Note

10:

Goodwill and Other Intangible Assets

The Company’s intangible assets (goodwill and core deposit intangible) at

March 31, 2018

consists of assets recorded in

December 2009

associated with the acquisition of a branch office in Pasadena, Maryland and the acquisition of Fairmount in

September 2015

and the acquisition of Fraternity in

May 2016.

Only the goodwill related to the branch office acquisition in the amount of

$2.7

million is deductible for tax purposes. We conducted our annual impairment test of goodwill as of

December 31, 2017.

In addition, due to the significant increase in tax expense resulting from the recording of a valuation allowance on our net deferred tax assets in the

fourth

quarter of fiscal

2018,

we concluded that a triggering event had occurred. Therefore, we performed an additional goodwill impairment analysis during the quarter ending

March 31, 2018.

Based upon the impairment tests performed as of

December 31, 2017

and

March 31, 2018,

the fair values exceeded the carrying values of our only reporting unit. As a result,

impairment to goodwill was recorded for the period ended

March 31, 2018.

The core deposit intangible asset is being amortized straight-line over a life of

eight

years.

The following table presents the changes in net book value of intangible assets for the years ended

March 31, 2018

and

2017:

				Core deposit
	Goodwill			intangible

Balance April 1, 2016	$	6,767,811		$	618,300
Additions (1)		1,877,243			242,020
Post acquisition adjustments		(81,524	)		-
Amortization		-			(121,022	)
Balance March 31, 2017		8,563,530			739,298
Amortization		-			(126,064	)

Balance March 31, 2018	$	8,563,530		$	613,234

(

) - Additions to intangible assets are related to the acquisition of Fraternity Community Bancorp, Inc.

The post-acquisition adjustment to goodwill shown in the table above was recorded in the

first

quarter of fiscal

2017.

The adjustment represents a

$451,000

write-down of several owner-occupied residential investor loans to

one

borrower that were acquired in the Fairmount acquisition and recording of an increase to the deferred tax asset related to a

$533,000

net operating loss (NOL) from Fairmount’s final tax return. With regards to the investor loans, information we were

not

aware of at the time of the acquisition became available during the quarter ended

June 30, 2016.

Had we known this information at the time of the acquisition, we would have deemed these loans as impaired and valued them accordingly.

March 31, 2018,

future expected annual amortization associated with the core deposit intangible is as follows:

Year ending March 31,	Amount

2019		126,070
2020		123,737
2021		98,070
2022		98,070
2023		98,070
2024		64,174
2025		5,043
	$	613,234