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Goodwill and Other Intangible Assets (Notes)
6 Months Ended
Jun. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]
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. Our intangible assets with definite lives are core deposit intangibles ("CDI") and customer relationship intangibles ("CRI"). In the second quarter of 2014, we wrote-off $6.6 million of goodwill and $0.5 million of CRI related to the reorganization of the legacy PacWest asset financing segment.
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.
CDI and CRI 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 remaining for all of our CDI and CRI is 5.3 years. The aggregate CDI and CRI amortization expense is expected to be $6.7 million for 2014. The estimated aggregate amortization expense related to these intangible assets for each of the next five years is $5.9 million for 2015, $3.9 million for 2016, $2.5 million for 2017, $2.1 million for 2018 and $1.7 million for 2019.
The following table presents the changes in the carrying amount of goodwill for the period indicated:    
 
Goodwill
 
(In thousands)
Balance, December 31, 2013
$
208,743

Addition from the CapitalSource Inc. merger
1,523,055

Write-off of goodwill
(6,645
)
Balance, June 30, 2014
$
1,725,153


The following table presents the changes in CDI and CRI and the related accumulated amortization for the periods indicated:
 
Three Months Ended
 
Six Months Ended June 30,
 
June 30, 2014
 
March 31, 2014
 
June 30, 2013
 
2014
 
2013
 
(In thousands)
Gross Amount of CDI and CRI:
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
48,963

 
$
48,963

 
$
45,412

 
$
48,963

 
$
45,412

Additions
6,720

 

 
7,927

 
6,720

 
7,927

Fully amortized portion
(1,293
)
 

 

 
(1,293
)
 

Write-off
(1,300
)
 

 

 
(1,300
)
 

Balance, end of period
53,090

 
48,963

 
53,339

 
53,090

 
53,339

Accumulated Amortization:
 
 
 
 
 
 
 
 
 
Balance, beginning of period
(33,079
)
 
(31,715
)
 
(31,865
)
 
(31,715
)
 
(30,689
)
Amortization
(1,677
)
 
(1,364
)
 
(1,284
)
 
(3,041
)
 
(2,460
)
Fully amortized portion
1,293

 

 

 
1,293

 

Write-off
804

 

 

 
804

 

Balance, end of period
(32,659
)
 
(33,079
)
 
(33,149
)
 
(32,659
)
 
(33,149
)
Net CDI and CRI, end of period
$
20,431

 
$
15,884

 
$
20,190

 
$
20,431

 
$
20,190