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Goodwill And Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill And Intangible Assets

NOTE 10 – Goodwill and Intangible Assets

The carrying amount of goodwill and intangible assets attributable to each of our reporting segments is presented in the following table (in thousands):

 

 

 

December 31,

2017

 

 

Net Additions

 

 

Write-off

 

 

December 31,

2018

 

Goodwill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

276,477

 

 

$

63,918

 

 

$

 

 

$

340,395

 

Institutional Group

 

 

692,357

 

 

 

1,927

 

 

 

 

 

 

694,284

 

 

 

$

968,834

 

 

$

65,845

 

 

$

 

 

$

1,034,679

 

 

 

 

December 31,

2017

 

 

Net Additions

 

 

Amortization

 

 

December 31,

2018

 

Intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

44,525

 

 

$

21,780

 

 

$

(5,773

)

 

$

60,532

 

Institutional Group

 

 

65,102

 

 

 

805

 

 

 

(6,784

)

 

 

59,123

 

 

 

$

109,627

 

 

$

22,585

 

 

$

(12,557

)

 

$

119,655

 

On March 19, 2018, the Company completed the acquisition of Ziegler. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $19.0 million of goodwill in the consolidated statement of financial condition, which has been allocated to our company’s Global Wealth Management and Institutional Group segments. Identifiable intangible assets purchased by our company consisted of customer relationships and non-compete agreements with an acquisition-date fair value of $9.5 million. See Note 3 in the notes to our consolidated financial statements for additional information regarding the acquisition of Ziegler.

The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of the Ziegler business and of the hired financial advisors and the conversion of the customer accounts to our platform. Goodwill is expected to be deductible for federal income tax purposes.

On August 31, 2018, the Company completed the acquisition of BBI. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $38.4 million of goodwill in the consolidated statement of financial condition, which has been allocated to our company’s Global Wealth Management segment. Identifiable intangible assets purchased by our company consisted of core deposits with an acquisition-date fair value of $8.6 million. The allocation of the purchase price of BBI is preliminary and will be finalized upon completion of the analysis of the fair values of the net assets of BBI as of the acquisition date and the identified intangible assets. The final goodwill recorded on the consolidated statement of financial condition may differ from that reflected herein as a result of future measurement period adjustments and the recording of identified intangible assets. See Note 3 in the notes to our consolidated financial statements for additional information regarding the acquisition of BBI.

On October 1, 2018, the Company completed the acquisition of Rand. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $8.3 million of goodwill in the consolidated statement of financial condition, which has been allocated to our company’s Global Wealth Management segment. Identifiable intangible assets purchased by our company consisted of customer relationships with an acquisition-date fair value of $4.6 million. The allocation of the purchase price of Rand is preliminary and will be finalized upon completion of the analysis of the fair values of the net assets of Rand as of the acquisition date and the identified intangible assets. The final goodwill recorded on the consolidated statement of financial condition may differ from that reflected herein as a result of future measurement period adjustments and the recording of identified intangible assets. See Note 3 in the notes to our consolidated financial statements for additional information regarding the acquisition of Rand.

The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of the Rand business and of the hired financial advisors and the conversion of the customer accounts to our platform. Goodwill is expected to be deductible for federal income tax purposes.

Amortizable intangible assets consist of acquired customer relationships, trade name, core deposits investment banking backlog, and non-compete agreements that are amortized over their contractual or determined useful lives. Intangible assets subject to amortization as of December 31, 2018 and 2017 were as follows (in thousands):

 

 

 

December 31, 2018

 

 

December 31, 2017

 

 

 

Gross

Carrying

Value

 

 

Accumulated

Amortization

 

 

Gross

Carrying

Value

 

 

Accumulated

Amortization

 

Customer relationships

 

$

160,745

 

 

$

65,254

 

 

$

146,986

 

 

$

55,809

 

Trade name

 

 

24,713

 

 

 

11,755

 

 

 

24,713

 

 

 

10,228

 

Core deposits

 

 

8,615

 

 

 

816

 

 

 

 

 

 

 

Non-compete agreements

 

 

2,603

 

 

 

1,452

 

 

 

2,598

 

 

 

1,202

 

Investment banking backlog

 

 

1,431

 

 

 

1,293

 

 

 

1,419

 

 

 

968

 

 

 

$

198,107

 

 

$

80,570

 

 

$

175,716

 

 

$

68,207

 

 

Amortization expense related to intangible assets was $12.6 million, $12.1 million, and $14.4 million for the years ended December 31, 2018, 2017, and 2016, respectively, and is included in other operating expenses in the consolidated statements of operations..

The weighted-average remaining lives of the following intangible assets at December 31, 2018, are: customer relationships, 10.5 years; trade name, 9.6 years; core deposits, 4.9 years; and non-compete agreements, 8.8 years. We have an intangible asset that is not subject to amortization and is, therefore, not included in the table below. As of December 31, 2018, we expect amortization expense in future periods to be as follows (in thousands):

 

Fiscal year

 

 

 

 

2019

 

$

13,737

 

2020

 

 

13,164

 

2021

 

 

12,310

 

2022

 

 

11,494

 

2023

 

 

10,673

 

Thereafter

 

 

56,159

 

 

 

$

117,537