Note 6 - Goodwill and Intangibles

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Goodwill and Intangibles

Note 6. Goodwill and Intangibles

The following table presents the changes in the carrying amount of goodwill for the years ended December 31, 2022, 2021 and 2020:

	2022		2021		2020
	(dollars in thousands)
Balance at the beginning of period	$	74,066	$	74,066	$	74,748
Acquisition of GFED		63,541		—		—
Sale of Bates Companies		—		—		(182)
Goodwill impairment - Bates Companies		—		—		(500)
Balance at the end of period	$	137,607	$	74,066	$	74,066

The following table presents the goodwill by reportable segment:

	December 31, 2022		December 31, 2021		December 31, 2020
	(dollars in thousands)
Commercial banking:
QCBT	$	3,223	$	3,223	$	3,223
CRBT		14,980		14,980		14,980
CSB		9,888		9,888		9,888
GB		109,516		45,975		45,975
	$	137,607	$	74,066	$	74,066

At November 30, 2022 and 2021 the Company’s management performed an annual internal assessment of goodwill at the reporting unit level and determined no impairment existed.

During the first quarter of 2020, the Company incurred goodwill impairment expense of $500 thousand related to the Bates Companies reporting unit.  This was the result of the announcement of a sale of the Bates Companies, as discussed in Note 2 to the Consolidated Financial Statements.  

The following table presents the changes in core deposit intangibles (included in Intangibles on the consolidated balance sheets) during the years ended December 31, 2022, 2021 and 2020:

	2022		2021		2020
	(dollars in thousands)
Balance at the beginning of the period	$	9,349	$	11,381	$	13,466
Acquisition of GFED		10,264		—		—
Amortization expense		(2,854)		(2,032)		(2,085)
Balance at the end of the period	$	16,759	$	9,349	$	11,381
Gross carrying amount	$	29,519	$	19,255	$	19,255
Accumulated amortization		(12,760)		(9,906)		(7,874)
Net book value	$	16,759	$	9,349	$	11,381

Note 6. Goodwill and Intangibles (continued)

The following table presents the core deposit intangibles by reportable segment:

	December 31, 2022		December 31, 2021		December 31, 2020
	(dollars in thousands)
Commercial Banking:
CRBT	$	1,225	$	1,702	$	2,189
CSB		2,027		2,653		3,305
GB		13,507		4,994		5,887
	$	16,759	$	9,349	$	11,381

The following table presents the estimated amortization of the core deposit intangibles:

	Amount
Years ending December 31,	(dollars in thousands)
2023	$	2,938
2024		2,761
2025		2,645
2026		2,360
2027		1,874
Thereafter		4,181
	$	16,759

The following table presents the changes in customer list intangible (included in Intangibles on the Consolidated Balance Sheets) during the years ended December 31, 2020.  There was no activity during the year ended December 31, 2022 or 2021.

	2020
Balance at the beginning of period	$	1,504
Sale of Bates Companies		(1,440)
Amortization		(64)
Balance at the end of period	$	—

The customer list intangible relates to the Parent Company Only (“All Other”) reportable segment.