Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets and the carrying amount of unamortizable intangible assets as of the periods presented.


	December 31, 2023				December 31, 2022
($ in thousands)	Gross Carrying Amount		Accumulated Amortization	Net Amount	Gross Carrying Amount	Accumulated Amortization	Net Amount
Amortizable intangible assets:
Customer lists	$	2,700	2,167	533	2,700	1,847	853
Core deposit intangibles	57,890		28,932	28,958	29,050	21,274	7,776
Other	100		83	17	100	58	42
Intangibles before servicing assets	60,690		31,182	29,508	31,850	23,179	8,671
SBA servicing assets	13,966		10,616	3,350	13,264	9,260	4,004
Total amortizable intangible assets	$	74,656	41,798	32,858	45,114	32,439	12,675
Unamortizable intangible assets:
Goodwill	$	478,750			364,263

Customer lists are generally amortized over five years and core deposit intangibles are generally amortized over 10 years, both at an accelerated rate.

In connection with the GrandSouth acquisition on January 1, 2023, the Company recorded $28.8 million in core deposit intangibles.

Amortization expense of all other intangible assets, excluding the SBA servicing asset, totaled $8.0 million, $3.7 million, and $3.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The portfolio of SBA loans serviced for others, which were not included in the accompanying consolidated balances sheets, was $349.3 million and $392.4 million, respectively, at December 31, 2023 and 2022. There were no other loans serviced for others in any year presented. During 2023, 2022 and 2021, the Company recorded $3.5 million, $3.4 million, and $3.9 million , respectively in SBA guaranteed servicing fee income. There was no impairment of SBA servicing assets at December 31, 2023 and $352 thousand as of December 31, 2022. Impairment charges or reversals are nominal in each year and are included with amortization expense in noninterest income as an offset to SBA servicing income.

A summary of the key assumptions used in the discounted cash flow method utilized to estimate the fair value of the SBA servicing asset were as follows:


	December 31, 2023	December 31, 2022
Prepayment rate assumption:
Weighted average	19.05%	15.58%
Range	9.27% - 33.14%	7.29% - 32.38%
Discount rate:
Weighted average	16.36%	22.14%
Range	11.19% - 22.51%	14.44% - 31.29%
Servicing cost	0.40%	0.40%

The following table presents the changes in the SBA servicing assets for each period indicated.


($ in thousands)	December 31, 2023		December 31, 2022
Beginning balance, net	$	4,004	5,472
Add: New servicing assets	702		1,332
Less: Amortization expense and impairment charges	(1,356)		(2,800)
Ending balance, net	$	3,350	4,004

Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring as of October 31st of each year. Goodwill is also evaluated for impairment any time there is a triggering event indicating that impairment may have occurred. No triggering events were identified during 2023 or 2022, and therefore, the Company did not perform interim impairment evaluations in either of those years. Each of the Company's goodwill impairment evaluations for the periods presented, including the most recent, which occurred in the fourth quarter of 2023, indicated that there was no goodwill impairment.

The following table presents the changes in carrying amounts of goodwill:


($ in thousands)	Total Goodwill
Balance at December 31, 2021	$	364,263
Net activity during 2022	—
Balance at December 31, 2022	364,263
Additions from acquisition of GrandSouth	114,487
Balance at December 31, 2023	$	478,750

The following table presents the estimated amortization expense schedule related to acquisition-related amortizable intangible assets, excluding the SBA servicing 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
2024	$	6,604
2025	5,672
2026	4,704
2027	3,951
2028	3,197
Thereafter	5,380
Total	$	29,508