Goodwill and Intangible Assets

Goodwill

In accordance with US GAAP, the Company tests goodwill for impairment on an annual basis or at an interim period if events or changed circumstances would more likely than not reduce the fair value of a reporting unit below its carrying amount. Under US GAAP, the Company first assesses the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amounts as a basis for determining if it is necessary to perform the two-step approach. Periodically estimating the fair value of a reporting unit requires significant judgment and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge.

The Company assessed the qualitative factors to determine whether is more likely than not that the fair value of the reporting unit is less than its carrying amount. For one of the Company’s reporting units, it was determined that it was not necessary to perform the two-step approach. For the remaining reporting unit, the Company estimated the fair value using the income and market approach which involves estimates of future cash flows, discount rates, economic forecast and other assumptions which are then used in the market approach (earnings and / or transactions multiples) and / or income approach (discounted cash flow method).

Based on the results of the impairment analysis as of December 31, 2018, the Company did not recognize any impairment relating to the investment management or investment bank reporting units. No impairment charges for goodwill were recognized during the years ended December 31, 2017 and 2016, respectively.

The following table presents the changes in the Company's goodwill balance, by reporting unit for the years ended December 31, 2018, 2017, and 2016:



	Investment Management			Investment Bank			Total
	(dollars in thousands)
Beginning balance - December 31, 2016
Goodwill	$	29,026		$	51,337		80,363
Accumulated impairment charges	(10,200		)	(9,485		)	(19,685		)
Net	18,826			41,852			60,678

Activity: 2017
Recognized goodwill	—			—			—
Goodwill allocated to disposal group	—			—			—
Goodwill impairment charges	—			—			—

Ending balance: December 31, 2017
Goodwill	29,026			51,337			80,363
Accumulated impairment charges	(10,200		)	(9,485		)	(19,685		)
Net	18,826			41,852			60,678

Activity: 2018
Recognized goodwill	—			—			—
Goodwill allocated to disposal group	—			—			—
Goodwill impairment charges	—			—			—

Ending balance: December 31, 2018
Goodwill	29,026			51,337			80,363
Accumulated impairment charges	(10,200		)	(9,485		)	(19,685		)
Net	$	18,826		$	41,852		$	60,678

Intangible assets

Information for the Company's intangible assets that are subject to amortization is presented below as of December 31, 2018 and 2017.



		December 31, 2018							December 31, 2017
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(in years)	(in thousands)							(in thousands)
Trade names	0.6 - 7.5	$	10,622	$	(10,599	)	$	23	$	10,622	$	(10,555	)	$	67
Customer relationships	3 - 14	41,134		(18,960		)	22,174		41,134		(15,733		)	25,401
Customer contracts	1.2	800		(800		)	—		800		(800		)	—
Non compete agreements and covenants with limiting conditions acquired	3 - 5	2,237		(2,055		)	182		2,237		(1,479		)	758
Intellectual property	3 - 10	8,243		(5,679		)	2,564		8,243		(4,514		)	3,729
		$	63,036	$	(38,093	)	$	24,943	$	63,036	$	(33,081	)	$	29,955

The Company tests intangible assets for impairment if events or circumstances suggest that the asset groups carrying value may not be fully recoverable. For the years ended December 31, 2018 and 2017, no impairment charge for intangible assets was recognized.

In connection with Convergex acquisition (See Note 2), in June 2017, the Company recognized intangible assets (including customer relationships, trade name, and intellectual property) with an estimated fair value of $10.3 million which are included within intangible assets, net in the consolidation statements of financial condition with the expected useful lives ranging from 0.6 years to 9.0 years with a weighted average useful life of 7.7 years.

Amortization expense related to intangible assets was $5.0 million, $6.1 million, and $5.0 million for the years ended December 31, 2018, 2017, and 2016, respectively, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. All of the Company's intangible assets have finite lives.

The estimated future amortization expense for the Company's intangible assets as of December 31, 2018 is as follows:



	(dollars in thousands)
2019	$	4,162
2020	3,950
2021	3,890
2022	3,108
2023	2,768
Thereafter	7,065
	$	24,943