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GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS
 3 Months Ended
Mar. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETSHTLF had goodwill of $576.0 million at both March 31, 2022 and December 31, 2021. HTLF conducts its annual internal assessment of the goodwill both at the consolidated level and at its subsidiaries as of September 30. HTLF performed its annual quantitative assessment of goodwill as of September 30, 2021, which was the most recent annual assessment, and there was no goodwill impairment.
HTLF's intangible assets consist of core deposit intangibles, mortgage servicing rights, customer relationship intangibles, and commercial servicing rights. The gross carrying amount of these intangible assets and the associated accumulated amortization at March 31, 2022, and December 31, 2021, are presented in the table below, in thousands:
 March 31, 2022December 31, 2021
 Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Amortizing intangible assets:    
Core deposit intangibles$101,185 $70,375 $30,810 $101,185 $68,330 $32,855 
Customer relationship intangibles1,177 1,053 124 1,177 1,044 133 
Mortgage servicing rights13,227 5,125 8,102 12,790 6,378 6,412 
Commercial servicing rights7,054 7,054 — 7,054 6,576 478 
Total$122,643 $83,607 $39,036 $122,206 $82,328 $39,878 

The following table shows the estimated future amortization expense for amortizable intangible assets, in thousands:
 Core
Deposit
Intangibles		Customer
Relationship
Intangibles		Mortgage
Servicing
Rights		 
 
Total
Nine months ending December 31, 2022$5,656 $26 $1,309 $6,991 
Year ending December 31, 
20236,739 33 1,698 8,470 
20245,591 33 1,456 7,080 
20254,700 32 1,213 5,945 
20263,533 — 970 4,503 
20272,601 — 728 3,329 
Thereafter1,990 — 728 2,718 
Total$30,810 $124 $8,102 $39,036 

Projections of amortization expense for mortgage servicing rights are based on existing asset balances and the existing interest rate environment as of March 31, 2022. HTLF'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 approximately $728.9 million at March 31, 2022, compared to $723.3 million at December 31, 2021. Custodial escrow balances maintained in connection with the mortgage loan servicing portfolio were approximately $8.2 million at March 31, 2022, and $4.5 million at December 31, 2021.

Fees collected for the servicing of mortgage loans for others were $454,000 and $464,000 for the three months ended March 31, 2022 and March 31, 2021, respectively.

The following table summarizes, in thousands, the changes in capitalized mortgage servicing rights for the three months ended March 31, 2022, and March 31, 2021:
 20222021
Balance at January 1,$6,412 $5,189 
Originations437 512 
Amortization(405)(400)
Valuation allowance1,658 917 
Balance at period end$8,102 $6,218 
Mortgage servicing rights, net to servicing portfolio1.11 %0.83 %

Mortgage rights are initially recorded at fair value in net gains on sale of loans held for sale when they are capitalized 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 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 HTLF 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 the carrying amount at each HTLF subsidiary, and a valuation adjustment is recorded into noninterest income.

At March 31, 2022, no valuation allowance was required on the mortgage servicing rights 15-year tranche, and no valuation allowance was required on the mortgage servicing rights 30-year tranche. At December 31, 2021, a $327,000 valuation allowance was required on the mortgage servicing rights 15-year tranche and a $1.3 million valuation allowance was required on the mortgage servicing rights 30-year tranche.

For the three months ended March 31, 2022 and March 31, 2021, a valuation adjustment of $1.7 million and $917,000, respectively, were recorded for the total mortgage servicing rights portfolio.

The following table summarizes, in thousands, the book value, the fair value of each tranche of the mortgage servicing rights and any recorded valuation allowance at March 31, 2022, and December 31, 2021:

Book Value 15-Year TrancheFair Value 15-Year TrancheValuation Allowance
15-Year Tranche		Book Value 30-Year TrancheFair Value 30-Year TrancheValuation Allowance
30-Year Tranche
March 31, 2022$1,597 $1,696 $— $6,505 $6,800 $— 
December 31, 20211,607 1,280 327 6,463 5,132 1,331 

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 the mortgage servicing rights are considered in the calculation. The following table presents key assumptions used to value the mortgage servicing rights as of March 31, 2022, and December 31, 2021, dollars in thousands:
As of
March 31, 2022December 31, 2021
Weighted average constant prepayment rate9.80 %13.40 %
Weighted average discount rate9.01 %9.02 %
Fair value of mortgage servicing rights$8,496 $6,412 
The average capitalization rate of mortgage servicing rights for the first three months of 2022 ranged from 83 to 111 basis points compared to a range of 76 to 112 basis points for the first three months of 2021.