Goodwill and Intangible Assets, Net

9 Months Ended

Sep. 30, 2011

Goodwill and Intangible Assets, Net [Abstract]

NOTE 7 — GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following is a summary showing the balance of goodwill by segment:


	Mortgage		Financial		Technology
(in thousands)	Services		Services		Services		Total

Balance, December 31, 2010	$	10,218	$	—	$	1,618	$	11,836
Acquisition of Springhouse		701		—		—		701
Acquisition of Tracmail		—		2,378		—		2,378


Balance, September 30, 2011	$	10,919	$	2,378	$	1,618	$	14,915

Intangible Assets, Net

Intangible Assets, net consists of the following:


	Weighted
	Average
	Estimated		Gross Carrying Amount				Accumulated Amortization					Net Book Value
	Useful Life		September 30,		December 31,		September 30,			December 31,		September 30,		December 31,
(dollars in thousands)	(Years)		2011		2010		2011			2010		2011		2010

Definite-lived Intangible
Assets
Trademarks		16	$	10,614	$	10,200	$	3,095		$	2,346	$	7,519	$	7,854
Customer Lists		19		38,366		37,700		11,677	(a)		7,447		26,689		30,253
Operating Agreement		20		35,000		35,000		2,917			1,604		32,083		33,396
Non-compete Agreement		4		1,300		1,200		525			275		775		925


Total Intangible Assets			$	85,280	$	84,100	$	18,214		$	11,672	$	67,066	$	72,428


(a)		Prior to our acquisition of Nationwide Credit, Inc. (“NCI”) in 2007, NCI completed an acquisition which created tax-deductible goodwill that amortizes for tax purposes over time. When we acquired NCI in 2007, we recorded a lesser amount of goodwill for financial reporting purposes than what had previously been recorded at NCI for tax purposes. This difference between the amount of goodwill recorded for financial reporting purposes and the amount recorded for taxes is referred to as “Component 2” goodwill and it resulted in our recording periodic reductions first to our book goodwill balance in our consolidated financial statements. As our book goodwill balance was fully written off at December 31, 2010, we continue to amortize the remaining Component 2 goodwill for U.S. tax purposes by reducing certain intangible assets by the remaining tax benefits of the Component 2 goodwill as they are realized in our tax returns. The amount amortized was $2.6 million for the nine months ended September 30, 2011. The balance of Component 2 goodwill remaining was $7.1 million as of September 30, 2011 which should generate $4.3 million of reductions of intangible assets when the benefit can be realized for U.S. tax purposes.

Amortization expense for definite lived intangible assets was $4.0 million and $4.1 million for the nine months ended September 30, 2011 and 2010, respectively ($1.3 million and $1.4 million for the third quarter of 2011 and 2010, respectively). Amortization expense is estimated to be $5.3 million for 2011, $5.0 million for 2012, $4.8 million for 2013, $4.5 million for 2014 and $4.4 million for 2015.

- 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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