Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

A summary of intangible assets and other assets is as follows:



(In Thousands)	2015		2014
Intangible assets:
Goodwill		$22,334		$22,334
Core deposit intangible	492		663
Trade name intangible	950		950
NBG customer relationships	—		88
Total		$23,776		$24,035

Goodwill and Other Intangible Assets: The Company recorded $1.1 million in intangible assets related to customer relationships purchased in the acquisition of an additional 40.1% of NBG in December 2005. The Company amortized this intangible over its estimated life of ten years. Accumulated amortization related to the NBG intangible asset was $1.1 million, $1.1 million, and $943,000 at December 31, 2015, 2014 and 2013, respectively. In 2007, the Company recorded $1.8 million of goodwill and $1.3 million of core deposit intangible ("CDI") as part of the acquisition of Alaska First Bank & Trust, N.A. (“Alaska First”) stock. The Company is amortizing the CDI related to the Alaska First acquisition over its estimated useful life of ten years using an accelerated method. Accumulated amortization related to the Alaska First CDI was $1.3 million, $1.1 million, and $983,000 at December 31, 2015, 2014 and 2013, respectively. On April 1, 2014, the Company recorded $623,000 of CDI as part of the acquisition of Alaska Pacific. The Company is amortizing the CDI related to the Alaska Pacific acquisition over its estimated useful life of ten years using an accelerated method. Accumulated amortization related to the Alaska Pacific CDI was $190,000 and $85,000 at December 31, 2015 and 2014, respectively. Lastly, on December 1, 2014 the Company recorded $14.8 million of goodwill and $950,000 of trade name intangible as part of the acquisition of RML. These assets have indefinite useful lives and are not amortized.

The Company performed its annual goodwill impairment testing at December 31, 2015 and 2014 in accordance with the policy described in Note 1 to the financial statements. There was no indication of impairment in the first step of the impairment test at December 31, 2015, and accordingly the Company did not perform the second step. At December 31, 2014, the Company performed its annual impairment test using the qualitative assessment. Significant positive inputs to the qualitative assessment included the Company’s capital position; the Company’s increasing historical trends and budget-to-actual results of operations; the Company’s decreasing trends in, and current level of nonperforming assets; results of regulatory examinations; peer comparisons of net interest margin; and trends in the Company’s cash flows. Significant negative inputs to the qualitative assessment included the Company's trend of decreasing net interest margin, decreased income from our mortgage affiliate, economic uncertainty related to the recent decline in oil prices, and, while there has been a recovery in recent years, the general decline in stock prices for financial institutions as compared to pre-2008 stock prices. We believe that the positive inputs to the qualitative assessment noted above outweighed the negative inputs, and we therefore concluded that it is more likely than not that the fair value of the Company exceeds the carrying value at December 31, 2014 and that no potential impairment existed at that time.

The Company recorded amortization expense of its intangible assets of $258,000, $289,000, and $228,000 for the years ended December 31, 2015, 2014, and 2013, respectively. Accumulated amortization for intangible assets was $6.7 million and $6.5 million at December 31, 2015 and 2014, respectively.

The future amortization expense required on these assets is as follows:



(In Thousands)
2016		$135
2017	100
2018	71
2019	59
2020	48
Thereafter	79
Total		$492

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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