Note

–

Intangible Assets

Intangible assets are included in the Consolidated Balance Sheets as a separate line item, net of accumulated amortization and consist of the following items:

	Gross								Net
	Intangible					Accumulated			Intangible
(dollars in thousands)	Assets		Additions			Amortization			Assets

December 31, 2016
Goodwill (1)	$	104,168	$	-		$	-		$	104,168
Core deposit (2)		7,070		-			(4,291	)		2,779
Excess servicing (3)		387		602			(517	)		472
	$	111,625	$	602		$	(4,808	)	$	107,419

December 31, 2015
Goodwill (1)	$	104,425	$	(257	)	$	-		$	104,168
Core deposit (2)		7,070		-			(3,084	)		3,986
Excess servicing (3)		282		379			(273	)		388
	$	111,777	$	122		$	(3,357	)	$	108,542

The aggregate amortization expense was

$1.7

million,

$1.5

million, and

$743

thousand for the years ended

December

31,

2016,

2015

and

2014,

respectively.

(1)

The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Fidelity of approximately

$360

thousand. Based on allowable adjustments through

August

31,

2009,

the unidentified intangible (goodwill) amounted to approximately

$2.2

million. The Company recorded an initial amount of unidentified intangible (goodwill) incident to the acquisition of Virginia Heritage of approximately

$102.3

million. Based on allowable adjustments through

October

31,

2015,

the unidentified intangible (goodwill) was reduced by

$257

thousand.

(2)

In connection with the Fidelity and Virginia Heritage acquisitions, the Company made an allocation of the purchase price of

$2.3

million and

$4.6

million, respectively, to the core deposit intangibles. These allocations were based on independent evaluations, and are included in intangible assets, net of accumulated amortization on the Consolidated Balances Sheets. The amount of the core deposit intangible relating to the Fidelity acquisition at

December

31,

2016

was

$209

thousand, which is being amortized over its remaining economic life through

2018

as a component of other noninterest expense. The amount of the core deposit intangible relating to the Virginia Heritage acquisition at

December

31,

2016

was

$2.6

million, which is being amortized over its remaining economic life through the year

2020

as a component of other noninterest expense.

Amortization expense for core deposit intangibles totaled

$1.2

million for both the years ended

December

31,

2016

and

2015.

The unamortized assets at

December

31,

2016

and

2015

were

$2.8

million and

$4.0

million, respectively.

(3)

The Company recognizes a servicing asset for the computed value of servicing fees on the sale of the guaranteed portion of SBA loans, which is in excess of a normal servicing fee. Assumptions related to the loan term and amortization period are made to arrive at the initial recorded value.

The future estimated annual amortization expense is presented below:

Years ending December 31:
(dollars in thousands)

2017	$	1,064
2018		957
2019		715
2020		43
Total	$	2,779