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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | NOTE 8 – Goodwill and Intangible Assets The carrying amount of goodwill and intangible assets attributable to each of our reporting segments is presented in the following table (in thousands):
|  | December 31, 2023 |  |  | Adjustments |  |  | Write-off |  |  | September 30, 2024 |
Goodwill |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 335,009 |  |  | $ | — |  |  | $ | — |  |  | $ | 335,009 |
Institutional Group |  |  | 1,053,234 |  |  |  | 5,848 |  |  |  | — |  |  |  | 1,059,082 |
|  | $ | 1,388,243 |  |  | $ | 5,848 |  |  | $ | — |  |  | $ | 1,394,091 |
|  | December 31, 2023 |  |  | Adjustments |  |  | Amortization |  |  | September 30, 2024 |
Intangible assets |  |  |  |  |  |  |  |  |  |  |  |
Global Wealth Management |  | $ | 28,687 |  |  | $ | — |  |  | $ | (3,305 | ) |  | $ | 25,382 |
Institutional Group |  |  | 104,592 |  |  |  | 1,598 |  |  |  | (14,405 | ) |  |  | 91,785 |
|  | $ | 133,279 |  |  | $ | 1,598 |  |  | $ | (17,710 | ) |  | $ | 117,167 |
The adjustments to goodwill and intangible assets during the nine months ended September 30, 2024 are primarily attributable to the acquisition of Finance 500, Inc. (“Finance 500”) and CB Resource, Inc. (“CBR”). On August 1, 2024, the Company acquired Finance 500 and CBR (collectively, the “acquired business”), which operate as strategic partners under common ownership. Finance 500 is a brokerage and investment services provider focused on underwriting FDIC-insured Certificates of Deposits and fixed income securities trading. CBR integrates ERM, strategic and capital plan solutions, and industry analytics through its fully integrated tech-enabled platform. Consideration for this acquisition consisted of cash from operations. The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $7.5 million of goodwill and intangible assets in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment. The allocation of the purchase price of the acquired business is preliminary and will be finalized upon completion of the analysis of the fair values of the net assets of the acquired business as of the acquisition date and the identified intangible assets. The final goodwill recorded on the consolidated statement of financial condition may differ from that reflected herein as a result of future measurement period adjustments and the recording of identified intangible assets. The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of the acquired business, its employees, and customer base. Amortizable intangible assets consist of acquired customer relationships, trade names, acquired technology, non-compete agreements, investment banking backlog, and core deposits that are amortized over their contractual or determined useful lives. Intangible assets as of September 30, 2024 and December 31, 2023 were as follows (in thousands):
|  | September 30, 2024 |  |  | December 31, 2023 |
|  | Gross Carrying Value |  |  | Accumulated Amortization |  |  | Gross Carrying Value |  |  | Accumulated Amortization |
Customer relationships |  | $ | 229,320 |  |  | $ | 133,214 |  |  | $ | 227,486 |  |  | $ | 122,971 |
Trade names |  |  | 30,359 |  |  |  | 23,477 |  |  |  | 30,359 |  |  |  | 22,366 |
Acquired technology |  |  | 18,314 |  |  |  | 7,635 |  |  |  | 18,314 |  |  |  | 3,447 |
Non-compete agreements |  |  | 10,700 |  |  |  | 9,314 |  |  |  | 10,700 |  |  |  | 8,421 |
Investment banking backlog |  |  | 8,913 |  |  |  | 6,935 |  |  |  | 8,913 |  |  |  | 5,758 |
Core deposits |  |  | 8,615 |  |  |  | 8,479 |  |  |  | 8,615 |  |  |  | 8,145 |
|  | $ | 306,221 |  |  | $ | 189,054 |  |  | $ | 304,387 |  |  | $ | 171,108 |
Amortization expense related to intangible assets was $5.9 million and $4.8 million for the three months ended September 30, 2024 and 2023, respectively. Amortization expense related to intangible assets was $17.7 million and $13.9 million for the nine months ended September 30, 2024 and 2023, respectively. Amortization expense is included in other operating expenses in the consolidated statements of operations. The weighted-average remaining lives of the following intangible assets at September 30, 2024, are: customer relationships, 9.6 years; trade names, 6.6 years; non-compete agreements, 4.1 years; acquired technology, 1.8 years; core deposits, 0.7 years; and investment banking backlog, 4.2 years. We have an intangible asset that is not subject to amortization and is, therefore, not included in the table below. As of September 30, 2024, we expect amortization expense in future periods to be as follows (in thousands):
Fiscal year |  |  |
Remainder of 2024 |  | $ | 5,558 |
2025 |  |  | 21,109 |
2026 |  |  | 17,005 |
2027 |  |  | 13,308 |
2028 |  |  | 12,350 |
Thereafter |  |  | 45,719 |
|  | $ | 115,049 |

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