GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill is tested annually for impairment in the fourth quarter or earlier upon the occurrence of certain events. A significant amount of judgment is involved in determining if an indicator of goodwill impairment occurred. Such indicators may include, among others; a significant decline in expected future cash flows; a sustained significant decline in the Company's stock price and market capitalization; a significant adverse change in legal factors or in the business climate; adverse assessment or action by a regulator; and unanticipated competition.
The goodwill impairment analysis includes the determination of the carrying value of the reporting unit, including the existing goodwill, and estimating the fair value of the reporting unit. If the fair value is less than its carrying amount, goodwill impairment is recognized equal to the difference between the fair value and its carrying amount, not to exceed its carrying amount. As of December 31, 2025, there has not been an identified or recorded impairment of goodwill. Goodwill totaled $30.4 million as of December 31, 2025 and 2024.
The following presents the Company’s intangible assets and related accumulated amortization as of the dates noted:
| | | | | | | | | | | |
| December 31, |
| (dollars in thousands) | 2025 | | 2024 |
| Other intangibles | $ | 5,270 | | | $ | 5,270 | |
| Less: accumulated amortization on other intangibles | (4,248) | | | (4,043) | |
| Other intangible assets, net | $ | 1,022 | | | $ | 1,227 | |
Amortization expense on definite-lived customer relationship and non-compete intangible assets was $0.2 million for the years ended December 31, 2025 and 2024. The following presents the expected amortization expense on definite-lived intangible assets existing as of December 31, 2025 (dollars in thousands):
| | | | | | | | |
| Year Ending December 31, | | Expense |
| 2026 | | $ | 193 | |
| 2027 | | 183 | |
| 2028 | | 175 | |
| 2029 | | 166 | |
| 2030 | | 157 | |
| Thereafter | | 148 | |
| Total | | $ | 1,022 | |
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.