Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2012

NOTE 12. Goodwill and Intangible Assets

The following table sets forth the roll-forward of goodwill for the years ending December 31, 2012 and 2011:

Goodwill

(In thousands)	Segment MBS & Rates			Segment Equities(1)			Segment Investment Banking			Total

Goodwill
Balance at December 31, 2010	$	17,364		$	8,928		$	79,402		$	105,694
Impairment of goodwill		—			(8,928	)		(75,670	)		(84,598	)

Balance at December 31, 2011	$	17,364		$	—		$	3,732		$	21,096
Impairment of goodwill		(17,364	)		—			(3,732	)		(21,096	)
RangeMark acquisition		1,212			—			—			1,212

Balance at December 31, 2012	$	1,212		$	—		$	—		$	1,212

(1): Discontinued operation

As previously disclosed within Note 11 herein, the Company recorded approximately $1.2 million of goodwill associated with the acquisition of certain assets and assumption of certain liabilities of RangeMark on November 7, 2012.

During the second quarter of 2012, the Company performed an interim goodwill impairment test which was triggered as a result of the Company's market capitalization trading at levels significantly below book value during the three months ended June 30, 2012. The Company determined that all of its then remaining goodwill of approximately $21.1 million had been impaired, due to the duration and severity of the decline in the Company's stock price in relation to its book value.

On August 22, 2011, the Company announced that it was implementing a new strategic plan, which included the realignment of its core investment banking practice and the termination of 32 investment banking employees as well as certain administrative positions. As a result of the realignment of the business and associated employee terminations, the Company performed an interim goodwill impairment test related to the Investment Banking reporting unit, which resulted in an impairment of approximately $75.7 million.

In addition, during the three months ended June 30, 2011, the Company performed an interim goodwill impairment test related to the Equities reporting unit as a result of the impact of the current market environment on the segment's net revenues coupled with the higher operating costs associated with the expansion of our equities trading and sales trading capabilities announced in the third quarter of 2010. These factors resulted in a shortfall of actual revenues and operating results in relation to current year projections and as a result, all of the goodwill of the Equities reporting unit (classified as part of discontinued operations) was written off during the year ended December 31, 2011.

Intangible Assets

(In thousands)	December 31, 2012			December 31, 2011

Intangible assets (amortizable):
MBS & Rates segment—Customer relationships
Gross carrying amount	$	641		$	641
Accumulated amortization		(463	)		(410	)

Net carrying amount		178			231

MBS & Rates segment (RangeMark)—Intellectual Property
Gross carrying amount		1,050			—
Accumulated amortization		(35	)		—

Net carrying amount		1,015			—

MBS & Rates segment (RangeMark)—Trade Name
Gross carrying amount		480			—
Accumulated amortization		(8	)		—

Net carrying amount		472			—

Credit Products segment—Customer relationships
Gross carrying amount		795			795
Accumulated amortization		(768	)		(610	)

Net carrying amount		27			185

Equities segment—Customer relationships
Gross carrying amount		1,614			6,960
Accumulated amortization		(1,614	)		(1,614	)
Impairment of intangible asset—June 1, 2011		—			(5,346	)

Net carrying amount		—			—

Equities segment—Covenant not to compete
Gross carrying amount		293			330
Accumulated amortization		(293	)		(293	)
Impairment of intangible asset—June 1, 2011		—			(37	)

Net carrying amount		—			—

Investment Banking segment—Trade name
Gross carrying amount		4,066			7,300
Accumulated amortization		(1,057	)		(874	)
Impairment of intangible asset—September 1, 2011		—			(3,234	)

Net carrying amount		3,009			3,192

Investment Banking segment—Covenant not to compete
Gross carrying amount		522			700
Accumulated amortization		(522	)		(522	)
Impairment of intangible asset—September 1, 2011		—			(178	)

Net carrying amount		—			—

Investment Banking segment—Customer relationships
Gross carrying amount		5,338			6,500
Accumulated amortization		(5,338	)		(5,338	)
Impairment of intangible asset—September 1, 2011		—			(1,162	)

Net carrying amount		—			—

ClearPoint segment—Customer relationships
Gross carrying amount		803			803
Accumulated amortization		(201	)		(100	)

Net carrying amount		602			703

Total Intangible assets	$	5,303		$	4,311

In connection with the previously mentioned goodwill impairment tests related to the Investment Banking and Equities reporting units during the year ended December 31, 2011, the Company evaluated the recoverability of the intangible assets allocated to these reporting units, by comparing the sum of the undiscounted cash flows expected to result from the use and eventual disposition of such assets to their carrying amounts. These outcomes resulted in the write-off of approximately $4.6 million of the intangible assets allocated to the Investment Banking reporting unit and all of the intangible assets allocated to the Equities reporting unit (classified as part of discontinued operations) during the year ended December 31, 2011.

Customer-related intangible assets are being amortized from 3 to 12 years and trademark assets are being amortized over 10 to 20 years. Excluding the impairment related to the intangible assets allocated to the Investment Banking and Equities reporting units discussed above, total amortization expense for the years ended December 31, 2012, 2011 and 2010 was approximately $0.5 million, $1.8 million and $3.0 million, respectively and is recorded within Other in the Consolidated Statements of Operations.

Future amortization expense is estimated as follows:

(In thousands)

2013	$	622
2014		595
2015		595
2016		559
2017		507
Thereafter		2,425

Total	$	5,303

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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