Bank of the West 2014 Annual Report Download - page 33

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estimates and perform impairment evaluations, actual results in the future could differ significantly. Impairment tests in
future periods may result in impairment charges, which could materially impact our future reported results.
The following table presents our finite-lived intangible assets:
(dollars in thousands)
Gross
Carrying
Amount
Less
Accumulated
Amortization
Net
Book
Value
Balance as of December 31, 2014:
Core deposits (1) $195,059 $163,532 $ 31,527
Software(2) 330,200 194,533 135,667
MSRs and other 85,539 49,523 36,016
Total 610,798 407,588 203,210
Balance as of December 31, 2013:
Core deposits (1) 195,059 150,996 44,063
Software(2) 281,088 170,224 110,864
MSRs and other 79,811 41,375 38,436
Total $555,958 $362,595 $193,363
(1) Does not include fully amortized assets.
(2) Includes in process software not subject to amortization of $57.6 million and $43.2 million as of December 31, 2014 and
2013, respectively.
Intangible amortization expense included in noninterest expense was $42.1 million and $36.7 million for the years
ended December 31, 2014 and 2013, respectively. For the years ended December 31, 2014 and 2013, the Bank’s review
did not result in any material impairment. See Note 3 for valuation allowance related to MSRs.
The table below presents the estimated future annual amortization expense for finite-lived intangible assets for the
years ending December 31:
(dollars in thousands) Core Deposits Software
MSRs and
Other Total
2015 $12,517 $26,178 $5,797 $44,492
2016 12,498 22,355 4,991 39,844
2017 6,392 17,022 4,551 27,965
2018 58 10,009 4,059 14,126
2019 39 2,272 3,533 5,844
8. Variable Interest Entities
A VIE is an entity that has either a total equity investment that is insufficient to finance its activities without
additional subordinated financial support or whose equity investors lack the ability to control the entity’s activities.
Under existing accounting guidance, a VIE is consolidated by its primary beneficiary, the party that has both the power
to direct the activities that most significantly impact the VIE and a variable interest that could potentially be significant
to the VIE.
The Bank evaluates whether an entity is a VIE upon its creation and upon the occurrence of significant events; such
as a change in an entity’s assets or activities. The determination of whether the Bank is the primary beneficiary involves
performing a qualitative analysis of the VIE. The analysis includes its capital structure, contractual terms including the
rights of each variable interest holder, the activities of the VIE that most significantly impact its economic performance,
whether the Bank has the power to direct those activities and our obligation to absorb losses or the right to receive
benefits significant to the VIE.
Limited liability companies
The Bank has formed CLAAS Financial Services, LLC with the purpose of providing lease and loan financing to
commercial entities acquiring agricultural equipment. The Bank owns 51% interest in the LLC and has the obligation to
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