Goodwill and Other Intangibles

12 Months Ended

Dec. 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’ annual impairment test, conducted as of July 31 each year, or more frequently if events occur or circumstances change that may trigger a decline in the value of the reporting unit or otherwise indicate that a potential impairment exists, resulted in no indication of goodwill impairment. Subsequent to the annual impairment test, there were no events or changes in circumstances that would indicate goodwill should be tested for impairment during the interim period between annual tests. BancShares had goodwill of $346 million at December 31, 2022 and 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, 2021 or 2020.

The following table presents the changes in the carrying amount of goodwill for the years ending December 31, 2022 and 2021:

	Year ended December 31
dollars in millions	2022		2021
Balance at January 1	$	346	$	350
Other adjustment	—		(4)
Balance at December 31	$	346	$	346

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 for the year ended December 31, 2022.

Core Deposit Intangibles

	Year ended December 31
dollars in millions	2022		2021
Balance, net of accumulated amortization at January 1	$	19	$	30
Core deposit intangibles related to the CIT Merger	143		—
Amortization for the period	(22)		(11)
Balance at December 31, net of accumulated amortization	$	140	$	19

Core Deposit Intangible Accumulated Amortization

dollars in millions	December 31, 2022		December 31, 2021
Gross balance	$	271	$	128
Accumulated amortization	(131)		(109)
Balance, net of accumulated amortization	$	140	$	19

The following table summarizes the expected amortization expense as of December 31, 2022 in subsequent periods for core deposit intangibles.

Core Deposit Intangible Expected Amortization

dollars in millions
2023	$	19
2024	17
2025	16
2026	15
2027	15
Thereafter	58
Total	$	140

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 for the year ended December 31, 2022.

Intangible Liability

dollars in millions	2022
Balance at January 1	$	—
Acquired in CIT Merger	52
Amortization for the period	(16)
Balance at December 31, net of accumulated amortization	$	36

The following table summarizes the expected amortization as of December 31, 2022 in subsequent periods for the intangible liability.

Intangible Liability

dollars in millions
2023	$	12
2024	6
2025	4
2026	3
2027	2
Thereafter	9
Total	$	36