California BanCorp \ CABCAL

California BanCorp \ CA Goodwill & Intangibles Disclosure

10-KFiled Mar 13, 20263 min read
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill, the excess purchase price over the fair value of all identifiable assets and liabilities acquired, totaled $110.9 million and $111.8 million at December 31, 2025 and 2024, respectively. Goodwill is reviewed for impairment at least annually during the fourth quarter of each fiscal year. On an ongoing basis, the Company qualitatively assesses if current events or circumstances warrant the need for an interim quantitative assessment of goodwill impairment.
The Company performed a qualitative assessment for the annual impairment review as of December 31, 2025, and as a result of that assessment had determined that there has been no impairment to the goodwill.
The following table presents changes in the carrying amount of goodwill for the years ended December 31:
(dollars in thousands)20252024
Beginning of the year$111,787 $37,803 
Goodwill from business combination— 74,712 
Adjustments to goodwill(1)(2)
(853)(728)
End of year$110,934 $111,787 
(1)During the year ended December 31, 2025, goodwill adjustments were related to a true-up of the low-income housing tax credit investments acquired from the Merger, offset by CALB state net operating losses that cannot be utilized post-merger and recoveries on acquired PCD loans previously charged-off prior to the Merger. These adjustments resulted in an $853 thousand decrease to goodwill.
(2)During the year ended December 31, 2024, goodwill adjustments for the Merger were related to an increase in the preliminary valuation of intangible assets, net by $300 thousand, with a net increase of $428 thousand to deferred taxes based on the change in the allocated fair value of intangible assets, net and the finalization of initial accounting for income taxes. These adjustments resulted in a $728 thousand decrease to goodwill.
Core deposit intangibles are amortized over remaining periods of 3.0 to 8.6 years. Trade name is amortized over a remaining period of 0.6 years. As of December 31, 2025, the weighted-average remaining amortization period for intangible assets was approximately 8.4 years.
The Company performs the annual impairment analysis for intangible assets at least annually during the fourth quarter of each fiscal year. The Company performed a qualitative assessment for potential impairment as of December 31, 2025, and as a result of that assessment had determined that there has been no impairment to intangible assets, net.
The following table presents the changes in intangibles assets, net for the years ended December 31:
(dollars in thousands)20252024
Gross balance, beginning of year$27,138 $4,185 
Additions(1)
— 22,953 
Gross balance, end of year$27,138 $27,138 
Accumulated amortization:
Balance, beginning of year$(4,867)$(2,990)
Amortization(2)
(3,791)(1,877)
Balance, end of period(8,658)(4,867)
Intangible assets, net, end of year
$18,480 $22,271 
(1)Includes $22.7 million of core deposit intangibles and $300 thousand of trade name obtained in connection with the Merger during the year ended December 31, 2024.
(2)Amortization of the core deposit intangibles and trade name obtained in connection with the merger were 10 years and 2 years, respectively, for a weighted average original term of 9.9 years.

Future estimated amortization for intangible assets, net for each of the next five years is as follows:
(dollars in thousands)Amount
2026$3,138 
20272,761 
20282,465 
20292,160 
20302,003 
Thereafter5,953 
$18,480 

Historical Timeline

Fiscal YearFiled
2025Mar 13, 2026Showing above
2024Apr 1, 2025
2023Mar 15, 2024

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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