GOODWILL

6 Months Ended

Jun. 30, 2020

Goodwill.

Goodwill

NOTE 5 - GOODWILL

Changes in the carrying amount of goodwill were as follows (in thousands):

		Wealth Management		Capital Management		Consolidated		Wealth Management		Capital Management		Consolidated
	June 30, 2020						December 31, 2019
Beginning balance	$	15,994	$	3,692	$	19,686	$	15,994	$	8,817	$	24,811
Impairment		—		—		—		—		(1,572)		(1,572)
Reclass to held or sale		—		—		—		—		(3,553)		(3,553)
Acquisition activity		4,505		—		4,505		—		—		—
Ending balance	$	20,499	$	3,692	$	24,191	$	15,994	$	3,692	$	19,686

During the three months ended June 30, 2020, the Company recognized $4.5 million of goodwill as a result of the Branch Acquisition on May 15, 2020. For additional information on goodwill and other intangible related to the acquisition, see Note 2 –Acquisitions.

Goodwill is tested annually for impairment on October 31 or earlier upon the occurrence of certain events. The Company performed a qualitative assessment of significant events and circumstances as of June 30, 2020 including reporting units historical and current results, assumptions regarding future performance, overall economic factors, including COVID-19, and macroeconomic developments, to determine the existence of potential indicators of impairment and assess if it is more likely than not that the fair value of reporting units are less than their carrying value. If indicators of impairment are identified a quantitative impairment test is performed. Based on the operating results for the six months ended June 30, 2020 and other considerations, the Company believes that it is more likely than not that the value for each of its reporting units is still greater than their carrying values.

During 2019, the Company received an unsolicited offer to purchase its Los Angeles-based fixed income team, a portion of the Capital Management segment. This resulted in performing an interim goodwill analysis and we recorded a goodwill impairment loss of $1.6 million in the Capital Management segment during 2019.

Additionally, goodwill was allocated based on the relative fair value for the portion of the segment held for sale, in the amount of $3.6 million, and was reclassified to assets held for sale in 2019. As of June 30, 2020, the remaining value of goodwill in the Capital Management segment was $3.7 million. For changes related to the portion of goodwill reclassified to assets held for sale, see Note 15 – Assets and Other Liabilities Classified as Held for Sale.