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Note 5 - Goodwill | 3 Months Ended
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Mar. 31, 2023
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] |
(5) | Goodwill
As of March 31, 2023 and December 31, 2022, goodwill totaled $194 million, of which $172 million was attributed to the commercial banking segment and $22 million is attributed to WM&T. Goodwill of $67 million was added through the CB acquisition, $8.5 million of which was subsequently written off as a result of Bancorp selling its interest in LFA effective December 31, 2022. Effective December 31, 2022, management finalized the fair values of the acquired assets and assumed liabilities associated with the CB acquisition in advance of the 12 month post-acquisition date, as allowed by GAAP. The composition of goodwill is presented by respective acquisition below:
|  | March 31, |  |  | December 31, |
(in thousands) |  | 2023 |  |  | 2022 |
Commonwealth Bancshares (2022) |  | $ | 58,244 |  |  | $ | 58,244 |
Kentucky Bancshares (2021) |  |  | 123,317 |  |  |  | 123,317 |
King Southern Bancorp (2019) |  |  | 11,831 |  |  |  | 11,831 |
Austin State Bank (1996) |  |  | 682 |  |  |  | 682 |
Total |  | $ | 194,074 |  |  | $ | 194,074 |
Note: The acquisition of The Bank Oldham County in 2013 resulted in a bargain purchase gain.
GAAP requires that goodwill and intangible assets with indefinite useful lives not be amortized, but instead be tested for impairment at least annually. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. Bancorp’s annual goodwill impairment test is conducted as of September 30 of each year or more often as situations dictate. At September 30, 2022, Bancorp elected to perform a qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting units exceeded their fair value. Changes in the carrying value of goodwill follows:
|  | Three months ended |
|  | March 31, |
(in thousands) |  | 2023 |  |  | 2022 |
Balance at beginning of period |  | $ | 194,074 |  |  | $ | 135,830 |
Goodwill recorded from acquisitions |  |  | — |  |  |  | 66,694 |
Provisional period adjustments |  |  | — |  |  |  | — |
Disposition of LFA |  |  | — |  |  |  | — |
Impairment |  |  | — |  |  |  | — |
Balance at end of period |  | $ | 194,074 |  |  | $ | 202,524 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
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