FINANCIAL INSTITUTIONS INC Goodwill & Intangibles Disclosure
(6.) GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill is not amortized but, instead, is subject to impairment tests on at least an annual basis, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performs its annual impairment test of goodwill as of October 1st of each year. See Note 1, Summary of Significant Accounting Policies, for the Company’s accounting policy for goodwill and other intangible assets.
The Company completed annual impairment assessments for its reporting units during the fourth quarter of 2025, utilizing a quantitative assessment. Based on the results of the 2025 annual impairment tests, management concluded that there was no goodwill impairment. There were no goodwill impairment charges recorded in 2025, 2024 or 2023.
Declines in the market value of the Company’s publicly traded stock price or declines in the Company’s ability to generate future cash flows may increase the potential that goodwill recorded on the Company’s consolidated statement of financial condition be designated as impaired and that the Company may incur a goodwill write-down in the future.
The carrying amount of goodwill totaled $58.1 million as of December 31, 2025 and 2024. On April 1, 2024, the Company announced and closed on the sale of the assets of its wholly owned subsidiary, SDN. The sale resulted in a $9.0 million reduction in the carrying amount of goodwill.
The change in the balance for goodwill during the years ended December 31 was as follows (in thousands):
|
|
Banking |
|
|
All Other(1) |
|
|
Total |
|
|||
Balance, December 31, 2023 |
|
$ |
48,536 |
|
|
$ |
18,535 |
|
|
$ |
67,071 |
|
Sale of assets |
|
- |
|
|
|
(8,950 |
) |
|
|
(8,950 |
) |
|
Balance, December 31, 2024 |
|
|
48,536 |
|
|
|
9,585 |
|
|
|
58,121 |
|
No activity during the period |
|
- |
|
|
|
- |
|
|
|
- |
|
|
Balance, December 31, 2025 |
|
$ |
48,536 |
|
|
$ |
9,585 |
|
|
$ |
58,121 |
|
Other Intangible Assets
The Company’s other intangible assets that are amortized primarily relate to customer relationships. Changes in the gross carrying amount, accumulated amortization and net book value for the years ended December 31 were as follows (in thousands):
|
|
2025 |
|
|
2024 |
|
||
Other intangibles: |
|
|
|
|
|
|
||
Gross carrying amount |
|
$ |
7,243 |
|
|
$ |
7,243 |
|
Accumulated amortization |
|
|
(5,021 |
) |
|
|
(4,606 |
) |
Net book value |
|
$ |
2,222 |
|
|
$ |
2,637 |
|
(6.) GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)
Other intangibles amortization expense was $415 thousand, $552 thousand and $910 thousand for the years ended December 31, 2025, 2024 and 2023. The weighted average remaining amortization period for other intangibles was 11.3 years. Estimated amortization expense of other intangible assets for each of the next five years is as follows (in thousands):
|
|
Amount |
|
|
2026 |
|
$ |
379 |
|
2027 |
|
|
343 |
|
2028 |
|
|
308 |
|
2029 |
|
|
272 |
|
2030 |
|
|
236 |
|
Thereafter |
|
|
684 |
|
Total |
|
$ |
2,222 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
| 2023 | Mar 13, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 15, 2021 | |
| 2019 | Mar 4, 2020 | |
| 2018 | Mar 8, 2019 | |
| 2017 | Mar 14, 2018 | |
| 2016 | Mar 7, 2017 | |
| 2015 | Mar 8, 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.