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Goodwill and Other Intangibles and Servicing Rights
 6 Months Ended
Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangibles and Servicing Rights Goodwill and Other Intangibles and 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 that would affect 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 of the underlying operations or assets which give rise to the intangible. Management also regularly monitors economic factors for potential impairment indications on the value of our franchise, stability of deposits, and the wealth client base, underlying our goodwill and other intangibles. Management concluded no impairment was indicated for the six months ended June 30, 2023 and the year ended December 31, 2022. A summary of goodwill and other intangibles was as follows.
(in thousands)June 30, 2023December 31, 2022
Goodwill$367,387 $367,387 
Core deposit intangibles28,710 32,701 
Customer list intangibles2,097 2,350 
    Other intangibles30,807 35,051 
Goodwill and other intangibles, net$398,194 $402,438 
Goodwill: A summary of goodwill was as follows. During 2022, goodwill increased due to the Charter acquisition.
Six Months EndedYear Ended
(in thousands)June 30, 2023December 31, 2022
Goodwill:
Goodwill at beginning of year$367,387 $317,189 
Acquisitions— 49,970 
Purchase accounting adjustment— 228 
Goodwill at end of period$367,387 $367,387 
Other intangible assets: Other intangible assets, consisting of core deposit intangibles and customer list intangibles, are amortized over their estimated finite lives. A summary of other intangible assets was as follows. During 2022, core deposit intangibles increased due to the Charter acquisition.
Six Months EndedYear Ended
(in thousands)June 30, 2023December 31, 2022
Core deposit intangibles:
Gross carrying amount$60,724 $60,724 
Accumulated amortization(32,014)(28,023)
Net book value$28,710 $32,701 
Additions during the period$— $19,364 
Amortization during the period$3,991 $6,108 
Customer list intangibles:
Gross carrying amount$5,523 $5,523 
Accumulated amortization(3,426)(3,173)
Net book value$2,097 $2,350 
Amortization during the period$253 $508 
Mortgage servicing rights (“MSR”): 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. 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 stratification based on the risk characteristics of the underlying loans (predominantly loan type and note interest rate). A summary of the changes in the mortgage servicing rights asset was as follows.
Six Months EndedYear Ended
(in thousands)June 30, 2023December 31, 2022
Mortgage servicing rights asset:
MSR asset at beginning of year$13,080 $13,636 
Capitalized MSR620 2,327 
Amortization during the period(1,489)(2,883)
MSR asset at end of period$12,211 $13,080 
Valuation allowance at beginning of year$(500)$(1,200)
Reversals500 700 
Valuation allowance at end of period$— $(500)
MSR asset, net$12,211 $12,580 
Fair value of MSR asset at end of period$16,200 $17,215 
Residential mortgage loans serviced for others$1,615,985 $1,637,109 
Net book value of MSR asset to loans serviced for others0.76 %0.77 %
Loan servicing rights (“LSR”): The Company acquired an LSR asset in December 2021 which will be amortized over the estimated remaining loan service period. The Company does not expect to add new loans to this servicing portfolio. A summary of the changes in the LSR asset were as follows.
Six Months EndedYear Ended
(in thousands)June 30, 2023December 31, 2022
Loan servicing rights asset:
LSR asset at beginning of year$11,039 $20,055 
Amortization during the period(1,104)(9,016)
LSR asset at end of period$9,935 $11,039 
Agricultural loans serviced for others$512,766 $538,392 
The following table shows the estimated future amortization expense for amortizing intangible assets and the servicing assets. The projections are based on existing asset balances, the current interest rate environment and estimated prepayment speeds as of June 30, 2023. 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 assetLSR asset
Year ending December 31,
2023 (remaining six months)
$3,598 $230 $945 $1,104 
20246,298 449 2,725 1,962 
20255,161 449 1,998 1,717 
20263,983 249 1,474 1,472 
20273,218 166 1,473 1,227 
20282,622 166 1,472 981 
Thereafter3,830 388 2,124 1,472 
Total$28,710 $2,097 $12,211 $9,935