Goodwill and Other Intangibles Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Other Intangibles Assets

Note 7: Goodwill and Other Intangibles Assets

Other than goodwill, the Company does not have any other intangible assets that are not amortized. Accounting standards allow for goodwill to be tested for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. Based on the impairment testing performed at December 31, 2012, Busey Wealth Management and FirsTech did not have indicators of potential impairment based on the estimated fair value of those operating segments.

Based upon interim impairment testing in the third quarter of 2009, Busey Bank indicated potential impairment and was subjected to the second step of goodwill impairment testing. Busey Bank experienced significant operating losses driven by the deterioration in the real estate markets, primarily due to its presence in southwest Florida through its loan production office. The operating losses and the effects of the current economic environment on the valuation of financial institutions and the capital markets had a significant, negative effect on the fair value of Busey Bank. As a result of applying the second step of the impairment test, all remaining goodwill associated with our banking operations was fully impaired, totaling $208.2 million, including $3.4 million related to our banking operations but held at the parent company level.

The remaining goodwill is associated with the operations of Busey Wealth Management and FirsTech, which both have sustained quarterly and annual profits to date. However, it is possible we will evaluate our goodwill for impairment on a more frequent basis than annually. The evaluation may result in further impairment.

There were no changes in the carrying amount of goodwill by operating segment during 2012 or 2011. The carrying amount of goodwill by operating segment at December 31, 2012 and 2011 is as follows:

	December 31 Balance
	(dollars in thousands)
Goodwill:
FirsTech	$	8,992
Busey Wealth Management	11,694
Total Goodwill	$	20,686

Core deposit and customer relationship intangible assets are amortized on an accelerated or straight-line basis over the estimated period benefited up to 10 years. Other intangible asset disclosures are as follows:

	Balance at December 31, 2011		Amortization		Balance at December 31, 2012
	(dollars in thousands)
Amortized intangible assets:
Core deposit intangibles	$	10,373	$	2,199	$	8,174
Customer relationship intangibles	5,645		1,116		4,529
	$	16,018	$	3,315	$	12,703

	Core deposit intangible		Customer relationship intangible
	(dollars in thousands)
As of December 31, 2012:
Gross carrying amount	$	34,836	$	11,320
Accumulated amortization	26,662		6,791
	$	8,174	$	4,529

Estimated amortization expense:
2013	$	2,050	$	1,082
2014	1,870		1,014
2015	1,720		973
2016	1,644		929
2017	890		531
Thereafter	—		—
	$	8,174	$	4,529

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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