XML 31 R19.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Goodwill, Intangible Assets, and Servicing Assets | 3 Months Ended
--- | ---
Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill, Intangible Assets, and Servicing Assets | Goodwill, Intangible Assets, and Servicing Assets Goodwill represents the excess of the purchase price over the sum of the estimated fair values of the tangible and identifiable intangible assets acquired less the estimated fair value of the liabilities assumed. Goodwill has an indefinite useful life and is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. At December 31, 2016, management assessed the qualitative factors related to goodwill for the year to determine whether it was more-likely-than-not that the fair value was less than its carrying amount. Based on the analysis of these factors, management determined that it was more-likely-than-not that the fair value of goodwill exceeded the carrying value and that the two-step impairment test was not needed. Goodwill is not amortized for book purposes and is not tax deductible. The carrying amount of the Company’s goodwill as of March 31, 2017 and December 31, 2016 was $464.0 million, and $463.0 million, respectively. There was no impairment of goodwill during the three months ended March 31, 2017. Goodwill recorded in the third quarter of 2016 from the acquisition of Wilshire totaled $359.0 million. During the fourth quarter of 2016, the Company made a net adjustment of $1.4 million to the deferred tax assets and taxes receivable acquired from Wilshire which reduced the previous goodwill recorded from the transaction by $1.4 million. Subsequently in the first quarter of 2017, the Company made a net adjustment of $978 thousand to OREO and deferred tax assets acquired from Wilshire which increased goodwill recorded from the Wilshire transaction by $978 thousand. These adjustments were made to reflect new information obtained about facts and circumstances that existed as of the acquisition date in accordance with ASC 805-10-25-13. At March 31, 2017, goodwill related to the acquisition of Wilshire totaled $358.6 million. Core deposit intangible assets are amortized over their estimated lives, which range from seven to ten years. Amortization expense related to core deposit intangible assets totaled $676 thousand and $212 thousand for the three months ended March 31, 2017 and 2016, respectively. The following table provides information regarding the core deposit intangibles at March 31, 2017:
|  |  | As of March 31, 2017
| Amortization period |  | Gross Carrying Amount |  | Accumulated Amortization
|  |  | (Dollars in thousands)
Core deposit—Center Financial acquisition | 7 years |  | $ | 4,100 |  |  | $ | (3,755 | )
Core deposit—PIB acquisition | 7 years |  | 604 |  |  | (484 | )
Core deposit—Foster acquisition | 10 years |  | 2,763 |  |  | (1,417 | )
Core deposit—Wilshire acquisition | 10 years |  | 18,138 |  |  | (1,399 | )
Total |  |  | $ | 25,605 |  |  | $ | (7,055 | )
Servicing assets are recognized when SBA or residential mortgage loans are sold with servicing retained with the income statement effect recorded in net gains on sales of SBA and other loans. Servicing assets are initially recorded at fair value based on the present value of the contractually specified servicing fee, net of servicing costs, over the estimated life of the loan, using a discount rate based on the related note rate. The Company’s servicing costs approximates the industry average servicing costs. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Management periodically evaluates servicing assets for impairment based upon the fair value of the rights as compared to the carrying amount. Impairment is determined by stratifying rights into groupings based on loan type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. As of March 31, 2017 and December 31, 2016, the Company did not have a valuation allowance for servicing assets. The changes in servicing assets for the three months ended March 31, 2017 and 2016 were as follows:
|  | Three Months Ended March 31,
|  | 2017 |  | 2016
|  | (Dollars in thousands)
Balance at beginning of period |  | $ | 26,457 |  |  | $ | 12,000 |
Additions through originations of servicing assets |  | 1,296 |  |  | 777 |
Amortization |  | (1,812 | ) |  | (921 | )
Balance at end of period |  | $ | 25,941 |  |  | $ | 11,856 |
Loans serviced for others are not reported as assets. The principal balances of loans serviced for other institutions were $1.5 billion as of March 31, 2017 and $1.5 billion as of December 31, 2016. The Company utilizes the discounted cash flow method to calculate the initial excess servicing assets. The inputs used in determining the impairment of the servicing assets at March 31, 2017 and December 31, 2016 are presented below.
|  | March 31, 2017 |  | December 31, 2016
SBA Servicing Assets: |  |  |  |
Weighted-average discount rate |  | 10.29% |  | 9.85%
Constant prepayment rate |  | 8.18% |  | 8.05%
Mortgage Servicing Assets: |  |  |  |
Weighted-average discount rate |  | 9.66% |  | 7.25%
Constant prepayment rate |  | 7.71% |  | 13.77%

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 all or part of the information related to intangible assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16265-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16323-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=66006027&loc=d3e16373-109275 + Details
Name: | us-gaap_IntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration