Acquired Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Intangible Assets

Note 6 Acquired Intangible Assets

The Company accounts for intangible assets in accordance with FASB ASC 350, Goodwill and Other Intangible Assets (“ASC 350”), which requires that intangibles with indefinite useful lives be tested annually for impairment and those with finite useful lives be amortized over their useful lives.

In September 2019, the Company acquired the assets of Gateway Giving, LLC and recorded intangible assets of $4,983,000. Those intangible assets were valued at $2,610,000 for software, $1,693,000 for goodwill, $490,000 for the customer list, and $190,000 for the trade name. The amounts for these intangible assets were originally recorded on a provisional basis and have been adjusted upon the completion of a valuation. The goodwill is deductible for tax purposes over 15 years, starting in 2019. The intangible assets and results of Gyve are included in the Banking Services operating segment.

The purchase price of the acquisition consisted of a cash payment of $3,000,000 and a potential earnout of $4,000,000. The Company recorded the earnout component to be $1,983,000. 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 scenario-based model. Any changes in the estimated fair value of the contingent earn-out consideration, up to the contracted amount, will be reflected in the results of operations in future periods as they are identified.

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

	December 31, 2019					December 31, 2018
(In thousands)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Assets eligible for amortization:
Customer lists	$	4,778	$	(3,463	)	$	4,288	$	(3,071	)
Patent		72		(20	)		72		(16	)
Non-compete agreements		332		(332	)		332		(326	)
Software		2,844		(358	)		234		(234	)
Trade Name		190		(3	)		—		—
Other		500		(259	)		500		(225	)
Unamortized intangible assets:
Goodwill (1)		14,489		(227	)		12,796		(227	)
Total intangible assets	$	23,205	$	(4,662	)	$	18,222	$	(4,099	)

⁽¹⁾ Amortization through December 31, 2001 prior to adoption of FASB ASC 350.

The customer lists are amortized over 7 and 10 years; the patents over 18 years, the non-compete agreements over 2 and 5 years, software over 3 years and 7 years, the trade name over 20 years and other intangible assets over 15 years. Amortization of intangible assets amounted to $563,000, $442,000, and $427,000 for the years ended December 31, 2019, 2018 and 2017, respectively. Estimated future amortization of intangibles is $859,000 in both 2020 and 2021, $540,000 in both 2022 and 2023, and $498,000 in 2024.