Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS

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



	Goodwill
	(In thousands)
Balance, December 31, 2013	$	208,743
Addition from the CapitalSource Inc. merger	1,518,381
Write-off due to the asset financing reorganization	(6,645		)
Balance, December 31, 2014	1,720,479
Adjustment to acquired CapitalSource Inc. deferred tax assets	7,901
Addition from the Square 1 acquisition	447,911
Balance, December 31, 2015	2,176,291
Adjustment to acquired Square 1 tax assets	(1,842		)
Reduction due to sale of PWEF leasing unit	(500		)
Balance, December 31, 2016	$	2,173,949

Goodwill adjustments include the finalization of the acquired Square 1 net tax assets and the reduction of goodwill in connection with the sale of the PWEF leasing unit. The finalization of the day 1 fair value of the acquired tax assets is due to completion of the 2015 tax returns. Through the sale of the PWEF leasing unit on March 31, 2016, $0.5 million of goodwill was allocated to this business group; such goodwill reduction is included in the $0.7 million loss on sale of the PWEF leasing unit and included in "Other income" in the condensed consolidated statements of earnings.

We perform our annual goodwill impairment testing in the fourth quarter each year. In the fourth quarter of 2016 we evaluated the carrying value of our goodwill and determined that it was not impaired.

Our intangible assets with definite lives are CDI and CRI. CDI and CRI are amortized over their respective estimated useful lives and reviewed for impairment at least quarterly. The amortization expense represents the estimated decline in the value of the underlying deposits or loan and lease customers acquired. The weighted average amortization period remaining for all of our CDI and CRI as of December 31, 2016 is 5.3 years. The estimated aggregate amortization expense related to these intangible assets for each of the next five years is $11.5 million for 2017, $8.8 million for 2018, $6.7 million for 2019, $4.7 million for 2020 and $3.0 million for 2021.

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



	Year Ended December 31,
	2016			2015			2014
	(In thousands)
Gross Amount of CDI and CRI:
Balance, beginning of year	$	95,524		$	53,090		$	48,963
Additions due to acquisitions	—			45,426			6,720
Fully amortized portion	(29,637		)	(2,992		)	(1,293		)
Reduction due to sale of PWEF leasing unit	(1,700		)	—			—
Write-off due to the asset financing reorganization	—			—			(1,300		)
Balance, end of year	64,187			95,524			53,090
Accumulated Amortization:
Balance, beginning of year	(42,304		)	(35,886		)	(31,715		)
Amortization	(16,517		)	(9,410		)	(6,268		)
Fully amortized portion	29,637			2,992			1,293
Reduction due to sale of PWEF leasing unit	1,363			—			—
Write-off due to the asset financing reorganization	—			—			804
Balance, end of year	(27,821		)	(42,304		)	(35,886		)
Net CDI and CRI, end of year	$	36,366		$	53,220		$	17,204

- 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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