Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 8 – GOODWILL AND OTHER INTANGIBLE ASSETS

The following table shows the changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016:


	Years Ended December 31,
(dollars in thousands)	2017		2016
Balance at beginning of period	$	655,018	$	584,634
Acquisitions		173,033		111,347
Divestitures		—		(40,963	)

Balance at end of period	$	828,051	$	655,018

Goodwill is reviewed annually for impairment. No events or circumstances since the August 31, 2017 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists.

During 2017, Old National recorded $173.0 million of goodwill associated with the acquisition of Anchor (MN). See Note 2 to the consolidated financial statements for detail regarding changes in goodwill recorded in 2016 associated with acquisitions and divestitures.

The gross carrying amounts and accumulated amortization of other intangible assets at December 31, 2017 and 2016 was as follows:


(dollars in thousands)	Gross Carrying Amount		Accumulated Amortization and Impairment			Net Carrying Amount
December 31, 2017
Core deposit	$	108,923	$	(62,874	)	$	46,049
Customer trust relationships		16,547		(9,533	)		7,014
Customer loan relationships		4,413		(4,380	)		33

Total intangible assets	$	129,883	$	(76,787	)	$	53,096

December 31, 2016
Core deposit	$	81,663	$	(53,214	)	$	28,449
Customer trust relationships		16,547		(7,753	)		8,794
Customer loan relationships		4,413		(3,979	)		434

Total intangible assets	$	102,623	$	(64,946	)	$	37,677

Other intangible assets consist of core deposit intangibles and customer relationship intangibles and are being amortized primarily on an accelerated basis over their estimated useful lives, generally over a period of 5 to 15 years. During 2017, Old National increased core deposit intangibles by $27.3 million related to the Anchor (MN) acquisition.

Old National reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. No impairment charges were recorded in 2017, 2016, or 2015. Total amortization expense associated with intangible assets was $11.8 million in 2017, $12.5 million in 2016, and $11.7 million in 2015.

Estimated amortization expense for future years is as follows:


(dollars in thousands)
2018	$	13,561
2019		11,115
2020		8,765
2021		6,498
2022		4,665
Thereafter		8,492

Total	$	53,096

- 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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