FB Bancorp, Inc. /MD/ Goodwill & Intangibles Disclosure
The Company is required to do periodic testing of goodwill impairment at certain times and if certain events occur or circumstances change which are considered to be triggering events that would more likely than not reduce the fair value of its goodwill below the carrying value of the reporting unit. The Company performed a quantitative impairment test as of December 31, 2024, using discounted cash flows under the income approach, due primarily to the decrease in mortgage origination volume as a result of the continued elevated interest rate environment as a triggering event, and based on the results of the test, the Company concluded the book value of goodwill of $5,786,000 was fully impaired. This goodwill was established in January 2014 as part of the Bank's acquisition of NOLA. The national mortgage industry has been under stress since mortgage interest rates increased dramatically since 2022 after being at record low interest rates in 2020 and 2021 during the COVID pandemic.
Goodwill was acquired with NOLA Lending Group. Operations of NOLA are reflected as discontinued operations in these financial statements. Goodwill was fully impaired at December 31, 2024. The impairment is included in the net loss from discontinued operations for the year ended December 31, 2024.
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.