Goodwill and Intangible Assets

A summary of goodwill and intangible assets at December 31, 2018 and 2017, is as follows:



(In Thousands)	2018		2017
Intangible assets:
Goodwill		$15,017		$15,017
Core deposit intangible	187		257
Trade name intangible	950		950
Total		$16,154		$16,224

Goodwill and Other Intangible Assets: Goodwill as of December 31, 2018 and 2017 includes $6.9 million related to the Company's acquisition of branch locations from Bank of America in 1998. 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 amortized the CDI related to the Alaska First acquisition over its estimated useful life. 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 $435,000, $365,000 and $283,000 at December 31, 2018, 2017, and 2016, respectively. Lastly, on December 1, 2014 the Company recorded goodwill and a trade name intangible as part of the acquisition of RML. As of December 31, 2018 and 2017, the Company has $7.5 million of goodwill and $950,000 of trade name intangible recorded related to this transaction. Refer to Note 1 for discussion of the change in the balance of goodwill in 2016 related to this acquisition. These assets have indefinite useful lives and are not amortized.

The Company performed its annual goodwill impairment testing at December 31, 2018 and 2017 in accordance with the policy described in Note 1 to the financial statements. At December 31, 2018, the Company performed its annual impairment test using a qualitative assessment. Significant positive inputs to the qualitative assessment included the Company’s increasing net income as compared to historical trends, the Company's stable budget-to-actual results of operations; results of regulatory examinations; peer comparisons of the Company's net interest margin; trends in the Company’s cash flows; and improvements in the Alaskan economy in 2018. Significant negative inputs to the qualitative assessment included the recent decline in oil prices and in the company's stock price, as well as the decline in the volume of mortgage originations in Alaska and the decrease in net income in the Company's Home Mortgage Lending segment. For the Community Banking segment, we believe that the positive inputs to the qualitative assessment noted above outweigh the negative inputs, and we therefore concluded that it is more likely than not that the fair value of the Company exceeds its carrying value at December 31, 2018 and that no potential impairment existed at that time. After review of these qualitative inputs, the Company determined that performing a quantitative goodwill impairment test for the Home Mortgage Lending segment as of December 31, 2018 was appropriate. The Company estimated the fair value of the Home Mortgage Lending segment using a discounted cash flow approach. We then compared the estimated fair value of the Home Mortgage Lending segment to the carrying value as of December 31, 2018 and concluded that no potential impairment existed at that time.

The Company recorded amortization expense of its intangible assets of $70,000, $100,000, and $135,000 for the years ended December 31, 2018, 2017, and 2016, respectively. Accumulated amortization for intangible assets was $7.0 million and $6.9 million at December 31, 2018 and 2017, respectively.

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



(In Thousands)
2019		$60
2020	48
2021	37
2022	25
2023	14
Thereafter	3
Total		$187