Heartland had goodwill of $576.0 million at December 31, 2020, and $446.3 million at December 31, 2019. Heartland conducts its annual internal assessment of the goodwill both at the consolidated level and at its subsidiaries as of September 30. There was no goodwill impairment as of the most recent assessment. Due to the COVID-19 pandemic and economic conditions, an interim quantitative assessment of goodwill was performed during the second quarter of 2020, and no goodwill impairment was identified.

Heartland recorded $38.4 million of goodwill and $1.3 million of core deposit intangibles in connection with the acquisition of certain assets and substantially all of the deposits and certain other liabilities of Johnson Bank's Arizona operations, headquartered in Racine, Wisconsin on December 4, 2020.

Heartland recorded $19.2 million of goodwill and $1.8 million of core deposit intangibles in connection with the acquisition of substantially all of the assets and substantially all of the deposits and certain other liabilities of Rockford Bank and Trust Company, headquartered in Rockford, Illinois on November 30, 2019.

The core deposit intangibles and goodwill recorded with Johnson Bank's Arizona operations and Rockford Bank and Trust Company acquisition of substantially all of the assets and substantially all of the deposits and certain other liabilities, is deductible for tax purposes and the core deposit intangibles are expected to be amortized over a period of 10 years on an accelerated basis for book purposes.

Other intangible assets consist of core deposit intangibles, mortgage servicing rights, customer relationship intangible and commercial servicing rights. The gross carrying amount of other intangible assets and the associated accumulated amortization at December 31, 2020, and December 31, 2019, are presented in the table below, in thousands:


	December 31, 2020						December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortizing intangible assets:
Core deposit intangibles	$	101,185	$	58,970	$	42,215	$	96,821	$	48,338	$	48,483
Customer relationship intangible	1,177		1,009		168		1,177		972		205
Mortgage servicing rights	11,268		6,079		5,189		7,886		2,265		5,621
Commercial servicing rights	7,054		6,191		863		6,952		5,837		1,115
Total	$	120,684	$	72,249	$	48,435	$	112,836	$	57,412	$	55,424

On April 30, 2019, Dubuque Bank and Trust Company closed on the sale of substantially all of its servicing rights portfolio, which contained loans with an unpaid principal balance of $3.31 billion to PNC Bank, N.A. The transaction qualified as a sale, and $20.6 million of mortgage servicing rights were de-recognized on the consolidated balance sheet in 2019. Cash of approximately $36.6 million was received during 2019, and Heartland recorded a gain on the sale of this portfolio of approximately $14.5 million.


	Core Deposit Intangibles		Customer Relationship Intangible		Mortgage Servicing Rights		Commercial Servicing Rights		Total
Year ending December 31,
2021	$	9,360	$	35	$	1,297	$	251	$	10,943
2022	7,702		34		1,112		222		9,070
2023	6,739		34		927		162		7,862
2024	5,591		33		741		110		6,475
2025	4,700		32		556		118		5,406
Thereafter	8,123		—		556		—		8,679
Total	$	42,215	$	168	$	5,189	$	863	$	48,435

Projections of amortization expense for mortgage servicing rights are based on existing asset balances and the existing interest rate environment as of December 31, 2020. Heartland's actual experience may be significantly different depending upon changes in mortgage interest rates and market conditions. Mortgage loans serviced for others at First Bank & Trust were $743.3 million and $616.7 million as of December 31, 2020, and December 31, 2019, respectively. Custodial escrow balances maintained in connection with the mortgage loan servicing portfolio at First Bank & Trust were approximately $5.7 million and $5.0 million as of December 31, 2020, and December 31, 2019, respectively.

The fair value of Heartland's mortgage servicing rights at First Bank & Trust was estimated at $5.2 million and $5.6 million at December 31, 2020, and December 31, 2019, respectively, and is comprised of loans serviced for the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC").

The fair value of mortgage servicing rights is calculated based upon a discounted cash flow analysis. Cash flow assumptions, including prepayment speeds, servicing costs and escrow earnings of First Bank & Trust's mortgage servicing rights are considered in the calculation. The average constant prepayment rate was 16.20% as of December 31, 2020 compared to 14.20% for the December 31, 2019 valuation. The discount rate was 9.02% for the December 31, 2020 valuations and 9.03% for the December 31, 2019 valuations. The average capitalization rate for 2020 ranged from 76 to 116 basis points compared to a range of 80 to 103 basis points for 2019. Fees collected for the servicing of mortgage loans for others were $1.7 million, $4.9 million and $9.9 million for the years ended December 31, 2020, 2019 and 2018, respectively.


	2020			2019
Balance at January 1,	$	5,621		$	29,363
Originations	3,383			893
Amortization	(2,037)			(3,168)
Sale of mortgage servicing rights	—			(20,556)

Valuation allowance on servicing rights	(1,778)			(911)
Balance at December 31,	$	5,189		$	5,621
Fair value of mortgage servicing rights	$	5,189		$	5,621
Mortgage servicing rights, net to servicing portfolio	0.70		%	0.91		%

Heartland's commercial servicing portfolio is comprised of loans guaranteed by the Small Business Administration and United States Department of Agriculture that have been sold with servicing retained by Heartland, which totaled $66.2 million at December 31, 2020, and $82.1 million at December 31, 2019. The commercial servicing rights portfolio is separated into two tranches at the respective Heartland subsidiary, loans with a term of less than 20 years and loans with a term of more than 20 years. Fees collected for the servicing of commercial loans for others were $879,000 and $1.0 million for the years ended December 31, 2020 and 2019, respectively.

The fair value of each commercial servicing rights portfolio is calculated based upon a discounted cash flow analysis. Cash flow assumptions, including prepayment speeds and servicing costs, are considered in the calculation. The range of average constant prepayment rates for the portfolio valuations was 14.95% and 19.25% as of December 31, 2020, compared to 14.25% and 18.08% as of December 31, 2019. The discount rate range was 7.70% and 12.88% for the December 31, 2020 valuations compared to 10.65% and 13.94% for the December 31, 2019 valuations. The capitalization rate ranged from 310 to 445 basis points at both December 31, 2020 and 2019. The total fair value of Heartland's commercial servicing rights portfolios was estimated at $1.3 million as of December 31, 2020, and $1.6 million as of December 31, 2019.


	2020			2019
Balance at January 1,	$	1,115		$	1,709
Originations	102			118
Amortization	(354)			(712)


Balance at December 31,	$	863		$	1,115
Fair value of commercial servicing rights	$	1,288		$	1,594
Commercial servicing rights, net to servicing portfolio	1.30		%	1.36		%

Mortgage and commercial servicing rights are initially recorded at fair value in net gains on sale of loans held for sale when they are acquired through loan sales. Fair value is based on market prices for comparable servicing contracts, when available, or based on a valuation model that calculates the present value of estimated future net servicing income.

Mortgage and commercial servicing rights are subsequently measured using the amortization method, which requires the asset to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing rights are evaluated for impairment at each Heartland subsidiary based upon the fair value of the assets as compared to the carrying amount. Impairment is recognized through a valuation allowance for specific tranches to the extent that fair value is less than carrying amount at each Heartland subsidiary. At December 31, 2020, a valuation allowance of $422,000 was required on the mortgage servicing rights 15-year tranche and a $1.4 million valuation allowance was required on the mortgage servicing rights 30-year tranche. At December 31, 2019, a $114,000 valuation allowance was required on the 15-year tranche and a $797,000 valuation was required on the 30-year tranche for mortgage servicing rights. At both December 31, 2020 and December 31, 2019, no valuation allowance was required on commercial servicing rights with an original term of less than 20 years and no valuation allowance was required on commercial servicing rights with an original term of greater than 20 years.


December 31, 2020	Book Value 15-Year Tranche		Fair Value 15-Year Tranche		Impairment 15-Year Tranche		Book Value 30-Year Tranche		Fair Value 30-Year Tranche		Impairment 30-Year Tranche

First Bank & Trust	1,522		1,100		422		5,445		4,089		1,356
Total	$	1,522	$	1,100	$	422	$	5,445	$	4,089	$	1,356
December 31, 2019

First Bank & Trust	1,482		1,368		114		5,050		4,253		797
Total	$	1,482	$	1,368	$	114	$	5,050	$	4,253	$	797


	Book Value- Less than 20 Years		Fair Value- Less than 20 Years		Impairment- Less than 20 Years		Book Value- More than 20 Years		Fair Value- More than 20 Years		Impairment- More than 20 Years
December 31, 2020

Premier Valley Bank	—		7		—		86		143		—
Wisconsin Bank & Trust	87		196		—		690		942		—
Total	$	87	$	203	$	—	$	776	$	1,085	$	—
December 31, 2019

Premier Valley Bank	1		13		—		135		161		—
Wisconsin Bank & Trust	128		272		—		851		1,148		—
Total	$	129	$	285	$	—	$	986	$	1,309	$	—