Goodwill and Other Intangible Assets
| | | | | | | | | | | |
| (Dollars in thousands) | 2025 | | 2024 |
| Goodwill balance January 1, | $ | 22,395 | | | $ | 22,395 | |
| Goodwill balance December 31, | $ | 22,395 | | | $ | 22,395 | |
Goodwill arising from business combinations represents the value attributable to unidentifiable intangible assets in the business acquired. The Company’s goodwill relates to the value inherent in the banking industry and that value is dependent upon the ability of the Company to provide quality, cost effective banking services in a competitive
marketplace. Goodwill is tested periodically for impairment. If the implied fair value of goodwill is lower than its carrying amount, goodwill impairment is indicated, and goodwill is written down to its implied fair value. There has not been any impairment of goodwill identified or recorded.
In addition to goodwill, a core deposit intangible was established from previous acquisitions. The Company had core deposit intangible balances of $1.2 million and $1.9 million as of December 31, 2025, and December 31, 2024, respectively. The table below summarizes the intangibles amortization:
The amortization recorded for the year ended December 31, is as follows: | | | | | |
| (Dollars in thousands) | Total |
| 2024 | $ | 1,411 | |
| 2025 | $ | 688 | |
Amortization to be recorded in future periods, is as follows:
| | | | | |
| (Dollars in thousands) | Total |
| |
| 2026 | 361 | |
| 2027 | 294 | |
| 2028 | 228 | |
| 2029 | 162 | |
| Thereafter | 127 | |
| Total | $ | 1,172 | |
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.