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GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS
 12 Months Ended
Dec. 31, 2023
Other Intangible Assets and Mortgage Servicing Rights [Abstract]  
OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS
Goodwill and Other Intangible Assets: At December 31, 2023, intangible assets are comprised of goodwill and CDI acquired in business combinations. Goodwill is not amortized but is reviewed at least annually for impairment. Banner has identified one reporting unit for purposes of evaluating goodwill for impairment. At December 31, 2023, the Company completed an assessment of qualitative factors and concluded that no further analysis was required as it is more likely than not that the fair value of the Bank, the reporting unit, exceeds the carrying value.

CDI represents the value of transaction-related deposits and the value of the client relationships associated with the deposits. The Company amortizes CDI assets over their estimated useful lives and reviews them at least annually for events or circumstances that could impair their value.  The CDI assets shown in the table below represent the value ascribed to the long-term deposit relationships acquired in various bank acquisitions.
The following table summarizes the changes in the Company’s goodwill and other intangibles for the years ended December 31, 2023, 2022 and 2021 (in thousands):
 GoodwillCDITotal
Balance,  January 1, 2021$373,121 $21,426 $394,547 
Amortization— (6,571)(6,571)
Balance, December 31, 2021373,121 14,855 387,976 
Amortization— (5,279)(5,279)
Other Changes (1)
— (136)(136)
Balance, December 31, 2022373,121 9,440 382,561 
Amortization— (3,756)(3,756)
Balance, December 31, 2023$373,121 $5,684 $378,805 
(1)    Acquired CDI was adjusted for the sale of branches in 2022.

Estimated amortization expense with respect to CDI as of December 31, 2023 for the periods indicated (in thousands):
Year ended:Estimated Amortization
2024$2,626 
20251,567 
2026904 
2027426 
2028126 
Thereafter35 
Net carrying amount$5,684 

Mortgage Servicing Rights: Mortgage and SBA servicing rights are reported in other assets.  SBA servicing rights are initially recorded and carried at fair value. Mortgage servicing rights are initially recognized at fair value and are amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.  Mortgage servicing rights are subsequently evaluated for impairment based upon the fair value of the rights compared to the amortized cost (remaining unamortized initial fair value).  If the fair value is less than the amortized cost, a valuation allowance is created through an impairment charge to servicing fee income.  However, if the fair value is greater than the amortized cost, the amount above the amortized cost is not recognized in the carrying value.  In 2023, 2022 and 2021, the Company did not record any impairment charges or recoveries against mortgage servicing rights. Unpaid principal balance of loans for which mortgage and SBA servicing rights have been recognized totaled $2.78 billion and $2.77 billion at December 31, 2023 and 2022, respectively.  Custodial accounts maintained in connection with this servicing totaled $11.6 million and $11.2 million at December 31, 2023 and 2022, respectively.
 
An analysis of the mortgage and SBA servicing rights for the years ended December 31, 2023, 2022 and 2021 is presented below (in thousands):
 Years Ended December 31
 202320222021
Balance, beginning of the year$16,166 $17,206 $15,223 
Additions—amounts capitalized1,590 3,200 7,260 
Additions—through purchase313 285 159 
Amortization (1)
(3,325)(4,216)(6,580)
Fair value adjustments (3)
(95)(309)1,144 
Balance, end of the year (2)
$14,649 $16,166 $17,206 

(1)    Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full.
(2)    There was no valuation allowance on mortgage servicing rights as of both December 31, 2023 and 2022.
(3)    Fair value adjustments relate to SBA servicing rights. These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.