UNION BANKSHARES INCUNB

UNION BANKSHARES INC Goodwill & Intangibles Disclosure

10-KFiled Mar 24, 20221 min read
Goodwill and Other Intangible Assets
As a result of the 2011 Branch Acquisition, the Company recorded goodwill amounting to $2.2 million. The goodwill is not amortizable. Goodwill is evaluated for impairment annually, in accordance with current authoritative accounting guidance. Management assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the Company, in total, is less than its carrying amount. Management is not aware of any such events or circumstances that would cause it to conclude that the fair value of the Company is less than its carrying amount.
The Company also recorded $1.7 million of acquired identifiable intangible assets in connection with the 2011 Branch Acquisition, representing the core deposit intangible which is subject to straight-line amortization over the estimated 10 years average life of the acquired core deposit base, absent any future impairment.
The core deposit intangible was fully amortized in 2021. Amortization expense was $71 thousand for 2021 and $171 thousand for 2020. The amortization expense is included in Other expenses in the consolidated statements of income and is deductible for tax purposes.

Historical Timeline

Fiscal YearFiled
2021Mar 24, 2022Showing above
2020Mar 19, 2021
2019Mar 13, 2020
2018Mar 15, 2019
2017Mar 16, 2018
2016Mar 15, 2017
2015Mar 15, 2016

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

Income TaxesEarnings Per ShareFair ValuePP&ELeasesDebtCommitmentsStock CompensationNew Standards