Note 12. Goodwill and Intangible Assets

The Company accounts for goodwill and other intangible assets in accordance with ASC Topic 350, “Intangibles — Goodwill and Other.” The Company records the excess of cost acquired entities over the fair value of identifiable tangible and intangible assets acquired, less liabilities assumed, as goodwill. The Company amortizes acquired intangible assets with definite useful economic lives over their useful economic lives. On a periodic basis, management assesses whether events or changes in circumstances indicate that the carrying amount of the intangible assets may be impaired. The Company does not amortize goodwill or any acquired intangible assets with an indefinite useful economic life, but reviews them for impairment on an annual basis, or when events or changes in circumstances indicate that the carrying amounts may be impaired. The Company has performed the required goodwill impairment test and has determined that goodwill was not impaired as of December 31, 2018.

Goodwill: The Company acquired goodwill in the purchase of Liberty Bell Bank (see Note 13). The following table provides changes in goodwill for the the nine months ended September 30, 2019 and the year ended December 31, 2018:


	September 30,		December 31,
Dollars in Thousands	2019		2018
Balance at the beginning of the period	$	5,237	$	—
Liberty Bell Bank acquisition		—		5,237
Impairment		—		—
Balance at the end of the period	$	5,237	$	5,237

Core Deposit Intangible: The Company acquired a core deposit intangible in the acquisition of Liberty Bell Bank. The Company utilizes the double declining balance method of amortization, in which the straight line amortization rate is doubled and applied to the remaining unamortized portion of the intangible asset. The amortization method changes to the straight line method of amortization when the straight line amortization amount exceeds the amount that would be calculated under the double declining balance method. The core deposit intangible is amortized over seven years. The following table provides changes in the core deposit intangible for the the nine months ended September 30, 2019, and the year ended December 31, 2018:


	September 30,		December 31,
Dollars in Thousands	2019		2018
Balance at the beginning of the period	$	1,069	$	—
Liberty Bell Bank acquisition		—		1,489
Accumulated amortization		(226)		(420)
Balance at the end of the period	$	843	$	1,069

The Company recorded amortization expense related to the core deposit intangible of $76,000 and $126,000 during the three months ended September 30, 2019 and 2018, respectively, and $226,000 and $294,000 during the nine months ended September 30, 2019 and 2018, respectively. Remaining amortization on the core deposit intangible is $76,000 through December 31, 2019 and $216,000, $155,000, $128,000, $128,000, and $140,000 for the years ended December 31, 2020, 2021, 2022, 2023, and 2024 and thereafter, respectively.

Deposits Purchased Premium: The Company paid a deposit premium in the acquisition of Liberty Bell Bank, which is included in the balances of time deposits on the balance sheets. The premium amount is amortized as a reduction in interest expense over the life of the acquired time deposits. The premium on deposits will be amortized over five years. The following table provides changes in the deposit premium for the nine months ended September 30, 2019 and the year ended December 31, 2018:


	September 30,		December 31,
Dollars in Thousands	2019		2018
Balance at the beginning of the period	$	27	$	—
Liberty Bell Bank acquisition		—		108
Accumulated accretion		(19)		(81)
Balance at the end of the period	$	8	$	27

The Company recorded accretion on the deposit premium of $6,000 and $27,000 during the three months ended September 30, 2019 and 2018, respectively, and $19,000 and $63,000 during the nine months ended September 30, 2019 and 2018, respectively. Remaining accretion on the deposits purchased premium is $4,000 through December 31, 2019 and $4,000 thereafter.