NOTE

11.

GOODWILL AND OTHER INTANGIBLES

March 31, 2020,

our only reporting unit, had goodwill totaling

$11.7

million. Goodwill is a common byproduct of a business combination, and is calculated as the amount of cash paid in excess of the fair value of the net assets acquired in the transaction. Goodwill is considered to have an indefinite life and, therefore, is

not

amortized. It is however, subject to impairment testing at least annually, or more frequently if events and circumstances warrant (triggering events). Impairment of goodwill occurs when the carrying amount of a reporting unit that includes goodwill exceeds the fair value of that reporting unit.

Triggering Events

March 31, 2020,

the COVID-

pandemic had essentially shutdown the United States economy to all but essential services and has resulted in uncertainty and extreme volatility in the financial markets. We experienced a sharp decline in our stock price during

March,

and lower than projected earnings for the month and the

three

months ended

March 31, 2020.

Events such as a deterioration in general economic conditions, decreased overall financial performance, or a sustained decrease in stock price are considered triggering events which require us to consider if goodwill has been impaired on an interim basis rather than waiting to perform our normal annual testing.

Review and Testing

first

made a qualitative assessment to determine whether it was more-likely-than-

not

(a likelihood of more than

50%

) that the fair value of our reporting unit was less than the carrying value amount, including goodwill. If it was more-likely-than-

not

that the fair value was higher than the carrying amount,

further impairment testing would have been required. If it was more-likely-than-

not

that the fair value is lower than the carrying amount, we must then perform quantitative impairment testing. We believe after performing our qualitative assessment that it was

not

more-likely-than-

not

that the fair value of our Company (our only reporting unit) was less than the carrying amount and that the quantitative impairment test was unnecessary.

In mid-

March

2020,

the rate of domestic COVID-

infections began to increase exponentially which led to a government implemented stay-at-home order and the declaration of a national emergency on

March 13, 2020.

Our qualitative assessment and conclusion at

March 31, 2020

was heavily dependent on the very short time period since the onset of the highly unusual negative circumstances associated with COVID-

and its impact on valuations; the possibly irrational reaction, even panic within the equity markets during this initial period which colors reliability; and uncertainty about how the economy as a whole will respond to government stimulus and updated news about medical advances. Clarity on these and related issues will be forthcoming over the coming weeks and months. We will again perform a qualitative assessment at

June 30, 2020

and there is

certainty that we will arrive at the same conclusion. It is possible that quantitative testing will be necessary and that it

may

support an impairment charge to earnings for the

second

quarter.

Core Deposit Intangibles

Acquired core deposits provide value as a source of below market rate funds and the realization of interest cost savings is a fundamental rationale for assuming these deposit liabilities. The cost savings is defined as the difference between the cost of funds on our new deposits (i.e., interest and net maintenance costs) and the cost of an equal amount of funds from an alternative source having a similar term as the new deposit base. Our core deposit intangibles were recorded at fair value which was derived by using the income approach and represent the present value of the cost savings over the projected term of our new deposit base.

Goodwill and Other Intangibles, net consisted of the following at

March 31, 2020

and

December 31, 2019.

(Amounts in thousands)	March 31,			December 31,
Goodwill and Other Intangibles	2020			2019
Goodwill	$	11,671		$	11,671
Core deposit intangibles		6,125			6,125
Domain name		32			32
Accumulated amortization		(1,539	)		(1,348	)
Goodwill and other intangibles, net	$	16,289		$	16,480

The following table sets forth, as of

March 31, 2020,

the total estimated future amortization of intangible assets:

(Amounts in thousands)
	Amount
2020	$	575
2021		766
2022		766
2023		766
2024		580
2025 and thereafter		1,133
Total	$	4,586