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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Note 7 -- Goodwill and Intangible Assets The Company has goodwill from business combinations, intangible assets from branch acquisitions, identifiable intangible assets assigned to core deposit relationships and customer lists of business lines acquired. The following table presents gross carrying amount and accumulated amortization by major intangible asset class as of December 31, 2022 and 2021 (in thousands):
|  | 2022 |  |  | 2021 |
|  | Gross Carrying |  |  | Accumulated |  |  | Gross Carrying |  |  | Accumulated |
|  | Value |  |  | Amortization |  |  | Value |  |  | Amortization |
Goodwill |  | $ | 144,172 |  |  | $ | 3,760 |  |  | $ | 115,613 |  |  | $ | 3,760 |
Intangibles from branch acquisition |  |  | 3,015 |  |  |  | 3,015 |  |  |  | 3,015 |  |  |  | 3,015 |
Core deposit intangibles |  |  | 45,355 |  |  |  | 28,432 |  |  |  | 39,435 |  |  |  | 24,085 |
Customer list intangibles |  |  | 20,782 |  |  |  | 8,551 |  |  |  | 20,561 |  |  |  | 6,808 |
|  | $ | 213,324 |  |  | $ | 43,758 |  |  | $ | 178,624 |  |  | $ | 37,668 |
Goodwill of $28.6 million was recorded for the acquisition and merger of Delta Bancshares Company during the first quarter of 2022. All this goodwill was assigned to the banking unit of the Company. During the second quarter of 2021, goodwill of $1.4 million was recorded for the acquisition of certain assets used by BBM & Associates Inc., in connection with its trucking insurance business. All this goodwill was assigned to First Mid Insurance. Goodwill of $8.9 million was provisionally recorded for the acquisition and merger of LINCO Bancshares, Inc. (“LINCO”) during the first quarter of 2021. All this goodwill was assigned to the banking segment of the Company. This goodwill was subsequently adjusted to $5.4 million to reflect adjustments made to finalize the purchase accounting. The following table provides a reconciliation of the purchase price paid for the acquisition of Delta and the amount of goodwill recorded (in thousands):
Unallocated purchase price |  |  |  |  | $ | 29,791 |
Less purchase accounting adjustments: |  |  |  |  |  |
Fair value of securities |  |  | (2,836 | ) |  |  |
Fair value of loans, net |  |  | (3,399 | ) |  |  |
Fair value of premises and equipment |  |  | 3,508 |  |  |  |
Fair value of time deposits |  |  | (1,759 | ) |  |  |
Fair value of FHLB advances |  |  | (75 | ) |  |  |
Core deposit intangible |  |  | 5,920 |  |  |  |
Other assets |  |  | (570 | ) |  |  |
Other liabilities |  |  | 444 |  |  |  |
|  |  |  |  |  | 1,233 |
Resulting goodwill from acquisition |  |  |  |  | $ | 28,558 |
The unpaid principal balance of mortgage loans serviced for others was $73.6 million and $90.2 million at December 31, 2022 and 2021, respectively. The following table summarizes the activity pertaining to the mortgage servicing rights included in intangible assets as of December 31, 2022 and 2021 (in thousands):
|  | December 31, 2022 |  |  | December 31, 2021 |
Beginning balance |  | $ | 420 |  |  | $ | 516 |
Valuation recovery |  |  | 108 |  |  |  | 544 |
Mortgage servicing rights amortized |  |  | (200 | ) |  |  | (629 | )
I/O strip |  |  | 3 |  |  |  | (11 | )
Ending balance |  | $ | 331 |  |  | $ | 420 |
Total amortization expense for the years ended December 31, 2022, 2021, and 2020 was as follows (in thousands):
|  | 2022 |  |  | 2021 |  |  | 2020 |
Core deposit intangibles |  | $ | 4,347 |  |  | $ | 3,176 |  |  | $ | 3,164 |
Customer list intangibles |  |  | 1,743 |  |  |  | 1,586 |  |  |  | 1,305 |
Mortgage servicing rights |  |  | 200 |  |  |  | 629 |  |  |  | 593 |
|  | $ | 6,290 |  |  | $ | 5,391 |  |  | $ | 5,062 |
Estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):
For year ended 12/31/23 |  | $ | 5,878 |
For year ended 12/31/24 |  |  | 5,371 |
For year ended 12/31/25 |  |  | 4,736 |
For year ended 12/31/26 |  |  | 3,835 |
For year ended 12/31/27 |  |  | 3,254 |
In accordance with the provisions of SFAS 142 ”Goodwill and Other Intangible Assets,” codified in ASC 350, the Company performed testing of goodwill for impairment as of September 30, 2022 and 2021, and determined, as of each of these dates, that goodwill was not impaired. Management also concluded that the remaining amounts and amortization periods were appropriate for all intangible assets. The weighted average amortization period for core deposit, customer lists and total intangibles was 3.23, 4.12 and 3.60 respectively, at December 31, 2022.

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