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Goodwill and Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2023
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, 2023 and 2022 (in thousands):
|  | 2023 |  |  | 2022 |
|  | Gross Carrying |  |  | Accumulated |  |  | Gross Carrying |  |  | Accumulated |
|  | Value |  |  | Amortization |  |  | Value |  |  | Amortization |
Goodwill |  | $ | 200,221 |  |  | $ | 3,760 |  |  | $ | 144,172 |  |  | $ | 3,760 |
Intangibles from branch acquisition |  |  | 3,015 |  |  |  | 3,015 |  |  |  | 3,015 |  |  |  | 3,015 |
Core deposit intangibles |  |  | 79,945 |  |  |  | 34,966 |  |  |  | 45,355 |  |  |  | 28,432 |
Customer list intangibles |  |  | 26,552 |  |  |  | 10,620 |  |  |  | 20,782 |  |  |  | 8,551 |
|  | $ | 309,733 |  |  | $ | 52,361 |  |  | $ | 213,324 |  |  | $ | 43,758 |
Goodwill of $50.1 million was recorded for the acquisition and merger of Blackhawk Bankcorp, Inc. during the third quarter of 2023. All this goodwill was assigned to the banking unit of the Company. The goodwill will not be deductible for tax purposes. The following table provides a reconciliation of the purchase price paid for the acquisition of Blackhawk and the amount of goodwill recorded (in thousands):
Unallocated purchase price |  |  |  |  | $ | 26,955 |
Less purchase accounting adjustments: |  |  |  |  |  |
Fair value of securities |  | $ | (25,521 | ) |  |  |
Fair value of loans, net |  |  | (43,477 | ) |  |  |
Fair value of premises and equipment |  |  | (3,856 | ) |  |  |
Fair value of time deposits |  |  | 2,311 |  |  |  |
Fair value of subordinated and jr subordinated debentures |  |  | 3,707 |  |  |  |
Increase in core deposit intangible |  |  | 33,731 |  |  |  |
Increase in mortgage servicing rights |  |  | 3,344 |  |  |  |
Other assets |  |  | 6,619 |  |  |  |
|  |  |  |  |  | (23,142 | )
Resulting goodwill from acquisition |  |  |  |  | $ | 50,097 |
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 quarter ended June 30, 2023, goodwill of $6 million was recorded for the acquisition of the stock of Purdum, Gray, Ingledue, Beck, Inc., in connection with its insurance business. First Mid Insurance was assigned all this goodwill. The following provides a reconciliation of the purchase price paid for Purdum, Gray, Ingledue, Beck, Inc. and the amount of goodwill recorded (in thousands):
Unallocated purchase price |  |  |  |  | $ | 10,145 |
Less purchase accounting adjustments: |  |  |  |  |  |
Insurance Company intangible |  | $ | 5,770 |  |  |  |
Other liabilities |  |  | (1,576 | ) |  |  |
|  |  |  |  |  | 4,194 |
Resulting goodwill from acquisition |  |  |  |  | $ | 5,951 |
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 $641.2 million and $73.6 million at December 31, 2023 and 2022, respectively. The following table summarizes the activity pertaining to the mortgage servicing rights included in intangible assets as of December 31, 2023 and 2022 (in thousands):
|  | December 31, 2023 |  |  | December 31, 2022 |
Beginning balance |  | $ | 331 |  |  | $ | 420 |
Mortgage servicing rights acquired |  |  | 7,070 |  |  |  | — |
Valuation recovery |  |  | (8 | ) |  |  | 108 |
Mortgage servicing rights amortized |  |  | (524 | ) |  |  | (200 | )
I/O strip |  |  | (10 | ) |  |  | 3 |
Ending balance |  | $ | 6,859 |  |  | $ | 331 |
Total amortization expense for the years ended December 31, 2023, 2022, and 2021 was as follows (in thousands):
|  | 2023 |  |  | 2022 |  |  | 2021 |
Core deposit intangibles |  | $ | 6,534 |  |  | $ | 4,347 |  |  | $ | 3,176 |
Customer list intangibles |  |  | 2,069 |  |  |  | 1,743 |  |  |  | 1,586 |
Mortgage servicing rights |  |  | 524 |  |  |  | 200 |  |  |  | 629 |
|  | $ | 9,127 |  |  | $ | 6,290 |  |  | $ | 5,391 |
Estimated amortization expense for each of the five succeeding years is shown in the table below (in thousands):
For year ended 12/31/24 |  | $ | 13,478 |
For year ended 12/31/25 |  |  | 12,158 |
For year ended 12/31/26 |  |  | 10,570 |
For year ended 12/31/27 |  |  | 9,351 |
For year ended 12/31/28 |  |  | 8,183 |
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 during the year, 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 3.51, 4.56 and 3.78 years respectively, at December 31, 2023.

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