Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 10. Goodwill and Other Intangible Assets

FASB ASC 350, Intangibles - Goodwill and Other, requires a company to perform an impairment test on goodwill annually, or more frequently if events or changes in circumstance indicate that the asset might be impaired, by comparing the fair value of such goodwill to its recorded or carrying amount. If the carrying amount of goodwill exceeds the fair value, an impairment charge must be recorded in an amount equal to the excess.

The following table presents activity for goodwill and other intangible assets, which consist of core deposit intangibles:

	September 30,
(in thousands)	2023		2022
Goodwill at beginning of period	$	19,168	$	19,168
Acquisition		—		—
Measurement period adjustment for previous acquisition		—		—
Goodwill at end of period	$	19,168	$	19,168
Other intangible assets at beginning of period	$	399	$	480
Acquisition		—		—
Amortization		(72)		(81)
Other intangible assets at end of period	$	327	$	399

The Company has identified the reporting unit for purposes of testing goodwill for impairment, the Bank, which is a component of the operating segment.

In assessing impairment, the Company has the option to perform a qualitative analysis 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 reporting unit is less than its carrying amount. If, after assessing the totality of such events or circumstances, the Company determines it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would not be required to perform a quantitative impairment test.

Due to recent declines in bank stock prices and events impacting the banking industry, the Company performed a quantitative impairment analysis at August 31, 2023. The annual quantitative assessment of goodwill for the reporting unit was performed utilizing a discounted cash flow analysis (“income approach”) and estimates of selected market information (“market approaches”). The income approach measures the fair value of an interest in a business by discounting expected future cash flows to present value. The market approaches take into consideration fair values of comparable companies operating in similar lines of business that are potentially subject to similar economic and environmental factors and could be considered reasonable investment alternatives. The result of the income approach was weighted 50% and the results of the market approaches comprised the remaining 50% in determining the fair value of the reporting unit. The results of the annual quantitative impairment analysis indicated that the fair value exceeded the carrying value of the reporting unit.

No impairment charges were required to be recorded in the years ended September 30, 2023 and 2022.

The following table presents the gross carrying amount and accumulated amortization for the Company’s other intangible assets, which consist of core deposit intangibles:

	September 30,
(in thousands)	2023		2022
Gross carrying amount	$	517	$	517
Accumulated amortization		(190)		(118)
Net book value	$	327	$	399

At September 30, 2023, the weighted-average remaining life of the Company’s other intangible assets was 3.73 years.

The following table presents estimated future amortization expense for other intangible assets:

(in thousands)
2024	$	63
2025		55
2026		49
2027		43
2028		38
Thereafter		79
Total	$	327