Goodwill and Other Intangibles

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

GOODWILL AND OTHER INTANGIBLES

Goodwill

BancShares applied the acquisition method of accounting for the CIT Merger. The fair value of the net assets acquired exceeded the purchase price. Consequently, there was a gain on acquisition (and no goodwill) related to the CIT Merger as discussed further in Note 2 — Business Combinations. BancShares had goodwill of $346 million at March 31, 2022 and December 31, 2021. The entire amount of goodwill relates to business combinations that BancShares completed prior to the CIT Merger. All of the goodwill relates to the General Banking segment. There was no goodwill impairment during the first quarter of 2022.

Other Intangible Assets

Core Deposit Intangibles

Core deposit intangibles represent the estimated fair value of core deposits and other customer relationships acquired. Core deposit intangibles are being amortized over their estimated useful life. The following tables summarize the activity for core deposit intangibles during the quarter ending March 31, 2022.

Core Deposit Intangibles

dollars in millions	2022
Balance, net of accumulated amortization at January 1	$	19
Core deposit intangibles related to the CIT Merger	143
Amortization for the period	(6)
Balance at March 31, net of accumulated amortization	$	156

Core Deposit Intangible Accumulated Amortization

dollars in millions	March 31, 2022		December 31, 2021
Gross balance	$	271	$	128
Accumulated amortization	(115)		(109)
Balance, net of accumulated amortization	$	156	$	19

The following table summarizes the expected amortization expense in subsequent periods for core deposit intangibles.

Core Deposit Intangible Expected Amortization

dollars in millions
Twelve months ended March 31,
2023	$	21
2024	19
2025	16
2026	16
2027	15
Thereafter	69
Total	$	156

Intangible Liability

An intangible liability of $52 million was recorded in other liabilities for net below market lessor lease contract rental rates related to the rail portfolio as a result of the CIT Merger. This lease intangible is being accreted on a straight-line over the lease term, thereby increasing rental income (a component of noninterest income) over the remaining lives of the lease agreements.

The following tables summarize the activity for the intangible liability during the quarter ending March 31, 2022.

Intangible Liability

dollars in millions	2022
Balance at January 1	$	—
Acquired in CIT Merger	52
Amortization	(4)
Balance at March 31, net of accumulated amortization	$	48

Intangible Liability Accumulated Amortization

dollars in millions	March 31, 2022
Gross balance	$	52
Accumulated amortization	(4)
Balance, net of accumulated amortization	$	48

The following table summarizes the expected accretion in subsequent periods for the intangible liability.

Intangible Liability

dollars in millions
Twelve months ended March 31,
2023	$	15
2024	11
2025	5
2026	3
2027	3
Thereafter	11
Total	$	48