GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE G - GOODWILL AND OTHER INTANGIBLES

The following table summarizes the changes in carrying amounts of goodwill and other intangibles (core deposit intangibles) for the periods presented:

				Core Deposit Intangible
	Goodwill			Gross		Accumulated Amortization			Net
Predecessor Company
Balance at January 1, 2009	$	30,233,049		$	1,333,493	$	(373,852	)	$	959,641
Amortization expense		–			–		(133,349	)		(133,349	)
Goodwill impairment charge		(30,233,049	)		–		–			–
Balance at December 31, 2009		–			1,333,493		(507,201	)		826,292
Amortization expense		–			–		(133,349	)		(133,349	)
Balance at December 31, 2010		–			1,333,493		(640,550	)		692,943
Amortization expense							(117,421	)		(117,421	)
Balance at November 18, 2011	$	–		$	1,333,493	$	(757,971	)	$	575,522
Successor Company
Balance at November 18, 2011	$	20,015,194		$	2,260,262	$	–		$	2,260,262
Amortization expense		–					(30,515	)		(30,515	)
Balance at December 31, 2011	$	20,015,194		$	2,260,262	$	(30,515	)	$	2,229,747

Successor Company goodwill represents the excess of proceeds from the Piedmont Investment (or purchase price) over the fair value of acquired net assets. This acquisition was nontaxable and, as a result, there is no tax basis in the goodwill. Accordingly, none of the goodwill associated with the acquisition is deductible for tax purposes. The only other intangible asset identified as part of the valuation of the Piedmont Investment in the Company was the value of its core deposit relationships. The core deposit intangible is amortized over a ten-year period on an accelerated method.

The following table presents estimated amortization expense for other intangibles:

2012	$	258,517
2013		254,063
2014		248,481
2015		241,768
2016		233,926
Thereafter		992,992
	$	2,229,747

For more information on the Piedmont Investment and the valuation of assets and liabilities acquired in that transaction, see Note C – Piedmont Investment.

Predecessor Company

Goodwill is reviewed for potential impairment at least annually at the reporting unit level. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. The Company’s annual goodwill impairment evaluation in 2009 resulted in a goodwill impairment charge of $30.2 million, which was recorded to noninterest expense for the predecessor year ended December 31, 2009. This impairment charge, representing the full amount of goodwill on the Consolidated Balance Sheet, was primarily due to a significant decline in the market value of the Company’s market capitalization and a decline in the Company’s discounted cash flow forecasts in 2008 and 2009.

Core deposit intangibles are evaluated for impairment if events and circumstances indicate a potential for impairment. Such an evaluation of other intangible assets is based on undiscounted cash flow projections. No impairment charges were recorded for other intangibles in any of the predecessor periods.