Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The carrying amounts of goodwill allocated to Valley's business segments, or reporting units thereof, for goodwill impairment analysis at both June 30, 2023 and December 31, 2022 were as follows:


Business Segment / Reporting Unit *
Wealth Management		Consumer Banking		Commercial Banking		Total
(in thousands)


$	49,767	$	284,873	$	1,534,296	$	1,868,936

* Valley’s Wealth Management and Insurance Division is comprised of trust, asset management, brokerage, insurance and tax credit advisory services. This reporting unit is included in the Consumer Banking segment for financial reporting purposes.

During the second quarter 2023, Valley performed the annual goodwill impairment test at its normal assessment date. The results of the 2023 annual impairment test resulted in no impairment of goodwill. During the six months ended June 30, 2023, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount. There was no impairment of goodwill recognized during the three and six months ended June 30, 2022.

The following table summarizes other intangible assets as of June 30, 2023 and December 31, 2022:


	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
	(in thousands)
June 30, 2023
Loan servicing rights	$	120,764	$	(98,453)	$	22,311
Core deposits	215,620		(99,129)		116,491
Other	50,393		(11,249)		39,144
Total other intangible assets	$	386,777	$	(208,831)	$	177,946
December 31, 2022
Loan servicing rights	$	119,943	$	(96,136)	$	23,807
Core deposits	223,670		(92,486)		131,184
Other	51,299		(8,834)		42,465
Total other intangible assets	$	394,912	$	(197,456)	$	197,456

Loan servicing rights are accounted for using the amortization method. Under this method, Valley amortizes the loan servicing assets over the period of the economic life of the assets arising from estimated net servicing revenues. On a quarterly basis, Valley stratifies its loan servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Impairment charges on loan servicing rights are recognized in earnings when the book value of a stratified group of loan servicing rights exceeds its estimated fair value. There was no net impairment recognized during the three and six months ended June 30, 2023 and 2022.

Core deposits are amortized using an accelerated method over a period of 10.0 years. The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of approximately 13.4 years.

Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the three and six months ended June 30, 2023 and 2022.

The following table presents the estimated future amortization expense of other intangible assets for the remainder of 2023 through 2027:


Year	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2023	$	1,579	$	14,054	$	3,201
2024	2,863		24,897		5,951
2025	2,506		21,048		5,380
2026	2,181		17,223		4,805
2027	1,890		13,544		4,205

Valley recognized amortization expense on other intangible assets totaling approximately $9.8 million and $11.4 million for the three months ended June 30, 2023 and 2022, respectively and $20.3 million and $15.8 million for the six months ended June 30, 2023 and 2022, respectively.