Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 19 — Goodwill and Other Intangible Assets

The carrying amount of goodwill was $1.9 billion and $1.6 billion, respectively billion at September 30, 2022

and December 31, 2021. The Company added $342.9 million in goodwill related to the Atlantic Capital acquisition in the first quarter of 2022. The Company made subsequent fair value adjustments related to the Atlantic Capital merger in the second quarter of 2022 that decreased goodwill by $1.5 million. The Company also added $17.5 million in core deposit intangibles related to the Atlantic Capital transaction during the first quarter of 2022. The Company’s other intangible assets, consisting of core deposit intangibles, noncompete intangibles, and client list intangibles are included on the face of the balance sheet.

The Company last completed its annual valuation of the carrying value of its goodwill as of October 31, 2021. We determined that no impairment charge was necessary as of the impairment testing period. We will continue to monitor the impact of current economic conditions and other events on the Company’s business, operating results, cash flows and/or financial condition.

The following is a summary of gross carrying amounts and accumulated amortization of other intangible assets:

	September 30,		December 31,
(Dollars in thousands)	2022		2021
Gross carrying amount	$	279,884	$	257,874
Accumulated amortization		(154,494)		(129,807)
	$	125,390	$	128,067

Amortization expense totaled $7.8 million and $25.2 million, for the three and nine months ended September 30, 2022, compared to $8.5 million and $26.7 million for the three and nine months ended September 30, 2021.  Other intangibles are amortized using either the straight-line method or an accelerated basis over their estimated useful lives, with lives generally between two and 15 years.  During the second quarter of 2022, the Company elected to prospectively apply fair value accounting for the SBA servicing assets beginning with the period ending June 30, 2022, with changes in fair value of the SBA servicing assets recorded in earnings during each applicable reporting period.  As a result, the Company will no longer amortize the SBA servicing assets and therefore excluded the SBA servicing assets from the future amortization expense table presented below.  The fair value of the SBA servicing assets as of September 30, 2022 was $7.0 million.  Estimated amortization expense for other intangibles, excluding the SBA servicing assets, for each of the next five quarters and thereafter is as follows:

(Dollars in thousands)
Quarter ending:
December 31, 2022	$	8,027
March 31, 2023		7,299
June 30, 2023		7,028
September 30, 2023		6,616
December 31, 2023		6,615
Thereafter		82,824
	$	118,409