Note 9 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 9 - GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in goodwill during 2024 and 2023 were as follows (in thousands):

	2024		2023
Balance, beginning of year	$	79,509		59,221
Additions from acquisition of CNNB		524		20,288
Additions from acquisition of EFBI		10,277		—
Balance, end of year	$	90,310		79,509

Core deposit and other intangible assets in the Consolidated Balance Sheets at December 31 were as follows (in thousands):

	2024						2023
	Gross				Net		Gross				Net
	Intangible		Accumulated		Intangible		Intangible		Accumulated		Intangible
	Assets		Amortization		Assets		Assets		Amortization		Assets
Core deposit intangibles	$	17,268		9,263		8,005		13,508		8,120		5,388
Mortgage servicing rights		5,575		2,476		3,099		5,881		1,775		4,106
Total	$	22,843		11,739		11,104		19,389		9,895		9,494

The estimated aggregate future amortization expense for each of the next five years for core deposit intangible assets as of December 31, 2024 is as follows (in thousands):

2025	$	1,075
2026		914
2027		913
2028		916
2029		913

Amortization of mortgage servicing rights is an adjustment to loan servicing income, which is included with other operating income in the Consolidated Statements of Income.  Activity in mortgage servicing rights included in other assets in the Consolidated Balance Sheets during the years ended December 31 was as follows (in thousands):

	2024			2023			2022
Balance, beginning of year	$	4,106			871			1,039
Amount obtained through merger with CNNB		—			3,427			—
Amount capitalized to mortgage servicing rights		—			48			100
Amortization of mortgage servicing rights		(1,007	)		(240	)		(268	)
Balance, end of year	$	3,099			4,106			871

At December 31, 2024, the fair value of servicing rights was $4,498,000, which was determined using a discount rate of 10.50% and an average prepayment rate of 6.63%. At December 31, 2023, the fair value of servicing rights was $5,023,000, which was determined using discount rate of 11.00% and an average prepayment rate of 6.86%. As estimated fair values were greater than the carrying value of LCNB's mortgage servicing rights, management determined that a valuation allowance was not necessary.