Acquired Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Intangible Assets

Acquired Intangible Assets

The Company accounts for intangible assets in accordance with FASB ASC 350, Goodwill and Other Intangible Assets, which requires that intangibles with indefinite useful lives be tested annually for impairment, or when management deems there is a triggering event, and those with finite useful lives be amortized over their useful lives.

In June 2022, the Company acquired the assets of mobile church management software developer TouchPoint, a division of the Pursuant Group, Inc., and recorded intangible assets of $5.3 million. Those intangible assets were valued at $3.0 million for goodwill, $1.7 million for the customer list, $368,000 for software, and $183,000 for the trade name. The goodwill is deductible for tax purposes over 15 years, starting in 2022. The intangible assets and financial results of TouchPoint are included in the Information Services operating segment.

The purchase price of the acquisition consisted of cash considerations of $4.9 million and potential contingent consideration in the form of an earn out up to $2.5 million. The Company valued the contingent earn out component at $389,000. The fair value of the contingent consideration was estimated on the acquisition date as the present value of the expected future contingent payments which were determined using a Monte Carlo simulation. The contingent consideration is based upon 4 years of earnings before interest, taxes, depreciation and amortization (EBITDA) subsequent to the acquisition date. The Company and Pursuant Group, Inc. agreed to settle the contingent consideration at the determined fair

value of $389,000 during the fourth quarter of 2022. As such, there is no contingent consideration related to TouchPoint going forward.

Details of the Company’s intangible assets are as follows:

	December 31, 2022				December 31, 2021
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Assets eligible for amortization:
Customer lists	$	6,470	$	(4,561)	$	4,778	$	(4,341)
Patent	72		(32)		72		(28)
Software	3,212		(1,508)		2,844		(1,104)
Trade Name	373		(42)		190		(22)
Other	500		(358)		500		(325)
Unamortized intangible assets:
Goodwill	17,309		—		14,262		—
Total intangible assets	$	27,936	$	(6,501)	$	22,646	$	(5,820)

Customer lists are amortized over 7 to 10 years; patents over 18 years, software over 3 years to 7 years, trade name over 10 years to 20 years and other intangible assets over 15 years. Amortization of intangible assets amounted to $680,000 and $859,000 for the years ended December 31, 2022, and 2021, respectively. Estimated future amortization of intangibles is $780,000 in 2023, $738,000 in 2024, $730,000 in 2025, $582,000 in 2026, and $262,000 in 2027.