GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

NOTE F:  GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows:

	December 31, 2020						December 31, 2019
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
(000’s omitted)	Amount		Amortization		Amount		Amount		Amortization		Amount
Amortizing intangible assets:
Core deposit intangibles	$	69,403	$	(55,572)	$	13,831	$	66,475	$	(50,057)	$	16,418
Other intangibles		90,462		(51,353)		39,109		89,266		(42,571)		46,695
Total amortizing intangibles	$	159,865	$	(106,925)	$	52,940	$	155,741	$	(92,628)	$	63,113

The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows (000’s omitted):

2021	$	12,640
2022		10,844
2023		9,082
2024		7,551
2025		6,374
Thereafter		6,449
Total	$	52,940

Shown below are the components of the Company’s goodwill at December 31, 2020, 2019, and 2018:

	December 31,				December 31,				December 31,
(000’s omitted)	2018		Activity		2019		Activity		2020
Goodwill, net	$	733,503	$	40,307	$	773,810	$	19,898	$	793,708

During 2020, the Company performed quarterly qualitative analyses of goodwill impairment and performed a quantitative assessment of its insurance subsidiary included in the All Other segment during the fourth quarter of 2020 by comparing the fair value of the reporting unit with its carrying amount. The qualitative analyses performed in 2020 included assessments of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, events affecting a reporting unit and changes in share price. During the first quarter of 2019, the Company performed its annual internal valuation of goodwill and impairment analysis by comparing the fair value of each reporting unit to its carrying value. Results of the quarterly and annual analyses indicate there was no goodwill impairment in 2020 or 2019.

Mortgage Servicing Rights

Under certain circumstances, the Company sells consumer residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Generally, the Company’s residential mortgage loans sold to third parties are sold on a non-recourse basis. Upon sale, a mortgage servicing right (“MSR”) is established, which represents the current fair value of future net cash flows expected to be realized for performing the servicing activities. The Company stratifies these assets based on predominant risk characteristics, namely expected term of the underlying financial instruments, and uses a valuation model that calculates the present value of future cash flows to determine the fair value of servicing rights. MSRs are recorded in other assets at the lower of the initial capitalized amount, net of accumulated amortization or fair value. Mortgage loans serviced for others are not included in the accompanying consolidated statements of condition.

The following table summarizes the changes in carrying value of MSRs and the associated valuation allowance:

(000’s omitted)	2020		2019
Carrying value before valuation allowance at beginning of period	$	972	$	1,137
Additions		715		17
Acquisitions		122		196
Amortization		(379)		(378)
Carrying value before valuation allowance at end of period		1,430		972
Valuation allowance balance at beginning of period		(298)		0
Impairment charges		(150)		(326)
Impairment recoveries		229		28
Valuation allowance balance at end of period		(219)		(298)
Net carrying value at end of period	$	1,211	$	674
Fair value of MSRs at end of period	$	1,384	$	1,362
Principal balance of loans sold during the year	$	79,709	$	2,204
Principal balance of loans serviced for others	$	351,759	$	294,093
Custodial escrow balances maintained in connection with loans serviced for others	$	5,583	$	4,596

The following table summarizes the key economic assumptions used to estimate the value of the MSRs at December 31:

	2020		2019
Weighted-average contractual life (in years)	21.5		20.9
Weighted-average constant prepayment rate (CPR)	30.4	%	18.7	%
Weighted-average discount rate	2.1	%	3.0	%