Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 6. Goodwill and Intangible Assets

In accordance with FASB ASC 350, Goodwill and Other, regarding testing goodwill for impairment provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company performs its annual goodwill impairment test as of December 31 of each year and at December 31, 2019, the results of the qualitative assessment provided no indication of potential impairment. Goodwill will continue to be monitored for triggering events that may indicate impairment prior to the next scheduled annual impairment test. Considering the recent economic conditions resulting from the COVID-19 pandemic, as of September 30, 2020, the Company performed a Step 1 goodwill impairment test (which compares the fair value of a reporting unit with its carrying amount, including goodwill).  The results indicated that there was no impairment as of September 30, 2020. Management will continue to evaluate the economic conditions at future reporting periods for applicable changes.

The Company’s other intangible assets consist of core deposit intangibles, and is initially recognized based on a valuation performed as of the consummation date. The core deposit intangible is amortized over the average remaining life of the acquired customer deposits.

The carrying amount of goodwill and other intangible assets as of the dates indicated is summarized below (in thousands):

	September 30,		December 31,
	2020		2019
Goodwill:
Balance, beginning of period	$	65,614	$	66,087
Adjustment to values initially recorded for Acquisition of Foothills Bancorp, Inc.		—		(473)
Acquisition of PFG		8,302		—
Adjustment to values initially recorded for Acquisition of PFG		1,014		—
Balance, end of the period	$	74,930	$	65,614

	September 30,		December 31,
	2020		2019
Core deposit intangible:
Balance, beginning of period	$	14,550	$	14,550
Acquisition of PFG		1,370		—
Balance, gross core deposit intangible		15,920		14,550
Less: accumulated amortization		(4,140)		(2,971)
Net core deposit intangible, net	$	11,780	$	11,579

The aggregate amortization of core deposit intangibles expense for the three and nine month periods ended September 30, 2020, was $402 thousand and $1.2 million, respectively, and for the three and nine months ended September 30, 2019, was $341 thousand and $1.0 million, respectively.

The estimated aggregate amortization expense for future periods for core deposit intangibles is as follows (in thousands):

Remainder of 2020	$	400
2021		1,570
2022		1,526
2023		1,485
2024		1,456
Thereafter		5,343
Total	$	11,780