GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 4—GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Goodwill and other intangible assets deemed to have indefinite lives generated from purchase business combinations are not subject to amortization and are instead tested for impairment no less than annually. Impairment exists when the carrying value of goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess and would be included in noninterest expense in the condensed consolidated statement of earnings.

The following table presents the changes in the carrying amount of goodwill for the period indicated:

	Goodwill

	(In thousands)
Balance, December 31, 2012	$	79,866
Adjustment to APB goodwill		(193	)
Non-tax deductible addition from the FCAL acquisition		136,189

Balance, September 30, 2013	$	215,862

Our intangible assets with definite lives are core deposit intangibles, or CDI, and customer relationship intangibles, or CRI. These intangible assets are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or loan customers acquired. The weighted average amortization period for the CDI addition from the FCAL acquisition is 3.1 years. The weighted average amortization period remaining for all of our CDI and CRI is 3.0 years. The aggregate CDI and CRI amortization expense is expected to be $5.4 million for 2013. The estimated aggregate amortization expense related to these intangible assets for each of the next five years is $5.3 million for 2014, $4.8 million for 2015, $3.0 million for 2016, $1.6 million for 2017, and $1.3 million for 2018.

The following table presents the changes in CDI and CRI and the related accumulated amortization for the periods indicated:

	Three Months Ended									Nine Months Ended September 30,

	September 30, 2013			June 30, 2013			September 30, 2012			Nine Months Ended September 30,
	September 30, 2013			June 30, 2013			September 30, 2012			2013			2012
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of period	$	53,339		$	45,412		$	62,272		$	45,412		$	67,100
Additions		—			7,927			1,924			7,927			4,924
Fully amortized portion		(4,376	)		—			(12,918	)		(4,376	)		(20,746	)
Removal due to branch sale		—			—			(5,866	)		—			(5,866	)

Balance, end of period		48,963			53,339			45,412			48,963			45,412

Accumulated Amortization:
Balance, beginning of period		(33,149	)		(31,865	)		(45,329	)		(30,689	)		(49,685	)
Amortization		(1,512	)		(1,284	)		(1,678	)		(3,972	)		(5,150	)
Fully amortized portion		4,376			—			12,918			4,376			20,746
Removal due to branch sale		—			—			4,576			—			4,576

Balance, end of period		(30,285	)		(33,149	)		(29,513	)		(30,285	)		(29,513	)

Net CDI and CRI, end of period	$	18,678		$	20,190		$	15,899		$	18,678		$	15,899

- 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.

+ References+ Details