SIERRA BANCORP Goodwill & Intangibles Disclosure
7. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The balance of goodwill at the years beginning and ended December 31, 2025, 2024, and 2023 was $27.4 million. There was no acquired goodwill or impairment for the years ended December 31, 2025, 2024, and 2023.
The Company performed a quantitative impairment assessment as of October 1, 2025, using a market approach. Based on the results of the Company’s goodwill impairment assessment, the Company determined that the fair value of its reporting unit, which was at the consolidated level, exceeded the carrying value. Therefore, goodwill was not
impaired as of December 31, 2025, and there was no impairment charges related to the Company’s goodwill recorded during the year ended December 31, 2025.
Acquired Intangible Assets
Acquired intangible assets were as follows at year-end (dollars in thousands):
Years Ended December 31, | ||||||||||||
2025 | 2024 | |||||||||||
| Gross | | Accumulated | | Gross | | Accumulated | |||||
Core deposit intangibles | $ | 5,181 | $ | 5,129 | $ | 5,181 | $ | 4,563 | ||||
Aggregate amortization expense was $0.6 million, $0.8 million, and $0.9 million for 2025, 2024, and 2023.
Estimated amortization expense for each of the next five years and thereafter (dollars in thousands):
2026 | | $ | 52 |
2027 | — | ||
2028 | — | ||
2029 | — | ||
2030 | — | ||
Thereafter | — | ||
Total | $ | 52 |
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.