Intangible Assets

12 Months Ended

Dec. 31, 2011

NOTE 9. INTANGIBLE ASSETS

Goodwill and certain other intangible assets with indefinite useful lives are not amortized into net income over an estimated life, but rather are tested at least annually for impairment. Intangible assets determined to have definite useful lives are amortized over their estimated useful lives and also are subject to impairment testing.

In accordance with ASC Topic 350 Intangibles – Goodwill and Other, goodwill is subject to impairment testing at least annually to determine whether write-downs of the recorded balances are necessary. A fair value is determined based on at least one of three various market valuation methodologies. If the fair value equals or exceeds the book value, no write-down of recorded goodwill is necessary. If the fair value is less than the book value, an expense may be required on our books to write down the goodwill to the proper carrying value. During the third quarter, we completed the required annual impairment test for 2011 and determined that no impairment write-offs were necessary.

In addition, at December 31, 2011 and December 31, 2010, we had $353,000 and $504,000, respectively, in unamortized acquired intangible assets consisting entirely of unidentifiable intangible assets recorded in accordance with ASC Topic 805, Business Combinations, and $2,100,000 and $2,300,000 in unamortized identifiable customer intangible assets at December 31, 2011 and 2010, respectively.


						Goodwill Activity
			Community			Insurance
Dollars in thousands			Banking			Services			Total
Balance, January 1, 2011		$		1,488		$	4,710	$		6,198
Acquired goodwill, net					-		-			-
Balance, December 31, 2011		$		1,488		$	4,710	$		6,198


					Other Intangible Assets
		December 31, 2011						December 31, 2010
	Community		Insurance				Community		Insurance
Dollars in thousands		Banking		Services		Total	Banking			Services		Total
Unidentifiable intangible assets
Gross carrying amount	$	2,267	$	-	$	2,267	$	2,267	$	-	$	2,267
Less: accumulated amortization		1,914		-		1,914		1,763		-		1,763
Net carrying amount	$	353	$	-	$	353	$	504	$	-	$	504

Identifiable intangible assets
Gross carrying amount	$	-	$	3,000	$	3,000	$	-	$	3,000	$	3,000
Less: accumulated amortization		-		900		900		-		700		700
Net carrying amount	$	-	$	2,100	$	2,100	$	-	$	2,300	$	2,300

We recorded amortization expense of $351,000 for the year ended December 31, 2011 relative to our other intangible assets. Annual amortization is expected to be approximately $351,000 for each of the years ending 2012 through 2016. The remaining amortization period is 10.5 years.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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