Goodwill and Other Intangibles Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying amount of the Company’s goodwill as of December 31, 2018 and 2017 was $464.5 million. 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. Management assessed the qualitative factors related to intangible assets and goodwill and for 2018 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 intangible assets were not impaired and that the fair value of goodwill exceeded the carrying value and that the two-step goodwill impairment test was not needed. Goodwill is not amortized for book purposes and is not tax deductible.

The following table provides information regarding the amortization of core deposit intangibles at December 31, 2018 and 2017:



		December 31,
		2018					2017
	Amortization Period	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
		(Dollars in thousands)
Core deposit intangibles related to:
Center Financial	7 years	$	4,100	$	(4,100	)	$	4,100	$	(3,966	)
Pacific International Bank	7 years	604		(579		)	604		(534		)
Foster Bankshares	10 years	2,763		(1,893		)	2,763		(1,636		)
Wilshire Bancorp	10 years	18,138		(4,972		)	18,138		(2,946		)
Total		$	25,605	$	(11,544	)	$	25,605	$	(9,082	)

Total amortization expense on core deposit intangibles was $2.5 million and $2.7 million for the years ended December 31, 2018 and 2017, respectively. The estimated future amortization expense over the next five years for core deposit intangibles is as follows: $2.2 million in 2019, $2.1 million in 2020, $2.0 million in 2021, $1.9 million in 2022, and $1.8 million in 2023.

In light of the Tax Cuts and Jobs Act that was enacted on December 22, 2017, the Company performed an analysis on its remaining core deposit intangibles to assess the potential impact from the reduction in corporate tax rates on core deposit intangibles. As core deposit intangibles represents the after tax cash flow savings on acquired core deposits, a change in tax rates could potentially result in an impairment to remaining core deposits intangibles. The Company determined that it was more-likely-than-not that the remaining core deposit intangibles were not impaired as a reduction in corporate tax rates would potentially increase after tax cash flows.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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