FIRST BANCORP /NC/FBNC

FIRST BANCORP /NC/ Goodwill & Intangibles Disclosure

10-KFiled Feb 25, 20263 min read
Goodwill, Other Intangible Assets and Servicing Assets
The following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets and the carrying amount of unamortized intangible assets as of the periods presented.
 December 31, 2025December 31, 2024
($ in thousands)Gross Carrying
Amount		Accumulated
Amortization		Net AmountGross Carrying
Amount		Accumulated
Amortization		Net Amount
Amortizable intangible assets:    
Customer lists$1,600 $1,600 $— $1,600 $1,387 $213 
Core deposit intangibles57,890 40,658 17,232 57,890 35,199 22,691 
Other100 100 — 100 100 — 
Total amortizable intangible assets$59,590 $42,358 $17,232 $59,590 $36,686 $22,904 
Unamortizable intangible assets:
Goodwill$478,750 $478,750 
Customer lists are generally amortized over five years and core deposit intangibles are generally amortized over 10 years, both at an accelerated rate.
Amortization expense of all amortizable intangible assets totaled $5.7 million, $6.6 million, and $8.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring as of October 31 of each year. Goodwill is also evaluated for impairment any time there is a triggering event indicating that impairment may have occurred. No triggering events were identified during 2025 or 2024 and, therefore, the Company did not perform interim impairment evaluations in either of those years. The Company's most recent evaluation of goodwill, which occurred in the fourth quarter of 2025, indicated that there was no goodwill impairment. There was no change to carrying amounts of goodwill during 2025 or 2024.
The following table presents the estimated amortization expense schedule related to amortizable intangible assets. These amounts will be recorded as "Intangibles amortization expense" within the noninterest expense section of the consolidated statements of income. These estimates are subject to change in future periods to the extent
management determines it is necessary to make adjustments to the carrying value or estimated useful lives of amortizable intangible assets.
($ in thousands)Estimated
Amortization Expense
2026$4,705 
20273,950 
20283,197 
20292,443 
20301,688 
Thereafter1,249 
Total$17,232 
During 2025, 2024 and 2023, the Company recorded $2.8 million, $3.2 million, and $3.5 million, respectively, in SBA guaranteed servicing fee income, which is included in "Other service charges and fees" on the consolidated income statements. There was no impairment of SBA servicing assets at December 31, 2025 and December 31, 2024.
A summary of the key assumptions used in the discounted cash flow method utilized to estimate the fair value of the SBA servicing assets were as follows:
December 31, 2025December 31, 2024
Prepayment rate assumption:
Weighted average20.30%19.89%
Range
12.44% - 33.44%
10.69% - 35.20%
Discount rate:
Weighted average13.83%12.91%
Range
6.51% - 18.83%
5.49% - 18.92%
Servicing cost0.40%0.40%
The following table presents the changes in the SBA servicing assets (included in "Other assets" in the Company's consolidated balance sheet) for each period indicated.
($ in thousands)December 31, 2025December 31, 2024
Beginning balance, net$2,605 $3,350 
Add: New servicing assets284 954 
Less: Amortization expense(1,141)(1,699)
Ending balance, net$1,748 $2,605 

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 28, 2024
2022Feb 28, 2023
2021Mar 1, 2022
2020Feb 26, 2021
2019Feb 28, 2020
2018Mar 1, 2019
2017Mar 1, 2018
2016Mar 15, 2017
2015Mar 14, 2016

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.

Other Available Disclosures

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