Goodwill and Other Intangible Assets
– Goodwill was recorded as a result of acquisitions. The carrying amount of goodwill as of December 31, 2025 and 2024 was $121.1 million and $121.6 million, respectively. In 2025, the decrease of $426,000 was due to the sale of the Kaplan banking center and adjustments from the 2024 acquisition of Oakwood. The Company performed the required annual goodwill impairment test as of October 1, 2025. The Company’s annual test did not indicate any impairment as of the testing date. Following the testing date, management determined no triggering event had occurred though December 31, 2025.
Core deposit and customer intangible assets were acquired in conjunction with the business combinations. A summary of the core deposit and customer intangible assets as of December 31, 2025 and 2024 is as follows:
| | | | | | | | | | | |
| (Dollars in thousands) | 2025 | | 2024 |
| | | |
| Gross Carrying Amount | $ | 28,690 | | | $ | 21,050 | |
| Adjustment for Sale of Branch | (122) | | | — | |
| Acquired in Oakwood Acquisition | — | | | 7,640 | |
| Less: Accumulated Amortization | (14,071) | | | (11,438) | |
| Net Carrying Amount | $ | 14,497 | | | $ | 17,252 | |
Amortization expense on the core deposit and customer intangible assets totaled approximately $2.6 million, $2.3 million and $2.1 million during the years ended December 31, 2025, 2024 and 2023, respectively. The following table presents the estimated aggregate amortization expense for the periods indicated:
| | | | | |
| December 31, | (Dollars in thousands) |
| 2026 | $ | 2,556 | |
| 2027 | 2,556 | |
| 2028 | 2,278 | |
| 2029 | 1,971 | |
| 2030 | 1,711 | |
| Thereafter | 3,425 | |
| Total Core Deposit and Customer Intangible | $ | 14,497 | |
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.