| GOODWILL AND INTANGIBLE ASSETS |
5. GOODWILL AND INTANGIBLE ASSETS
The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from acquisitions. The Company has determined that its core deposit intangibles have finite lives and they are amortized over their estimated useful lives, which ranges from four years to ten years, using an accelerated method. Other amortizable intangible assets are being amortized over the period of expected benefit, which ranges from five months to 16 years, using various methods. The Company concluded that there was no impairment to goodwill or intangible assets as of the balance sheet date. In the normal course of business, the Company routinely monitors the impact of the changes in the financial markets and includes these assessments in the Company’s impairment process.
As a result of the Sandy Spring acquisition, the Company recorded initial goodwill totaling $496.9 million at April 1, 2025. As a result of the Company’s acquisition of American National on April 1, 2024, the Company recorded goodwill totaling $288.8 million. See Note 2 “Acquisitions” in Part I, Item I of this Quarterly Report for more information on the Sandy Spring and American National acquisitions.
The following table provides information on the significant components of goodwill and other acquired intangible assets as of the periods ended (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
Additions: |
|
|
|
|
Net |
|
|
Carrying |
|
Sandy Spring |
|
Accumulated |
|
Carrying |
|
|
Value |
|
Acquisition |
|
Amortization |
|
Value |
June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
1,214,053 |
|
$ |
496,859 |
|
$ |
— |
|
$ |
1,710,912 |
CDIs |
|
|
159,901 |
|
|
243,351 |
|
|
(106,502) |
|
|
296,750 |
Other amortizable intangibles |
|
|
14,254 |
|
|
47,299 |
|
|
(6,922) |
|
|
54,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross |
|
Additions: |
|
|
|
|
Net |
|
|
Carrying |
|
American National |
|
Accumulated |
|
Carrying |
|
|
Value |
|
Acquisition |
|
Amortization |
|
Value |
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
925,211 |
|
$ |
288,842 |
|
$ |
— |
|
$ |
1,214,053 |
CDIs |
|
|
85,491 |
|
|
74,410 |
|
|
(85,768) |
|
|
74,133 |
Other amortizable intangibles |
|
|
3,977 |
|
|
10,277 |
|
|
(3,824) |
|
|
10,430 |
The following table presents the Company’s goodwill and intangible assets by operating segment as of the periods ended (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Banking |
|
Consumer Banking |
|
Corporate Other |
|
Total |
June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill (1) (3) |
|
$ |
1,237,585 |
|
$ |
473,327 |
|
$ |
— |
|
$ |
1,710,912 |
Intangible Assets (2) (4) |
|
|
53,159 |
|
|
697 |
|
|
297,525 |
|
|
351,381 |
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill (3) |
|
$ |
850,035 |
|
$ |
364,018 |
|
$ |
— |
|
$ |
1,214,053 |
Intangible Assets (4) |
|
|
8,714 |
|
|
778 |
|
|
75,071 |
|
|
84,563 |
| (1) |
Wholesale Banking and Consumer Banking includes gross carrying values of $387.6 million and $109.3 million, respectively, related to goodwill from the Sandy Spring acquisition. Refer to Note 2 “Acquisitions” for more information.
|
| (2) |
Wholesale Banking and Corporate Other includes gross carrying values of $46.3 million and $244.4 million, respectively, related to intangible assets from the Sandy Spring acquisition. Refer to Note 2 “Acquisitions” for more information.
|
| (3) |
Wholesale Banking and Consumer Banking includes gross carrying values of $210.8 million and $78.0 million, respectively, related to the American National acquisition. Refer to Note 2 “Acquisitions” for more information.
|
| (4) |
Wholesale Banking and Corporate Other includes gross carrying values of $8.4 million and $76.3 million, respectively, related to the American National acquisition. Refer to Note 2 “Acquisitions” for more information.
|
Amortization expense of intangibles for the three months ended June 30, 2025 and 2024 totaled $18.4 million and $6.0 million, respectively, and totaled $23.8 million and $7.9 million, respectively, for the six months ended June 30, 2025 and 2024. As of June 30, 2025, the estimated remaining amortization expense of intangibles is as follows for the years ending (dollars in thousands):
|
|
|
|
For the remaining six months of 2025 |
|
$ |
35,836 |
2026 |
|
|
60,282 |
2027 |
|
|
50,407 |
2028 |
|
|
41,936 |
2029 |
|
|
35,235 |
Thereafter |
|
|
127,685 |
Total estimated amortization expense |
|
$ |
351,381 |
|