Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

(8.) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performs its annual impairment test of goodwill as of October 1st of each year. See Note 1 for the Company’s accounting policy for goodwill and other intangible assets.

The Company completed qualitative assessments for the Banking, Courier Capital and HNP Capital reporting units and a quantitative assessment for the SDN reporting unit during 2022. The results of the 2022 annual impairment tests for the Company’s reporting units indicated no goodwill impairment.

The results of the 2021 annual impairment tests for the Company's reporting units indicated no goodwill impairment.

Based on volatility in the capital markets and overall economic conditions as a result of the COVID‐19 pandemic accompanied by a decline in the Company’s stock price, a quantitative assessment was performed for the Banking reporting unit in the third quarter of 2020. Based on this quantitative assessment, the Company concluded that goodwill was not impaired.

The Company completed a quantitative assessment in relation to the SDN reporting unit as of its 2020 annual test date and determined that goodwill was not impaired.

The Company completed qualitative assessments in relation to the Courier Capital and the HNP Capital reporting units as of their 2020 annual test date and determined it was not more likely than not that the fair value of these reporting units was less than their carrying values.

Declines in the market value of the Company’s publicly traded stock price or declines in the Company’s ability to generate future cash flows may increase the potential that goodwill recorded on the Company’s consolidated statement of financial condition be designated as impaired and that the Company may incur a goodwill write-down in the future.

The change in the balance for goodwill during the years ended December 31 was as follows (in thousands):


	Banking		All Other(1)		Total
Balance, January 1, 2021	$	48,536	$	17,526	$	66,062
Acquisitions	-			1,009		1,009
Balance, December 31, 2021		48,536		18,535		67,071
No activity during the period	-			-		-
Balance, December 31, 2022	$	48,536	$	18,535	$	67,071

(1)

All Other includes the SDN, Courier Capital and HNP Capital reporting units. The amounts are reported net of $4.7 million accumulated impairment related to the SDN reporting unit.

Other Intangible Assets

The Company has other intangible assets that are amortized, consisting of core deposit intangibles and other intangibles (primarily related to customer relationships). Changes in the gross carrying amount, accumulated amortization and net book value for the years ended December 31 were as follows (in thousands):


	2022			2021
Core deposit intangibles:
Gross carrying amount	$	2,042		$	2,042
Accumulated amortization		(2,042	)		(2,039	)
Net book value	$	-		$	3

Other intangibles:
Gross carrying amount	$	14,545		$	14,545
Accumulated amortization		(8,202	)		(7,219	)
Net book value	$	6,343		$	7,326

(8.) GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

Core deposit intangibles and other intangibles amortization expense was $3 thousand and $983 thousand, respectively, for the year ended December 31, 2022. Core deposit intangibles and other intangibles amortization expense was $25 thousand and $1.0 million, respectively, for the year ended December 31, 2021. Core deposit intangibles and other intangibles amortization expense was $70 thousand and $1.1 million, respectively, for the year ended December 31, 2020. Estimated amortization expense of other intangible assets for each of the next five years is as follows (in thousands):


2023	$	910
2024		838
2025		766
2026		894
2027		623