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Note 8 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Text Block]

8.	GOODWILL AND OTHER INTANGIBLE ASSETS

The following table presents changes in the carrying amount of goodwill for the three-year period ended December 31, 2011.

Changes in the Carrying Amount of Goodwill

(Dollar amounts in thousands)

Balance at December 31, 2008	$	262,886
2009 activity		-
Balance at December 31, 2009		262,886
Goodwill acquired through FDIC-assisted transaction		7,941
Balance at December 31, 2010		270,827
Adjustment to goodwill recorded in 2010 (1)		(5,350	)
Adjusted balance at January 1, 2011		265,477
2011 activity		-
Balance at December 31, 2011	$	265,477

(1)	Goodwill was adjusted based on additional information received in 2011 relating to the acquisition date value of certain assets and liabilities. Refer to Note 1, “Summary of Significant Accounting Policies,” for further details of this adjustment.

Goodwill is not amortized but is subject to impairment testing on an annual basis or more often if events or circumstances indicate the potential for impairment. Due to volatile market conditions and a decline in the Company’s market capitalization, management determined that an interim impairment test of goodwill as of September 30, 2011 was appropriate. The testing was performed by comparing the carrying value of the reporting unit with management’s estimate of the fair value of the reporting unit, which was based on a discounted cash flow analysis. Step 1 of the interim test indicated that management’s estimate of the fair value of the reporting unit exceeded the carrying value of the reporting unit; therefore, no impairment existed, and Step 2 of the impairment test was not required.

The Company’s annual impairment test date is October 1. Given the proximity of the interim test to the annual test date and management’s evaluation of market conditions, no additional goodwill impairment testing was deemed necessary during the fourth quarter of 2011.

The Company’s other intangible assets are core deposit premiums, which are being amortized over their estimated useful lives. The Company reviews intangible assets at least annually for possible impairment or more often if events or changes in circumstances between tests indicate that carrying amounts may not be recoverable. The Company’s annual impairment testing was performed as of November 30, 2011 by comparing the carrying value of intangibles with our anticipated discounted future cash flows, and it was determined that no impairment existed as of that date.

In December 2011, the Company completed the purchase of certain Chicago-market deposits from Old National. The transaction included $106.7 million in deposits (comprised of $70.6 million in core transactional deposits and $36.1 in time deposits) and one banking facility located in the market in which the Company operates. As a result of the transaction, the Company recorded $1.4 million in core deposit intangibles and a net gain of $1.1 million.

Core Deposit Intangibles

(Dollar amounts in thousands)

	Years Ended December 31,
	2011										2010										2009
	Gross			Accumulated Amortization			Net				Gross			Accumulated Amortization			Net				Gross		Accumulated Amortization		Net
Balance at beginning of year	$	42,832		$	22,276			$	20,556		$	36,591		$	17,998			$	18,593		$	35,731	$	14,069		$	21,662
Additions		1,419			-				1,419			6,242			-				6,242			860		-			860
Amortization expense		-			3,802				(3,802	)		-			4,279				(4,279	)		-		3,929			(3,929	)
Fully amortized assets/other		(9,933	)		(9,933	)			-			(1	)		(1	)			-			-		-			-
Balance at end of year	$	34,318		$	16,145			$	18,173		$	42,832		$	22,276			$	20,556		$	36,591	$	17,998		$	18,593
Weighted-average remaining life (in years)									6.9										7.3								7.0
Estimated useful lives (in years)							3.3 to 12.6										3.3 to 12.6								5.5 to 11.8

Scheduled Amortization of Other Intangible Assets

(Dollar amounts in thousands)

	Total
Year ending December 31,
2012	$	3,336
2013		3,192
2014		2,603
2015		2,414
2016		2,337
2017 and thereafter		4,291
Total	$	18,173

- 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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