Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The Corporation has core deposit and customer-related intangibles and servicing rights, which are not deemed to have an indefinite life and therefore will continue to be amortized over their useful life using the present value of projected cash flows. The Corporation also has goodwill which is deemed to be an indefinite intangible asset and is not amortized.

Changes in the carrying amount of the Corporation's goodwill by business segment for the six months ended June 30, 2020 were as follows:

(Dollars in thousands)	Banking		Wealth Management		Insurance		Consolidated
Balance at December 31, 2019	$	138,476	$	15,434	$	18,649	$	172,559
Addition to goodwill from acquisitions	—		—		—		—
Balance at June 30, 2020	$	138,476	$	15,434	$	18,649	$	172,559

The following table reflects the components of intangible assets at the dates indicated:

	At June 30, 2020						At December 31, 2019
(Dollars in thousands)	Gross Carrying Amount		Accumulated Amortization (1)		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:
Core deposit intangibles	$	6,788	$	4,431	$	2,357	$	6,788	$	4,026	$	2,762
Customer related intangibles	7,604		6,944		660		8,819		7,923		896
Servicing rights	20,521		14,440		6,081		19,160		12,534		6,626
Total amortized intangible assets	$	34,913	$	25,815	$	9,098	$	34,767	$	24,483	$	10,284

(1) Includes a valuation allowance of $338 thousand on mortgage servicing rights at June 30, 2020 within accumulated amortization. There was no valuation allowance as of December 31, 2019.

The estimated aggregate amortization expense for core deposit and customer-related intangibles for the remainder of 2020 and the succeeding fiscal years is as follows:

Year	(Dollars in thousands)	Amount
Remainder of 2020		$	559
2021		923
2022		666
2023		409
2024		267
Thereafter		193

The aggregate fair value of mortgage servicing rights was $6.1 million and $9.2 million at June 30, 2020 and December 31, 2019, respectively. The fair value of mortgage servicing rights was determined using a discount rate of 10.0% at June 30, 2020 and December 31, 2019.

Changes in the servicing rights balance are summarized as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2020		2019		2020		2019
Beginning of period	$	6,440	$	6,725	$	6,626	$	6,768
Servicing rights capitalized	835		321		1,361		587
Amortization of servicing rights	(911)		(426)		(1,568)		(735)
Changes in valuation allowance	(283)		(21)		(338)		(21)
End of period	$	6,081	$	6,599	$	6,081	$	6,599
Loans serviced for others	$	1,113,819	$	1,042,438	$	1,113,819	$	1,042,438

Activity in the valuation allowance for mortgage servicing rights was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2020		2019		2020		2019
Valuation allowance, beginning of period	$	(55)	$	—	$	—	$	—
Additions	(283)		(21)		(338)		(21)
Valuation allowance, end of period	$	(338)	$	(21)	$	(338)	$	(21)

The estimated amortization expense of servicing rights for the remainder of 2020 and the succeeding fiscal years is as follows:

Year	(Dollars in thousands)	Amount
Remainder of 2020		$	1,683
2021		1,255
2022		934
2023		692
2024		171
Thereafter		1,346