GOODWILL AND OTHER INTANGIBLES

On January 5, 2005, ACNB Corporation completed its acquisition of Russell Insurance Group, Inc. (RIG) of Westminster, Maryland. The acquisition of RIG resulted in goodwill of approximately $6,308,000.

On July 1, 2017, ACNB completed its acquisition of New Windsor Bancorp Inc. (New Windsor) of Taneytown, Maryland. The acquisition of New Windsor resulted in goodwill of approximately $13,272,000 and generated $2,418,000 in core deposit intangibles.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, customer relationship intangibles and renewal lists, are amortized over their estimated useful lives and subject to periodic impairment testing. Core deposit intangibles are primarily amortized over ten years using accelerated methods. Customer renewal lists are amortized over their estimated useful lives which range from eight to fifteen years.

Combining goodwill resulting from this transaction with existing goodwill from the 2005 RIG purchase of $6,308,000, total goodwill included in the Corporation’s consolidated statement of condition is $19,580,000. Goodwill is not deductible for federal income tax purposes. Goodwill, which has an indefinite useful life, is evaluated for impairment annually and is evaluated for impairment more frequently if events and circumstances indicate that the asset might be impaired. The Corporation did not identify any impairment on RIG’s or the Bank’s outstanding goodwill from its most recent testing. No change occurred during the year with RIG’s goodwill, $6,308,000, or the Bank’s goodwill of $13,272,000.

The carrying value and accumulated amortization of the intangible assets (RIG customer lists and New Windsor core deposit intangibles) are as follows:



		2018				2017
Year Purchased	Dollars in thousands	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
2005		$	3,282	$	3,282	$	3,282	$	3,282
2007		637		637		637		637
2008		1,165		1,165		1,165		1,101
2009		1,300		1,300		1,300		1,170
2010		33		30		33		26
2014		77		39		77		31
2015		173		67		173		49
2018		2,583		90		—		—
	RIG amortized intangible assets	9,250		6,623		6,667		6,296
2017	New Windsor core deposit intangibles	2,418		638		2,418		220
		$	11,668	$	7,261	$	9,085	$	6,516

Amortization expense was $745,000 and $537,000 for the years ended December 31, 2018 and 2017, respectively.

Amortization of the intangible assets for the five years subsequent to December 31, 2018, is expected to be as follows:



Years Ending	In thousands
2019	$	683
2020	635
2021	591
2022	547
2023	503
Thereafter	1,448