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Goodwill and Other Intangibles and Servicing Rights
 6 Months Ended
Jun. 30, 2024
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, 2024 and the year ended December 31, 2023. A summary of goodwill and other intangibles was as follows.
(in thousands)June 30, 2024December 31, 2023
Goodwill$367,387 $367,387 
Core deposit intangibles21,806 25,112 
Customer list intangibles2,228 1,867 
    Other intangibles24,034 26,979 
Goodwill and other intangibles, net$391,421 $394,366 
Other intangible assets: Other intangible assets, consisting of core deposit intangibles and customer list intangibles, are amortized over their estimated finite lives. During first quarter 2024, Nicolet purchased a financial advisory book of business and established a corresponding customer list intangible. A summary of other intangible assets was as follows.
Six Months EndedYear Ended
(in thousands)June 30, 2024December 31, 2023
Core deposit intangibles:
Gross carrying amount$60,724 $60,724 
Accumulated amortization(38,918)(35,612)
Net book value$21,806 $25,112 
Additions during the period$— $— 
Amortization during the period$3,306 $7,589 
Customer list intangibles:
Gross carrying amount$6,173 $5,523 
Accumulated amortization(3,945)(3,656)
Net book value$2,228 $1,867 
Additions during the period$650 $— 
Amortization during the period$289 $483 
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, 2024December 31, 2023
Mortgage servicing rights asset:
MSR asset at beginning of year$11,655 $13,080 
Capitalized MSR893 1,540 
Amortization during the period(1,576)(2,965)
MSR asset at end of period$10,972 $11,655 
Valuation allowance at beginning of year$— $(500)
Reversals— 500 
Valuation allowance at end of period$— $— 
MSR asset, net$10,972 $11,655 
Fair value of MSR asset at end of period$17,604 $16,810 
Residential mortgage loans serviced for others$1,604,743 $1,609,395 
Net book value of MSR asset to loans serviced for others0.68 %0.72 %
Loan servicing rights (“LSR”): The Company acquired an LSR asset in December 2021 which will be amortized over the estimated remaining loan service period, as 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, 2024December 31, 2023
Loan servicing rights asset:
LSR asset at beginning of year$8,831 $11,039 
Amortization during the period(981)(2,208)
LSR asset at end of period$7,850 $8,831 
Agricultural loans serviced for others$470,291 $492,137 
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, 2024. 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,
2024 (remaining six months)
$2,992 $291 $1,385 $981 
20255,161 579 2,181 1,717 
20263,983 379 1,583 1,472 
20273,218 296 1,582 1,227 
20282,622 296 1,581 981 
20291,911 166 1,569 736 
Thereafter1,919 221 1,091 736 
Total$21,806 $2,228 $10,972 $7,850