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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Other Intangible Assets
Goodwill  
Goodwill is not amortized but is instead subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 1 for the Corporation’s accounting policy for goodwill and other intangible assets.
The Corporation conducted its most recent annual impairment testing in May 2018, utilizing a qualitative assessment. Factors that management considered in this assessment included macroeconomic conditions, industry and market considerations, overall financial performance of the Corporation and each reporting unit (both current and projected), changes in management strategy, and changes in the composition or carrying amount of net assets. In addition, management considered the changes in both the Corporation’s common stock price and in the overall bank common stock index (based on the S&P 400 Regional Bank Sub-Industry Index), as well as the Corporation’s earnings per common share trend over the past year. Based on these assessments, management concluded that it is more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative analysis was not required. There were no events since the May 2018 impairment testing that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2018, 2017, or 2016.
At December 31, 2018, the Corporation had goodwill of $1.2 billion, compared to $976 million at December 31, 2017. Goodwill increased $175 million related to the Bank Mutual acquisition, $10 million related to the acquisition of Diversified, and $7 million related to the acquisition of Anderson. See Note 2 for additional information on the Corporation's acquisitions.
Other Intangible Assets  
The Corporation has other intangible assets that are amortized, consisting of core deposit intangibles, other intangibles (primarily related to customer relationships acquired in connection with the Corporation’s insurance agency acquisitions), and mortgage servicing rights. During the first quarter of 2018, the Corporation added approximately $58 million of core deposit intangibles as a result of the Bank Mutual acquisition. In addition, the Corporation added approximately $8 million of other intangibles relating to customer relationships associated with the Diversified acquisition. During the second quarter of 2018, the Corporation added approximately $3 million of other intangibles related to customer relationships associated with the Anderson acquisition. See Note 2 for additional information on the Corporation's acquisitions. For core deposit intangibles and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows:
 
2018
 
2017
 
2016
 
($ in Thousands)
Core deposit intangibles
 
 
 
 
 
Gross carrying amount
$
58,100

 
$
4,385

 
$
4,385

Accumulated amortization
(5,326
)
 
(4,385
)
 
(4,273
)
Net book value
$
52,774

 
$
—

 
$
112

Additions during the period
$
58,100

 
$
—

 
$
—

Amortization during the year
$
5,326

 
$
112

 
$
281

Other intangibles
 
 
 
 
 
Gross carrying amount
$
44,931

 
$
34,572

 
$
32,410

Reductions due to sale
(43
)
 
—

 
—

Accumulated amortization
(21,825
)
 
(18,992
)
 
(17,145
)
Net book value
$
23,062

 
$
15,580

 
$
15,265

Additions during the period
$
10,359

 
$
2,162

 
$
1,012

Amortization during the year
$
2,833

 
$
1,847

 
$
1,812


Mortgage Servicing Rights 
The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. See Note 1 for the Corporation’s accounting policy for mortgage servicing rights. See Note 15 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 17 which further discusses fair value measurement relative to the mortgage servicing rights asset.
A summary of changes in the balance of the mortgage servicing rights asset and the mortgage servicing rights valuation allowance is as follows:
 
2018
 
2017
 
2016
 
($ in Thousands)
Mortgage servicing rights
 
 
Mortgage servicing rights at beginning of year
$
59,168

 
$
62,085

 
$
62,150

Additions from acquisition
8,136

 
—

 
—

Additions
10,722

 
7,167

 
12,262

Amortization
(9,594
)
 
(10,084
)
 
(12,327
)
Mortgage servicing rights at end of year
$
68,433

 
$
59,168

 
$
62,085

Valuation allowance at beginning of year
(784
)
 
(609
)
 
(809
)
(Additions) recoveries, net
545

 
(175
)
 
200

Valuation allowance at end of year
(239
)
 
(784
)
 
(609
)
Mortgage servicing rights, net
$
68,193

 
$
58,384

 
$
61,476

Fair value of mortgage servicing rights
$
81,012

 
$
64,387

 
$
73,149

Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)
$
8,600,983

 
$
7,646,846

 
$
7,974,742

Mortgage servicing rights, net to servicing portfolio
0.79
%
 
0.76
%
 
0.77
%
Mortgage servicing rights expense (a)
$
9,049

 
$
10,259

 
$
12,127


(a)
Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net in the consolidated statements of income.

The projections of amortization expense are based on existing asset balances, the current interest rate environment, and prepayment speeds as of December 31, 2018. The actual amortization expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable. The following table shows the estimated future amortization expense for amortizing intangible assets:
Estimated Amortization Expense
Core Deposit Intangibles
 
Other Intangibles
 
Mortgage Servicing Rights
 
($ in Thousands)
Year ending December 31,
 
 
 
 
 
2019
$
5,810

 
$
2,824

 
$
9,666

2020
5,810

 
2,707

 
10,355

2021
5,810

 
2,682

 
8,951

2022
5,810

 
2,659

 
7,694

2023
5,810

 
2,640

 
6,580

Beyond 2023
23,724

 
9,551

 
25,187

Total Estimated Amortization Expense
$
52,774

 
$
23,062

 
$
68,433