Goodwill and Other Acquisition-Related Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Acquisition-Related Intangible Assets

A summary of the Company’s goodwill assets by reporting unit is presented in the following table:


(In thousands)	December 31, 2023		Goodwill Acquired		Impairment Loss		Goodwill Adjustments		September 30, 2024
Community banking	$	545,671	$	144,586	$	—	$	—	$	690,257
Specialty finance	39,006		—		—		(478)		38,528
Wealth management	71,995		—		—		—		71,995
Total	$	656,672	$	144,586	$	—	$	(478)	$	800,780

The community banking unit's goodwill increased $144.6 million in the third quarter of 2024 as a result of the Macatawa acquisition. The specialty finance unit’s goodwill decreased $478,000 in the first nine months of 2024 as a result of foreign currency translation adjustments related to the Canadian acquisitions.

The Company assesses each reporting unit’s goodwill for impairment on at least an annual basis and considers potential indicators of impairment at each reporting date between annual goodwill impairment tests. At October 1, 2023, the Company utilized a qualitative approach for its annual goodwill impairment tests of the community banking, specialty finance and wealth

management reporting units and determined that it was more likely than not that the fair value of all reporting units exceeded the respective carrying value of such reporting unit at that time.

At each reporting date between annual goodwill impairment tests, the Company considers potential indicators of impairment. The Company assessed whether events and circumstances resulted in it being more likely than not that the fair value of any reporting unit was less than its carrying value. Potential impairment indicators considered include the condition of the economy and banking industry; government intervention and regulatory updates; the impact of recent events to financial performance and cost factors of the reporting units; performance of the Company’s stock and other relevant events.

At the conclusion of this assessment of all reporting units, the Company determined that as of September 30, 2024, it was more likely than not that the fair value of all reporting units exceeded the respective carrying value of such reporting unit.

A summary of acquisition-related intangible assets as of the dates shown and the expected amortization of finite-lived acquisition-related intangible assets as of September 30, 2024 is as follows:


(In thousands)	September 30, 2024		December 31, 2023		September 30, 2023
Community banking segment:
Core deposit intangibles with finite lives:
Gross carrying amount	$	154,506	$	55,206	$	55,206
Accumulated amortization	(51,358)		(46,125)		(45,304)
Net carrying amount	$	103,148	$	9,081	$	9,902
Trademark with indefinite lives:
Carrying amount	13,800		5,800		5,800
Total net carrying amount	$	116,948	$	14,881	$	15,702
Specialty finance segment:
Customer list intangibles with finite lives:
Gross carrying amount	$	1,962	$	1,963	$	1,962
Accumulated amortization	(1,871)		(1,837)		(1,826)
Net carrying amount	$	91	$	126	$	136
Wealth management segment:
Customer list and other intangibles with finite lives:
Gross carrying amount	$	26,630	$	26,630	$	26,630
Accumulated amortization	(19,803)		(18,748)		(18,224)
Net carrying amount	$	6,827	$	7,882	$	8,406
Total acquisition-related intangible assets:
Gross carrying amount	$	196,898	$	89,599	$	89,598
Accumulated amortization	(73,032)		(66,710)		(65,354)
Total other acquisition-related intangible assets, net	$	123,866	$	22,889	$	24,244


Estimated amortization
Actual in nine months ended September 30, 2024	$	6,322
Estimated remaining in 2024	5,501
Estimated—2025	20,784
Estimated—2026	18,268
Estimated—2027	15,848
Estimated—2028	13,477

The community banking unit's core deposit intangibles and trademarks with indefinite lives increased $99.3 million and $8.0 million, respectively, in the third quarter of 2024 as a result of the Macatawa acquisition.

The core deposit intangibles recognized in connection with the Company’s bank acquisitions are amortized over a ten-year period on an accelerated basis. The customer list intangibles recognized in connection with the purchase of life insurance premium finance assets in 2009 are being amortized over an 18-year period on an accelerated basis. The customer list and other

intangibles recognized in connection with prior acquisitions within the wealth management segment are being amortized over a period of up to ten years on a straight-line or accelerated basis. Indefinite-lived intangible assets consist of certain trade and domain names recognized in connection with prior acquisitions. As indefinite-lived intangible assets are not amortized, the Company assesses impairment on at least an annual basis. Total amortization expense associated with finite-lived acquisition-related intangibles totaled approximately $6.3 million and $4.1 million for the nine months ended September 30, 2024 and 2023, respectively.