XML 22 R13.htm IDEA: XBRL DOCUMENT
v3.23.3

GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS | 9 Months Ended
--- | ---
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS | Goodwill and Other Intangible Assets: At September 30, 2023, intangible assets are comprised of goodwill and core deposit intangibles (CDI) acquired in business combinations. Goodwill represents the excess of the purchase consideration paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in a business combination, and is not amortized but is reviewed at least annually for impairment. The Company has identified one reporting unit for the purpose of evaluating goodwill for impairment. The Company completed an assessment of qualitative factors as of December 31, 2022 and concluded that no further analysis was required as it is more likely than not that the fair value of Banner Bank, the reporting unit, exceeds the carrying value. CDI represents the value of transaction-related deposits and the value of the client relationships associated with the deposits. The Company amortizes CDI assets over their estimated useful lives and reviews them at least annually for events or circumstances that could impair their value. The following table summarizes the changes in the Company’s goodwill and other intangibles for the nine months ended September 30, 2023, and the year ended December 31, 2022 (in thousands):
| Goodwill |  | CDI |  | Total
Balance, December 31, 2021 | $ | 373,121 |  |  | $ | 14,855 |  |  | $ | 387,976 |
Amortization | — |  |  | (5,279) |  |  | (5,279) |
Other changes(1) | — |  |  | (136) |  |  | (136) |
Balance, December 31, 2022 | 373,121 |  |  | 9,440 |  |  | 382,561 |
Amortization | — |  |  | (2,898) |  |  | (2,898) |
Balance, September 30, 2023 | $ | 373,121 |  |  | $ | 6,542 |  |  | $ | 379,663 |
(1) Acquired CDI was adjusted for the sale of branches in 2022. The following table presents the estimated amortization expense with respect to CDI as of September 30, 2023, for the periods indicated (in thousands):
|  | Estimated Amortization
Remainder of 2023 |  | $ | 857 |
2024 |  | 2,626 |
2025 |  | 1,567 |
2026 |  | 904 |
2027 |  | 426 |
Thereafter |  | 162 |
|  | $ | 6,542 |
Mortgage Servicing Rights: Mortgage and SBA servicing rights are reported in other assets. SBA servicing rights are initially recorded and carried at fair value. Mortgage servicing rights are initially recognized at fair value and are amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Mortgage servicing rights are subsequently evaluated for impairment based upon the fair value of the rights compared to the amortized cost (remaining unamortized initial fair value). If the fair value is less than the amortized cost, a valuation allowance is created through an impairment charge to servicing fee income. However, if the fair value is greater than the amortized cost, the amount above the amortized cost is not recognized in the carrying value. During the three and nine months ended September 30, 2023 and 2022, the Company did not record any impairment charges or recoveries against mortgage servicing rights. The unpaid principal balance of loans for which mortgage and SBA servicing rights have been recognized totaled $2.76 billion and $2.77 billion at September 30, 2023 and December 31, 2022, respectively. Custodial accounts maintained in connection with this servicing totaled $29.1 million and $11.2 million at September 30, 2023 and December 31, 2022, respectively. An analysis of the mortgage and SBA servicing rights for the three and nine months ended September 30, 2023 and 2022 is presented below (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Balance, beginning of the period | $ | 15,111 |  |  | $ | 17,633 |  |  | $ | 16,166 |  |  | $ | 17,206 |
Additions—amounts capitalized | 638 |  |  | 296 |  |  | 1,123 |  |  | 3,053 |
Additions—through purchase | 98 |  |  | 57 |  |  | 222 |  |  | 202 |
Amortization (1) | (851) |  |  | (985) |  |  | (2,525) |  |  | (3,331) |
Fair value adjustments (3) | (128) |  |  | (72) |  |  | (118) |  |  | (201) |
Balance, end of the period (2) | $ | 14,868 |  |  | $ | 16,929 |  |  | $ | 14,868 |  |  | $ | 16,929 |
(1) Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full. (2) There was no valuation allowance on mortgage servicing rights as of both September 30, 2023 and 2022. (3) Fair value adjustments relate to SBA servicing rights. These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.

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://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration