Goodwill and Intangibles

12 Months Ended

Jun. 30, 2021

Goodwill and Intangibles

Goodwill and Intangibles

Note 10 – Goodwill and Intangibles

The goodwill and intangible assets arising from acquisitions is accounted for in accordance with the accounting guidance in FASB ASC Topic 350 for Intangibles — Goodwill and Other. The Company recorded goodwill of $4.9 million and core deposit intangibles of $1.4 million in connection with the acquisition of Audubon Savings Bank. The Company also recorded core deposit intangibles totaling $65 thousand and $197 thousand in connection with the acquisitions of Fidelity and Washington, respectively. As of June 30, 2021 and 2020, the other intangibles consisted of $937 thousand and $1.2 million, respectively, of core deposit intangibles, which are amortized over an estimated useful life of ten years.

The Company performs its annual impairment evaluation on June 30 or more frequently if events and circumstances indicate that the fair value of the banking unit is less than its carrying value. During the year ended June 30, 2021, the Company included considerations

of the current economic environment caused by COVID-19 in its evaluation, and determined that it is not more likely than not that the carrying value of goodwill is impaired.  No goodwill impairment exists during the year ended June 30, 2021.  

Goodwill and other intangibles at June 30, 2021 and 2020, are summarized as follows:

The Company performs its annual impairment evaluation on June 30 or more frequently if events and circumstances indicate that the fair value of the banking unit is less than its carrying value. During the year ended June 30, 2021, management included considerations of the current economic environment caused by COVID-19 in its qualitative assessment of goodwill impairment and determined that a quantitative assessment of goodwill was warranted. Management engaged a third-party valuation specialist to perform a quantitative assessment of goodwill impairment and it was determined that it is not more likely than not that the carrying value of goodwill is impaired. No goodwill impairment existed at June 30, 2021. Goodwill and other intangibles at June 30, 2021 and 2020, are summarized as follows:
			Core Deposit
			Core Deposit
(Dollars in thousands)	Goodwill		Intangibles
Balance, July 1, 2019	$	4,858	$	1,172
Adjustments:
Additions		—		262
Amortization		—		(242)
Balance, June 30, 2020	$	4,858	$	1,192
Adjustments:
Additions		—		—
Amortization		—		(255)
Balance, June 30, 2021	$	4,858	$	937

The following tables summarize amortizing intangible assets at June 30, 2021, and 2020:

	June 30, 2021
			Accumulated
(Dollars in thousands)	Gross		Amortization		Net
Core deposit intangibles	$	1,694	$	(757)	$	937

	June 30, 2020
			Accumulated
(Dollars in thousands)	Gross		Amortization		Net
Core deposit intangibles	$	1,694	$	(502)	$	1,192

Aggregate amortization expense was $255 thousand and $242 thousand for the years ended  June 30, 2021 and 2020, respectively. Amortization expense for the next five years and thereafter is expected to be as follows:

(Dollars in thousands)
For the year ended June 30,	Expense
2022	$	224
2023		194
2024		163
2025		132
2026		101
2027 and thereafter		123
	$	937