GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

8. GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

The changes in carrying amount of goodwill were as follows:

	Gross		Accumulated
	Goodwill		Impairment						Net
	as of		as of		Acquisition				Goodwill
	Beginning-		Beginning-		Accounting				as of End-
	of-Year		of-Year		Adjustments		Impairment		of-Year
	(In thousands)
For the year ended December 31,:
2020	$	10,997	$	—	$	—	$	(10,997)	$	—
2021	10,997		(10,997)		—		—		—

Related to our annual quantitative goodwill impairment assessment performed on October 1, our reporting unit is defined as consolidated FNHC. The fair value of the reporting unit, which we consider a Level 3 fair value estimate, is comprised of the value of in-force (i.e., existing) business and the value of new business. Specifically, new business is representative of cash flows and profitability associated with policies or contracts we expect to issue in the future, reflecting our forecasts of volume and product mix over a 10-year period. To determine the value of in-force and new business, we use a discounted cash flows technique that applies a discount rate reflecting the market expected, weighted-average rate of return adjusted for the risk factors associated with our operations to the projected future cash flow for our reporting unit.

Coinciding with the preparation of the financial statements for the year ended December 31, 2020, the Company’s annual goodwill impairment testing resulted in the conclusion that the goodwill intangible asset established in conjunction with the acquisition of the Maison Companies in December 2019 was impaired. Therefore, during the fourth quarter of 2020, we recorded a non-cash impairment charge of $11.0 million, against which there is no tax offset, representing the write-off of the full amount of our goodwill asset. The Company’s impairment analysis considered the earnings and share price of the Company and comparable companies, as well as projected cash flows. Continued adverse storm activity, higher excess of loss catastrophe reinsurance costs and the continued unfavorable claims environment in the state of Florida reduced the previously modeled fair value of the Company. These impacts, along with other information relevant to the estimated fair value of the Company, including the trading price of our shares, resulted in the impairment conclusion.

The gross carrying amounts and accumulated amortization for each major specifically identifiable intangible asset class were as follows:

	December 31, 2021				December 31, 2020				Weighted-
	Gross				Gross				Average-
	Carrying		Accumulated		Carrying		Accumulated		Amortization
	Amount		Amortization		Amount		Amortization		Period
	(In thousands)
Trade name (1)	$	—	$	—	$	1,100	$	—	0
Non-compete agreements (2)	300		300		300		162		2
Insurance licenses (3)	—		—		180		—		0
Total	$	300	$	300	$	1,580	$	162

(1)This intangible had an indefinite useful life. We recorded impairment of $1.1 million in the year ended December 31, 2021, due primarily to the lowering of revenue forecasts. as a result of the to the Company's plan to execute an orderly runoff of

MIC's insurance operations, and a higher discount rate, which lowered the fair value. We recorded impairment of $0.7 million in the year ended December 31, 2020, due primarily to a higher discount rate, which lowered the fair value.

(2)Became fully amortized during the year ended December 31, 2021.

(3)This intangible had an indefinite useful life. We recorded impairment of $180 thousand for the year ended December 31, 2021, due primarily to the decision to runoff the insurance operations of the Maison Companies, which lowered the fair value. We recorded impairment of $2 thousand for the year ended December 31, 2020, due primarily to a higher discount rate, which lowered the fair value.