Goodwill and Other Intangibles and Mortgage Servicing Rights

Management periodically reviews the carrying value of its intangible assets to determine if any impairment has occurred, in which case an impairment charge would be recorded as an expense in the period of impairment, or whether changes in circumstances have occurred that would require a revision to the remaining useful life which would impact expense prospectively. In making such determination, management evaluates whether there are any adverse qualitative factors indicating that an impairment may exist, as well as the performance, on an undiscounted basis, of the underlying operations or assets which give rise to the intangible. The Company’s quarterly assessment indicated no impairment charge on goodwill, core deposit intangibles or customer list intangibles was required for the year ended December 31, 2018 or the nine months ended September 30, 2019. A summary of goodwill and other intangibles was as follows.



	Nine Months Ended		Year Ended
(in thousands)	September 30, 2019		December 31, 2018
Goodwill	$	107,366	$	107,366
Core deposit intangibles	10,006		12,562
Customer list intangibles	3,999		4,379
Other intangibles	14,005		16,941
Goodwill and other intangibles, net	$	121,371	$	124,307

Goodwill: Goodwill was $107.4 million at both September 30, 2019 and December 31, 2018.

Other intangible assets: Other intangible assets, consisting of core deposit intangibles and customer list intangibles, are amortized over their estimated finite lives.



	Nine Months Ended			Year Ended
(in thousands)	September 30, 2019			December 31, 2018
Core deposit intangibles:
Gross carrying amount	$	29,015		$	29,015
Accumulated amortization	(19,009		)	(16,453		)
Net book value	$	10,006		$	12,562
Additions during the period	$	—		$	—
Amortization during the period	$	2,556		$	3,915
Customer list intangibles:
Gross carrying amount	$	5,523		$	5,523
Accumulated amortization	(1,524		)	(1,144		)
Net book value	$	3,999		$	4,379
Additions during the period	$	—		$	290
Amortization during the period	$	380		$	474

Mortgage servicing rights: Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date, with the amortization recorded in mortgage income, net, in the consolidated statements of income. Mortgage servicing rights are carried at the lower of the initial capitalized amount, net of accumulated amortization, or estimated fair value, and are included in other assets in the consolidated balance sheets. A summary of the changes in the mortgage servicing rights asset was as follows.



	Nine Months Ended			Year Ended
(in thousands)	September 30, 2019			December 31, 2018
Mortgage servicing rights ("MSR") asset:
MSR asset at beginning of year	$	3,749		$	3,187
Capitalized MSR	1,807			1,203
Amortization during the period	(611		)	(641		)
MSR asset at end of period	$	4,945		$	3,749
Fair value of MSR asset at end of period	$	6,960		$	6,347
Residential mortgage loans serviced for others	$	721,569		$	603,446
Net book value of MSR asset to loans serviced for others	0.69		%	0.62		%

The Company periodically evaluates its mortgage servicing rights asset for impairment. At each reporting date, impairment is assessed based on estimated fair value using estimated prepayment speeds of the underlying mortgage loans serviced and stratifications based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). No valuation allowance or impairment charge was recorded for the year ended December 31, 2018 or the nine months ended September 30, 2019. See Note 9 for additional information on the fair value of the MSR asset.

The following table shows the estimated future amortization expense for amortizing intangible assets and the MSR asset. The projections are based on existing asset balances, the current interest rate environment and prepayment speeds as of September 30, 2019. The actual amortization expense the Company recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements and events or circumstances that indicate the carrying amount of an asset may not be recoverable.



(in thousands)	Core deposit intangibles		Customer list intangibles		MSR asset
Year ending December 31,
2019 (remaining three months)	$	781	$	127	$	224
2020	2,657		507		879
2021	2,167		507		730
2022	1,735		507		730
2023	1,273		483		658
2024	841		449		400
Thereafter	552		1,419		1,324
Total	$	10,006	$	3,999	$	4,945