Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 6 – Intangible Assets

On February 1, 2016 (the “Effective Date”), VNB Wealth purchased the book of business, including interest in the client relationships, (“Purchased Relationships”), from a current officer (the “Seller”) of VNB Wealth pursuant to an employment and asset purchase agreement (the “Purchase Agreement”). Prior to becoming an employee of VNB Wealth and until the Effective Date of the sale, the Seller provided services to these Purchased Relationships as a sole proprietor. As of January 15, 2016, the fair value of the assets under management associated with the Purchased Relationships totaled $31.5 million. Under the terms of the Purchase Agreement, the Company will receive all future revenue for investment management, advisory, brokerage, insurance, consulting, trust and related services performed for the Purchased Relationships.

The purchase price of $1.2 million is payable over a five year period. During the first quarter of 2016, the Company recognized goodwill and other intangible assets arising from this purchase. As required under ASC Topic 805, “Business Combinations,” using the acquisition method of accounting, below is a summary of the net asset values, as determined by an independent third party, based on the fair value measurements and the purchase price.

The intangible assets identified below will be amortized using a straight line method over the estimated useful life, and the amortized cost will be shown as noninterest expense. In accordance with ASC 350, “Intangibles-Goodwill and Other,” the Company will review the carrying value of indefinite lived goodwill at least annually or more frequently if certain impairment indicators exist.

					Estimated
			% of Total		Economic Useful
	Fair Value		Intangible Assets		Life
Identified Intangible Assets
Non-Compete Agreement	$	103	9.0	%	3 years
Customer Relationships Intangible		670	58.5	%	10 years
Total Identified Intangible Assets	$	773	67.5	%
Goodwill	$	372	32.5	%	Indefinite
Total Intangible Assets	$	1,145	100.0	%

Through the twelve months ended December 31, 2018, the Company recognized $109,000 in amortization expense from these identified intangible assets with a finite life. The net carrying value of $477,000 will be recognized as amortization expense in future reporting periods through 2026. The following shows the gross and net balance of these intangible assets as of December 31, 2018.

	Gross Carrying		Accumulated		Net Carrying
	Value		Amortization		Value
Identified Intangible Assets
Non-Compete Agreement	$	103	$	100	$	3
Customer Relationships Intangible		670		196	$	474
Total Identified Intangible Assets	$	773	$	296	$	477

As of December 31, 2018, the Company carried a contingent liability of $63,000, representing the net of the fair value of the purchase price, less the first three payments made to the Seller. The remaining two annual payments as delineated in the Purchase Agreement will be paid from this liability.