Goodwill and Intangible Assets
The change in goodwill during the years ended December 31, 2024 and 2023 is as follows:
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| | |
| | |
| (in thousands) | | 2024 | | 2023 |
| Balance at beginning of period | | $ | — | | | $ | — | |
| Acquired goodwill | | 21,126 | | | — | |
| Impairment | | — | | | — | |
| Balance at end of period | | $ | 21,126 | | | $ | — | |
At December 31, 2024, the Company’s reporting units where goodwill was pushed down had positive equity and earnings. The Company has elected to perform a qualitative assessment annually as of October 1 to determine if it is more than likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more than likely than not that the fair value of the reporting unit exceeded the carrying value, resulting in no impairment.
Acquired amortizing intangible assets were as follows at December 31:
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| | 2024 | | 2023 | | | | |
| | Gross Carrying Amount | | Accumulated Amortization | | Gross Carrying Amount | | Accumulated Amortization | | | | | | | | |
| Amortized intangible assets: | | | | | | | | | | | | | | | | |
| Customer list intangible | | $ | 12,200 | | | $ | (188) | | | $ | — | | | $ | — | | | | | | | | | |
| Trade name intangible | | 2,100 | | | (40) | | | — | | | — | | | | | | | | | |
| Core deposits intangible | | 1,779 | | | (34) | | | — | | | — | | | | | | | | | |
| Total amortized intangible assets | | $ | 16,079 | | | $ | (262) | | | $ | — | | | $ | — | | | | | | | | | |
Goodwill represents the intangible value of IFH’s business and reputation within the markets it previously served and is not expected to be deductible for income tax purposes. The customer list intangible and trade name intangible will be amortized over its expected useful life of 17 years and 15 years, respectively, using the straight-line method. The core deposit intangible will be amortized over its expected useful life of 10 years using the sum-of-the-years-digits method.
Aggregate amortization expense was $262,000 and zero for the years ended December 31, 2024 and 2023, respectively.
At December 31, 2024, scheduled amortization of the intangible assets for each of the next five years is as follows:
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| (in thousands) | | |
| | |
| 2025 | | $ | 1,046 | |
| 2026 | | 1,043 | |
| 2027 | | 1,038 | |
| 2028 | | 1,033 | |
| 2029 | | 1,026 | |
| Thereafter | | 10,631 | |
| Total | | $ | 15,817 | |
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.