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Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Net carrying value of intangible assets
The following table shows the net carrying value of the Corporation’s intangible assets:
(Dollars in thousands)
 
September 30,
2016
 
December 31,
2015
Goodwill
 
$
1,137,166

 
$
287,393

Loan servicing rights
 
51,393

 
11,122

Other intangible assets:
 
 
 
 
Core deposit intangible assets
 
$
35,618

 
$
26,654

Non-compete intangible assets
 
82

 
328

Total other intangible assets
 
$
35,700

 
$
26,982
Carrying amount, accumulated amortization and amortization expense of core deposit intangible assets
The following table sets forth the carrying amount and accumulated amortization of core deposit intangible assets that are amortizable and arose from business combinations or other acquisitions:
(Dollars in thousands)
 
September 30,
2016
 
December 31,
2015
Gross original amount
 
$
52,454

 
$
40,055

Accumulated amortization
 
16,836

 
13,401

Net carrying amount
 
$
35,618


$
26,654
Activity for loan servicing rights accounted for under fair value method
The following table represents the activity for LSRs accounted for under the fair value method and the related fair value changes:
(Dollars in thousands)
 
Three and nine months ended September 30, 2016
 
 
Commercial
Real Estate
 
Mortgage
 
Total
Fair value, beginning of period
 
$
—

 
$
—

 
$
—

Acquired in Talmer Bancorp, Inc. merger
 
365

 
42,097

 
42,462

Additions from loans sold with servicing retained
 
—

 
810

 
810

Changes in fair value due to:
 
 
 
 
 
 
Reductions from pay-offs, pay downs and run-off
 
(2
)
 
(685
)
 
(687
)
Changes in estimates of fair value (1)
 
—

 
(657
)
 
(657
)
Fair value, end of period
 
$
363

 
$
41,565

 
$
41,928

Principal balance of loans serviced for others that have servicing capitalized
 
$
79,405

 
$
5,523,423

 
$
5,602,828

 
(1) Represents estimated LSR value change resulting primarily from market-driven changes in interest rates.
Net carrying value, fair value of MSRs and loans Corporation servicing for others
The Corporation continues to account for all other LSRs using the amortization method. The following shows the net carrying value and fair value of LSRs and the total loans that the Corporation is servicing for others accounted for under the amortization method:
(Dollars in thousands)
 
September 30,
2016
 
December 31,
2015
Net carrying value of LSRs
 
$
9,465

 
$
11,122

Fair value of LSRs
 
$
12,434

 
$
15,542

Valuation allowance
 
$
214

 
$
—

Loans serviced for others that have servicing rights capitalized
 
$
1,981,157

 
$
2,082,899
Activity for capitalized MSRs
The following table shows the activity for capitalized LSRs accounted for under the amortization method:
(Dollars in thousands)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2016
 
2015
 
2016
 
2015
Balance at beginning of period
 
$
9,677

 
$
12,307

 
$
11,122

 
$
12,217

Acquired in Monarch acquisition
 
—

 
—

 
—

 
1,284

Additions
 
695

 
303

 
1,612

 
1,118

Amortization
 
(1,105
)
 
(1,070
)
 
(3,055
)
 
(3,279
)
Change in valuation allowance
 
198

 
—

 
(214
)
 
200

Balance at end of period
 
$
9,465

 
$
11,540

 
$
9,465

 
$
11,540
Assumptions utilized in determining the fair value of loan servicing rights
Expected and actual loan prepayment speeds are the most significant factors driving the fair value of loan servicing rights. The following table presents assumptions utilized in determining the fair value of loan servicing rights as of September 30, 2016 and December 31, 2015.
 
 
Commercial
Real Estate
 
Mortgage
As of September 30, 2016
 
 

 
 

Prepayment speed
 
0.00 - 22.47%

 
0.00 - 38.28%

Weighted average (“WA”) discount rate
 
16.46
%
 
10.09
%
Cost to service/per year
 
$467-$500

 
$65-$90

Ancillary income/per year
 
N/A

 
$
28

WA float range
 
0.53
%
 
0.68
%
As of December 31, 2015
 
 

 
 

Prepayment speed
 
N/A

 
6.96 - 17.65%

WA discount rate
 
N/A

 
10.04
%
Cost to service/per year
 
N/A

 
$70-$85

Ancillary income/per year
 
N/A

 
$
20

WA float range
 
N/A

 
1.72
%