GOODWILL AND INTANGIBLE ASSETS

Goodwill: The Company has acquired three banks, Lotus Bank in March 2015, Bank of Michigan in March 2016, and Ann Arbor State Bank in January 2020, which resulted in the recognition of goodwill of $4.6 million, $4.8 million, and $26.8 million, respectively. Total goodwill was $36.2 million at March 31, 2020 and $9.4 million at December 31, 2019.

Goodwill is not amortized but is evaluated annually for impairment and on an interim basis if events or changes in circumstances indicate that goodwill might be impaired. Impairment exists when the carrying value of goodwill exceeds its fair value. The Company's most recent annual goodwill impairment review as of October 1, 2019 did not indicate that an impairment existed. However, in accordance with ASC 350, the Company reviewed the requirements of interim impairment testing based on the current economic conditions resulting from the COVID-19 pandemic. As a result, the Company concluded to perform a qualitative analysis as of March 31, 2020 which indicated no impairment as of March 31, 2020.

Acquired Intangible Assets: The Company has recorded core deposit intangibles ("CDIs") associated with each of its acquisitions. CDIs are amortized on an accelerated basis over their estimated useful lives.

The table below presents the Company's net carrying amount of CDIs:



(Dollars in thousands)	March 31, 2020			December 31, 2019
Gross carrying amount	$	5,708		$	2,045
Accumulated amortization	(1,936		)	(1,744		)
Net Intangible	$	3,772		$	301

Amortization expense for the CDIs was $192 thousand and $52 thousand for the three months ended March 31, 2020 and 2019, respectively.

Mortgage Servicing Rights ("MSRs"): The Company has recorded MSRs for loans that are sold with servicing retained. MSRs are carried at the lower of the initial capitalized amount, net of accumulated amortization or estimated fair value. MSRs are amortized in proportion to and over the period of estimated net servicing income. The Company serviced residential mortgage loans for others with unpaid principal balances of approximately $21.9 million and $9.0 million, as of March 31, 2020 and December 31, 2019, respectively.

Changes in our mortgage servicing rights were as follows for the three months ended March 31, 2020. The Company had no mortgage servicing rights for the three months ended March 31, 2019:



(Dollars in thousands)	March 31, 2020
Mortgage servicing rights:
Balance, beginning of period	$	76
Originated servicing	142
Amortization	(5		)
Balance, end of period	213
Valuation allowance:
Balance, beginning of period	—
Additions	17
Balance, end of period	17
Mortgage servicing rights, net	$	196
Fair value:
At beginning of period	$	87
At end of period	196