v3.26.1
LEASES
 3 Months Ended
Mar. 31, 2026
Leases [Abstract]  
LEASES LEASES
Lessee
Customers has operating leases for its branches, certain LPOs, and administrative offices, with remaining lease terms ranging between one month and ten years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands)ClassificationMarch 31, 2026December 31, 2025
ASSETS
Operating lease ROU assetsOther assets$33,003 $34,347 
LIABILITIES
Operating lease liabilitiesOther liabilities$40,327 $41,719 
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
Three Months Ended March 31,
(amounts in thousands)Classification20262025
Operating lease cost (1)
Occupancy expenses$1,846 $1,949 
(1) There were no variable lease costs for the three months ended March 31, 2026 and 2025, and sublease income for operating leases was immaterial.
Maturities of non-cancelable operating lease liabilities were as follows at March 31, 2026:
(amounts in thousands)March 31, 2026
2026$5,785 
20277,810 
20287,527 
20296,591 
20304,958 
Thereafter14,643 
Total minimum payments47,314 
Less: interest
6,987 
Present value of lease liabilities$40,327 
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to the operating lease liabilities was $1.9 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively. These payments were reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Weighted average remaining lease term (years)
Operating leases7.2 years7.4 years
Weighted average discount rate
Operating leases4.20 %4.20 %
Equipment Lessor
Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. Lease terms typically range from 24 months to 120 months. Customers’ commercial equipment financing group leases equipment under direct finance, sales-type or operating leases.
The estimated residual values for direct finance, sales-type and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. Expected credit losses on direct financing and sales-type leases and the related estimated residual values are included in the ACL on loans and leases.
Direct finance and sales-type equipment leases, are included in commercial and industrial loans and leases receivable and are recorded at the discounted amounts of lease payments receivable and the estimated residual value of the leased assets. Interest income on direct finance and sales-type leases is recognized over the term of the leases using the effective interest method. Any difference between the lower of the fair value of the underlying leased asset or the sum of the lease receivables and the carrying amount of the underlying leased asset would result to a gain or loss at the lease commencement date. Customers’ direct finance and sales-type lease activity primarily relates to leasing of new equipment.
Customers’ commercial equipment financing group has executed leases of commercial clean vehicles that qualified for investment tax credits in 2024. Customers accounted for these leases as sales-type leases and were included in loans and leases receivable on the balance sheet. Customers did not enter into sales-type leases of commercial clean vehicles that qualified for investment tax credits during the three months ended March 31, 2026 and 2025.
Customers’ commercial equipment financing group had total interest income, including from direct financing and sales-type leases of $17.8 million and $14.6 million for the three months ended March 31, 2026 and 2025, respectively.
Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at March 31, 2026 and December 31, 2025:
(amounts in thousands)ClassificationMarch 31, 2026December 31, 2025
ASSETS
Direct financing and sales-type leases
Lease receivablesLoans and leases receivable$313,823 $301,753 
Guaranteed residual assetsLoans and leases receivable27,052 26,859 
Unguaranteed residual assetsLoans and leases receivable11,287 11,788 
Deferred initial direct costsLoans and leases receivable1,732 1,717 
Unearned incomeLoans and leases receivable(36,961)(35,575)
Net investment in direct financing and sales-type leases
$316,933 $306,542 
Operating leases
Investment in operating leasesOther assets$412,104 $407,987 
Accumulated depreciationOther assets(116,578)(105,706)
Deferred initial direct costsOther assets1,009 1,094 
Net investment in operating leases296,535 303,375 
Total lease assets$613,468 $609,917 
Maturities of operating and direct financing and sales-type lease receivables were as follows at March 31, 2026:
(amounts in thousands)Operating leases
Direct financing and sales-type leases
2026$58,500 $74,030 
202751,959 76,658 
202842,505 57,806 
202931,879 45,331 
203019,175 29,354 
Thereafter11,650 30,644 
Total minimum payments$215,668 313,823 
Less: interest36,961 
Present value of lease receivables$276,862 
LEASES LEASES
Lessee
Customers has operating leases for its branches, certain LPOs, and administrative offices, with remaining lease terms ranging between one month and ten years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands)ClassificationMarch 31, 2026December 31, 2025
ASSETS
Operating lease ROU assetsOther assets$33,003 $34,347 
LIABILITIES
Operating lease liabilitiesOther liabilities$40,327 $41,719 
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
Three Months Ended March 31,
(amounts in thousands)Classification20262025
Operating lease cost (1)
Occupancy expenses$1,846 $1,949 
(1) There were no variable lease costs for the three months ended March 31, 2026 and 2025, and sublease income for operating leases was immaterial.
Maturities of non-cancelable operating lease liabilities were as follows at March 31, 2026:
(amounts in thousands)March 31, 2026
2026$5,785 
20277,810 
20287,527 
20296,591 
20304,958 
Thereafter14,643 
Total minimum payments47,314 
Less: interest
6,987 
Present value of lease liabilities$40,327 
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to the operating lease liabilities was $1.9 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively. These payments were reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Weighted average remaining lease term (years)
Operating leases7.2 years7.4 years
Weighted average discount rate
Operating leases4.20 %4.20 %
Equipment Lessor
Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. Lease terms typically range from 24 months to 120 months. Customers’ commercial equipment financing group leases equipment under direct finance, sales-type or operating leases.
The estimated residual values for direct finance, sales-type and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. Expected credit losses on direct financing and sales-type leases and the related estimated residual values are included in the ACL on loans and leases.
Direct finance and sales-type equipment leases, are included in commercial and industrial loans and leases receivable and are recorded at the discounted amounts of lease payments receivable and the estimated residual value of the leased assets. Interest income on direct finance and sales-type leases is recognized over the term of the leases using the effective interest method. Any difference between the lower of the fair value of the underlying leased asset or the sum of the lease receivables and the carrying amount of the underlying leased asset would result to a gain or loss at the lease commencement date. Customers’ direct finance and sales-type lease activity primarily relates to leasing of new equipment.
Customers’ commercial equipment financing group has executed leases of commercial clean vehicles that qualified for investment tax credits in 2024. Customers accounted for these leases as sales-type leases and were included in loans and leases receivable on the balance sheet. Customers did not enter into sales-type leases of commercial clean vehicles that qualified for investment tax credits during the three months ended March 31, 2026 and 2025.
Customers’ commercial equipment financing group had total interest income, including from direct financing and sales-type leases of $17.8 million and $14.6 million for the three months ended March 31, 2026 and 2025, respectively.
Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at March 31, 2026 and December 31, 2025:
(amounts in thousands)ClassificationMarch 31, 2026December 31, 2025
ASSETS
Direct financing and sales-type leases
Lease receivablesLoans and leases receivable$313,823 $301,753 
Guaranteed residual assetsLoans and leases receivable27,052 26,859 
Unguaranteed residual assetsLoans and leases receivable11,287 11,788 
Deferred initial direct costsLoans and leases receivable1,732 1,717 
Unearned incomeLoans and leases receivable(36,961)(35,575)
Net investment in direct financing and sales-type leases
$316,933 $306,542 
Operating leases
Investment in operating leasesOther assets$412,104 $407,987 
Accumulated depreciationOther assets(116,578)(105,706)
Deferred initial direct costsOther assets1,009 1,094 
Net investment in operating leases296,535 303,375 
Total lease assets$613,468 $609,917 
Maturities of operating and direct financing and sales-type lease receivables were as follows at March 31, 2026:
(amounts in thousands)Operating leases
Direct financing and sales-type leases
2026$58,500 $74,030 
202751,959 76,658 
202842,505 57,806 
202931,879 45,331 
203019,175 29,354 
Thereafter11,650 30,644 
Total minimum payments$215,668 313,823 
Less: interest36,961 
Present value of lease receivables$276,862 
LEASES LEASES
Lessee
Customers has operating leases for its branches, certain LPOs, and administrative offices, with remaining lease terms ranging between one month and ten years. These operating leases comprise substantially all of Customers’ obligations in which Customers is the lessee. These lease agreements typically consist of initial lease terms ranging between one and ten years, with options to renew the leases or extend the term up to ten years at Customers’ sole discretion. Some operating leases include variable lease payments that are based on an index or rate, such as the CPI. Variable lease payments are not included in the liability or ROU asset and are recognized in the period in which the obligation for those payments are incurred. Customers’ operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. Pursuant to these agreements, Customers does not have any commitments that would meet the definition of a finance lease.
As most of Customers’ operating leases do not provide an implicit rate, Customers utilized its incremental borrowing rate when determining the present value of lease payments.
The following table summarizes operating lease ROU assets and operating lease liabilities and their corresponding balance sheet location:
(amounts in thousands)ClassificationMarch 31, 2026December 31, 2025
ASSETS
Operating lease ROU assetsOther assets$33,003 $34,347 
LIABILITIES
Operating lease liabilitiesOther liabilities$40,327 $41,719 
The following table summarizes operating lease cost and its corresponding income statement location for the periods presented:
Three Months Ended March 31,
(amounts in thousands)Classification20262025
Operating lease cost (1)
Occupancy expenses$1,846 $1,949 
(1) There were no variable lease costs for the three months ended March 31, 2026 and 2025, and sublease income for operating leases was immaterial.
Maturities of non-cancelable operating lease liabilities were as follows at March 31, 2026:
(amounts in thousands)March 31, 2026
2026$5,785 
20277,810 
20287,527 
20296,591 
20304,958 
Thereafter14,643 
Total minimum payments47,314 
Less: interest
6,987 
Present value of lease liabilities$40,327 
Customers does not have leases where it is involved with the construction or design of an underlying asset. Cash paid pursuant to the operating lease liabilities was $1.9 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively. These payments were reported as cash flows used in operating activities in the statement of cash flows.
The following table summarizes the weighted average remaining lease term and discount rate for Customers’ operating leases at March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
Weighted average remaining lease term (years)
Operating leases7.2 years7.4 years
Weighted average discount rate
Operating leases4.20 %4.20 %
Equipment Lessor
Customers’ commercial equipment financing group goes to market through the following origination platforms: vendors, intermediaries, direct and capital markets. Lease terms typically range from 24 months to 120 months. Customers’ commercial equipment financing group leases equipment under direct finance, sales-type or operating leases.
The estimated residual values for direct finance, sales-type and operating leases are established by utilizing internally developed analyses, external studies, and/or third-party appraisals to establish a residual position. Expected credit losses on direct financing and sales-type leases and the related estimated residual values are included in the ACL on loans and leases.
Direct finance and sales-type equipment leases, are included in commercial and industrial loans and leases receivable and are recorded at the discounted amounts of lease payments receivable and the estimated residual value of the leased assets. Interest income on direct finance and sales-type leases is recognized over the term of the leases using the effective interest method. Any difference between the lower of the fair value of the underlying leased asset or the sum of the lease receivables and the carrying amount of the underlying leased asset would result to a gain or loss at the lease commencement date. Customers’ direct finance and sales-type lease activity primarily relates to leasing of new equipment.
Customers’ commercial equipment financing group has executed leases of commercial clean vehicles that qualified for investment tax credits in 2024. Customers accounted for these leases as sales-type leases and were included in loans and leases receivable on the balance sheet. Customers did not enter into sales-type leases of commercial clean vehicles that qualified for investment tax credits during the three months ended March 31, 2026 and 2025.
Customers’ commercial equipment financing group had total interest income, including from direct financing and sales-type leases of $17.8 million and $14.6 million for the three months ended March 31, 2026 and 2025, respectively.
Leased assets under operating leases are reported at amortized cost, net of accumulated depreciation and any impairment charges, and are presented in other assets. The depreciation expense of the leased assets is recognized on a straight-line basis over the contractual term of the leases up to the expected residual value. The expected residual value and, accordingly, the monthly depreciation expense, may change throughout the term of the lease. Operating lease rental income for leased assets is recognized in commercial lease income on a straight-line basis over the lease term. Customers periodically reviews its operating leased assets for impairment. An impairment loss is recognized if the carrying amount of the operating leased asset exceeds its fair value and is not recoverable. The carrying amount of operating leased assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the lease payments and the estimated residual value upon the eventual disposition of the equipment.
The following table summarizes lease receivables and investment in operating leases and their corresponding balance sheet location at March 31, 2026 and December 31, 2025:
(amounts in thousands)ClassificationMarch 31, 2026December 31, 2025
ASSETS
Direct financing and sales-type leases
Lease receivablesLoans and leases receivable$313,823 $301,753 
Guaranteed residual assetsLoans and leases receivable27,052 26,859 
Unguaranteed residual assetsLoans and leases receivable11,287 11,788 
Deferred initial direct costsLoans and leases receivable1,732 1,717 
Unearned incomeLoans and leases receivable(36,961)(35,575)
Net investment in direct financing and sales-type leases
$316,933 $306,542 
Operating leases
Investment in operating leasesOther assets$412,104 $407,987 
Accumulated depreciationOther assets(116,578)(105,706)
Deferred initial direct costsOther assets1,009 1,094 
Net investment in operating leases296,535 303,375 
Total lease assets$613,468 $609,917 
Maturities of operating and direct financing and sales-type lease receivables were as follows at March 31, 2026:
(amounts in thousands)Operating leases
Direct financing and sales-type leases
2026$58,500 $74,030 
202751,959 76,658 
202842,505 57,806 
202931,879 45,331 
203019,175 29,354 
Thereafter11,650 30,644 
Total minimum payments$215,668 313,823 
Less: interest36,961 
Present value of lease receivables$276,862