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Goodwill and Intangible Assets
9 Months Ended
Sep. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

NOTE 8 – 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, 2018

 

 

Adjustments

 

 

Write-off

 

 

September 30, 2019

 

Goodwill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

340,395

 

 

$

6,336

 

 

$

 

 

$

346,731

 

Institutional Group

 

 

694,284

 

 

 

117,108

 

 

 

 

 

 

811,392

 

 

 

$

1,034,679

 

 

$

123,444

 

 

$

 

 

$

1,158,123

 

 

 

 

December 31, 2018

 

 

Net Additions

 

 

Amortization

 

 

September 30, 2019

 

Intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Wealth Management

 

$

60,532

 

 

$

 

 

$

(5,527

)

 

$

55,005

 

Institutional Group

 

 

59,123

 

 

 

7,743

 

 

 

(5,433

)

 

 

61,433

 

 

 

$

119,655

 

 

$

7,743

 

 

$

(10,960

)

 

$

116,438

 

 

The adjustments to goodwill included in our Institutional Group segment during the nine months ended September 30, 2019 are primarily attributable to the following:

On January 2, 2019, the Company completed the acquisition of First Empire. 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 $22.7 million of goodwill and intangible assets in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment.

On July 1, 2019, the Company completed the acquisition of Mooreland. 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 $37.4 million of goodwill and intangible assets in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment.

On September 3, 2019, the Company completed the acquisition of B&F. 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 $19.6 million of goodwill and intangible assets in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment.

On September 27, 2019, the Company completed the acquisition of certain assets of GKB. 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 $45.2 million of goodwill and intangible assets in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment.

The allocation of the purchase price of these acquisitions are preliminary and will be finalized upon completion of the analysis of the fair values of the net assets as of the respective acquisition dates 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 1 in the notes to our consolidated financial statements for additional information regarding our acquisitions.

The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of each respective business, its employees and customer base. Goodwill is expected to be deductible for federal income tax purposes.

The adjustments to goodwill included in our Global Wealth Management segment during the nine months ended September 30, 2019 are primarily attributable to the Business Bank acquisition, which closed on August 31, 2018.

Amortizable intangible assets consist of acquired customer relationships, trade name, investment banking backlog, and non-compete agreements that are amortized over their contractual or determined useful lives. Intangible assets subject to amortization as of September 30, 2019 and December 31, 2018 were as follows (in thousands):

 

 

 

September 30, 2019

 

 

December 31, 2018

 

 

 

Gross

Carrying

Value

 

 

Accumulated

Amortization

 

 

Gross

Carrying

Value

 

 

Accumulated

Amortization

 

Customer relationships

 

$

168,110

 

 

$

72,794

 

 

$

160,745

 

 

$

65,254

 

Trade name

 

 

27,131

 

 

 

13,200

 

 

 

26,831

 

 

 

11,755

 

Core deposits

 

 

8,615

 

 

 

2,474

 

 

 

8,615

 

 

 

816

 

Non-compete agreements

 

 

2,714

 

 

 

1,794

 

 

 

2,603

 

 

 

1,452

 

Investment banking backlog

 

 

1,445

 

 

 

1,315

 

 

 

1,431

 

 

 

1,293

 

 

 

$

208,015

 

 

$

91,577

 

 

$

200,225

 

 

$

80,570

 

    

Amortization expense related to intangible assets was $3.8 million and $3.0 million for the three months ended September 30, 2019 and 2018, respectively. Amortization expense related to intangible assets was $11.0 million and $8.7 million for the nine months ended September 30, 2019 and 2018, respectively. Amortization expense is included in other operating expenses in the consolidated statements of operations.

The weighted-average remaining lives of the following intangible assets at September 30, 2019, are: customer relationships, 9.7 years; trade name, 9.0 years; core deposits, 4.4 years; and non-compete agreements, 9.3 years. We have an intangible asset that is not subject to amortization and is, therefore, not included in the table below.  As of September 30, 2019, we expect amortization expense in future periods to be as follows (in thousands):

 

Fiscal year

 

 

 

 

Remainder of 2019

 

$

3,493

 

2020

 

 

13,573

 

2021

 

 

12,718

 

2022

 

 

11,903

 

2023

 

 

11,234

 

Thereafter

 

 

61,399

 

 

 

$

114,320