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Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
GOODWILL AND OTHER INTANGIBLE ASSETS (Note 8)
The changes in the carrying amount of goodwill as allocated to our business segments, or reporting units thereof, for goodwill impairment analysis were: 
 
Business Segment / Reporting Unit*
 
Wealth
Management
 
Consumer
Lending
 
Commercial
Lending
 
Investment
Management
 
Total
 
(in thousands)
Balance at December 31, 2012
$
20,517

 
$
128,451

 
$
174,763

 
$
104,503

 
$
428,234

Balance at December 31, 2013
$
20,517

 
$
128,451

 
$
174,763

 
$
104,503

 
$
428,234

Goodwill from business combinations

 
40,471

 
78,137

 
29,050

 
147,658

Balance at December 31, 2014
$
20,517

 
$
168,922

 
$
252,900

 
$
133,553

 
$
575,892

 
*
Valley’s Wealth Management Division is comprised of trust, asset management, and insurance services. This reporting unit is included in the Consumer Lending segment for financial reporting purposes.
During 2014, goodwill from business combinations related to the acquisition of 1st United (see Note 2 for further details). There were no changes to the carrying amounts of goodwill allocated to Valley’s business segments, or reporting units thereof, for goodwill impairment analysis during 2013. There was no impairment of goodwill during the years ended December 31, 2014, 2013, and 2012.
The following tables summarize other intangible assets as of December 31, 2014 and 2013: 
 
Gross
Intangible
Assets
 
Accumulated
Amortization
 
Valuation
Allowance
 
Net
Intangible
Assets
 
(in thousands)
December 31, 2014
 
 
 
 
 
 
 
Loan servicing rights
$
72,154

 
$
(51,708
)
 
$
(592
)
 
$
19,854

Core deposits
46,694

 
(29,916
)
 

 
16,778

Other
4,591

 
(2,448
)
 

 
2,143

Total other intangible assets
$
123,439

 
$
(84,072
)
 
$
(592
)
 
$
38,775

December 31, 2013
 
 
 
 
 
 
 
Loan servicing rights
$
71,100

 
$
(45,032
)
 
$
(504
)
 
$
25,564

Core deposits
35,194

 
(27,238
)
 

 
7,956

Other
5,878

 
(3,268
)
 

 
2,610

Total other intangible assets
$
112,172

 
$
(75,538
)
 
$
(504
)
 
$
36,130


Core deposits are amortized using an accelerated method and have a weighted average amortization period of 11 years. The line item labeled “Other” included in the table above primarily consists of customer lists and covenants not to compete, which are amortized over their expected lives generally using a straight-line method and have a weighted average amortization period of 18 years. In 2014, Valley recorded $11.5 million in core deposit intangibles resulting from the 1st United Bancorp acquisition. Valley evaluates core deposits and other intangibles for impairment when an indication of impairment exists. No impairment was recognized during the years ended December 31, 2014, 2013, and 2012.

The following table summarizes the change in loan servicing rights during the years ended December 31, 2014, 2013 and 2012: 
 
2014
 
2013
 
2012
 
(in thousands)
Loan servicing rights
 
 
 
 
 
Balance at beginning of year
$
26,068

 
$
19,984

 
$
12,900

Origination of loan servicing rights
1,065

 
13,265

 
12,039

Amortization expense
(6,687
)
 
(7,181
)
 
(4,955
)
Balance at end of year
$
20,446

 
$
26,068

 
$
19,984

Valuation allowance
 
 
 
 
 
Balance at beginning of year
$
(504
)
 
$
(3,046
)
 
$
(2,670
)
Impairment adjustment
(88
)
 
2,542

 
(376
)
Balance at end of year
$
(592
)
 
$
(504
)
 
$
(3,046
)
Balance at end of year, net of valuation allowance
$
19,854

 
$
25,564

 
$
16,938


Loan servicing rights are accounted for using the amortization method (see Note 1 for more details).
The Bank is a servicer of residential mortgage and SBA loan portfolios, and it is compensated for loan administrative services performed for mortgage servicing rights of loans originated and sold by the Bank, and to a lesser extent, purchased mortgage servicing rights. The aggregate principal balances of residential mortgage loans serviced by the Bank for others approximated $2.3 billion, $2.5 billion, and $1.8 billion at December 31, 2014, 2013, and 2012, respectively. The SBA loans serviced by the Bank for third-party investors totaled $26.9 million, $28.4 million, and $30.4 million at December 31, 2014, 2013 and 2012, respectively. The outstanding balance of all loans serviced for others is not included in the consolidated statements of financial condition.
Valley recognized amortization expense on other intangible assets, including recoveries and net impairment charges on loan servicing rights (reflected in the table above), of $9.9 million, $8.3 million, and $9.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.
The following presents the estimated amortization expense of other intangible assets over the next five-year period: 
 
Loan Servicing
Rights
 
Core
Deposits
 
Other
 
(in thousands)
2015
$
5,347

 
$
3,645

 
$
434

2016
4,144

 
2,909

 
233

2017
3,234

 
2,354

 
220

2018
2,458

 
1,975

 
193

2019
1,795

 
1,679

 
181