Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

The following is a summary of the gross carrying amount, accumulated amortization and net amount of amortizable intangible assets as of September 30, 2023 and December 31, 2022, and the carrying amount of unamortized intangible assets as of those same dates.


	September 30, 2023				December 31, 2022
($ in thousands)	Gross Carrying Amount		Accumulated Amortization	Net Amount	Gross Carrying Amount	Accumulated Amortization	Net Amount
Amortizable intangible assets:
Customer lists	$	2,700	2,087	613	2,700	1,847	853
Core deposit intangibles	57,890		27,162	30,728	29,050	21,274	7,776
Other intangibles	100		77	23	100	58	42
Intangibles before servicing assets	60,690		29,326	31,364	31,850	23,179	8,671
SBA servicing assets	13,728		10,213	3,515	13,264	9,260	4,004
Total amortizable intangible assets	$	74,418	39,539	34,879	45,114	32,439	12,675
Unamortizable intangible assets:
Goodwill	$	478,750			364,263

Customer lists are generally amortized over five years and core deposit intangibles are generally amortized over 10 years, both at an accelerated rate.

Amortization expense of all other intangible assets, excluding the SBA servicing assets, totaled $2.0 million and $0.9 million for the three months ended September 30, 2023 and 2022, respectively, and $6.1 million and $2.9 million for the nine months ended September 30, 2023 and 2022, respectively.

SBA servicing assets are recorded for the portions of SBA loans that the Company has sold but continues to service for a fee. Servicing assets are initially recorded at fair value and amortized over the expected lives of the related loans and are tested for impairment on a quarterly basis. SBA servicing asset amortization expense is recorded within noninterest income as an offset to SBA servicing fees within the line item "Other service charges, commissions, and fees."

The following table presents the changes in the SBA servicing assets and SBA servicing income for the three and nine months ended September 30, 2023 and 2022:


	Three months ended September 30,			Nine months ended September 30,
($ in thousands)	2023		2022	2023	2022
Beginning balance, net	$	3,781	4,967	4,004	5,472
Add: New servicing assets	191		131	464	1,158
Less: Amortization and impairment expense	457		707	953	2,239
Ending balance, net	$	3,515	4,391	3,515	4,391

SBA guaranteed servicing income	$	846	1,120	2,693	2,901

At September 30, 2023 and December 31, 2022, the Company serviced SBA loans totaling $364.9 million and $392.4 million, respectively, for others. There were no other loans serviced in any period presented.

Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring as of October 31 of each year. Goodwill is also evaluated for impairment any time there is a triggering event indicating that impairment may have occurred. No triggering events were identified during 2023 to date or in 2022, and therefore, the Company did not perform interim impairment evaluations in either of those periods. The Company's most recent evaluation of goodwill, which occurred in the fourth quarter of 2022, indicated that there was no goodwill impairment.

The following table presents the changes in carrying amounts of goodwill:


($ in thousands)	Total Goodwill
Balance at December 31, 2021	$	364,263
Net activity during 2022	—
Balance at December 31, 2022	364,263
Additions from acquisition of GrandSouth	114,487
Balance at September 30, 2023	$	478,750

In connection with the GrandSouth acquisition on January 1, 2023, the Company recorded $28.8 million in core deposit intangibles.

The following table presents the estimated amortization expense schedule related to acquisition-related amortizable intangible assets, excluding the SBA servicing assets. These amounts will be recorded as "Intangibles amortization expense" within the noninterest expense section of the Consolidated Statements of Income. These estimates are subject to change in future periods to the extent management determines it is necessary to make adjustments to the carrying value or estimated useful lives of amortized intangible assets.


($ in thousands)	Estimated Amortization Expense
October 1, 2023 to December 31, 2023	$	1,856
2024	6,604
2025	5,672
2026	4,705
2027	3,951
Thereafter	8,576
Total	$	31,364