Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The Corporation has goodwill from acquisitions 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 three months ended March 31, 2023 were as follows:

(Dollars in thousands)	Banking		Wealth Management		Insurance		Consolidated
Balance at December 31, 2022	$	138,476	$	15,434	$	21,600	$	175,510
Addition to goodwill from acquisitions	—		—		—		—
Balance at March 31, 2023	$	138,476	$	15,434	$	21,600	$	175,510

The Corporation also has core deposit and customer-related intangibles, 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 following table reflects the components of intangible assets at the dates indicated:

	At March 31, 2023						At December 31, 2022
(Dollars in thousands)	Gross Carrying Amount		Accumulated Amortization (1)		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization (1)		Net Carrying Amount
Amortized intangible assets:
Core deposit intangibles	$	6,788	$	6,048	$	740	$	6,788	$	5,939	$	849
Customer related intangibles	4,162		2,318		1,844		8,493		6,530		1,963
Servicing rights	29,181		20,721		8,460		28,904		20,332		8,572
Total amortized intangible assets	$	40,131	$	29,087	$	11,044	$	44,185	$	32,801	$	11,384

(1) Included within accumulated amortization is a valuation allowance of $40 thousand and $5 thousand on servicing rights at March 31, 2023 and December 31, 2022, respectively.

The estimated aggregate amortization expense for core deposit and customer-related intangibles for the remainder of 2023 and the succeeding fiscal years is as follows:

Year	(Dollars in thousands)	Amount
Remainder of 2023		$	616
2024		648
2025		469
2026		319
2027		216
Thereafter		316
Total		$	2,584

The aggregate fair value of servicing rights was $16.8 million at March 31, 2023 and December 31, 2022. The fair value of these rights was determined using a discount rate ranging from 10.4% to 12.4% at March 31, 2023 and 10.1% to 12.0% at December 31, 2022.

Changes in the servicing rights balance are summarized as follows:

	Three Months Ended March 31,
(Dollars in thousands)	2023		2022
Beginning of period	$	8,572	$	7,878
Servicing rights capitalized	277		714
Amortization of servicing rights	(354)		(476)
Changes in valuation allowance	(35)		6
End of period	$	8,460	$	8,122
Loans serviced for others	$	1,496,319	$	1,440,562

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

	Three Months Ended March 31,
(Dollars in thousands)	2023		2022
Valuation allowance, beginning of period	$	(5)	$	(13)
Additions	(35)		—
Reductions	—		6
Valuation allowance, end of period	$	(40)	$	(7)

The estimated amortization expense of servicing rights for the remainder of 2023 and the succeeding fiscal years is as follows:

Year	(Dollars in thousands)	Amount
Remainder of 2023		$	1,072
2024		958
2025		855
2026		761
2027		641
Thereafter		4,173
Total		$	8,460