Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible AssetsThe following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets as of September 30, 2021 and December 31, 2020, and the carrying amount of unamortized intangible assets as of those same dates.


	September 30, 2021			December 31, 2020
($ in thousands)	Gross Carrying Amount		Accumulated Amortization	Gross Carrying Amount	Accumulated Amortization
Amortizable intangible assets:
Customer lists	$	2,700	1,263	7,613	2,814
Core deposit intangibles	28,440		25,677	28,440	23,832
SBA servicing asset	11,687		5,792	9,976	4,188
Other	1,040		962	1,403	1,232
Total	$	43,867	33,694	47,432	32,066
Unamortizable intangible assets:
Goodwill	$	231,906		239,272

SBA servicing assets are recorded for the portions of SBA loans that the Company has sold but continues to service for a fee. Servicing assets are initially recorded at fair value and amortized over the expected lives of the related loans and are tested for impairment on a quarterly basis. SBA servicing asset amortization expense is recorded within noninterest income as an offset to SBA servicing fees within the line item "Other service charges, commissions, and fees." As derived from the table above, the Company had a SBA servicing asset at September 30, 2021 with a remaining book value of $5,895,000. The Company recorded $1,711,000 and $1,492,000 in servicing assets associated with the guaranteed portion of SBA loans sold during the first nine months of 2021 and 2020, respectively. During the first nine months of 2021 and 2020, the Company recorded $1,605,000 and $1,231,000, respectively, in related amortization expense. Included in the amortization expense for the first nine months of 2020 was an impairment charge of approximately $500,000 due to a decrease in the fair value of the asset resulting from deterioration in market conditions at March 31, 2020. At September 30, 2021 and December 31, 2020, the Company serviced for others SBA loans totaling $424.7 million and $395.4 million, respectively.

In the second quarter of 2021, the Company completed the sale of the operations and substantially all of the operating assets of its property and casualty insurance agency subsidiary, First Bank Insurance Services. In the transaction, intangible assets totaling $10.2 million were derecognized from the Company's balance sheet, including goodwill of $7.4 million and customer lists with a carrying value of $2.8 million.

Amortization expense of all other intangible assets, excluding the SBA servicing asset, totaled $695,000 and $928,000 for the three months ended September 30, 2021 and 2020, respectively, and $2,437,000 and $2,961,000 for the nine months ended September 30, 2021 and 2020, respectively.

Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring on October 31st of each year. Goodwill is also evaluated for impairment any time there is a triggering event indicating that impairment may have occurred. In addition to the 2020 annual impairment evaluation, due to the COVID-19 pandemic, the Company evaluated its goodwill for impairment at each of the first three quarter ends of 2020, with each evaluation indicating that there was no impairment. Due to improving economic conditions and increases in the Company's stock price and market capitalization at year end 2020 and throughout 2021, no triggering events were identified and therefore, the Company has not performed interim impairment evaluations since the third quarter of 2020.

The following table presents the estimated amortization expense schedule related to acquisition-related amortizable intangible assets. These amounts will be recorded as "Intangibles amortization expense" within the noninterest expense section of the Consolidated Statements of Income. These estimates are subject to change in future

periods to the extent management determines it is necessary to make adjustments to the carrying value or estimated useful lives of amortized intangible assets.


($ in thousands)	Estimated Amortization Expense
October 1, 2021 to December 31, 2021	$	642
2022	1,994
2023	1,037
2024	392
2025	213
Thereafter	—
Total	$	4,278