Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

v3.5.0.2
GOODWILL AND OTHER INTANGIBLE ASSETS
9 Months Ended
Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS
GOODWILL AND OTHER INTANGIBLE ASSETS
Business segments are based on segment leadership structure, which reflects how segment performance is monitored and assessed. We have five major business segments: Retail and Business Banking, Commercial Banking, Automobile Finance and Commercial Real Estate (AFCRE), Regional Banking and The Huntington Private Client Group (RBHPCG), and Home Lending. A Treasury / Other function includes, along with technology and operations, other unallocated assets, liabilities, revenue, and expense.
A rollforward of goodwill by business segment for the first nine-month period of 2016 is presented in the table below:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollar amounts in thousands)
Retail &
Business
Banking
 
Commercial
Banking
 
AFCRE
 
RBHPCG
 
Home
Lending
 
Treasury/
Other
 
Huntington
Consolidated
Balance, December 31, 2015
$
368,097

 
$
215,422

 
$

 
$
88,512

 
$

 
$
4,838

 
$
676,869

Goodwill acquired during the period
1,036,240

 
242,096

 

 
53,981

 

 

 
1,332,317

Adjustments

 

 

 

 

 
(4,838
)
 
(4,838
)
Balance, September 30, 2016
$
1,404,337

 
$
457,518

 
$

 
$
142,493

 
$

 
$

 
$
2,004,348


On August 16, 2016, Huntington completed its acquisition of FirstMerit in a stock and cash transaction valued at approximately $3.7 billion. In connection with the acquisition, the Company recorded $1.3 billion of goodwill, $310 million core deposit intangible asset and $95 million of other intangible assets. For additional information on the acquisition, see Acquisition of FirstMerit Corporation footnote.
During the 2016 third quarter, Huntington reclassified $5 million of goodwill in the Treasury/Other segment related to a held for sale disposal group at September 30, 2016.
Goodwill is not amortized but is evaluated for impairment on an annual basis at October 1 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable.
At September 30, 2016 and December 31, 2015, Huntington’s other intangible assets consisted of the following:
 
 
 
 
 
 
 
(dollar amounts in thousands)
Gross
Carrying
Amount
 
 
Accumulated
Amortization
 
Net
Carrying
Value
September 30, 2016
 
 
 
 
 
 
Core deposit intangible
$
336,508

 
 
$
(18,340
)
 
$
318,168

Customer relationship
194,956

(1)
 
(84,412
)
 
110,544

Other
794

 
 
(732
)
 
62

Total other intangible assets
$
532,258

 
 
$
(103,484
)
 
$
428,774

December 31, 2015
 
 
 
 
 
 
Core deposit intangible
$
26,758

 
 
$
(11,306
)
 
$
15,452

Customer relationship
114,553

 
 
(75,115
)
 
39,438

Other
794

 
 
(706
)
 
88

Total other intangible assets
$
142,105

 
 
$
(87,127
)
 
$
54,978


(1)
During the 2016 third quarter, certain commercial merchant relationships, which resulted in an intangible of $14 million, were contributed to a joint venture in which Huntington holds a minority interest.
The estimated amortization expense of other intangible assets for the remainder of 2016 and the next five years is as follows:
 
 
 
 
(dollar amounts in thousands)
Amortization
Expense
2016
$
14,416

2017
56,341

2018
53,161

2019
50,446

2020
42,291

2021
39,783