$	3,502,381
Commercial and industrial	350		—		350		8,443		967,391		1,037		977,221		103		—		103		17,392		1,130,831		764		1,149,090
Commercial real estate - owner occupied	137		—		137		2,039		379,227		12,229		393,632		202		—		202		1,453		472,501		10,572		484,728
Commercial real estate - non-owner occupied	—		—		—		2,057		1,185,331		6,327		1,193,715		93		—		93		160		1,213,216		5,250		1,218,719
Construction	—		—		—		—		64,789		—		64,789		—		—		—		—		85,393		—		85,393
Residential real estate	4,417		—		4,417		2,959		178,559		7,567		193,502		7,628		—		7,628		5,420		215,361		5,681		234,090
Manufactured housing (5)	3,761		2,813		6,574		2,236		89,850		3,070		101,730		4,028		2,743		6,771		1,959		78,946		2,551		90,227
Other consumer	12		—		12		58		2,420		236		2,726		116		—		116		31		3,184		216		3,547
Total	$	21,250	$	2,813	$	24,063	$	17,792	$	6,067,889	$	32,570	$	6,142,314	$	17,070	$	2,743	$	19,813	$	26,415	$	6,695,032	$	26,915	$	6,768,175


(1)	Includes past due loans that are accruing interest because collection is considered probable.


(2)	Loans where next payment due is less than 30 days from the report date.


(4)	Amounts exclude deferred costs and fees, unamortized premiums and discounts, and the allowance for loan losses.


(5)	Manufactured housing loans purchased in 2010 are ~~subject to~~supported by cash reserves held at the Bank that are used to fund past-due payments when the loan becomes 90 days or more delinquent. Subsequent purchases are subject to varying provisions in the event of borrowers’ delinquencies.


Three Months Ended June 30, 2017	Multi-family			Commercial and Industrial			Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
Three Months Ended March 31, 2018																											Multi-family		Commercial and Industrial			Commercial Real Estate Owner Occupied			Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, March 31, 2017	$	12,283		$	13,009		$	2,394	$	7,847		$	885		$	3,080		$	284		$	101		$	39,883
Ending Balance, December 31, 2017																											$	12,168	$	10,918		$	3,232		$	7,437		$	979		$	2,929		$	180		$	172		$	38,015
Charge-offs	—			(1,849		)	—		(4		)	—			(69		)	—			(24		)	(1,946		)	—		(50		)	(18		)	—			—			(365		)	—			(256		)	(689		)
Charge-offs for BankMobile loans (1)	—			—			—		—			—			—			—			(202		)	(202		)
Recoveries	—			68			9		—			49			6			—			2			134			—		35			—			—			11			7			—			3			56
Recoveries for BankMobile loans (1)	—			—			—		—			—			—			—			54			54
Provision for loan losses	(255		)	357			573		(57		)	(218		)	(22		)	(16		)	173			535			377		834			311			(204		)	(69		)	608			(4		)	264			2,117
Ending Balance, June 30, 2017	$	12,028		$	11,585		$	2,976	$	7,786		$	716		$	2,995		$	268		$	104		$	38,458
Six Months Ended June 30, 2017
Ending Balance, December 31, 2016	$	11,602		$	11,050		$	2,183	$	7,894		$	840		$	3,342		$	286		$	118		$	37,315
Charge-offs	—			(2,047		)	—		(408		)	—			(290		)	—			(24		)	(2,769		)
Charge-offs for BankMobile loans (1)	—			—			—		—			—			—			—			(222		)	(222		)
Recoveries	—			283			9		—			130			27			—			4			453
Recoveries for BankMobile loans (1)	—			—			—		—			—			—			—			96			96
Provision for loan losses	426			2,299			784		300			(254		)	(84		)	(18		)	132			3,585
Ending Balance, June 30, 2017	$	12,028		$	11,585		$	2,976	$	7,786		$	716		$	2,995		$	268		$	104		$	38,458
Ending Balance, March 31, 2018																											$	12,545	$	11,737		$	3,525		$	7,233		$	921		$	3,179		$	176		$	183		$	39,499

As of June 30, 2017
As of March 31, 2018
Loans:
Individually evaluated for impairment	$	—		$	10,121		$	2,649	$	285		$	—		$	8,002		$	10,374		$	56		$	31,487		$	—	$	14,288		$	1,483		$	242		$	—		$	8,242		$	10,108		$	97		$	34,460
Collectively evaluated for impairment	3,397,645			1,051,233			429,279		1,209,987			61,226			430,413			82,914			2,282			6,664,979			3,643,539		1,187,632			490,231			1,190,591			81,101			212,289			75,103			3,223			6,883,709
Loans acquired with credit deterioration	1,972			929			11,276		5,740			—			6,038			2,860			223			29,038			1,835		721			10,436			5,071			—			5,308			2,476			250			26,097
	$	3,399,617		$	1,062,283		$	443,204	$	1,216,012		$	61,226		$	444,453		$	96,148		$	2,561		$	6,725,504		$	3,645,374	$	1,202,641		$	502,150		$	1,195,904		$	81,101		$	225,839		$	87,687		$	3,570		$	6,944,266
Allowance for loan losses:
Individually evaluated for impairment	$	—		$	1,959		$	642	$	67		$	—		$	118		$	5		$	—		$	2,791		$	—	$	986		$	764		$	—		$	—		$	365		$	4		$	—		$	2,119
Collectively evaluated for impairment	12,028			9,128			2,317		4,673			716			2,245			83			48			31,238			12,545		10,300			2,751			4,512			921			2,274			82			125			33,510
Loans acquired with credit deterioration	—			498			17		3,046			—			632			180			56			4,429			—		451			10			2,721			—			540			90			58			3,870
	$	12,028		$	11,585		$	2,976	$	7,786		$	716		$	2,995		$	268		$	104		$	38,458		$	12,545	$	11,737		$	3,525		$	7,233		$	921		$	3,179		$	176		$	183		$	39,499



Three Months Ended June 30, 2016	Multi-family		Commercial and Industrial			Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, March 31, 2016	$	12,135	$	9,959		$	1,410	$	8,548		$	1,264		$	3,676		$	468		$	145		$	37,605
Charge-offs	—		(537		)	—		—			—			(413		)	—			(50		)	(1,000		)
Charge-offs for BankMobile loans (1)	—		—			—		—			—			—			—			(140		)	(140		)
Recoveries	—		55			—		—			24			1			—			—			80
Provision for loan losses	233		893			172		(65		)	(79		)	271			(28		)	155			1,552
Ending Balance, June 30, 2016	$	12,368	$	10,370		$	1,582	$	8,483		$	1,209		$	3,535		$	440		$	110		$	38,097
Six Months Ended June 30, 2016
Ending Balance, December 31, 2015	$	12,016	$	8,864		$	1,348	$	8,420		$	1,074		$	3,298		$	494		$	133		$	35,647
Charge-offs	—		(537		)	—		—			—			(413		)	—			(92		)	(1,042		)
Charge-offs for BankMobile loans (1)	—		—			—		—			—			—			—			(140		)	(140		)
Recoveries	—		111			—		8			457			1			—			—			577
Provision for loan losses	352		1,932			234		55			(322		)	649			(54		)	209			3,055
Ending Balance, June 30, 2016	$	12,368	$	10,370		$	1,582	$	8,483		$	1,209		$	3,535		$	440		$	110		$	38,097
As of December 31, 2016
Loans:
Individually evaluated for impairment	$	—	$	8,516		$	2,050	$	2,151		$	—		$	6,972		$	9,665		$	57		$	29,411
Collectively evaluated for impairment	3,212,895		967,668			379,353		1,185,237			64,789			178,963			88,995			2,433			6,080,333
Loans acquired with credit deterioration	2,104		1,037			12,229		6,327			—			7,567			3,070			236			32,570
	$	3,214,999	$	977,221		$	393,632	$	1,193,715		$	64,789		$	193,502		$	101,730		$	2,726		$	6,142,314
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	1,024		$	287	$	14		$	—		$	35		$	—		$	—		$	1,360
Collectively evaluated for impairment	11,602		9,686			1,896		4,626			772			2,414			88			60			31,144
Loans acquired with credit deterioration	—		340			—		3,254			68			893			198			58			4,811
	$	11,602	$	11,050		$	2,183	$	7,894		$	840		$	3,342		$	286		$	118		$	37,315



Three Months Ended March 31, 2017	Multi-family		Commercial and Industrial			Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, December 31, 2016	$	11,602	$	11,050		$	2,183	$	7,894		$	840		$	3,342		$	286		$	118		$	37,315
Charge-offs	—		(198		)	—		(404		)	—			(221		)	—			(20		)	(843		)
Recoveries	—		215			—		—			81			21			—			44			361
Provision for loan losses	681		1,942			211		357			(36		)	(62		)	(2		)	(41		)	3,050
Ending Balance, March 31, 2017	$	12,283	$	13,009		$	2,394	$	7,847		$	885		$	3,080		$	284		$	101		$	39,883
As of December 31, 2017
Loans:
Individually evaluated for impairment	$	—	$	17,461		$	1,448	$	160		$	—		$	9,247		$	10,089		$	30		$	38,435
Collectively evaluated for impairment	3,500,500		1,130,865			472,708		1,213,309			85,393			219,162			77,587			3,301			6,702,825
Loans acquired with credit deterioration	1,881		764			10,572		5,250			—			5,681			2,551			216			26,915
	$	3,502,381	$	1,149,090		$	484,728	$	1,218,719		$	85,393		$	234,090		$	90,227		$	3,547		$	6,768,175
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	650		$	642	$	—		$	—		$	155		$	4		$	—		$	1,451
Collectively evaluated for impairment	12,168		9,804			2,580		4,630			979			2,177			82			117			32,537
Loans acquired with credit deterioration	—		464			10		2,807			—			597			94			55			4,027
	$	12,168	$	10,918		$	3,232	$	7,437		$	979		$	2,929		$	180		$	172		$	38,015



	March 31, 2018						December 31, 2017
	Accruing TDRs		Nonaccrual TDRs		Total		Accruing TDRs		Nonaccrual TDRs		Total
(amounts in thousands)
Commercial and industrial	$	68	$	5,519	$	5,587	$	63	$	5,939	$	6,002
Commercial real estate owner occupied	45		—		45		—		—		—
Manufactured housing	8,130		1,787		9,917		8,130		1,766		9,896
Residential real estate	3,026		463		3,489		3,828		703		4,531
Total TDRs	$	11,269	$	7,769	$	19,038	$	12,021	$	8,408	$	20,429



	Three Months Ended June 30, 2017			Three Months Ended June 30, 2016
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Extensions of maturity	2	$	5,855	—	$	—
Interest-rate reductions	9	320		16	535
Total	11	$	6,175	16	$	535


	Three Months Ended June 30,						Three Months Ended March 31,
	2017			2016			2018			2017
(amounts in thousands)
Accretable yield balance as of March 31,	$	9,376		$	12,622
Accretable yield balance as of December 31,							$	7,825		$	10,202
Accretion to interest income	(465		)	(499		)	(338		)	(493		)
Reclassification from nonaccretable difference and disposals, net	95			(958		)	176			(333		)
Accretable yield balance as of June 30,	$	9,006		$	11,165
Accretable yield balance as of March 31,							$	7,663		$	9,376



	FDIC Loss Sharing Receivable/ Clawback Liability
	Three Months Ended June 30,
(amounts in thousands)	2017		2016
Ending balance as of March 31,	$	—	$	(2,544	)
Increased estimated cash flows (2)	—		766
Other activity, net (a)	—		49
Cash payments to the FDIC	—		348
Ending balance as of June 30,	$	—	$	(1,381	)

(1) Provision for loan losses	$	535	$	1,552
(2) Effect attributable to FDIC loss share arrangements	—		(766		)
Net amount reported as provision for loan losses	$	535	$	786


~~(1)~~	~~Includes consumer and other installment loans not subject to risk ratings.~~