XML 24 R14.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Goodwill and Other Intangible Assets
 3 Months Ended
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other 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.
The Corporation conducted its most recent annual impairment testing in May 2023, 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 KBW Nasdaq Regional Banking Index (KRX), 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 have been no events since the May 2023 impairment test that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2023 or the first three months of 2024.
The Corporation had goodwill of $1.1 billion at both March 31, 2024 and December 31, 2023.
Core Deposit Intangibles
The Corporation has CDIs which are amortized. Changes in the gross carrying amount, accumulated amortization, and net book value for CDIs were as follows:
($ in thousands)Three Months Ended March 31, 2024Year Ended Dec 31, 2023
Core deposit intangibles
Gross carrying amount at the beginning of period$88,109 $88,109 
Accumulated amortization(49,841)(47,638)
Net book value$38,268 $40,471 
Amortization during the period$2,203 $8,811 
Mortgage Servicing Rights
The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. MSRs are not traded in active markets. As a result, a cash flow model is used to determine fair value. Key assumptions and estimates, including projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads, are used in measuring the fair value of the MSRs asset. These assumptions are considered significant unobservable inputs. See Note 11 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 12 which further discusses fair value measurement relative to the MSRs asset.
A summary of changes in the balance of the MSRs asset under the fair value measurement method for the three months ended March 31, 2024 and the year ended December 31, 2023 is as follows:
($ in thousands)Three Months Ended March 31, 2024Year Ended Dec 31, 2023
Mortgage servicing rights
Mortgage servicing rights at beginning of period$84,390 $77,351 
Additions877 3,564 
Paydowns(1,687)(7,185)
Valuation:
Change in fair value model assumptions— 8,881 
Changes in fair value of asset1,646 1,778 
Mortgage servicing rights at end of period$85,226 $84,390 
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)(a)
$6,349,049 $7,364,492 
Mortgage servicing rights to servicing portfolio(a)
1.34 %1.15 %
(a) During the fourth quarter of 2023, the Corporation transferred $969 million of residential mortgages into held for sale and subsequently sold them for $844 million. After sale, the servicing was retained for a short period until full servicing was transferred to the purchaser in January 2024.
The projections of amortization expense for CDIs and decay for MSRs are based on existing asset balances, the current interest rate environment, and prepayment speeds as of March 31, 2024. The actual expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable. The following table shows the estimated future amortization expense for CDIs and decay for MSRs:
($ in thousands)Core Deposit IntangiblesMortgage Servicing Rights
Nine months ended December 31, 2024$6,608 $6,930 
20258,811 11,133 
20268,811 11,013 
20278,811 10,506 
20283,485 9,628 
20291,681 8,614 
Beyond 202961 27,402 
Total estimated amortization expense and MSRs decay$38,268 $85,226