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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2023
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 2023, 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 KBW Nasdaq Regional Banking Index (KRX), 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 have been no events since the May 2023 impairment test that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2023, 2022, or 2021.
The Corporation had goodwill of $1.1 billion at both December 31, 2023 and 2022.
Other Intangible Assets
The Corporation has CDIs and historically had other intangible assets, both of which are amortized. For CDIs and other intangibles, changes in the gross carrying amount, accumulated amortization, and net book value were as follows:
($ in thousands)202320222021
Core deposit intangibles
Gross carrying amount at the beginning of the year$88,109 $88,109 $88,109 
Accumulated amortization(47,638)(38,827)(30,016)
Net book value$40,471 $49,282 $58,093 
Amortization during the year$8,811 $8,811 $8,811 
Other intangibles
Gross carrying amount at the beginning of the year$— $— $2,000 
Reductions due to sale— — (1,317)
Accumulated amortization— — (683)
Net book value$— $— $— 
Amortization during the year$— $— $33 
Mortgage Servicing Rights 
The Corporation sells residential mortgage loans in the secondary market and typically retains the right to service the loans sold. On January 1, 2022, the Corporation made the irrevocable election to account for its MSRs under the fair value measurement method, with any change in fair value being recognized through earnings in mortgage banking, net on the consolidated statements of income. See Note 1 for the Corporation’s accounting policy for MSRs. See Note 16 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 18 which further discusses fair value measurement relative to the MSRs asset.
A summary of changes in the balance of the MSRs asset under the fair value measurement method for the years ended December 31, 2023 and 2022 is as follows:
($ in thousands)20232022
Mortgage servicing rights
Mortgage servicing rights at beginning of period$77,351 $54,862 
Cumulative effect of accounting methodology changeN/A2,296 
Balance at beginning of period, adjusted$77,351 $57,158 
Additions3,564 7,279 
Paydowns(7,185)(9,350)
Valuation:
Change in fair value model assumptions8,881 5,715 
Changes in fair value of asset1,778 16,549 
Mortgage servicing rights at end of period$84,390 $77,351 
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)(a)
$7,364,492 $6,711,820 
Mortgage servicing rights to servicing portfolio(a)
1.15 %1.15 %
(a) During the fourth quarter of 2023, the Corporation transferred $969 million of residential mortgages into held for sale and subsequently sold them for $844 million. After sale, the servicing has been retained for a short period until full servicing can be transferred to the purchaser.
Prior to January 1, 2022, the Corporation accounted for its MSRs under the amortization methodology. See Note 1 for the Corporation’s accounting policy for MSRs when they were still under the amortization methodology.
A summary of changes in the balance of the MSRs asset and the MSRs valuation allowance under the amortization methodology for the year ended December 31, 2021 is as follows:
($ in thousands)2021
Mortgage servicing rights
Mortgage servicing rights at beginning of year$59,967 
Additions16,151 
Amortization(19,436)
Mortgage servicing rights at end of year$56,682 
Valuation allowance at beginning of year(18,006)
(Additions) recoveries, net16,186 
Valuation allowance at end of year(1,820)
Mortgage servicing rights, net$54,862 
Fair value of mortgage servicing rights$57,259 
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)6,994,834 
Mortgage servicing rights, net to servicing portfolio0.78 %
Mortgage servicing rights expense(a)
$3,250 
(a) Includes the amortization of mortgage servicing rights and additions / recoveries to the valuation allowance of mortgage servicing rights, and is a component of mortgage banking, net on the consolidated statements of income.
The projections of amortization expense for CDIs and decay for MSRs are based on existing asset balances, the current interest rate environment, and prepayment speeds as of December 31, 2023. The actual expense the Corporation recognizes in any given period may be significantly different depending upon acquisition or sale activities, changes in interest rates, prepayment speeds, market conditions, regulatory requirements, and events or circumstances that indicate the carrying amount of an asset may not be recoverable. The following table shows the estimated future amortization expense for CDIs and decay for MSRs:
($ in thousands)Core Deposit IntangiblesMortgage Servicing Rights
Year ending December 31,
2024$8,811 $10,555 
20258,811 11,404 
20268,811 10,710 
20278,811 9,922 
20283,485 9,005 
Beyond 20281,742 32,794 
Total estimated amortization expense and MSRs decay(a)
$40,471 $84,390