GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill consists of the following (in thousands):


	December 31,
	2021		2020
Indefinite life:
Goodwill	$	36,260	$	36,260
Total indefinite life	$	36,260	$	36,260

Intangible assets consist of the following (in thousands):


	December 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Amortizable:
Agent relationships	$	40,500	$	(32,915)	$	7,585	$	40,500	$	(29,759)	$	10,741
Trade name	15,500		(9,404)		6,096		15,500		(7,964)		7,536
Developed technology	6,600		(5,690)		910		6,600		(5,234)		1,366
Other intangibles	1,279		(478)		801		1,155		(368)		787
Net amortizable intangible assets	$	63,879	$	(48,487)	$	15,392	$	63,755	$	(43,325)	$	20,430

Goodwill and the majority of intangible assets on the consolidated balance sheets of the Company were recognized from a prior acquisition. The fair value measurements were based on significant inputs, such as the Company’s forecasted revenues, assumed turnover of agent locations, obsolescence assumptions for technology, market discount and royalty rates. These inputs are based on information not observable in the market and represent Level 3 measurements within the fair value hierarchy. Trade name refers to the Intermex name, branded on all agent locations and well recognized in the market. This fair value was determined using the relief-from-royalty method, which is based on the Company’s expected revenues and a royalty rate estimated using comparable market data. The Company determined it was appropriate to assign a finite useful life of 15 years to the trade name to provide better matching of the amortization expense during the period of expected benefits.

The agent relationships intangible represents the network of independent sending agents. This intangible was valued using the excess earnings method, which was based on the Company’s forecasts and historical activity at agent locations in order to develop a turnover rate and expected useful life. Assuming a year-over-year location turnover rate of 17.4%, this resulted in an expected useful life for this intangible of 15 years. Developed technology includes the state-of-the-art system that the Company has continued to develop and improve upon over the past 20 years. This intangible was valued using the relief-from-royalty method based on the Company’s forecasted revenues, a royalty rate estimated using comparable market data, an expected obsolescence rate of 18.0% and an estimated useful life of 15 years. Other intangibles primarily relate to the acquisition of Company-operated stores, which are amortized on a straight-line basis over 10 years. The net book value of these intangibles was $0.8 million at both December 31, 2021 and 2020.

Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. A change in the conditions, circumstances or strategy of the Company may result in a need to recognize an impairment charge.

As a result of the annual impairment tests, the Company determined that goodwill was not impaired as of December 31, 2021 and 2020.

The following table presents the changes in goodwill and intangible assets (in thousands):


	Goodwill		Intangible Assets
Balance at December 31, 2018	$	36,260	$	36,395
Acquisition of agent locations	—		335
Amortization expense	—		(9,349)
Balance at December 31, 2019	$	36,260	$	27,381
Amortization expense	—		(6,951)
Balance at December 31, 2020	$	36,260	$	20,430
Acquisition of agent locations	—		124
Amortization expense	—		(5,162)
Balance at December 31, 2021	$	36,260	$	15,392

Amortization expense related to intangible assets for the next five years and thereafter is as follows (in thousands):


2022	$	4,010
2023	3,002
2024	2,282
2025	1,730
2026	1,310
Thereafter	3,058
	$	15,392