Note 6 – Goodwill and Intangible Assets

Goodwill

All of the Company’s goodwill relates to the Business Combination. As discussed in Note 3, during the three months ended March 31, 2020, the Company recorded a measurement period adjustment to reduce the preliminary fair value of intangible assets in the form of customer relationships by $5.0 million and increased the Company’s preliminary value of goodwill by $5.0 million resulting in $137.0 million of goodwill as of March 31, 2020. As a result of this adjustment to preliminary values, $0.9 million of amortization of intangible assets recorded in 2019 was reversed during the three months ended March 31, 2020.

In accordance with ASC Topic 350, the Company continuously evaluates the presence of triggering events that require an impairment test. As of March 31, 2020, the Company determined that the coronavirus pandemic (“COVID-19”) was a triggering event based on the adverse impact on the Company’s business and results of operations. Specifically, the Company noted that the COVID-19 pandemic and containment measures have contributed to, among other things, adverse impacts on the progress of construction on our borrowers’ projects, the demand for and value of commercial and residential real estate that our borrowers have developed, the creditworthiness of our borrowers and other counterparties, the capital and credit market conditions and potential delays in foreclosure proceedings. The Company performed a quantitative assessment of its goodwill based on both the market and income approach and determined that, as of March 31, 2020, the fair value of the reporting unit exceeded the carrying value and there was no goodwill impairment. The Company will continue to monitor the impact of COVID-19 and will reevaluate the fair value of the reporting unit during its annual assessment in October 2020 or earlier in the case of another triggering event.

Intangible Assets

All of the Company’s intangible assets, which resulted from purchase accounting for the Business Combination, relate to the value of customer relationships and the recorded amounts as of March 31, 2020 consist of the following:


	Acquired
(dollars in thousands)	Intangibles
Asset Type
Customer relationships	$	1,000
Less Accumulated Amortization		126
	$	874

The weighted average life remaining of the intangible assets is approximately 2.7 years. Amortization expense for the next three years, based on preliminary valuations and determinations of useful lives, is expected to be as follows:


	Year ended December 31,
(dollars in thousands)	2020		2021		2022
Estimated future intangible amortization expense	$	251	$	333	$	290