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Goodwill and Other Intangible Assets | 6 Months Ended
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Jun. 30, 2020
Goodwill and Other Intangible Assets |
Goodwill and Other Intangible Assets | 7) Goodwill and Other Intangible Assets ​ Goodwill ​ At June 30, 2020, the carrying value of goodwill was $167,631,000, which included $13,044,000 of goodwill related to its acquisition of Bay View Funding, $32,619,000 from its acquisition of Focus Business Bank (“Bank”), $13,819,000 from its acquisition of Tri-Valley, $24,271,000 from its acquisition of United American and $83,878,000 from Presidio. ​ Goodwill impairment exists when a reporting unit’s carrying value exceeds its fair value, which is determined through a qualitative assessment whether it is more likely than not that the fair value of equity of the reporting unit exceeds the carrying value (“Step Zero”). If the qualitative assessment indicates it is more likely than not that the fair value of equity of a reporting unit is less than book value, then a quantitative two-step impairment test is required. Step 1 includes the determination of the carrying value of the Company’s reporting units, including the existing goodwill and intangible assets, and estimating the fair value of each reporting unit. ​ We performed our required annual goodwill impairment test as of November 30, 2019 and there was no impairment. During the first and second quarters of 2020 bank stocks in general as well as our market capitalization have declined as a result of events surrounding the current COVID-19 pandemic outbreak. As a result, we completed a qualitative goodwill impairment test as of June 30, 2020. This qualitative analysis included a review of our earnings, asset quality trends , capital levels and the economic conditions of our markets. Based on this qualitative analysis we do not believe this decline is indicative of a permanent deterioration of the fundamental value of our Company. As such we do not believe that it is more likely than not a goodwill impairment exists at June 30, 2020. ​ Other Intangible Assets ​ The Company’s intangible assets are summarized as follows for the periods indicated: ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | June 30, 2020
​ | Gross | ​ | ​ | ​ | ​ | ​
​ | Carrying | ​ | Accumulated | ​ | ​ | ​
​ | Amount | ​ | Amortization | ​ | Total
​ | (Dollars in thousands)
Core deposit intangibles | $ | 25,023 | ​ | $ | (7,446) | ​ | $ | 17,577
Customer relationship and brokered relationship intangibles | ​ | 1,900 | ​ | ​ | (1,076) | ​ | ​ | 824
Below market leases | ​ | 770 | ​ | ​ | (578) | ​ | ​ | 192
Total | $ | 27,693 | ​ | $ | (9,100) | ​ | $ | 18,593
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | December 31, 2019
​ | Gross | ​ | ​ | ​ | ​ | ​
​ | Carrying | ​ | Accumulated | ​ | ​ | ​
​ | Amount | ​ | Amortization | ​ | Total
​ | (Dollars in thousands)
Core deposit intangibles | $ | 25,023 | ​ | $ | (5,846) | ​ | $ | 19,177
Customer relationship and brokered relationship intangibles | ​ | 1,900 | ​ | ​ | (981) | ​ | ​ | 919
Below market leases | ​ | 770 | ​ | ​ | (451) | ​ | ​ | 319
Total | $ | 27,693 | ​ | $ | (7,278) | ​ | $ | 20,415
​ Estimated amortization expense for the remainder of 2020, the next five years, and thereafter is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | United | ​ | United | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Bay View Funding | ​ | ​ | ​
​ | ​ | Presidio | ​ | Presidio | ​ | American | ​ | American | ​ | Tri-Valley | ​ | Tri-Valley | ​ | Focus | ​ | Customer & | ​ | ​ | ​
​ | ​ | Core | ​ | Above | ​ | Core | ​ | Below | ​ | Core | ​ | Below | ​ | Core | ​ | Brokered | ​ | Total | ​
​ | ​ | Deposit | ​ | Market | ​ | Deposit | ​ | Market | ​ | Deposit | ​ | Market | ​ | Deposit | ​ | Relationship | ​ | Amortization | ​
Year |  | Intangible | ​ | Lease | ​ | Intangible | ​ | Lease | ​ | Intangible | ​ | Lease |  | Intangible |  | Intangible |  | Expense |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (Dollars in thousands) | ​
2020 | ​ | $ | 912 | ​ | ​ | (9) | ​ | $ | 332 | ​ | $ | 109 | ​ | $ | 104 | ​ | $ | 8 | ​ | $ | 359 | ​ | $ | 95 | ​ | ​ | 1,910 | ​
2021 | ​ | ​ | 1,447 | ​ | ​ | (20) | ​ | ​ | 602 | ​ | ​ | — | ​ | ​ | 184 | ​ | ​ | 18 | ​ | ​ | 596 | ​ | ​ | 190 | ​ | ​ | 3,017 | ​
2022 | ​ | ​ | 1,225 | ​ | ​ | (20) | ​ | ​ | 553 | ​ | ​ | — | ​ | ​ | 167 | ​ | ​ | 18 | ​ | ​ | 502 | ​ | ​ | 190 | ​ | ​ | 2,635 | ​
2023 | ​ | ​ | 1,118 | ​ | ​ | (20) | ​ | ​ | 521 | ​ | ​ | — | ​ | ​ | 158 | ​ | ​ | 18 | ​ | ​ | 420 | ​ | ​ | 190 | ​ | ​ | 2,405 | ​
2024 | ​ | ​ | 1,026 | ​ | ​ | (14) | ​ | ​ | 499 | ​ | ​ | — | ​ | ​ | 152 | ​ | ​ | 18 | ​ | ​ | 346 | ​ | ​ | 159 | ​ | ​ | 2,186 | ​
2025 | ​ | ​ | 970 | ​ | ​ | — | ​ | ​ | 478 | ​ | ​ | — | ​ | ​ | 145 | ​ | ​ | 18 | ​ | ​ | 200 | ​ | ​ | — | ​ | ​ | 1,811 | ​
Thereafter | ​ | ​ | 3,211 | ​ | ​ | — | ​ | ​ | 1,042 | ​ | ​ | — | ​ | ​ | 306 | ​ | ​ | 70 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,629 | ​
​ | ​ | $ | 9,909 | ​ | $ | (83) | ​ | $ | 4,027 | ​ | $ | 109 | ​ | $ | 1,216 | ​ | $ | 168 | ​ | $ | 2,423 | ​ | $ | 824 | ​ | $ | 18,593 | ​
​ Impairment testing of the intangible assets is performed at the individual asset level. Impairment exists if the carrying amount of the asset is not recoverable and exceeds its fair value at the date of the impairment test. For intangible assets, estimates of expected future cash flows (cash inflows less cash outflows) that are directly associated with an intangible asset are used to determine the fair value of that asset. Management makes certain estimates and assumptions in determining the expected future cash flows from core deposit and customer relationship intangibles including account attrition, expected lives, discount rates, interest rates, servicing costs and other factors. Significant changes in these estimates and assumptions could adversely impact the valuation of these intangible assets. If an impairment loss exists, the carrying amount of the intangible asset is adjusted to a new cost basis. The new cost basis is then amortized over the remaining useful life of the asset. Based on its assessment, management concluded that there was no impairment of intangible assets at June 30, 2020 and December 31, 2019.

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- Definition The entire disclosure for all or part of the information related to intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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