GOODWILL

9 Months Ended

Sep. 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
				September 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 for 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 nine months ended September 30, 2020, the Company recorded $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.

In 2019, an interim goodwill analysis resulted in the recognition of a goodwill impairment loss of $1.6 million in the Capital Management segment. Additionally, the Capital Management goodwill was allocated based on the relative fair value, and $3.6 million was reclassified to assets held for sale in 2019. As of September 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.

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 September 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. The qualitative assessment indicated that it was more likely than not that the carrying value of the reporting unit exceeded its fair value. Therefore, the Company proceeded to complete the two-step impairment test.

Step 1 of the goodwill impairment analysis includes the determination of the carrying value of the reporting unit, including the existing goodwill, and estimating the fair value of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, we are required to perform the second step to the impairment test.

Our Step 1 goodwill impairment analysis as of September 30, 2020 indicated that the Step 2 analysis was unnecessary.