As discussed in Note 21, Valley made changes to its operating structure and strategy during the second quarter 2022 (and subsequent to the annual goodwill impairment test), which resulted in changes in its operating segments and reporting units to reflect how the CEO, who is the chief operating decision maker, intends to manage Valley, allocates resources and measures performance. Goodwill balances were reallocated across the new operating segments and reporting units based on their relative fair values using the valuation performed during the second quarter 2022.

During 2023, the carrying amounts of goodwill allocated to Valley's reporting units at December 31, 2022 and 2021, as reflected in the table below, were adjusted for the correction of an immaterial error related to the reallocation of goodwill during the second quarter 2022. As a result of the segment change in the second quarter 2022, the goodwill balance of $220.5 million from the former Investment Management reporting unit was allocated to the Consumer Banking (formerly Consumer Lending) and Commercial Banking (formerly Commercial Lending) reporting units, on a relative fair value basis, in the amounts of $41.3 million and $179.2 million, respectively.

The following tables summarize the effects of the adjustment on the amounts previously reported in the goodwill allocation table, the corrected (or “as adjusted”) amounts for each applicable period end and the changes in goodwill for each period presented.


	Reporting Unit (1)
	Wealth Management		Consumer Banking		Commercial Banking		Total
	(in thousands)
December 31, 2021, as reported	$	38,851	$	222,390	$	1,197,767	$	1,459,008
Adjustment	(4,536)		127,167		(122,631)		—
December 31, 2021, as adjusted	$	34,315	$	349,557	$	1,075,136	$	1,459,008

December 31, 2022, as reported	$	49,767	$	284,873	$	1,534,296	$	1,868,936
Adjustment	28,375		64,773		(93,148)		—
December 31, 2022, as adjusted	$	78,142	$	349,646	$	1,441,148	$	1,868,936


	Reporting Unit (1)
	Wealth Management		Consumer Banking		Commercial Banking		Total
	(in thousands)
December 31, 2021, as adjusted	$	34,315	$	349,557	$	1,075,136	$	1,459,008
Goodwill from business combinations, as adjusted (2)	43,827		89		366,012		409,928
December 31, 2022, as adjusted	$	78,142	$	349,646	$	1,441,148	$	1,868,936
December 31, 2023	$	78,142	$	349,646	$	1,441,148	$	1,868,936

(1) The Wealth Management and Consumer Banking reporting units are both components of the overall Consumer Banking operating segment, which is further described in Note 21.

(2) Includes adjustments of $32.9 million, $(62.4) million and $29.4 million for Wealth Management, Consumer Banking and Commercial Banking, respectively, to reflect the correction of an immaterial error related to the reallocation of goodwill during the second quarter 2022.

The goodwill from business combinations set forth in the table above during 2022 related to the acquisitions of Bank Leumi USA and Landmark totaled $400.6 million and $4.4 million, respectively. The goodwill from Landmark transaction was allocated entirely to the Wealth Management reporting unit during the year ended December 31, 2022. Valley also recorded $4.9 million of additional goodwill during 2022 reflecting an adjustment to the deferred tax assets acquired from Westchester as of the acquisition date. See Note 2 for further details related to acquisitions.

During the second quarter 2023, Valley performed the annual goodwill impairment test at its normal assessment date. During the year ended December 31, 2023, there were no triggering events that would more likely than not reduce the fair value of any reporting unit below its carrying amount. There was no impairment of goodwill recognized during the years ended December 31, 2023, 2022 and 2021 and the correction of the error in allocation of goodwill to reporting units described above had no impact on this conclusion.


	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
	(in thousands)
December 31, 2023
Loan servicing rights	$	122,586	$	(100,636)	$	21,950
Core deposits	215,620		(113,183)		102,437
Other	50,393		(14,449)		35,944
Total other intangible assets	$	388,599	$	(228,268)	$	160,331
December 31, 2022
Loan servicing rights	$	119,943	$	(96,136)	$	23,807
Core deposits	223,670		(92,486)		131,184
Other	51,299		(8,834)		42,465
Total other intangible assets	$	394,912	$	(197,456)	$	197,456

Core deposits are amortized using an accelerated method over a period of 10.0 years. Valley recorded $114.4 million of core deposit intangibles resulting from the Bank Leumi USA acquisition during the year ended December 31, 2022.

The line item labeled “Other” included in the table above primarily consists of customer lists, certain financial asset servicing contracts 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 13.4 years. Valley recorded $39.0 million and $6.2 million of other intangible assets resulting from the Bank Leumi USA and Landmark acquisitions, respectively, during the year ended December 31, 2022.

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, 2023, 2022 and 2021.


	2023		2022		2021
	(in thousands)
Loan servicing rights:
Balance at beginning of year	$	23,807	$	23,685	$	22,810
Origination of loan servicing rights	2,643		5,307		11,486
Amortization expense	(4,500)		(5,185)		(10,611)
Balance at end of year	$	21,950	$	23,807	$	23,685
Valuation allowance:
Balance at beginning of year	$	—	$	—	$	(865)
Impairment recovery adjustment	—		—		865

Balance at end of year, net of valuation allowance	$	21,950	$	23,807	$	23,685

Loan servicing rights are accounted for using the amortization method. There was no net impairment recognized during December 31, 2023 and 2022. As shown in the above table, Valley recorded net recoveries of impairment charges totaling $865 thousand for the year ended December 31, 2021.

The Bank services residential mortgage 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 $3.3 billion, $3.5 billion and $3.6 billion at December 31, 2023, 2022 and 2021, respectively. The outstanding balance of loans serviced for others is not included in the consolidated statements of financial condition.

Valley recognized amortization expense on other intangible assets, including net (recoveries of) impairment charges on loan servicing rights (reflected in the table above), of $39.8 million, $37.8 million and $21.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.


Year	Loan Servicing Rights		Core Deposits		Other
	(in thousands)
2024	$	2,816	$	24,897	$	5,951
2025	2,478		21,048		5,380
2026	2,187		17,223		4,805
2027	1,916		13,544		4,205
2028	1,681		10,117		3,633