GOODWILL AND INTANGIBLE ASSETS

The change in goodwill during the years ended December 31, 2018, 2017, and 2016 is as follows (in thousands):



	2018		2017		2016
Balance, beginning of year	$	53,777	$	40,231	$	29,917
Acquired goodwill	—		13,546		10,314
Impairment	—		—		—
Balance, end of year	$	53,777	$	53,777	$	40,231

Business combinations involving the Company’s acquisition of the equity interests or net assets of another enterprise give rise to goodwill. Total goodwill at December 31, 2018 and 2017 was $53,777,000. Total goodwill at December 31, 2018 consisted of $13,466,000, $10,394,000, $6,340,000, $14,643,000, and $8,934,000 representing the excess of the cost of Folsom Lake Bank, Sierra Vista Bank, Visalia Community Bank, Service 1st Bancorp, and Bank of Madera County, respectively, over the net of the amounts assigned to assets acquired and liabilities assumed in the transactions accounted for under the purchase method of accounting. The value of goodwill is ultimately derived from the Company’s ability to generate net earnings after the acquisitions and is not deductible for tax purposes. A decline in net earnings could be indicative of a decline in the fair value of goodwill and result in impairment. For that reason, goodwill is assessed at least annually for impairment.

The Company has selected September 30 as the date to perform the annual impairment test. Management assessed qualitative factors including performance trends and noted no factors indicating goodwill impairment.

Goodwill is also tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company below its carrying amount. No such events or circumstances arose during the fourth quarter of 2018, so goodwill was not required to be retested.

The intangible assets at December 31, 2018 represent the estimated fair value of the core deposit relationships acquired in the acquisition of Folsom Lake Bank in 2017 of $1,879,000, Sierra Vista Bank in 2016 of $508,000 and the 2013 acquisition of Visalia Community Bank of $1,365,000. Core deposit intangibles are being amortized using the straight-line method over an estimated life of five to ten years from the date of acquisition. At December 31, 2018, the weighted average remaining amortization period is four years. The carrying value of intangible assets at December 31, 2018 was $2,572,000, net of $1,180,000 in accumulated amortization expense. The carrying value at December 31, 2017 was $3,027,000, net of $725,000 in accumulated amortization expense. Management evaluates the remaining useful lives quarterly to determine whether events or circumstances warrant a revision to the remaining periods of amortization. Based on the evaluation, no changes to the remaining useful lives was required. Management performed an annual impairment test on core deposit intangibles as of September 30, 2018 and determined no impairment was necessary. Amortization expense recognized was $455,000 for 2018, $234,000 for 2017, and $149,000 for 2016.

The following table summarizes the Company’s estimated core deposit intangible amortization expense for each of the next five years (in thousands):



Years Ending December 31,	Estimated Core Deposit Intangible Amortization
2019	$	696
2020	696
2021	661
2022	453
2023	66
Thereafter	—
Total	$	2,572