Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Note 5 - Goodwill and Other Intangible Assets

During the first quarter of 2022, Synovus reorganized its internal management reporting structure to add an additional segment for Consumer Banking. The Consumer Banking segment was previously included in the Community Banking segment. In connection with the reorganization, management reallocated a portion of the Community Banking goodwill to Consumer Banking using a relative fair value approach, and no indicators of impairment were identified.

Effective April 1, 2023, Synovus changed its internal management reporting structure to transfer Capital Markets activities and related personnel from the Financial Management Services segment to the Wholesale Banking segment. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 17 - Segment Reporting" in this Report for additional information. In connection with the transfer, management reallocated a portion of the Wealth Management goodwill that was attributable to the Financial Management Services segment to Wholesale Banking using a relative fair value approach, and no indicators of impairment were identified.

On June 1, 2023, Synovus acquired a 60% equity interest and a majority of the Board seats in Qualpay, which constituted a business combination. In connection with the acquisition, Synovus recorded $30.5 million of goodwill and $29.3 million of other intangible assets based on preliminary fair value estimates of the assets acquired and liabilities assumed in the transaction. Synovus will continue to record any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition date. See "Part II - Item 8. Financial Statements and Supplementary Data - Note 1 - Summary of Significant Accounting Policies" in this Report for additional information on Qualpay.

During the third quarter of 2023, Synovus sold its GLOBALT asset management firm to its management team. The divestiture resulted in a reduction in goodwill of $2.5 million and a gain on sale of $1.9 million, representing the difference in the fair value of consideration received and assets sold, and no indicators of impairment were identified.

Goodwill allocated to each reporting unit at December 31, 2023 and 2022 is presented as follows:


(in thousands)	Wholesale Banking Reporting Unit		Community Banking Reporting Unit		Consumer Banking Reporting Unit		Wealth Management Reporting Unit		Total Goodwill
Balance as of December 31, 2021	$	171,636	$	256,323	$	—	$	24,431	$	452,390
Change in goodwill from reallocation	—		(114,701)		114,701		—		—
Balance as of December 31, 2022	$	171,636	$	141,622	$	114,701	$	24,431	$	452,390
Changes during the period from:
Reallocation	4,197		—		—		(4,197)		—
Acquisition	—		30,512		—		—		30,512
Divestiture	—		—		—		(2,462)		(2,462)
Balance as of December 31, 2023	$	175,833	$	172,134	$	114,701	$	17,772	$	480,440

Goodwill is evaluated for impairment on an annual basis or whenever an event occurs or circumstances change to indicate that it is more likely than not that an impairment loss has been incurred (i.e., a triggering event). As of October 1, 2023,

Synovus completed its annual goodwill impairment evaluation by performing a qualitative assessment of goodwill at the reporting unit level. In performing the qualitative assessment, the Company evaluated events and circumstances since the last impairment analysis, recent operating performance including reporting unit performance, changes in market capitalization, changes in the business climate, company-specific factors and trends in the banking industry. The results of the qualitative assessment indicated that it was more likely than not that the estimated fair value of each reporting unit exceeded its carrying amount as of the test date. In addition, no indicators of impairment have been identified through December 31, 2023; therefore, a quantitative goodwill impairment test was not necessary.

The following table shows the gross carrying amount and accumulated amortization of other intangible assets as of December 31, 2023 and 2022, which primarily consist of core deposit intangible assets. The CDI is being amortized over its estimated useful life of approximately ten years utilizing an accelerated method. Intangible assets resulting from the Qualpay acquisition, which primarily include client relationships, partner relationships, and developed technology, are being amortized on a straight-line basis over their estimated useful lives ranging from five to eight years. Aggregate other intangible assets amortization expense for the years ended December 31, 2023, 2022, and 2021 was $10.5 million, $8.5 million, and $9.5 million, respectively, and is included in other operating expense on the consolidated statements of income.


(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
December 31, 2023
CDI	$	57,400	$	(41,745)	$	15,655
Client Relationships	22,100		(8,078)		14,022
Partner Relationships	4,700		(548)		4,152
Developed Technology	11,091		(1,294)		9,797
Other	3,900		(1,598)		2,302
Total other intangible assets	$	99,191	$	(53,263)	$	45,928
December 31, 2022
CDI	$	57,400	$	(35,484)	$	21,916
Client Relationships	10,800		(6,136)		4,664
Partner Relationships	—		—		—
Developed Technology	—		—		—
Other	1,700		(1,156)		544
Total other intangible assets	$	69,900	$	(42,776)	$	27,124

The estimated amortization expense of other intangible assets for the next five years is as follows:


(in thousands)	Amortization Expense
2024	$	11,609
2025	10,510
2026	9,438
2027	8,067
2028	3,826