Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2012

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12.  Goodwill and Intangible Assets

Refer to Note 1 within the footnotes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, for a detailed discussion of the accounting policy related to goodwill and intangible assets.

Goodwill

The Company has designated its annual goodwill impairment testing dates for its MBS/ABS & Rates and Investment Banking reporting units to be December 31, and June 1, respectively.  The fair value of the MBS/ABS & Rates reporting unit exceeded its carrying value by approximately 70% as of December 31, 2011.  The goodwill assigned to the Investment Banking reporting unit was written down to its fair value during the year ended December 31, 2011.

(In thousands of dollars)	Reporting Unit MBS/ABS &Rates		Reporting Unit Investment Banking		Total
Goodwill
Balance at December 31, 2011	$	17,364	$	3,732	$	21,096
Increases/(decreases)	—		—		—
Balance at March 31, 2012	$	17,364	$	3,732	$	21,096

The Company considered a combination of the market and income approaches to determine fair value of its reporting units.  Key assumptions utilized in the market approach included the use of multiples of earnings before interest and taxes and earnings before interest, taxes, depreciation and amortization based upon available comparable company market data.  The income approach, which is a discounted cash flow analysis, utilized a discount rate which included an estimated cost of debt and cost of equity and capital structure.

There is a degree of uncertainty associated with the key assumptions utilized within the annual goodwill impairment tests.  The discounted cash flow assumptions included an estimated growth rate which may not be indicative of actual future results.  In addition, a downturn in the market may widen credit spreads resulting in a larger discount rate being utilized in the discounted cash flow analysis and could also have an adverse effect on the market multiples of our guideline companies.  Such uncertainties may cause varying results in future periods.

The Company continues to monitor its market capitalization in relation to its book value for purposes of determining whether its remaining goodwill should be impaired.  The goodwill is at risk of future impairment to the extent the Company’s market capitalization remains significantly below its book value for an extended period of time.

Intangible Assets

(In thousands)	March 31, 2012			December 31, 2011
Intangible assets (amortizable):
MBS/ABS & Rates — Customer relationships
Gross carrying amount	$	641		$	641
Accumulated amortization	(423		)	(410		)
Net carrying amount	218			231
Corporate Credit - Customer relationships
Gross carrying amount	795			795
Accumulated amortization	(650		)	(610		)
Net carrying amount	145			185
Investment Banking — Trade name
Gross carrying amount	7,300			7,300
Accumulated amortization	(919		)	(874		)
Impairment of intangible asset — September 1, 2011	(3,234		)	(3,234		)
Net carrying amount	3,147			3,192
ClearPoint — Customer relationships
Gross carrying amount	803			803
Accumulated amortization	(126		)	(100		)
Net carrying amount	677			703
Total Intangible assets	$	4,187		$	4,311

Customer-related intangible assets are being amortized from 3 to 12 years and trademark assets are being amortized over 20 years (with approximately 17 years remaining).   Total amortization expense recorded within Other in the Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011 was approximately $0.1 million and $0.8 million, respectively.

Future amortization expense is estimated as follows:

(In thousands)
2012 (remaining)	$	372
2013	364
2014	337
2015	337
2016	301
Thereafter	2,476
Total	$	4,187