Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2024

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 2024, utilizing a qualitative assessment. Based on this assessment, 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 2024 impairment test that have changed the Corporation's impairment assessment conclusion. There were no impairment charges recorded in 2024, 2023, or 2022.

The Corporation had goodwill of $1.1 billion at both December 31, 2024 and 2023.

Core Deposit Intangibles

The Corporation has CDIs which are amortized. Changes in the gross carrying amount, accumulated amortization, and net book value for CDIs were as follows:

($ in thousands)	2024		2023		2022
Core deposit intangibles
Gross carrying amount at the beginning of the year	$	88,109	$	88,109	$	88,109
Accumulated amortization	(56,449)		(47,638)		(38,827)
Net book value	$	31,660	$	40,471	$	49,282
Amortization during the year	$	8,811	$	8,811	$	8,811

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 not traded in active markets. As a result, a cash flow model is used to determine fair value. Key assumptions and estimates, including projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads, are used in measuring the fair value of the MSRs asset. These assumptions are considered significant unobservable inputs. See Note 1 for the Corporation’s accounting policy for MSRs. See Note 15 for a discussion of the recourse provisions on sold residential mortgage loans. See Note 17 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 is as follows:

($ in thousands)	2024			2023
Mortgage servicing rights
Mortgage servicing rights at beginning of period	$	84,390		$	77,351
Additions	6,707			3,564
Decay	(8,060)			(7,185)
Valuation:
Change in fair value model assumptions	—			8,881
Changes in fair value of asset	4,646			1,778
Mortgage servicing rights at end of period	$	87,683		$	84,390
Portfolio of residential mortgage loans serviced for others (“servicing portfolio”)(a)	$	6,285,018		$	7,364,492
Mortgage servicing rights to servicing portfolio(a)	1.40		%	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 was retained for a short period until full servicing was transferred to the purchaser in January 2024.

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, 2024. 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 yearly amortization expense for CDIs and decay for MSRs:

($ in thousands)	Core Deposit Intangibles		Mortgage Servicing Rights
2025	$	8,811	$	9,767
2026	8,811		11,230
2027	8,811		11,602
2028	3,485		10,945
2029	1,681		9,767
Beyond 2029	61		34,373
Total estimated amortization expense and MSRs decay(a)	$	31,660	$	87,683

(a) Represents the decrease in value due to passage of time, including the impact from both regularly scheduled principal payments and partial loan paydowns.