FIRST COMMUNITY BANKSHARES INC /VA/ Goodwill & Intangibles Disclosure
Note 8. Goodwill and Other Intangible Assets
Goodwill
The Company has reporting unit for goodwill impairment testing purposes, Community Banking. The Company performed its annual assessment of goodwill as of October 31, 2025, and a review as of December 31, 2025. Both reviews conclude that the carrying value of goodwill was not impaired. No events have occurred after the analysis to indicate potential impairment.
As of December 31, 2025, the Company's goodwill totaled $143.95 million. The Surrey acquisition, in 2023, resulted in the Company recognizing $14.38 million in goodwill in the transaction. The beginning balance was $129.57 million for 2023.
| (Amounts in thousands) | ||||
| Balance January 1, 2023 | $ | 129,565 | ||
| Acquisitions | 14,381 | |||
| Balance December 31, 2023 | $ | 143,946 | ||
| Balance January 1, 2024 | $ | 143,946 | ||
| Acquisitions | - | |||
| Balance December 31, 2024 | $ | 143,946 | ||
| Balance January 1, 2025 | $ | 143,946 | ||
| Acquisitions | - | |||
| Balance December 31, 2025 | $ | 143,946 |
Other Intangible Assets
As of December 31, 2025, the remaining lives of core deposit intangibles ranged from 4 to 7 years with a weighted average remaining life of 6.79 years. The Surrey acquisition, in 2023, resulted in the Company recognizing $12.70 million in core deposit intangibles. The following table presents the components of other intangible assets as of the dates indicated:
| December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| (Amounts in thousands) | ||||||||||||
| Core deposit intangibles | $ | 13,014 | $ | 25,374 | $ | 12,674 | ||||||
| Acquisitions | - | - | 12,700 | |||||||||
| Accumulated amortization | (1,916 | ) | (12,360 | ) | (10,229 | ) | ||||||
| Total other intangible assets, net | $ | 11,098 | $ | 13,014 | $ | 15,145 | ||||||
Amortization expense for other intangible assets was $1.92 million in 2025, $2.13 million in 2024, and $1.73 million in 2023.
The following schedule presents the estimated amortization expense for intangible assets, by year, as of December 31, 2025:
| (Amounts in thousands) | ||||
| 2026 | 1,719 | |||
| 2027 | 1,719 | |||
| 2028 | 1,719 | |||
| 2029 | 1,717 | |||
| 2030 | 1,270 | |||
| 2031 and thereafter | 2,954 | |||
| Total estimated amortization expense | $ | 11,098 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Mar 3, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 13, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 5, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 4, 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.