GOODWILL AND INTANGIBLE ASSETS, NET

9 Months Ended

Sep. 30, 2012

GOODWILL AND INTANGIBLE ASSETS, NET

GOODWILL AND INTANGIBLE ASSETS, NET

NOTE 6 — GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

There were no changes in goodwill during the nine months ended September 30, 2012. The following is a summary of goodwill by segment:

	Mortgage		Financial		Technology
(in thousands)	Services		Services		Services		Total
Balance, September 30, 2012 and December 31, 2011	$	10,919	$	2,378	$	1,618	$	14,915

Intangible Assets, Net

Intangible assets, net consist of the following:

	Weighted
	average
	estimated	Gross carrying amount				Accumulated amortization						Net book value
(dollars in thousands)	useful life (years)	September 30, 2012		December 31, 2011		September 30, 2012			December 31, 2011			September 30, 2012		December 31, 2011
Definite-lived intangible assets
Trademarks	16	$	10,614	$	10,614	$	(3,942	)	$	(3,353	)	$	6,672	$	7,261
Customer lists	19	38,366		38,366		(17,203		)(a)	(13,010		)	21,163		25,356
Operating agreement	20	35,000		35,000		(4,667		)	(3,354		)	30,333		31,646
Non-compete agreement	4	1,300		1,300		(875		)	(613		)	425		687
Total		$	85,280	$	85,280	$	(26,687	)	$	(20,330	)	$	58,593	$	64,950

(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 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 reduction in intangible assets was $2.5 million for each of the nine months ended September 30, 2012 and 2011, respectively. The balance of Component 2 goodwill remaining was $1.4 million as of September 30, 2012 which should generate $0.8 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 $3.8 million and $4.0 million for the nine months ended September 30, 2012 and 2011, respectively ($1.2 million and $1.3 million for the third quarters of 2012 and 2011, respectively). Amortization expense is estimated to be $5.0 million for 2012, $4.8 million for 2013, $4.5 million for 2014, $4.4 million for 2015 and $4.3 million for 2016.