Goodwill and Other Intangibles

9 Months Ended

Sep. 30, 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 September 30, 2022 and December 31, 2021. The entire amount of goodwill relates to business combinations that BancShares completed prior to the CIT Merger and is reported in the General Banking segment. There was no goodwill impairment during 2022.

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 September 30, 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	(17)
Balance at September 30, net of accumulated amortization	$	145

Core Deposit Intangible Accumulated Amortization

dollars in millions	September 30, 2022		December 31, 2021
Gross balance	$	271	$	128
Accumulated amortization	(126)		(109)
Balance, net of accumulated amortization	$	145	$	19

The following table summarizes the expected amortization expense as of September 30, 2022 in subsequent periods for core deposit intangibles.

Core Deposit Intangible Expected Amortization

dollars in millions
Remainder 2022	$	5
2023	19
2024	17
2025	16
2026	15
2027	15
Thereafter	58
Total	$	145

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 amortized on a straight-line basis over the lease term, thereby increasing rental income (a component of noninterest income) over the remaining term of the lease agreements.

The following tables summarize the activity for the intangible liability during the nine month period ending September 30, 2022.

Intangible Liability

dollars in millions	2022
Balance at January 1	$	—
Acquired in CIT Merger	52
Amortization	(12)
Balance at September 30, net of accumulated amortization	$	40

The following table summarizes the expected amortization as of September 30, 2022 in subsequent periods for the intangible liability.

Intangible Liability

dollars in millions
Remainder 2022	$	4
2023	12
2024	6
2025	4
2026	3
2027	2
Thereafter	9
Total	$	40