AMERICAN COASTAL INSURANCE CorpACIC

AMERICAN COASTAL INSURANCE Corp Goodwill & Intangibles Disclosure

10-KFiled Mar 10, 20252 min read
GOODWILL AND INTANGIBLE ASSETS
Goodwill

The carrying amount of goodwill at December 31, 2024, 2023, and 2022 was $59,476,000.

For the 2024 annual goodwill impairment test, we utilized the quantitative assessment for our goodwill, determining that it was not impaired. This testing took place during the fourth quarter of 2024. As a result of the strategic decision to place our former subsidiary, UPC, into an orderly runoff, we recognized an impairment of our goodwill totaling $10,156,000 during the third quarter of 2022 related to IIC.

There was no additional goodwill acquired or disposed of during the years ended December 31, 2024, 2023 and 2022. Accumulated impairment related to goodwill was $10,156,000 at December 31, 2024, 2023 and 2022, attributable wholly to IIC.
Intangible Assets

The following is a summary of intangible assets excluding goodwill recorded as other assets on our Consolidated Balance Sheets at:
December 31, 2024December 31, 2023
Intangible assets subject to amortization$5,485 $8,125 
Indefinite-lived intangible assets(1)
423 423 
Total$5,908 $8,548 
(1) Indefinite-lived intangible assets are comprised of state insurance and agent licenses, as well as perpetual software licenses.

    
Intangible assets subject to amortization consisted of the following:
Weighted-average remaining amortization period (in years)Gross carrying amountAccumulated amortizationNet carrying amount
2024
Agency agreements acquired2.334,661 (29,176)5,485 
Trade names acquired—6,381 (6,381)— 
Total$41,042 $(35,557)$5,485 
2023
Agency agreements acquired3.334,661 (26,738)7,923 
Trade names acquired0.36,381 (6,179)202 
Total$41,042 $(32,917)$8,125 

No impairment in the value of amortizing or non-amortizing intangible assets was recognized during the years ended December 31, 2024 and 2023; however, during the year ended December 31, 2023, we disposed of intangible assets totaling $200,000.

Amortization expense of our intangible assets was $2,640,000, $3,247,000 and $3,247,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

Estimated amortization expense of our intangible assets to be recognized by the Company over the next five years is as follows:
Year ending December 31,Estimated Amortization Expense
2025$2,439 
20262,438 
2027609 
2028— 
2029— 

Historical Timeline

Fiscal YearFiled
2024Mar 10, 2025Showing above
2023Mar 15, 2024
2019Mar 12, 2020
2017Mar 28, 2018

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

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