XML 94 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.6

GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
--- | ---
Dec. 31, 2012
GOODWILL AND OTHER INTANGIBLE ASSETS |
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS During the first quarter of 2010, we determined than an impairment test on our remaining goodwill was required because of the uncertainty regarding our ability to continue as a going concern at that time combined with the fact that our market capitalization remained depressed. As a result of that impairment test, we determined that the remaining goodwill associated with our Banking Operations reporting unit was impaired and we recorded a non-cash impairment charge of $102.7 million. Since that time, no goodwill remains on our consolidated balance sheet. Other intangible assets include a core deposit premium and mortgage servicing rights. The following table presents changes in other intangible assets for the periods presented:
|  | Core |  | Mortgage |  |  |  |  |  |  |
|  | Deposit |  | Servicing |  | Customer |  | Non-compete |  |  |
|  | Premium |  | Rights |  | Relationships |  | Agreements |  | Total |
|  | (Dollars in thousands) |
Balance as of December 31, 2010 |  | $ | 20,727 |  | $ | 22,712 |  | $ | 1,050 |  | $ | 150 |  | $ | 44,639 |
Additions |  | — |  | 4,380 |  | — |  | — |  | 4,380 |
Amortization |  | (2,674 | ) | (4,159 | ) | (140 | ) | (60 | ) | (7,033 | )
Balance as of December 31, 2011 |  | $ | 18,053 |  | $ | 22,933 |  | $ | 910 |  | $ | 90 |  | $ | 41,986 |
Additions |  | — |  | 5,692 |  | — |  | — |  | 5,692 |
Amortization |  | (2,675 | ) | (6,504 | ) | (58 | ) | (25 | ) | (9,262 | )
Impairment charges |  | — |  | — |  | (852 | ) | (65 | ) | (917 | )
Balance as of December 31, 2012 |  | $ | 15,378 |  | $ | 22,121 |  | $ | — |  | $ | — |  | $ | 37,499 |
During the second quarter of 2012, we evaluated the recoverability of the intangible assets related to our customer relationships and non-compete agreements, both of which related to the 2008 asset acquisition of Pacific Islands Financial Management. Upon completion of this review, we determined that the intangible assets related to our customer relationships and non-compete agreements, both of which are associated with our Banking Operations reporting unit, were both fully impaired, and thus, we recorded impairment charges to other operating expense of $852,000 and $65,000, respectively. The gross carrying value, accumulated amortization and net carrying value related to our other intangible assets are presented below:
|  | December 31, 2012 |  | December 31, 2011 |
|  | Gross |  |  |  | Net |  | Gross |  |  |  | Net |
|  | Carrying |  | Accumulated |  | Carrying |  | Carrying |  | Accumulated |  | Carrying |
|  | Value |  | Amortization |  | Value |  | Value |  | Amortization |  | Value |
|  | (Dollars in thousands) |
Core deposit premium |  | $ | 44,642 |  | $ | (29,264 | ) | $ | 15,378 |  | $ | 44,642 |  | $ | (26,589 | ) | $ | 18,053 |
Mortgage servicing rights |  | 51,739 |  | (29,618 | ) | 22,121 |  | 46,047 |  | (23,114 | ) | 22,933 |
Customer relationships |  | 1,400 |  | (1,400 | ) | — |  | 1,400 |  | (490 | ) | 910 |
Non-compete agreements |  | 300 |  | (300 | ) | — |  | 300 |  | (210 | ) | 90 |
Total |  | $ | 98,081 |  | $ | (60,582 | ) | $ | 37,499 |  | $ | 92,389 |  | $ | (50,403 | ) | $ | 41,986 |
Based on our other intangible assets held as of December 31, 2012, estimated amortization expense for the next five succeeding fiscal years and all years thereafter are as follows:
|  | Estimated Amortization Expense |
|  |  |  | Mortgage |  |  |
|  | Core Deposit |  | Servicing |  |  |
|  | Premium |  | Rights |  | Total |
|  | (Dollars in thousands) |
2013 |  | $ | 2,674 |  | $ | 6,290 |  | $ | 8,964 |
2014 |  | 2,674 |  | 5,532 |  | 8,206 |
2015 |  | 2,674 |  | 4,940 |  | 7,614 |
2016 |  | 2,674 |  | 4,426 |  | 7,100 |
2017 |  | 2,674 |  | 933 |  | 3,607 |
Thereafter |  | 2,008 |  | — |  | 2,008 |
Total |  | $ | 15,378 |  | $ | 22,121 |  | $ | 37,499 |
At December 31, 2012, there were no events or changes in circumstances that would indicate that the assets assigned to our Banking Operations reporting unit, which includes the entire core deposit premium, were not recoverable. We utilize the amortization method to measure our mortgage servicing rights. Under the amortization method, we amortize our mortgage servicing rights in proportion to and over the period of net servicing income. Income generated as the result of new mortgage servicing rights is reported as gains on sales of loans and totaled $5.7 million, $4.4 million and $6.3 million in 2012, 2011 and 2010, respectively. Amortization of the servicing rights is reported as amortization of other intangible assets in our consolidated statements of operations. Ancillary income is recorded in other income. Mortgage servicing rights are recorded when loans are sold to third-parties with servicing of those loans retained and we classify our entire mortgage servicing rights into one class. Initial fair value of the servicing right is calculated by a discounted cash flow model prepared by a third party service provider based on market value assumptions at the time of origination and we assess the servicing right for impairment using current market value assumptions at each reporting period. Critical assumptions used in the discounted cash flow model include mortgage prepayment speeds, discount rates, costs to service and ancillary income. Variations in our assumptions could materially affect the estimated fair values. Changes to our assumptions are made when current trends and market data indicate that new trends have developed. Current market value assumptions based on loan product types (fixed rate, adjustable rate and balloon loans) include average discount rates and national prepayment speeds. Many of these assumptions are subjective and require a high level of management judgment. Our mortgage servicing rights portfolio and valuation assumptions are periodically reviewed by management. Prepayment speeds may be affected by economic factors such as home price appreciation, market interest rates, the availability of other credit products to our borrowers and customer payment patterns. Prepayment speeds include the impact of all borrower prepayments, including full payoffs, additional principal payments and the impact of loans paid off due to foreclosure liquidations. As market interest rates decline, prepayment speeds will generally increase as customers refinance existing mortgages under more favorable interest rate terms. As prepayment speeds increase, anticipated cash flows will generally decline resulting in a potential reduction, or impairment, to the fair value of the capitalized mortgage servicing rights. Alternatively, an increase in market interest rates may cause a decrease in prepayment speeds and therefore an increase in fair value of mortgage servicing rights. The following table presents the fair market value and key assumptions used in determining the fair market value of our mortgage servicing rights:
|  | Year Ended December 31, |
|  | 2012 |  | 2011 |
|  | (Dollars in thousands) |
Fair market value, beginning of period |  | $ | 23,149 |  | $ | 23,709 |
Fair market value, end of period |  | 22,356 |  | 23,149 |
Weighted average discount rate |  | 8.0 | % | 8.5 | %
Weighted average prepayment speed assumption |  | 14.0 |  | 14.7 |
Fair values at December 31, 2012 and 2011 reflected approximately $2.7 billion in loans serviced for others.

X
- 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 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. + References Reference 1: 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=7658586&loc=d3e16373-109275 Reference 2: 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=7658586&loc=d3e16265-109275 Reference 3: 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=7658586&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13854-109267 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=14024403&loc=d3e13816-109267 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration