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Note 7 - Goodwill and Intangibles

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 7 - GOODWILL AND INTANGIBLES

Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill resulting from whole bank acquisitions is not amortized, but tested for impairment at least annually. The Company has historically selected December 31st as the date to perform the annual impairment test. However, since the COVID-19 pandemic, the Company has performed goodwill impairment tests quarterly. Goodwill amounted to $69.2 million at September 30, 2020 and $58.6 million at December 31, 2019, and is the only intangible asset with an indefinite life on the balance sheet. The Company performed goodwill impairment tests as of March 31 and June 30, 2020. There were no impairment losses recognized on goodwill during the three months and nine months ended September 30, 2020.

Other intangible assets consist of core deposit intangible ("CDI") assets arising from whole bank acquisitions. CDI assets are amortized on an accelerated method over their estimated useful life of 8 to 10 years. The unamortized balance at September 30, 2020 and December 31, 2019 was $5.5 million and $6.1 million, respectively. CDI amortization expense was $357,0000 and $384,000 for the three months ended September 30, 2020 and 2019, respectively, and $1.1 million and $1.2 million for the nine months ended September 30, 2020 and 2019, respectively.

Estimated CDI amortization expense for future years is as follows:

*(dollars in thousands)*
As of September 30:
Remainder of 2020	$	322
2021		1,121
2022		936
2023		800
2024		683
Thereafter		1,657
Total	$	5,519