Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is tested annually, or more often than annually, if circumstances warrant, for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated, and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. Goodwill totaled $1.065 billion at March 31, 2020 and $1.056 billion at December 31, 2019.

During 2019, the Company recorded $131.3 million and $78.5 million of goodwill as a result of its acquisitions of Landrum and Reliance, respectively. During the first quarter of 2020, goodwill increased $9.5 million related to the continued assessment of the fair value and assumed tax position of the Landrum acquisition.

Goodwill impairment was neither indicated nor recorded during the three months ended March 31, 2020 or the year ended December 31, 2019. During the first quarter 2020, the Company’s share price began to decline as the markets in the United States responded to the global COVID-19 pandemic. As a result of the economic decline, the effect on share price and other factors, the Company performed an interim goodwill impairment qualitative assessment and concluded that it is more likely-than-not that the fair value of goodwill continues to exceed its carrying value and therefore, goodwill is not impaired.

Core deposit premiums represent the value of the relationships that acquired banks had with their deposit customers and are amortized over periods ranging from 10 years to 15 years and are periodically evaluated, at least annually, as to the recoverability of their carrying value. Other intangible assets represent the value of other acquired relationships, including relationships with trust and wealth management customers, and are being amortized over various periods ranging from 10 years to 15 years.

Changes in the carrying amount and accumulated amortization of the Company’s core deposit premiums and other intangible assets at March 31, 2020 and December 31, 2019 were as follows:



(In thousands)	March 31, 2020			December 31, 2019
Core deposit premiums:
Balance, beginning of year	$	111,808		$	79,807
Acquisitions⁽¹⁾	—			42,695
Disposition of intangible asset⁽²⁾	(1,841		)	—
Amortization	(3,070		)	(10,694		)
Balance, end of period	106,897			111,808
Books of business and other intangibles:
Balance, beginning of year	15,532			11,527
Acquisitions⁽³⁾	—			5,116
Disposition of intangible asset	(413		)	—
Amortization	(343		)	(1,111		)
Balance, end of period	14,776			15,532
Total other intangible assets, net	$	121,673		$	127,340

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(1) Core deposit premiums of $24.3 million and $18.4 million were recorded during 2019 as part of the Landrum and Reliance acquisitions, respectively. See Note 2, Acquisitions, for additional information on acquisitions completed in 2019.

(2) Consisting of an adjustment for the premium on certain deposit liabilities related to the sale of the Texas Branches.

(3) The Company recorded $5.1 million during 2019 primarily related to the wealth management operations acquired from Landrum. See Note 2, Acquisitions, for additional information on acquisitions completed in 2019.

The carrying basis and accumulated amortization of the Company’s other intangible assets at March 31, 2020 and December 31, 2019 were as follows:



(In thousands)	March 31, 2020			December 31, 2019
Core deposit premiums:
Gross carrying amount	$	146,838		$	148,679
Accumulated amortization	(39,941		)	(36,871		)
Core deposit premiums, net	106,897			111,808
Books of business and other intangibles:
Gross carrying amount	19,938			20,350
Accumulated amortization	(5,162		)	(4,818		)
Books of business and other intangibles, net	14,776			15,532
Total other intangible assets, net	$	121,673		$	127,340

The Company’s estimated remaining amortization expense on other intangible assets as of March 31, 2020 is as follows:



(In thousands)	Year	Amortization Expense
	Remainder of 2020	$	10,120
	2021	13,436
	2022	13,384
	2023	13,101
	2024	12,199
	Thereafter	59,433
	Total	$	121,673