FIRST UNITED CORP/MD/ Goodwill & Intangibles Disclosure
11. Goodwill and Other Intangible Assets
The gross carrying amounts and accumulated amortization of intangible assets and goodwill are presented at December 31, 2023 and 2022 in the following table:
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
(in thousands) | Gross | Accumulated Amortization | Net | Weighted Average Remaining Life | Gross | Accumulated Amortization | Net | Weighted Average Remaining Life | ||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||
Intangible assets associated with purchase of wealth portfolio | $ | 1,048 | $ | 419 | $ | 629 | 3.00 years | $ | 1,048 | $ | 209 | $ | 839 | 4.00 years | ||||||
Intangible assets associated with acquisition of mortgage company | 600 | 130 | 470 | 3.92 years | 600 | 10 | 590 | 4.92 years | ||||||||||||
Total Other intangibles | $ | 1,648 | $ | 549 | $ | 1,099 | 3.38 years | $ | 1,648 | $ | 219 | $ | 1,429 | 4.38 years | ||||||
Goodwill | $ | 11,004 | $ | 11,004 | $ | 11,004 | $ | 11,004 | ||||||||||||
The following table presents the estimated future amortization expense for amortizing intangible assets within the years ending December 31:
(in thousands) |
| Amount | |
2024 | $ | 330 | |
2025 | 330 | ||
2026 | 330 | ||
2027 | 109 | ||
Total amortizing intangible assets | $ | 1,099 | |
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.