BLUE RIDGE BANKSHARES, INC. Goodwill & Intangibles Disclosure
Note 6. Goodwill and Other Intangible Assets
As of December 31, 2023 and December 31, 2022, the Company's goodwill totaled $0 and $26.8 million, respectively. During the third quarter of 2023, management concluded that goodwill had become impaired as a result of the decline in the Company's stock price and its market value relative to its book value. Accordingly, an impairment charge totaling $26.8 million, the entire amount of goodwill reported in the consolidated balance sheet, was recognized during the third quarter of 2023.
The following tables present information on amortizable intangible assets included on the consolidated balance sheets as of the dates stated.
|
|
December 31, 2023 |
|
|||||||||
(Dollars in thousands) |
|
Gross Carrying Value |
|
|
Accumulated Amortization |
|
|
Net Carrying Value |
|
|||
Core deposit intangibles |
|
$ |
9,626 |
|
|
$ |
(5,582 |
) |
|
$ |
4,044 |
|
Other amortizable intangibles |
|
|
3,962 |
|
|
|
(2,624 |
) |
|
|
1,338 |
|
Total |
|
$ |
13,588 |
|
|
$ |
(8,206 |
) |
|
$ |
5,382 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
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 |
|
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, 2023, 2022, and 2021, intangible amortization expense totaled $1.3 million, $1.5 million, and $1.7 million, respectively.
Included in other amortizable intangibles were loan servicing assets of $1.3 million and $876 thousand as of December 31, 2023 and 2022, respectively, related to the servicing of the government guaranteed portion of certain loans that the Company has sold. Loan servicing assets of $679 thousand and $820 thousand were added during the years ended December 31, 2023 and 2022, respectively. The amortization of these intangibles is included in interest and fees on loans in the consolidated statements of operations and totaled $216 thousand and $306 thousand for the years ended December 31, 2023 and 2022, respectively.
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, 2023 |
|
|
2024 |
|
$ |
1,457 |
|
2025 |
|
|
1,195 |
|
2026 |
|
|
940 |
|
2027 |
|
|
704 |
|
2028 |
|
|
486 |
|
Thereafter |
|
|
600 |
|
Total |
|
$ |
5,382 |
|
The Company retains servicing rights on mortgages originated and sold to the secondary market. The fair value of MSR assets was $27.1 million and $29.0 million as of December 31, 2023 and 2022, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Mar 15, 2024 | Showing above |
| 2022 | Mar 10, 2023 | |
| 2021 | Mar 11, 2022 | |
| 2020 | Mar 29, 2021 | |
| 2019 | Apr 14, 2020 | |
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.