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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

NOTE F: GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows:


	December 31, 2022						December 31, 2021
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
(000’s omitted)	Amount		Amortization		Amount		Amount		Amortization		Amount
Amortizing intangible assets:
Core deposit intangibles	$	77,373	$	(65,069)	$	12,304	$	69,403	$	(60,316)	$	9,087
Other intangibles		119,813		(71,121)		48,692		116,799		(60,660)		56,139
Total amortizing intangibles	$	197,186	$	(136,190)	$	60,996	$	186,202	$	(120,976)	$	65,226

The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows (000’s omitted):


Year	Amount
2023	$	13,698
2024		11,601
2025		9,883
2026		8,745
2027		3,333
Thereafter		13,736
Total	$	60,996

Shown below are the components of the Company’s goodwill at December 31, 2022, 2021, and 2020:


		December 31,			December 31,				December 31,
(000’s omitted)		2020	Activity		2021		Activity		2022
Goodwill	$	793,708	$	5,401	$	799,109	$	42,732	$	841,841

The Company performed a qualitative assessment for evaluating impairment of goodwill and other intangibles as of December 31, 2022, including assessments of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events and changes in share price. The results of the qualitative analysis indicated that there was no goodwill impairment at December 31, 2022 and therefore a quantitative analysis was not necessary. During 2022, the Company also performed a quarterly analysis to determine if triggering events occurred that would necessitate an interim qualitative assessment of goodwill or other intangible impairment. No triggering events or impairment was noted during these interim analyses. During 2021, the Company performed quarterly qualitative analyses of goodwill impairment and performed a quantitative assessment of its banking and financial services businesses during the fourth quarter of 2021 by comparing the fair value of the reporting unit with its carrying amount. Results of the analyses indicate there was no goodwill impairment in 2021.

Mortgage Servicing Rights

Under certain circumstances, the Company sells consumer residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Generally, the Company’s residential mortgage loans sold to third parties are sold on a non-recourse basis. Upon sale, a mortgage servicing right (“MSR”) is established, which represents the current fair value of future net cash flows expected to be realized for performing the servicing activities. The Company stratifies these assets based on predominant risk characteristics, namely expected term of the underlying financial instruments, and uses a valuation model that calculates the present value of future cash flows to determine the fair value of servicing rights. MSRs are recorded in other assets at the lower of the initial capitalized amount, net of accumulated amortization or fair value. Mortgage loans serviced for others are not included in the accompanying consolidated statements of condition.

The following table summarizes the changes in carrying value of MSRs and the associated valuation allowance:


(000’s omitted)	2022		2021
Carrying value before valuation allowance at beginning of period	$	1,144	$	1,430
Additions		83		233
Acquisitions		2,879		0
Amortization		(801)		(519)
Carrying value before valuation allowance at end of period		3,305		1,144
Valuation allowance balance at beginning of period		0		(219)
Impairment charges		(676)		(55)
Impairment recoveries		0		274
Valuation allowance balance at end of period		(676)		0
Net carrying value at end of period	$	2,629	$	1,144
Fair value of MSRs at end of period	$	5,107	$	1,469
Principal balance of mortgage loans sold during the year	$	5,309	$	20,133
Principal balance of loans serviced for others	$	583,109	$	296,506
Custodial escrow balances maintained in connection with loans serviced for others	$	10,534	$	4,934

The following table summarizes the key economic assumptions used to estimate the value of the MSRs at December 31:


	2022		2021
Weighted-average contractual life (in years)	21.6		21.4
Weighted-average constant prepayment rate (CPR)	7.7	%	24.5	%
Weighted-average discount rate	4.9	%	2.6	%