XML 26 R15.htm IDEA: XBRL DOCUMENT
v3.24.3

GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended
--- | ---
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill. Assets and liabilities acquired in a business combination are recorded at their estimated fair values as of the acquisition date. The excess of the purchase price of the acquisition over the fair value of net assets acquired is recorded as goodwill. Changes in the carrying amount of goodwill for the three and nine months ended September 30, 2024 and September 30, 2023 were as follows:
|  | Three months ended |  | Nine months ended
|  | September 30, |  | September 30,
(Dollars in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Balance at beginning of period |  | $ | 1,007,656 |  |  | $ | 1,005,828 |  |  | $ | 1,005,868 |  |  | $ | 1,001,507 |
Goodwill resulting from business combinations |  | 0 |  |  | 40 |  |  | 1,788 |  |  | 4,361 |
Balance at end of period |  | $ | 1,007,656 |  |  | $ | 1,005,868 |  |  | $ | 1,007,656 |  |  | $ | 1,005,868 |
In the first quarter of 2024, First Financial recorded $1.8 million of goodwill related to the acquisition of Agile Premium Finance. Agile specializes in lending to commercial customers to finance insurance premiums. These loans are generally secured by the unearned premiums on the underlying insurance policies and are typically short in duration. This acquisition is consistent with First Financial's approach of adding niche financial services to its line-up of core banking services and will complement First Financial's existing specialty lending business. The measurement period for recording adjustments to the fair value of assets and liabilities acquired in the Agile acquisition ends in February 2025. In the first quarter of 2023, First Financial recorded $4.2 million of goodwill related to the acquisition of the assets of Brady Ware Capital. Brady Ware Capital specializes in buy-side and sell-side consulting services for mid-sized businesses. Similar to Agile, this acquisition is consistent with First Financial's approach of adding niche financial services to further expand its broad service offerings. In May 2023, First Financial also acquired Brady Ware Corporate Finance, a broker-dealer and member of FINRA. First Financial recorded $0.1 million of goodwill in connection with the acquisition of Brady Ware Corporate Finance. The measurement period for recording adjustments to the fair value of assets and liabilities ended in January 2024 for Brady Ware Capital and in May 2024 for Brady Ware Corporate Finance. Goodwill is evaluated for impairment on an annual basis as of October 1 of each year, or whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying value. First Financial performed its most recent annual impairment test as of October 1, 2023 and no impairment was indicated. As of September 30, 2024, no events or changes in circumstances indicated that the fair value of the reporting unit was below its carrying value. Other intangible assets. Other intangible assets consist primarily of core deposit, customer lists, mortgage servicing rights and other miscellaneous intangibles, such as purchase commissions, non-compete agreements, trade name intangibles and premium finance servicing rights. Core deposit intangibles represent the estimated fair value of acquired customer deposit relationships on the date of acquisition and are amortized on an accelerated basis over their estimated useful lives. First Financial's core deposit intangibles have an estimated weighted average remaining life of 3.5 years. First Financial recorded a customer list intangible asset in conjunction with the Agile, Summit and Bannockburn acquisitions to account for the obligation or advantage on the part of either the Company or the customer to continue the pre-existing relationship subsequent to the merger. These customer list intangibles are being amortized on a straight-line basis over their estimated used lives. The Agile customer list was $2.6 million at September 30, 2024 and is being amortized over an estimated remaining life of 12.4 years. The Summit customer list was $23.2 million and $25.1 million at September 30, 2024 and December 31, 2023, respectively, and is being amortized over an estimated remaining life of 9.3 years. The Bannockburn customer list was $21.2 million and $23.9 million at September 30, 2024 and December 31, 2023, respectively, and is being amortized over an estimated remaining life of 5.9 years. Mortgage servicing rights represent the value of servicing fees First Financial expects to receive from the servicing responsibilities it retains when selling fixed and adjustable-rate residential mortgage loans. In those sales, First Financial retains servicing responsibilities and provides certain standard representations and warranties; however, the investors have no recourse to the Company’s other assets for failure of debtors to pay when due. First Financial receives servicing fees based on a percentage of the outstanding balance. When First Financial sells mortgage loans with servicing rights retained, these servicing rights are initially recorded at fair value. First Financial has selected the “amortization method” as permissible within U.S. GAAP, whereby the servicing rights capitalized are amortized in proportion to and over the period of estimated future servicing income with respect to the underlying loan. At the end of each reporting period, the carrying value of MSRs is assessed for impairment with a comparison to fair value. MSRs are carried at the lower of their amortized cost or fair value. The amortization of MSRs is included within other noninterest income in the Consolidated Statements of Income. Amortization expense recognized on other intangible assets for the three months ended September 30, 2024 and September 30, 2023 was $3.3 million and $3.4 million, which includes MSR amortization of $0.9 million and $0.8 million, respectively. Amortization expense recognized on other intangible assets for the nine months ended September 30, 2024 and September 30, 2023 was $9.7 million and $10.1 million, which includes MSR amortization of $2.6 million and $2.3 million, respectively. The gross carrying amount and accumulated amortization of other intangible assets at September 30, 2024 and December 31, 2023 were as follows:
(Dollars in thousands) |  | September 30, 2024 |  | December 31, 2023
|  | Gross carrying amount |  | Accumulated amortization |  | Gross carrying amount |  | Accumulated amortization
Core deposit intangibles |  | $ | 41,750 |  |  | $ | (31,575) |  |  | $ | 41,750 |  |  | $ | (29,395) |
Customer list |  | 72,278 |  |  | (25,246) |  |  | 69,563 |  |  | (20,553) |
Other |  | 9,381 |  |  | (3,284) |  |  | 10,960 |  |  | (5,477) |
Mortgage servicing rights |  | 26,508 |  |  | (8,265) |  |  | 23,791 |  |  | (6,690) |
Total |  | $ | 149,917 |  |  | $ | (68,370) |  |  | $ | 146,064 |  |  | $ | (62,115) |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration