BLUE RIDGE BANKSHARES, INC. Goodwill & Intangibles Disclosure
Note 6. Goodwill and Other Intangible Assets
As of December 31, 2022 and 2021, goodwill totaled $26.8 million.
The following tables present information on amortizable intangible assets included on the consolidated balance sheets as of the dates stated.
|
|
December 31, 2022 |
|
|||||||||
(Dollars in thousands) |
|
Gross Carrying Value |
|
|
Accumulated Amortization |
|
|
Net Carrying Value |
|
|||
Core deposit intangibles |
|
$ |
9,626 |
|
|
$ |
(4,330 |
) |
|
$ |
5,296 |
|
Other amortizable intangibles |
|
|
3,282 |
|
|
|
(1,995 |
) |
|
|
1,287 |
|
Total |
|
$ |
12,908 |
|
|
$ |
(6,325 |
) |
|
$ |
6,583 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
December 31, 2021 |
|
|||||||||
(Dollars in thousands) |
|
Gross Carrying Value |
|
|
Accumulated Amortization |
|
|
Net Carrying Value |
|
|||
Core deposit intangibles |
|
$ |
9,626 |
|
|
$ |
(2,908 |
) |
|
$ |
6,718 |
|
Other amortizable intangibles |
|
|
2,463 |
|
|
|
(1,587 |
) |
|
|
876 |
|
Total |
|
$ |
12,089 |
|
|
$ |
(4,495 |
) |
|
$ |
7,594 |
|
Intangible amortization expense is included in noninterest expense or interest and fees on loans in the consolidated statements of operations depending on the intangible. For the years ended December 31, 2022, 2021, and 2020, intangible amortization expense totaled $1.5 million, $1.7 million, and $629 thousand, respectively.
Included in other amortizable intangibles were loan servicing assets of $876 thousand and $362 thousand as of December 31, 2022 and 2021, respectively, related to the servicing of the government guaranteed portion of certain loans that the Company has sold. Loan servicing assets of $820 thousand and $266 thousand were added during the years ended December 31, 2022 and 2021, respectively. The amortization of these intangibles is included in interest and fees on loans in the consolidated statement of operations and totaled $306 thousand for the year ended December 31, 2022.
The following table presents estimated intangible asset amortization expense of the core deposit intangibles and other amortizable intangibles for the next five years and thereafter from the date stated.
(Dollars in thousands) |
|
December 31, 2022 |
|
|
2023 |
|
$ |
1,355 |
|
2024 |
|
|
1,221 |
|
2025 |
|
|
1,046 |
|
2026 |
|
|
1,073 |
|
2027 |
|
|
627 |
|
Thereafter |
|
|
1,261 |
|
Total |
|
$ |
6,583 |
|
The Company retains servicing rights on mortgages originated and sold to the secondary market. Beginning January 1, 2022, the Company elected the fair value measurement method for accounting for MSR assets, pursuant to which assets are initially recorded at fair value and subsequently adjusted to fair value at each reporting period. Prior to this election, the Company accounted for MSR assets under the amortization method, whereby the MSR assets were recorded at the lower of cost or fair value. As of December 31, 2022, the fair value of MSR assets was $29.0 million, and at December 31, 2021, the carrying value of MSR assets under the amortization method was $16.5 million.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2022 | Mar 10, 2023 | Showing above |
| 2020 | Mar 29, 2021 | |
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.