Goodwill And Other Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill And Other Intangible Assets [Abstract]

NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table summarizes the changes in the Company's goodwill and other intangible assets for the years ended December 31, 2009, 2010, 2011, and 2012. Goodwill is reflected by operating segment; all other intangible assets are related to the Community Banking segment.


(in thousands)
		Goodwill
		Community Banking						Wealth Management
				Accumulated						Accumulated
		Gross		Impairment		Total		Gross		Impairment		Total
Balance, December 31, 2009	$	719,255	$	(111,952)	$	607,303	$	3,697	$	(982)	$	2,715
Net additions		45,954		-		45,954		-		-		-
Reductions		(96)		-		(96)		-		-		-
Balance, December 31, 2010		765,113		(111,952)		653,161		3,697		(982)		2,715
Net additions		247		-		247		-		-		-
Reductions		(44)		-		(44)		-		-		-
Balance, December 31, 2011		765,316		(111,952)		653,364		3,697		(982)		2,715
Net additions		12,545		-		12,545		-		-		-
Reductions		(452)		-		(452)		-		-		-
Balance, December 31, 2012	$	777,409	$	(111,952)	$	665,457	$	3,697	$	(982)	$	2,715

		Other Intangible Assets
				Accumulated
		Gross		Amortization		Net
Balance, December 31, 2009	$	56,213	$	(26,597)	$	29,616
Net additions		7,016		-		7,016
Reductions		(5,150)		-		(5,150)
Amortization		-		(5,389)		(5,389)
Balance, December 31, 2010		58,079		(31,986)		26,093
Net additions		-		-		-
Amortization		-		(4,948)		(4,948)
Balance, December 31, 2011		58,079		(36,934)		21,145
Net additions		830		-		830
Amortization		-		(4,816)		(4,816)
Balance, December 31, 2012	$	58,909	$	(41,750)	$	17,159

Goodwill additions in 2012 relate to the Circle acquisition and represent the excess of the total purchase price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed. Additional information on the acquisition and purchase price allocation is provided in Note 2. Goodwill additions in 2011 relate to purchase accounting adjustments finalized relating to the Rainier acquisition. Goodwill additions in 2010 relate to the Evergreen, Rainier and Nevada Security acquisitions and represent the excess of the total purchase price paid over the fair values of the assets acquired, net of the fair values of liabilities assumed. The reductions to goodwill include decreases of $452,000, $44,000, and $96,000 in 2012, 2011, and 2010, respectively, due to the recognition of tax benefits upon exercise of fully vested acquired stock options.

Intangible additions in 2012 relate to the Circle acquisition and represent core deposits, which includes all deposits except certificates of deposit. Intangible additions in 2010 relate to the Evergreen, Rainier, and Nevada Security acquisitions and represent core deposits, which includes all deposits except certificates of deposit, and an insurance related customer relationship, which was sold in the second quarter of 2010 for the same value recorded in the purchase price allocation. The values of the core deposit intangible assets were determined by an analysis of the cost differential between the core deposits and alternative funding sources. The value of the insurance related customer relationship was determined based on market indicators. Intangible assets with definite useful lives are amortized to their estimated residual values over their respective estimated useful lives, and are also reviewed for impairment. We amortize other intangible assets on an accelerated or straight-line basis over an estimated ten to fifteen year life. No impairment losses separate from the scheduled amortization have been recognized in the periods presented.

The Company conducted its annual evaluation of goodwill for impairment at both December 31, 2012 and 2011, respectively. At both dates, in the first step of the goodwill impairment test, the Company determined that the fair value of the Community Banking and Wealth Management reporting units exceeded its carrying amount. The significant assumptions and methodology utilized to test for goodwill impairment as of December 31, 2012 were consistent with those used at December 31, 2011.

A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others, a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse action or assessment by a regulator; and unanticipated competition.

Under recently issued guidance, the Company has the option to perform a qualitative assessment before completing the goodwill impairment test two-step process. The first step compares the fair value of a reporting unit to its carrying value. If the reporting unit’s fair value is less than its carrying value, the Company would be required to proceed to the second step. In the second step the Company calculates the implied fair value of the reporting unit’s goodwill. The implied fair value of goodwill is determined in the same manner as goodwill recognized in a business combination. The estimated fair value of the Company is allocated to all of the Company’s assets and liabilities, including any unrecognized identifiable intangible assets, as if the Company had been acquired in a business combination and the estimated fair value of the reporting unit is the price paid to acquire it. The allocation process is performed only for purposes of determining the amount of goodwill impairment. No assets or liabilities are written up or down, nor are any additional unrecognized identifiable intangible assets recorded as a part of this process. Any excess of the estimated purchase price over the fair value of the reporting unit’s net assets represents the implied fair value of goodwill. If the carrying amount of the goodwill is greater than the implied fair value of that goodwill, an impairment loss would be recognized as a charge to earnings in an amount equal to that excess. The Company performs the first step on an annual basis and in between if certain events or circumstances indicate goodwill may be impaired.

The table below presents the forecasted amortization expense for intangible assets acquired in all mergers:


(in thousands)
		Expected
Year		Amortization
2013	$	4,782
2014		4,529
2015		4,286
2016		2,520
2017		549
Thereafter		493
	$	17,159

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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