Goodwill and Intangibles

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

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


(dollars in thousands)	Gross Intangible Assets		Additions		Accumulated Amortization		Impairment		Net Intangible Assets
June 30, 2024:
Goodwill	$	104,168	$	—	$	—	$	(104,168)	$	—

Excess servicing (1)	37		—		(11)		—		26
Non-compete agreements	720		—		(617)		—		103
Total	$	104,925	$	—	$	(628)	$	(104,168)	$	129
December 31, 2023:
Goodwill	$	104,168	$	—	$	—	$	—	$	104,168

Excess servicing (1)	65		—		(28)		—		37
Non-compete agreements	—		1,234		(514)		—		720
Total	$	104,233	$	1,234	$	(542)	$	—	$	104,925

(1)The Company recognizes a servicing asset for the computed value of servicing fees on the sale of multifamily FHA loans and the sale of the guaranteed portion of SBA loans. Assumptions related to loan terms and amortization are made to arrive at the initial recorded values.

During the three months ended June 30, 2024, Management determined that a triggering event had occurred as a result of the share price trading under book value for more than four quarters. During the past twelve months ended June 30, 2024, changes in macroeconomic conditions and market volatility resulting from rising interest rates resulted in a sustained decrease in the Company’s stock price. Management performed an interim quantitative impairment test, resulting in the impairment charge on its only reporting unit as of May 31, 2024 and determined that goodwill had become fully impaired, which resulted in an impairment charge of $104.2 million to reduce fully the carrying value of the Company's goodwill. The goodwill is primarily related to the acquisition of the Virginia Heritage Bank in October 2014. The impairment charge did not impact our cash, liquidity ratios, core operating performance, or regulatory capital ratios.