Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

(a) Goodwill

The Company’s goodwill represents the excess of the purchase price over the fair value of net assets acquired in the following mergers: Premier Commercial Bancorp on July 2, 2018; Puget Sound Bancorp on January 16, 2018; Washington Banking Company on May 1, 2014; Valley Community Bancshares on July 15, 2013; Western Washington Bancorp in 2006 and North Pacific Bank in 1998. The Company’s goodwill is assigned to the Bank and is evaluated for impairment at the Bank level (reporting unit).

The following table presents the change in goodwill for the periods indicated:



	Year Ended December 31,
	2019		2018		2017
	(In thousands)
Balance at the beginning of the period	$	240,939	$	119,029	$	119,029
Additions as a result of acquisitions⁽¹⁾	—		121,910		—
Balance at the end of the period	$	240,939	$	240,939	$	119,029


⁽¹⁾	See Note (2) Business Combinations

At December 31, 2019, the Company’s step-one analysis concluded that the reporting unit’s fair value of the reporting unit exceeded the carrying value, such that the Company's goodwill was not considered impaired. Similarly, no goodwill impairment charges were required, or recorded, for the years ended December 31, 2018 and 2017. Even though there was no goodwill impairment at December 31, 2019, changes in the economic environment, operations of the reporting unit or other adverse events could result in future impairment charges which could have a material impact on the Company’s operating results.

(b) Other Intangible Assets

Other intangible assets represent CDI acquired in business combinations. The useful life of the CDI was estimated to be ten years for the acquisitions of Premier Commercial Bancorp, Puget Sound Bancorp, Washington Banking Company, and Valley Community Bancshares, and was estimated to be five years for the acquisition of Northwest Commercial Bank.

The following table presents the change in other intangible assets for the periods indicated:



	Year Ended December 31,
	2019			2018			2017
	(In thousands)
Balance at the beginning of the year	$	20,614		$	6,088		$	7,374
Additions as a result of acquisitions ⁽¹⁾	—			18,345			—
Amortization	(4,001		)	(3,819		)	(1,286		)
Balance at the end of the year	$	16,613		$	20,614		$	6,088


⁽¹⁾	See Note (2) Business Combinations

The estimated aggregate amortization expense related to these intangible assets for future years is as follows:



	Year Ending December 31,
	(In thousands)
2020	$	3,525
2021	3,111
2022	2,750
2023	2,435
2024	1,640
Thereafter	3,152
	$	16,613