SOUTH PLAINS FINANCIAL, INC.SPFI

SOUTH PLAINS FINANCIAL, INC. Goodwill & Intangibles Disclosure

10-KFiled Mar 7, 20251 min read
7.
GOODWILL AND INTANGIBLES

The Company had goodwill of $19.3 million at December 31, 2024 and 2023, respectively.

Other intangible assets, which consisted of CDI, customer lists, and employment agreements at the dates indicated are summarized below (dollars in thousands):

    December 31,
 		 
   
2024
    
2023
  
Amortized intangible assets:
            
Core deposit intangible
 
$
6,679
    
$
6,679
  
Less: Accumulated amortization
    
(4,959
)
    
(4,250
)
Other intangible assets, net
  
$
1,720
    
$
2,429
  

On April 1, 2023, the sale of Windmark was completed, resulting in the removal of goodwill and other intangible assets, net of accumulated amortization, of $193 thousand and $942 thousand, respectively.
Amortization expense for other intangibles for the years ended December 31, 2024, 2023, and 2022 totaled $0.7 million, $1.0 million, and $1.5 million, respectively. The estimated amount of amortization expense for core deposit intangibles to be recognized over the next five years is as follows (dollars in thousands):
2025
  
$
587
  
2026
    
465
  
2027
    
344
  
2028
    
223
  
2029
    
101
  

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.

Other Available Disclosures

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