Investar Holding Corp Goodwill & Intangibles Disclosure
NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS
The Company’s intangible assets consist of goodwill, core deposit intangible assets arising from acquisitions, and a trademark intangible. At December 31, 2024 and 2023, “Goodwill and other intangible assets, net” in the accompanying consolidated balance sheets totaled $41.7 million and $42.3 million, respectively, and included no accumulated impairment losses.
The carrying amount of goodwill at December 31, 2024 and 2023 was $40.1 million. The trademark intangible had a carrying value of $0.1 million at December 31, 2024 and 2023.
In accordance with ASC Topic 350, “Intangibles – Goodwill and Other,” the Company reviews the carrying value of indefinite-lived intangible assets at least annually, or more frequently if certain impairment indicators exist. The Company performed its annual impairment testing on October 31, 2024 and determined that there was no impairment to its goodwill or trademark intangible asset.
Core deposit intangibles have finite lives and are being amortized on an accelerated basis over their estimated useful lives, which range from 10 to 15 years. The table below shows a summary of the core deposit intangible assets as of the dates presented (dollars in thousands).
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Gross carrying amount | $ | 7,486 | $ | 7,486 | ||||
| Accumulated amortization | (5,978 | ) | (5,354 | ) | ||||
| Net carrying amount | $ | 1,508 | $ | 2,132 | ||||
Amortization expense for the core deposit intangible assets recorded in “Depreciation and amortization” in the accompanying consolidated statements of income totaled approximately $0.6 million, $0.8 million, and $0.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The estimated remaining amortization expense for the Company’s core deposit intangible assets is displayed in the table below (dollars in thousands). The weighted average amortization period remaining for core deposit intangibles is 4.6 years.
| 2025 | $ | 512 | ||
| 2026 | 398 | |||
| 2027 | 278 | |||
| 2028 | 161 | |||
| 2029 | 85 | |||
| Thereafter | 74 | |||
| Total | $ | 1,508 |
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.