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Note 8 - Core Deposit and Customer List Intangible Assets

12 Months Ended

Dec. 31, 2022

Intangible Assets Disclosure [Text Block]

(8)

Core Deposit and Customer List Intangible Assets

Bancorp recorded CDI assets of $13 million, $4 million, $2 million and $3 million in association with the acquisition of CB in 2022, KB in 2021, KSB in 2019 and TBOC in 2013, respectively.

Changes in the net carrying amount of CDI assets follow:

Years ended December 31, (in thousands)	2022			2021			2020

Balance at beginning of period	$	5,596		$	1,962		$	2,285
Additions from acquisitions		12,724			3,404			—
Provisional period adjustments		—			999			—
Amortized to expense		(3,362	)		(769	)		(323	)
Balance at end of period	$	14,958		$	5,596		$	1,962

As a result of the CB acquisition, Bancorp also recorded intangible assets totaling $14 million associated with the customer lists of the acquired WM&T and LFA businesses. Of this total, $12 million was recorded for WM&T and $2 million was recorded for LFA. Similar to CDI assets, these intangibles also amortize over their estimated useful lives. No such activity was recorded for the years ended December 31, 2021 and 2020.

As previously noted, Bancorp’s interest in LFA was sold effective December 31, 2022. As a result, the remaining CLI associated with LFA was written off at the date of sale and ultimately reflected as a component of the $870,000 pre-tax loss on the disposition of LFA that was recorded on Bancorp’s consolidated income statements for the year ended December 31, 2022.

The carrying amount of the CLI assets follows:

Year ended December 31, (in thousands)	2022
Balance at beginning of period	$	-
Additions from acquisitions		14,360
Provisional period adjustments		—
Disposition of LFA		(2,146	)
Amortized to expense		(2,182	)
Balance at end of period	$	10,032

Future CDI and CLI amortization expense is estimated as follows:

(in thousands)	CDI		CLI
2023	$	3,015	$	1,672
2024		2,686		1,520
2025		2,375		1,368
2026		2,063		1,216
2027		1,752		1,064
2028		1,339		912
2029		888		760
2030		576		608
2031		264		456
2032		-		304
2033		-		152
Total future expense	$	14,958	$	10,032