Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

There were no changes in the carrying value of goodwill during 2015. The following tables details the changes in carrying value of goodwill by segment during the year ended December 31, 2014.



	Balance at December 31, 2013		Contributions, net			Acquisitions		Balance at December 31, 2014
	(In thousands)
Goodwill
Private Banking	$	2,403	$	(2,403	)	$	—	$	—
Wealth Management and Trust	—		2,403			41,902		44,305
Investment Management	66,955		—			—		66,955
Wealth Advisory	40,822		—			—		40,822
Total goodwill	$	110,180	$	—		$	41,902	$	152,082

The following tables detail total goodwill and the cumulative impairment charges thereon as of December 31, 2015 and 2014:



	Goodwill prior to impairment		Cumulative goodwill impairment			Goodwill
	(In thousands)
Private Banking	$	34,281	$	(34,281	)	$	—
Wealth Management and Trust	44,305		—			44,305
Investment Management	117,216		(50,261		)	66,955
Wealth Advisory	40,822		—			40,822
Total goodwill at December 31, 2015	$	236,624	$	(84,542	)	$	152,082

Private Banking	$	34,281	$	(34,281	)	$	—
Wealth Management and Trust	44,305		—			44,305
Investment Management	117,216		(50,261		)	66,955
Wealth Advisory	40,822		—			40,822
Total goodwill at December 31, 2014	$	236,624	$	(84,542	)	$	152,082

In 2015, the Company recognized no additional goodwill.

In 2014, additional goodwill of $41.9 million was recorded as a result of the acquisition of Banyan. In the fourth quarter of 2014, goodwill of $2.4 million was reclassified from the Private Banking segment to the newly-created Wealth Management and Trust segment.

Goodwill and indefinite lived intangible assets such as trade names are subject to annual impairment tests, or more frequently, if there is an indication of impairment, based on the guidance in ASC 350, Intangibles-Goodwill and Other (“ASC 350”). Long-lived intangible assets such as advisory contracts are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”).

Management performed its annual goodwill and indefinite-lived intangible asset impairment testing during the fourth quarters of 2015 and 2014 for applicable reporting units. The estimated fair value for all applicable reporting units exceeded the carrying value, and as a result no impairment was evident. There was no additional testing required for long-lived intangible assets in 2014 or 2015.

The 2015 goodwill impairment testing indicated that the reporting units with the closest fair values as compared to carrying value were Anchor and Boston Private Wealth. The estimated fair value of Anchor was $92.0 million as compared to a carrying value of $82.8 million, an excess of $9.2 million, or 11.2%. The estimated fair value of Boston Private Wealth was $85.0 million as compared to a carrying value of $71.5 million, an excess of $13.5 million, or 18.9%.

Should recent declines in net outflows of AUM at Anchor and or Boston Private Wealth continue, financial results will be negatively impacted, In addition, the decline in the U.S. equity market in early 2016 will, until recovered, have a further negative impact on AUM even more at these firms. If net outflows at these firms continue and or the U.S. equity market does not recover in the short term, the risk of impairment will increase.

In addition to current financial results, other assumptions such as forecasted earnings and market comparisons for these types of firms are used to determine the fair value and whether there is indication of impairment. Material negative changes in the assumptions or inputs in to the valuation models will increase the risk of impairment. The Company will continue to monitor the events and circumstances at these firms for indication of a triggering event that would necessitate impairment testing prior to the usual testing in the fourth quarter.

Intangible assets

The following table shows the gross and net carrying amounts of identifiable intangible assets at December 31, 2015 and 2014:



	2015						2014
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
	(In thousands)
Advisory contracts	$	75,013	$	44,046	$	30,967	$	75,013	$	37,676	$	37,337
Employment agreements	3,247		3,247		—		3,247		3,247		—
Trade names	2,040		—		2,040		2,040		—		2,040
Mortgage servicing rights	1,380		1,380		—		1,380		1,039		341
Total	$	81,680	$	48,673	$	33,007	$	81,680	$	41,962	$	39,718

The Company recognized no additional identifiable intangible assets in 2015. The Company recognized additional identifiable intangible assets of $23.9 million in advisory contracts in 2014 related to the acquisition of Banyan.

Boston Private Bank acquired Banyan on October 2, 2014 and allocated approximately $41.9 million of the purchase price to goodwill and $23.9 million to amortizable intangible assets. The intangible assets consist of advisory contracts, including referral networks, and are projected to be amortized over a 10 year period based on the expected economic benefits. See Part I. Item 1. “Notes to Consolidated Financial Statements - Note 3: Acquisitions, Asset sales, and Divestitures” for further details.

Consolidated expense related to intangible assets subject to amortization was $6.7 million, $4.8 million, and $4.3 million for 2015, 2014, and 2013, respectively.

Management reviews, and adjusts if necessary, intangible asset amortization schedules to ensure that the remaining life on the amortization schedule accurately reflects the useful life of the intangible asset. The weighted average amortization period of these intangible assets is 7.91 years.

The estimated annual amortization expense for these identifiable intangibles over the next five years is:



	Estimated intangible amortization expense
	(In thousands)
2016	$	6,282
2017	5,678
2018	4,438
2019	3,508
2020	3,248

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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