Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

The Corporation has the following types of intangible assets: goodwill, core deposit intangible assets, mortgage servicing rights (MSRs) and non-compete agreements. Goodwill, core deposit intangible assets and non-compete agreements arose as the result of business combinations or other acquisitions. MSRs arose as a result of selling residential real estate mortgage loans in the secondary market while retaining the right to service these loans and receive servicing income over the life of the loan, as well as a result of the OAK acquisition. Amortization is recorded on the core deposit intangible assets, MSRs and non-compete agreements. Goodwill is not amortized but is evaluated at least annually for impairment. The Corporation’s most recent annual goodwill impairment test was performed as of October 31, 2011, and no impairment existed for the Corporation’s goodwill at that date. No triggering events have occurred since the most recent annual goodwill impairment review that would require an interim valuation.

The following table shows the net carrying value of the Corporation’s intangible assets:



	September 30, 2012		December 31, 2011		September 30, 2011
	(In thousands)
Goodwill	$	113,414	$	113,414	$	113,414
Other intangible assets:
Core deposit intangible assets	$	6,777	$	7,879	$	8,261
Mortgage servicing rights	3,466		3,593		3,561
Non-compete agreements	—		—		27
Total other intangible assets	$	10,243	$	11,472	$	11,849

The following table sets forth the carrying amount, accumulated amortization and amortization expense of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:



	September 30, 2012		December 31, 2011		September 30, 2011
	(In thousands)
Gross original amount	$	26,468	$	26,468	$	26,468
Accumulated amortization	19,691		18,589		18,207
Carrying amount	$	6,777	$	7,879	$	8,261
Amortization expense for the three months ended September 30	$	367			$	382
Amortization expense for the nine months ended September 30	$	1,102			$	1,145

At September 30, 2012, the remaining amortization expense on core deposit intangible assets that existed as of that date was estimated as follows: 2012 — $0.4 million; 2013 — $1.3 million; 2014 — $1.1 million; 2015 — $1.1 million; 2016 — $0.9 million; 2017 and thereafter — $2.0 million.

The following shows the net carrying value and fair value of MSRs and the total loans that the Corporation is servicing for others:



	September 30, 2012		December 31, 2011		September 30, 2011
	(In thousands)
Net carrying value of MSRs	$	3,466	$	3,593	$	3,561
Fair value of MSRs	$	4,277	$	4,757	$	4,437
Loans serviced for others that have servicing rights capitalized	$	901,052	$	902,812	$	900,197

The following table shows the activity for capitalized MSRs:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(In thousands)
Balance at beginning of period	$	3,463		$	3,577		$	3,593		$	3,782
Additions	503			317			1,706			1,028
Amortization	(500		)	(333		)	(1,833		)	(1,249		)
Balance at end of period	$	3,466		$	3,561		$	3,466		$	3,561

There was no impairment valuation allowance recorded on MSRs as of September 30, 2012, December 31, 2011 or September 30, 2011.

- 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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