Goodwill and Other Acquisition-Related Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Acquisition-Related Intangible Assets

NOTE 8. GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLE ASSETS

People’s United goodwill totaled $3.07 billion at both March 31, 2020 and December 31, 2019, and was allocated to its operating segments as follows: Commercial Banking ($1.97 billion); Retail Banking ($1.01 billion); and Wealth Management ($88.5 million).

Recent acquisitions have been undertaken with the objective of expanding the Company’s business, both geographically and through product offerings, as well as realizing synergies and economies of scale by combining with the acquired entities. For these reasons, a market-based premium was paid for the acquired entities which, in turn, resulted in the recognition of goodwill, representing the excess of the respective purchase prices over the estimated fair value of the net assets acquired.

All of People’s United’s tax deductible goodwill was created in transactions in which the Company purchased the assets of the target (as opposed to purchasing the issued and outstanding stock of the target). At March 31, 2020 and December 31, 2019, tax deductible goodwill totaled $131.8 million and $134.4 million, respectively.

People’s United’s other acquisition-related intangible assets totaled $198.5 million and $209.1 million at March 31, 2020 and December 31, 2019, respectively. At March 31, 2020, the carrying amounts of other acquisition-related intangible assets were as follows: core deposit intangible ($118.9 million); trade name intangible ($49.0 million); client relationships intangible ($17.4 million); trust relationships intangible ($7.0 million); insurance relationships intangible ($3.7 million); favorable lease agreements ($2.3 million); and non-compete agreements ($0.2 million).

Amortization expense of other acquisition-related intangible assets totaled $10.7 million and $6.7 million for the three months ended March 31, 2020 and 2019, respectively. Scheduled amortization expense attributable to other acquisition-related intangible assets for the full-year of 2020 and each of the next five years is as follows: $40.9 million in 2020; $36.1 million in 2021; $31.7 million in 2022; $24.0 million in 2023; $20.3 million in 2024; and $17.3 million in 2025. There were no impairment losses relating to goodwill or other acquisition-related intangible assets recorded in the Consolidated Statements of Income during the three months ended March 31, 2020 and 2019.