---
title: "Intangible Assets: definition, formula, and thresholds"
description: "Intangible assets are non-physical assets other than goodwill: core deposit intangibles, customer relationships, and certain servicing rights. Most are deducted from regulatory capital, so like goodwill they widen the gap between book and tangible equity."
canonical_url: https://www.bankregreports.com/glossary/intangible-assets/
source: BankRegReports
category: "Capital"
units: "$"
schedule: "Schedule RC"
---

# Intangible Assets

> Intangible assets are non-physical assets other than goodwill: core deposit intangibles, customer relationships, and certain servicing rights. Most are deducted from regulatory capital, so like goodwill they widen the gap between book and tangible equity.

## Formula

```
Intangible Assets = Core Deposit Intangibles + Other Identifiable Intangibles (excl. goodwill)
```

Reported on Schedule RC separately from goodwill. Core deposit intangibles arise in acquisitions to value the acquired deposit base; they amortize over time. Most intangibles are deducted from CET1 capital, though limited mortgage servicing assets can be partially included.

## Why it matters

Intangibles, with goodwill, are what separate book equity from tangible common equity. They reflect acquisition activity and, because regulators largely disallow them, they overstate the capital actually available to absorb losses.

## How to read it

Read intangibles alongside goodwill and tangible common equity. Amortizing intangibles shrink over time, so a high balance at a recently acquisitive bank will decline; the key question is how much of reported equity survives once all intangibles are stripped out.

## Thresholds

| Range | Reading | What it means |
|---|---|---|
| Minimal | Strong | Tangible equity ≈ book equity. |
| Moderate | Adequate | Modest acquisition-related intangibles. |
| High vs. equity | Watch | Meaningful share of equity is regulator-disallowed. |
| Dominant | Concern | Tangible capital materially below reported equity. |


## Worked example

After acquiring a competitor, a bank books a $15 million core deposit intangible to value the acquired checking and savings relationships. That intangible amortizes over roughly a decade and is deducted from CET1, so it boosts book assets but not regulatory capital.

## Questions

### What is a core deposit intangible?

When a bank acquires another, the value of the acquired low-cost deposit relationships is booked as a core deposit intangible. It amortizes over the expected life of those deposits and is deducted from regulatory capital.

### Are intangibles the same as goodwill?

Goodwill is the residual premium over fair value of net assets; other intangibles (core deposit intangibles, servicing rights) are separately identifiable. Both are reported on Schedule RC and largely deducted from CET1.

## Sources

- [FFIEC Call Report Schedule RC (Balance Sheet)](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)
- [FFIEC Call Report Schedule RC-R (Regulatory Capital, deductions)](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF)

## Related metrics

- [Goodwill](https://www.bankregreports.com/glossary/goodwill/): Goodwill is the premium a bank paid over the fair value of net assets in an acquisition. It is an intangible asset that is fully deducted from common equity tier 1 capital and from tangible common equity, so it inflates book equity but counts for nothing in regulatory capital.
- [Tangible Common Equity / Tangible Assets](https://www.bankregreports.com/glossary/tce-ta/): TCE/TA measures common shareholders' equity excluding goodwill and intangibles, divided by total assets excluding the same. It is the purest measure of a bank's capital cushion to common shareholders and is not subject to risk-weighting choices.
- [Common Equity Tier 1 Capital Ratio](https://www.bankregreports.com/glossary/cet1-ratio/): The CET1 ratio measures a bank's highest-quality capital (common stock and surplus, retained earnings and, for banks that have not opted out, accumulated other comprehensive income, less regulatory deductions) against its risk-weighted assets. It is the most-watched single capital indicator in US bank supervision after the 2013 Basel III reforms.
- [Total Equity Capital](https://www.bankregreports.com/glossary/total-equity/): Total equity capital is the bank's net worth on a book basis: common stock, surplus, retained earnings, and accumulated other comprehensive income (AOCI). It is the first cushion that absorbs losses before depositors or the FDIC are exposed.

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