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Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure Goodwill and Other Intangible Assets
Goodwill
Goodwill is not amortized, but is subject to impairment tests on 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 (including goodwill). At December 31, 2021 and 2020, the Corporation had goodwill of $10.7 million, which was related to the acquisition of Alterra in 2014.
The Corporation conducted its annual impairment test on August 1, 2021, utilizing a qualitative assessment, and concluded that it was more likely than not the estimated fair value of the reporting unit exceeded its carrying value, resulting in no impairment.
Other Intangible Assets
The Corporation has intangible assets that are amortized consisting of loan servicing rights and core deposit intangibles.
Loan servicing rights are recognized upon sale of the guaranteed portions of SBA loans with servicing rights retained. When SBA loans are sold, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Loan servicing assets are subsequently measured using the amortization method, which requires servicing rights to be amortized into interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. For the years ended December 31, 2021 and 2020, loan servicing asset amortization totaled $412,000 and $458,000, respectively.
The estimated fair value of the Corporation’s loan servicing asset was $1.6 million and $1.3 million as of December 31, 2021 and 2020, respectively. The Corporation periodically reviews this portfolio for impairment and engages a third-party valuation firm to assess the fair value of the overall servicing rights portfolio. During the years ended December 31, 2021 and 2020, impairment recovery of $63,000 and $16,000, respectively, was recognized.
The core deposit intangibles have a finite life and is amortized over a period of seven years, and were fully amortized during 2021. There was no net book value of the core deposit intangible as of December 31, 2021 and $25,000 as of December 31, 2020. For the years ended December 31, 2021 and 2020, amortization totaled $25,000 and $35,000, respectively.