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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Other Intangible Assets
Goodwill  
Goodwill is not amortized but is instead subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. See Note 1 for the Corporation’s accounting policy for goodwill and other intangible assets.
The Corporation conducted its most recent annual impairment testing in May 2019, utilizing a qualitative assessment. Factors that management considered in this assessment included macroeconomic conditions, industry and market considerations, overall financial performance of the Corporation and each reporting unit (both current and projected), changes in management strategy, and changes in the composition or carrying amount of net assets. In addition, management considered the changes in both the Corporation’s common stock price and in the overall bank common stock index (based on the S&P 400 Regional Bank Sub-Industry Index), as well as the Corporation’s earnings per common share trend over the past year. Based on these assessments, management concluded that it is more likely than not that the estimated fair value exceeded the carrying value (including goodwill) for each reporting unit. Therefore, a step one quantitative analysis was not required. There were no events since the May 2019 impairment testing that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2019, 2018, or 2017.
The Corporation had goodwill of $1.2 billion at both December 31, 2019 and 2018. Goodwill increased $7 million in 2019, due to the Huntington branch acquisition. During 2018, goodwill increased $175 million related to the Bank Mutual acquisition, $10 million related to the acquisition of Diversified, and $7 million related to the acquisition of Anderson. See Note 2 for additional information on the Corporation's acquisitions.
Other Intangible Assets  
The Corporation has other intangible assets that are amortized, consisting of CDIs, other intangibles (primarily related to customer relationships acquired in connection with the Corporation’s insurance agency acquisitions), and MSRs. For CDIs and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows:
($ in Thousands)201920182017
Core deposit intangibles
Gross carrying amount$80,730  $58,100  $4,385  
Accumulated amortization(12,456) (5,326) (4,385) 
Net book value$68,274  $52,774  $—  
Additions during the period$22,630  $58,100  $—  
Amortization during the year$7,130  $5,326  $112  
Other intangibles
Gross carrying amount$44,887  $44,931  $34,572  
Reductions due to sale(217) (43) —  
Accumulated amortization(24,643) (21,825) (18,992) 
Net book value$20,027  $23,062  $15,580  
Additions during the period$—  $10,359  $2,162  
Amortization during the year$2,818  $2,833  $1,847  
Mortgage Servicing Rights 
The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. MSRs are amortized in proportion to and over the period of estimated net servicing income, and assessed for impairment at each reporting date. See Note 1 for the Corporation’s accounting policy for MSRs. See Note 16 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 18 which further discusses fair value measurement relative to the MSRs asset.
A summary of changes in the balance of the MSRs asset and the MSRs valuation allowance is as follows:
($ in Thousands)201920182017
Mortgage servicing rights
Mortgage servicing rights at beginning of year$68,433  $59,168  $62,085  
Additions from acquisition—  8,136  —  
Additions11,606  10,722  7,167  
Amortization(12,432) (9,594) (10,084) 
Mortgage servicing rights at end of year$67,607  $68,433  $59,168  
Valuation allowance at beginning of year(239) (784) (609) 
(Additions) recoveries, net(63) 545  (175) 
Valuation allowance at end of year(302) (239) (784) 
Mortgage servicing rights, net$67,306  $68,193  $58,384  
Fair value of mortgage servicing rights$72,532  $81,012  $64,387  
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)$8,484,977  $8,600,983  $7,646,846  
Mortgage servicing rights, net to servicing portfolio0.79 %0.79 %0.76 %
Mortgage servicing rights expense(a)
$12,494  $9,049  $10,259  
(a) Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net on the consolidated statements of income.
The projections of amortization expense are based on existing asset balances, the current interest rate environment, and prepayment speeds as of December 31, 2019. The actual amortization expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable. The following table shows the estimated future amortization expense for amortizing intangible assets:
($ in Thousands)Core Deposit IntangiblesOther IntangiblesMortgage Servicing Rights
Year ending December 31,
2020$8,073  $2,681  $10,628  
20218,073  2,656  11,481  
20228,073  2,633  9,576  
20238,073  2,614  7,967  
20248,073  2,594  6,621  
Beyond 202427,909  6,850  21,336  
Total Estimated Amortization Expense$68,274  $20,027  $67,607